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FX Energy, Inc. (FXEN) Eyes Value in Underexplored Polish Permian Basin
FX Energy builds value for its shareholders in the oil and gas exploration and production market with production in the U.S. and Poland. The company’s primary exploration and production activity targets Poland’s Permian Basin where the gas-bearing Rotliegend sandstone is a direct analog to the Southern Gas Basin offshore England. Operator and owner of 51% of the well, PGNiG, is running a full production test to determine flow rates and reserves.
The company recently reported that drilling, coring and logging of the Karmin-1 well have been completed. Results of these operations show 30 meters of gas-saturated Rotliegend sandstone with porosity approaching 30%. The well flowed at a rate up to 6.7 mmcfg/d on a 22/64? choke with no water. It will now be completed for production and is expected to start producing at the start of 2016. The Baraniec-1 well, which began drilling in September of this year, has run casing to a depth of 3,894 meters at the base of the Zechstein. The well is a planned test of a Rotliegend sandstone structure. Pending the test’s measure of success, Baraniec-1 will be connected to the production facility at Lisewo and could be in production by the end of next year. Both wells are located in the Fences license.
The company’s oil and gas revenues for 2013 were $33.3 million, a modest 3% decrease compared to revenues for the following fiscal year. FXEN expects its 2014 production will net a rise from its 2013 production rates with the start of production at its Lisewo-2 and Komorze-3K wells. Further, this production will be included to a full year of production from its Lisewo-1 and Winna Gora wells, which is believed will be greater than the natural declines in production from producing wells.
FX Energy’s strategy is well defined. It believes Poland embodies a unique international exploration opportunity. Within the past half century, Western companies have invested billions of dollars into exploration efforts in the British, German, Dutch and Norwegian sectors in the North Sea area. Industry data suggests these efforts have resulted in the discovery of trillions of cubic feet of gas and more than a billion barrels of oil. Up until the late 1990’s, Poland been closed to exploration by foreign oil and gas companies. As of today, exploration activities conducted in the Polish onshore Permian Basin area are only a fraction of those conducted in the western part of the basin. As a result the company feels the Polish Permian Basin is underpenetrated and, therefore, has high potential for discovery of significant volumes of oil and gas relative to the North Sea or other mature oil and gas provinces in the United States and around the world. One example is that the estimated gross proved recoverable reserves per well associated with the 11 conventional gas discoveries in its core Fences concession in Poland are 12.7 Bcf.
As of the end of 2013, FX Energy estimated oil and gas reserves were 42.0 billion cubic feet of natural gas and 0.5 million barrels of oil. This amounts to a total of 44.8 billion cubic feet of natural gas equivalent. The company retains oil and gas exploration rights in a range of project areas comprising approximately 2.7 million gross acres in Poland, as well as produces oil from approximately 10,730 gross acres in Montana and 400 gross acres in Nevada.
For more information on the company, visit www.fxenergy.com
