Schedule 13D

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BzdWV8pfAlGWPLu+m9OOs9+6oz72JPy5MtLIfFidiEujQGxDTEtp1xnWFa5iIsea F+KKYduudZRp+9t7ERfJ6g== 0001193125-06-218148.txt : 20061030 0001193125-06-218148.hdr.sgml : 20061030 20061030165929 ACCESSION NUMBER: 0001193125-06-218148 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20061030 DATE AS OF CHANGE: 20061030 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SOFAER CAPITAL NATURAL RESOURCES HEDGE FUND CENTRAL INDEX KEY: 0001350469 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O SOFAER CAPITAL INC STREET 2: PO BOX 71 CRAIGMUIR CHAMBERS ROAD CITY: TORTOLA STATE: D8 ZIP: 00000 MAIL ADDRESS: STREET 1: C/O SOFAER CAPITAL INC STREET 2: PO BOX 71 CRAIGMUIR CHAMBERS ROAD CITY: TORTOLA STATE: D8 ZIP: 00000 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FAR EAST ENERGY CORP CENTRAL INDEX KEY: 0001124024 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 880459590 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-78318 FILM NUMBER: 061172699 BUSINESS ADDRESS: STREET 1: 400 N. SAM HOUSTON PARKWAY E. STREET 2: SUITE 205 CITY: HOUSTON STATE: TX ZIP: 77060 BUSINESS PHONE: 7135861900 MAIL ADDRESS: STREET 1: 400 N. SAM HOUSTON PARKWAY E. STREET 2: SUITE 205 CITY: HOUSTON STATE: TX ZIP: 77060 FORMER COMPANY: FORMER CONFORMED NAME: EZFOODSTOP COM DATE OF NAME CHANGE: 20010306 SC 13D 1 dsc13d.htm SCHEDULE 13D Schedule 13D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

Far East Energy Corporation

(Name of Issuer)

Common Stock, $.001 par value

(Title of Class of Securities)

307325100

(CUSIP Number)

Tim Whyte

Sofaer Global Research (UK) Ltd.

9 Upper Belgrave Street

London SW1X 8BD

United Kingdom

+44-20-7259-4400

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

October 23, 2006

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1 (e), 13d-1(f) or 13d-1 (g), check the following box. x

The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

(Continued on following pages)


CUSIP No. 307325100		13D		Page 2 of 7 Pages


1	NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

	Sofaer Capital Natural Resources Hedge Fund
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
	(a) x
	(b) ¨
3	SEC USE ONLY


4	SOURCE OF FUNDS

	WC, OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)	¨


6	CITIZENSHIP OR PLACE OF ORGANIZATION

	Cayman Islands


NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 SOLE VOTING POWER


		8 SHARED VOTING POWER

		24,599,749
		9 SOLE DISPOSITIVE POWER

		739,900
		10 SHARED DISPOSITIVE POWER

		9,664,779


11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	9,664,779
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES	¨


13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	7.6%
14	TYPE OF REPORTING PERSON

	OO

SCHEDULE 13D

1.	SECURITY AND ISSUER.

This statement on Schedule 13D (this “Statement”) relates to the common stock, par value $0.001 per share (the “Common Stock”), of Far East Energy Corporation, a Nevada corporation (the “Issuer”), whose principal executive offices are located at 400 N. Sam Houston Parkway East, Suite 205, Houston, Texas 77060.

2.	IDENTITY AND BACKGROUND.

This statement is filed by Sofaer Capital Natural Resources Hedge Fund, a Cayman Islands mutual trust (“Sofaer Resources”).

Set forth below is certain information as specified in Instruction 2 to Schedule 13D with respect to Sofaer Resources.


