Far East Energy Corp. (OTC:FEEC
, FEEC message board
) share price overcame certain levels of resistance yesterday but then fell down at market close. Also, yesterday FEEC announced a financing agreement for its Shouyang project which could help the share price remain stable, or even start appreciating on the long-term.
FEEC closed Monday session with a 7.68% decrease in the share price at $0.20, while the trading volume exceeded 2.38 million shares, which is more than four times higher than the daily average for the past three months. Although FEEC jumped up to $0.25, the session ended with RSI pointing down and crossing the centerline, while MACD line have also made a cross and point down.
Still, the price did not fall lower than $0.20, which could serve as support, and the news from yesterday could be considered positive.
The company announced the closing of a credit facility with a bank that would provide up to $25 million to FEEC. The company should use the funds to cover the costs of its Shouyang Project in Shanxi Province, China, as well as any other general corporate expenses as approved by the lender.
The agreement has an initial term of nine months ending August 28, 2012 and FEEC states in the press release it has already drawn down an initial amount of $17.87 million to finance its operations in the first half of next year and to pay certain other expenses. According to the terms, the agreement should not dilute FEEC shareholders, which could also serve as validation for the potential of the company's project.