BlackRock Inc., the world’s biggest money manager, and a fund related to billionaire George Soros have acquired stakes in Far East Energy Corp., a Houston company that’s raising cash to develop natural-gas properties in China.
Far East sold new shares representing a 9.95 percent interest in the company to New York-based BlackRock for about $9.5 million, Bruce Huff, the gas producer’s chief financial officer, said today in a telephone interview. Far East sold the same size stake to a mutual fund that Huff declined to identify and an undisclosed number of shares to a Soros fund and other buyers, he said.
The sales, which were completed on Aug. 25, totaled $34.8 million. Far East is accelerating production of coalbed methane, a type of natural gas contained in coal deposits. Output in the Shouyang Block of China’s Shanxi Province surpassed 1 million cubic feet of gas a day, the company said last month. Far East has to burn off the fuel it’s producing until pipelines are in place to gather the gas later this year, Huff said.
“That’s why we’re moving so quickly to accelerate production,” he said. “The purpose here was trying to raise sufficient capital in order to really make a major impact on not only the production level, but also ultimately the potential valuation of the company.”
Far East plans to double or triple its production within four to six months, Huff said.
Melissa Garville, a spokeswoman for BlackRock, declined to comment on the investment. Michael Vachon, a spokesman for Soros, didn’t immediately respond to telephone and e-mail messages seeking comment.
Far East rose 3 cents, or 7.5 percent, to 43 cents as of 4 p.m. New York time in over-the-counter stock trading. The new shares were sold at a price of 33 cents. BlackRock fell $1.20 to $150.74.