Name of Reporting Person	Jurisdiction of Organization of Reporting Person	Principal Business of Reporting Person	Address of Principal Business of Reporting Person	Address of Principal Office of Reporting Person, if different
Sofaer Capital Natural Resources Hedge Fund*	Cayman Islands	Mutual Trust	c/o Citco Trustees (Cayman) Limited, Regatta Office Park West Bay Road PO Box 31106 SMB Grand Cayman Cayman Islands

Marcus Hinkley		Trustee of Citco Trustees (Cayman) Limited	c/o Citco Trustees (Cayman) Limited, Regatta Office Park West Bay Road PO Box 31106 SMB Grand Cayman Cayman Islands

Robert Thomas		Trustee of Citco Trustees (Cayman) Limited	c/o Citco Trustees (Cayman) Limited, Regatta Office Park West Bay Road PO Box 31106 SMB Grand Cayman Cayman Islands

Page 3 of 7 Pages


Name of Reporting Person	Jurisdiction of Organization of Reporting Person	Principal Business of Reporting Person	Address of Principal Business of Reporting Person	Address of Principal Office of Reporting Person, if different
Sofaer Capital, Inc.	Hong Kong	Investment Advisor	Craigmuir Chambers Road Town Tortola British Virgin Islands

Michael Sofaer	Hong Kong	Sole Director and Officer of Sofaer Capital Inc.	16^th Floor 16 Ice House Street Central Hong Kong

*	Citco Trustees (Cayman) Limited is the Trustee of the Sofaer Capital Natural Resources Hedge Fund. The Trustee has entered into a managing agreement with Sofaer Capital, Inc. to manage the funds held in the trust.

During the last five years, none of Sofaer Resources or, to the best of its knowledge, any of its trustees, directors, managers or executive officers, if any, have been convicted of any criminal proceeding (excluding traffic violations or similar misdemeanors) or have been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding were or are subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to federal or state securities laws or finding any violation with respect to such laws.

3.	SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

The Reporting Person acquired shares of Common Stock in the open market with funds derived from the available capital of the Reporting Person.

4.	PURPOSES OF TRANSACTION.

Sofaer Resources has attached as Exhibit 99.1 to this Statement a letter, dated October 23, 2006, from Sofaer Capital Inc, a British Virgin Islands company (“Sofaer”), to the shareholders of the Company confirming Sofaer’s intention to run an opposing slate of directors at the Company’s upcoming annual meeting. Sofaer Resources has agreed to participate with Sofaer (and the other participants, named in Item 6) in the intended solicitation of proxies.

Except as otherwise described in this Item 4 of this Statement, the acquisition of the shares of Common Stock by the Reporting Person is for investment purposes.

5.	INTEREST IN SECURITIES OF THE ISSUER.

The Reporting Person owns 739,900 shares of the Common Stock. Although the Reporting Person is managed by independent trustees and pursues its own investment strategy, the Reporting Person is a participant in an intended solicitation of proxies. The Reporting Person may be deemed the beneficial

Page 4 of 7 Pages

owner of the shares of the other participants, Sofaer Capital Asian Hedge Fund, a Cayman Islands mutual trust (“SCAHF”), Sofaer Capital Global Hedge Fund, a Cayman Islands mutual trust (“SCGHF”), Sofaer, John Laurie Hunter, Eric Wing Cheong Leung, Mark Adam Parkin and Tim Whyte.

Sofaer Resources may also be deemed the beneficial owner of the shares of the parties to an Investor Group Agreement, dated December 23, 2004, which consist of Sofaer, SCAHF and SCGHF, as well as Restructuring Investors Limited, a British Virgin Islands Limited Liability Company (“Restructuring”), Passlake Limited, a Cayman Islands investment holding company (“Passlake”) and Persistency, a Cayman Islands limited company (“Persistency”).

Sofaer Resources may also be deemed the beneficial owner of 1,189,700 shares of Common Stock owned by RIT Capital Partners plc (“RIT”), a public limited company organized under the laws of England and Wales, by virtue of the fact that RIT has designated Sofaer to vote and dispose of RIT’s shares of Common Stock in accordance with Sofaer’s discretion.

Each of the parties described above disclaims beneficial ownership of the shares held by any other party.

