Trading on the NASDAQ and with headquarters in Salt Lake City, Utah, FX Energy Inc. is an independent oil and gas company focusing their efforts primarily in Poland. The company believes Poland’s hydrocarbon producing areas are underdeveloped because the country remained closed to competition from foreign exploration companies for so many years. The area they are concentrating on in the country is the Permian Basin region.
Accumulating large land positions in known productive areas, FX Energy Inc. has a $29M exploration program currently in progress. Their corporate goal is to increase production and reserves in their core areas of operation. Their subsequent goal is to use the revenue from their core areas to support high-potential exploration on their plentiful non-core acreage.
FX Energy Inc. conducts some of their Polish operations in partnership with the Polish Oil and Gas Company, or POGC. POGC is a fully integrated oil and gas company, mainly owned by the Treasury of the Republic of Poland. POGC is Poland’s principal domestic oil and gas exploration, production, transportation, and distribution entity. FX Energy Inc. also has a small oil presence in the United States.
Their projects in Poland are primarily on the Rotliegend sandstones of the Permian Basin. They have identified a core area consisting of approximately 852,000 gross acres surrounding the Radlin Field. Their ongoing activities in Poland are in six areas: Fences, Northwest, Kutno, Warsaw South, Block 255, and Block 287. Their exploration activities right now are primarily on the core Fences area, where there is gas-bearing Rotliegend sandstone reservoir rock.
Substantial gas reserves, discovered and developed by POGC, are in this area. They have made five commercial gas discoveries, together with POGC. Containing proved gas reserves of approximately 71 billion cubic feet (Bcf) gross (31 Bcf net), FX Energy Inc. feels there is more potential in this area. The company’s U.S. operation does not have substantial exploration potential. It provides a small cash flow and is not capital intensive. It consists mainly of shallow, oil-producing wells in the Cut Bank oil field of Montana. As of December 31, 2007, the estimation of their U.S. reserves was at 482,000 barrels of crude oil.
In Poland, FX Energy holds 3.7 million gross or 3.2 million net acres. Independent engineers estimate that the company’s total oil and gas reserves are at 34.1 billion cubic feet of gas equivalents (Bcfe). The company doubled their production in 2007 from 2006. Their total oil and gas reserves increased approximately 50 percent from 2006 to 2007. Practically all of this increase was from the company’s operations in Poland. FX Energy continues to reach across the Atlantic into this region to increase shareholder value.
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