NON-QUALIFIED STOCK OPTION AGREEMENT

This First Amendment to Non-Qualified Stock Option Agreement (this " Amendment ") is entered this 19 ^th day of December, 2008 (the " Effective Date "), by and between Far East Energy Corporation, a Nevada corporation (the " Company "), and Michael R. McElwrath (the " Option Holder ").

WHEREAS, the Company and the Option Holder entered into that certain Non-Qualified Stock Option Agreement dated February 2, 2006 (the " Existing Agreement "); and

WHEREAS, the Company and the Option Holder desire to amend the Existing Agreement on the terms herein provided.

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements of the parties herein contained, the parties hereto agree as follows:

Section 1.01. Capitalized terms used in this Amendment that are not defined herein shall have the meanings ascribed thereto by the Existing Agreement.

Section 2.01.  Section 8 .  The first sentence of Section 8 is hereby amended and restated in its entirety to read as follows:

"Upon a Termination of Service for any reason (other than death or Disability), the unexercised Option may thereafter be exercised during the period ending 90 days after the date of such Termination of Service, subject to any earlier termination of the Option as provided herein, but only to the extent to which the Option was vested and exercisable at the time of such termination of Service."

Section 3.01.  Ratifications .  The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Existing Agreement.  Except as expressly modified and superseded by this Amendment, the Company and the Option Holder each hereby (a) ratifies and confirms the Existing Agreement, (b) agrees that the same shall continue in full force and effect, and (c) agrees that the same are the legal, valid and binding obligations of the Company and the Option Holder, enforceable