By virtue of the relationships described above, the participants in the intended proxy solicitation, the Investor Group Agreement parties and RIT may all be deemed to be members of a “group”, as such term is used in Section 13(d)(3) of the Exchange Act. The aggregate beneficial ownership of such deemed group is 24,599,749 shares of Common Stock 17,574,349 shares of which are outstanding and 7,025,400 shares of which are issuable upon the exercise of warrants. According to the definitive proxy statement filed on behalf of the Company’s Board of Directors on October 27, 2006, there were 123,752,342 shares of Common Stock outstanding as of October 26, 2006. Together, the Reporting Person and the other members of the aforementioned deemed group therefore have a beneficial ownership percentage of 18.8%.

Together, the Reporting Person and the other members of the aforementioned deemed group, may be deemed to have shared power to vote 24,599,749 shares of Common Stock.

Sofaer, Sofaer Resources, SCAHF and SCGHF have shared dispositive power over 9,664,779 shares of Common Stock. Mr. Parkin has sole dispositive power over 300,000 shares of Common Stock and may be deemed to be the beneficial owner of 103,400 shares of Common Stock held by Red Earth Holdings (not counted as beneficially owned by the aforementioned deemed group), a fund for which he is an advisor. None of Messrs. Hunter, Leung or Whyte has sole dispositive power over any shares of Common Stock. Restructuring has sole dispositive power over 4,442,865 shares of Common Stock, 150,000 shares of which (issuable upon the exercise of warrants) are not subject to the Investor Group Agreement and therefore not deemed beneficially owned by the aforementioned deemed group. Passlake has sole

Page 5 of 7 Pages

dispositive power over 566,676 shares of Common Stock. Persistency has sole dispositive power over 8,585,729 shares of Common Stock. RIT has shared dispositive power with Sofaer over 1,189,700 shares of Common Stock.

Neither the Reporting Person nor any of the persons named in paragraph (A) have effected any transactions in the Common Stock during the past sixty (60) days, except as listed below:

Sofaer Resources acquired 100,000 shares of Common Stock on October 5, 2006, in the open market for a price of $0.9498 per share.

Sofaer Resources acquired 20,000 shares of Common Stock on October 17, 2006, in the open market for a price of $1.00 per share.

Sofaer Resources acquired 19,900 shares of Common Stock on October 18, 2006, in the open market for a price of $1.00 per share.

RIT acquired 100,000 shares of Common Stock on October 18, 2006, in the open market for a price of $1.0275 per share.

RIT acquired 127,200 shares of Common Stock on October 19, 2006, in the open market for a price of $1.0377 per share.

RIT acquired 2,500 shares of Common Stock on October 19, 2006, in the open market for a price of $1.05 per share.

RIT acquired 470,000 shares of Common Stock on October 20, 2006, in the open market for a price of $1.0981 per share.

RIT acquired 61,000 shares of Common Stock on October 23, 2006, in the open market for a price of $1.088 per share.

Not applicable.

6.	CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.

As of October 23, 2006, Sofaer Resources joined as a participant in an intended solicitation of proxies with Sofaer, SCAHF, and SCGHF, and certain individuals who have been nominated to serve as Directors of the Company. The participants in such solicitation filed a Schedule 14A relating to such solicitation on October 23, 2006 and a preliminary proxy statement on Schedule 14A relating to such solicitation on October 30, 2006.

7.	MATERIAL TO BE FILED AS EXHIBITS.

Exhibit 99.1: Letter, dated October 23, 2006, from Sofaer to the shareholders of the Company.

Page 6 of 7 Pages

SIGNATURE

After reasonable inquiry and to the best of the undersigned’s knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

October 30, 2006


SOFAER CAPITAL NATURAL RESOURCES HEDGE FUND

By:		/s/ Tim Whyte
Name:		Tim Whyte
Title:		Investment Manager

Page 7 of 7 Pages

EX-99.1 2 dex991.htm PRESS RELEASE Press Release

EXHIBIT 99.1

PRESS RELEASE

SOFAER CAPITAL CONFIRMS IT WILL RUN AN OPPOSING SLATE OF

DIRECTORS AT THE UPCOMING FAR EAST ENERGY CORPORATION

ANNUAL MEETING

London, England October 23, 2006 – Sofaer Capital, Inc. today issued the following open letter to shareholders of Far East Energy Corporation (OTC BB: FEEC.OB):

Sofaer Capital, Inc.

