FX Energy Signs Letter of Intent to Complete Industry Funding of First Kutno Well

abarrelfullabarrelfull wrote on 23 Dec 2010 06:45
Tags: fx-energy gas poland shale upstream

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FX Energy, Inc. (NASDAQ: FXEN) today announced that it signed a Letter of Intent with Kulczyk Investments S.A., (“Kulczyk Investments”) in connection with the Company’s Kutno project in central Poland. The agreement provides for Kulczyk Investments to join FX Energy and the Polish Oil and Gas Company (“PGNiG”) in drilling the first well to test the Kutno prospect. The Letter of Intent is subject to negotiation and execution of a definitive Joint Operating Agreement, approval by the boards of both companies and other matters.

The parties plan to test a previously undrilled 35,000 acre (140 square kilometer) 2-D defined Rotliegend structure at a depth of approximately 21,000 feet (6,500 meters). The prospect is believed to be the largest undrilled Rotliegend structure on-shore Europe. Well design and engineering are currently underway. The well is scheduled to begin drilling during the second half of 2011.

FX Energy will be the operator and will hold a 25% interest in the well and the project. PGNiG and Kulczyk Investments will hold 75% of the working interest in the well and the project.
David Pierce, FX Energy’s CEO, said, “We are excited about drilling the Kutno prospect. This will be the highest potential well we have ever drilled and probably the highest risk. With PGNiG and Kulczyk Investments on our team, we will have a group of three experienced energy companies, all committed to Poland, working together on a big project that could be very important to Poland.”

About PGNiG
PGNiG Capital Group is a leader in the natural gas market in Poland. The core activity of the PGNiG Capital Group encompasses field exploration and production of natural gas and crude oil as well as import, storage, trade and distribution of gas and liquid fuels. Polish Oil and Gas Company is one of the largest and oldest companies in Poland. The Company trades on the Stock Exchange in Warsaw under the symbol PGN. Website www.pgnig.pl.

About Kulczyk Investments
Kulczyk Investments is an international investment company based in Luxembourg. The company is a long-term investor focused on transactions where it can add value through local
knowledge, relationships, international expertise in transforming economies and access to its own capital. Kulczyk Investments’ strategic sectors include energy and infrastructure. It also holds significant assets in the real estate, brewing, automotive and the chemical industries. The company invests in the energy sector broadly, from exploration and production, through power generation to power and gas distribution and trading. Kulczyk Investments’ objective is to create a balanced portfolio of energy assets around the world. The company’s energy portfolio includes, inter alia, Kulczyk Oil Ventures, Aurelian Oil and Gas, Loon Energy Corporation, Ophir Energy Plc, KI Energy Trading, Elektrownia Północ and Strata Limited.
Website www.kulczykinvestments.com.

About FX Energy
FX Energy is an independent oil and gas exploration and production company with production in the US and Poland. The Company's main exploration and production activity is focused on Poland's Permian Basin where the gas-bearing Rotliegend sandstone is a direct analog to the Southern Gas Basin offshore England. The Company trades on the NASDAQ Global Market under the symbol FXEN. Website www.fxenergy.com.

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