Craigmuir Chambers

Road Town, Tortola

British Virgin Islands

October 23, 2006

Dear Fellow Far East Energy Shareholders,

As one of Far East Energy Corporation’s largest shareholders, we are disgusted with recent actions by the Company’s Board that we believe management has orchestrated in order to entrench itself at the expense of shareholders. We are writing to you today to ask for your support in our campaign to halt these disgraceful actions and protect the rights of investors in Far East Energy Corporation.

You have probably seen that in the past week Far East has sold well over 18 million shares of common stock, mostly to a group of unnamed “institutional investors”. Far East has also said it intends to sell even more shares in the next few days. These sales have taken place even as Far East’s share price hovers just above a historic low, and management has provided little explanation of why it needs funds so desperately now. Indeed, it postponed a shareholder call that it might have used to explain itself for almost a week on a flimsy excuse, and has used the delay to push its dilutive share sales through. Despite repeated requests, management has stonewalled attempts by Mr. Tim Whyte, our Board representative, to obtain information about these sales to which he is legitimately entitled as a Director, including information about the identities of the “institutional investors” that have purchased the bulk of the shares.

We believe the unnamed beneficiaries of this sweetheart deal may use their votes to stuff the ballot box in favor of management’s candidates for the Board of Directors at Far East’s upcoming Annual Meeting. Indeed, it is our view that management is engaging in these share sales because it is aware that a large part of the existing shareholder base would support our proposals.

Shareholders must act now to stop further damage to the Company and their investments. We will soon be filing our own proxy statement, which will nominate a group of directors who will put shareholder value before job preservation and cronyism. We urge you to join us and vote with the GOLD proxy card that we will include with that statement.

But we cannot wait until December 15 to let management know we will not tolerate its continued destruction of value and potential subversion of shareholder democracy. It has gone on for too long already.

A Record of Failure

Three Years, $60 million, No Results

We believe the numbers speak for themselves when it comes to management’s failure to deliver. Including the investment of approximately $10 million that we made along with a group of other investors in December 2004, the company has raised over $60 million since current management took over in late 2003. Investors are still waiting for verified proof of commercial gas from any one of the Company’s four wells. In the meantime, the share price has continued to fall.

This shockingly poor performance has taken place in one of the most favorable investment environments for energy firms in decades. As the Company’s own performance graph from its recent proxy filing shows, other companies in the sector have gone from strength to strength. A look at performance since current management began its tenure provides an even starker contrast: a $100 investment in Far East made at the end of 2003 would now be worth only $32.32, compared to $129.82 for an investment in the S&P 500, or $139.78 for an investment in the Dow Jones U.S. Exploration and Production Index. In another telling example, Green Dragon Gas Ltd., a company similar to Far East (perhaps even at an earlier stage of development) recently listed on the London Stock Exchange’s Alternative Investment Market and as of Friday, October 20, 2006, had a market capitalization of almost $540 million, compared to approximately $111 million for Far East.

Potemkin Governance

Management goes on for many pages in its proxy statement with boilerplate language about how wonderful its governance arrangements are. Yet we believe that its claims are as hollow as those it makes about shareholder value.

Over the past two years we have repeatedly expressed concern about the direction of the Company and its constant attempts to raise funds without a strategic plan to use them effectively. These new fundraisings started not long after we made our investment in December 2004, resulting in sales in the summer of 2005 and 2006 and culminating in the latest sale of over 18 million shares that has occurred over the past week.

Our frustration led us to conclude we had no choice but to work for change on the Board. On September 15, we nominated a group of candidates that we feel bring much-needed financial expertise and knowledge of the Chinese CBM market. We also made it clear that we were willing to enter into a dialogue with management about how to move the Company forward.

Management responded by shutting itself into a bunker. In typical fashion, it buried consideration of our proposals in a committee, which, after no attempt to speak with us, rejected them out of hand. This reaction should come as no surprise, because management has almost no money invested in the Company and therefore no incentives that align its interests with those of shareholders. For example, according to the Company’s own proxy statement, Michael McElwrath, the Company’s CEO, owns only 100 shares of common stock.

Our Way Forward for Shareholder Value

There is much that we can do together before the vote on December 15. We will be communicating with all of you over the coming weeks with our plans to enhance shareholder value and reform the Company’s governance. We intend to present a detailed plan for reform that will include:

•

Strengthening the Board with sorely need expertise to ensure strategic decisionmaking.

•

Formulating an integrated strategy for the Company that combines operations, marketing and finance over a sensible time horizon.

•

Implementing best practices that align the interests of management with those of shareholders.

•

Rolling back shareholder-unfriendly Bylaw provisions to ensure greater Board accountability and true shareholder democracy.

To show how much we believe in this Company, we will also make clear to management our willingness to purchase more equity in the Company, votable at the Annual Meeting, right now at a price higher than 90 cents per share, with no 6% commission. We feel that if management has any objective other than its own preservation, it has a duty to shareholders to consider this proposal.

We can also assure all shareholders that we are considering all options, including litigation, to enforce proper governance standards. We hope, however, that management will choose to listen before wasting more of other peoples’ money defending itself.

Make Your Voice Heard

In the meantime, we urge you to make your voice heard. There is a shareholder call scheduled for 11:00 a.m. EST today; call-in information is on the Company’s website. Participate in the call. Demand answers from management about why it is diluting existing shareholders and how it intends to stop destroying shareholder value. And don’t let management off the hook after the call. Keep asking questions until you receive the answers you deserve.

Sincerely,

/s/ Tim Whyte

Tim Whyte

Investment Manager

Sofaer Capital, Inc.

SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO SOLICITATION OF PROXIES BY SOFAER CAPITAL GLOBAL HEDGE FUND AND OTHER POTENTIAL PARTICIPANTS FROM THE SHAREHOLDERS OF FAR EAST ENERGY CORPORATION FOR USE AT ITS ANNUAL MEETING WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY SOLICITATION, AND WHEN COMPLETED, A DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY WHICH WILL BE MAILED TO SHAREHOLDERS OF FAR EAST ENERGY CORPORATION AND WILL BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION’S WEBSITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN ANY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT, WHEN FILED, WITHOUT CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS’ PROXY SOLICITOR, MACKENZIE PARTNERS, INC., AT ITS TOLL-FREE NUMBER: 800-322-2885 OR E-MAIL: PROXY@MACKENZIEPARTNERS.COM.

THE PARTICIPANTS IN THE PROXY SOLICITATION ARE ANTICIPATED TO BE SOFAER CAPITAL GLOBAL HEDGE FUND, SOFAER CAPITAL ASIAN HEDGE FUND, SOFAER CAPITAL, INC., SOFAER CAPITAL NATURAL RESOURCES HEDGE FUND, TIM WHYTE, ERIC WING CHEONG LEUNG, JOHN LAURIE HUNTER AND MARK ADAM PARKIN (COLLECTIVELY, THE “PARTICIPANTS”). INFORMATION REGARDING THE PARTICIPANTS AND THEIR DIRECT OR INDIRECT INTERESTS IS AVAILABLE IN THE SCHEDULE 14A FILED IN CONNECTION HEREWITH AND THE SCHEDULE 13D FILED BY SOFAER CAPITAL GLOBAL HEDGE FUND AND CERTAIN OTHER PARTIES ON JANUARY 3, 2005 AND AMENDED ON JANUARY 4, 2005, OCTOBER 13, 2005 AND SEPTEMBER 15, 2006 (INCLUDING EXHIBIT 1 THERETO), AND TO BE FURTHER AMENDED OCTOBER 23, 2006 WITH RESPECT TO FAR EAST ENERGY CORPORATION. SUCH SCHEDULE 13D AND ALL OF ITS AMENDMENTS ARE AVAILABLE AT NO CHARGE ON THE SECURITIES AND EXCHANGE COMMISSION’S WEBSITE.

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