Energy Prospectus

December 21: "FX Energy (FXEN) announces that it signed a Letter of Intent with Kulczyk Investments in connection with its Kutno project in central Poland. The agreement provides for Kulczyk Investments to join FX Energy and the Polish Oil and Gas Company in drilling the first well to test the Kutno prospect. 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."

This is a very significant prospect for a company the size of FXEN. I'm hoping they end up with quarter of the prospect with all costs of the test well paid by others. - Dan

Salt Lake City, December 21, 2010 – 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.

Dan,

Have you changed the fair value estimate of FXEN changed as a result of Kutno prospect?

This may be why FXEN is up today.

Aurelian Oil & Gas successfully completes Trzek-2 on Siekierki project
Thursday, December 23, 2010 by Jamie Ashcroft

http://www.proactiveinvestors.co.uk/com ... 24238.html

Aurelian Oil & Gas (LON:AUL) shares shot up 8 percent in early trades on news it successfully completed the Trzek-2 horizontal well and encountered 1,378.5 metres of gas.
Trzek-2, on the Siekierki tight gas project, is the first ever Multi Fracced Horizontal Well (MFHW) to be drilled in this part of the world.

The planned flow test has been delayed as a result of the severe weather that has swept most of central and western Europe.

"Successfully completing the horizontal section and encountering such an extensive section of gas is a very good outcome in this first well in our 346 billon cubic feet Siekierki tight gas project,” chief executive Rowen Bainbridge said.

“Whilst the severe weather in Poland will delay the results of the flow test for approximately four weeks, we are nonetheless very pleased to be in a position to be able to finish this first well on budget.”

Aurelian plans to spud Trzek-3 in early January.

Meanwhile drilling is still underway at the Bieszczady project, in the Carpathian Thrust Fold Belt Core Area.

The first Bieszczady wel was spudded in late October. It is targeting prospective resources of up to 100 million barrels of oil.

It is currently drilling ahead at 2,700 metres, and it is expected to reach the 4,800 metre target depth by February 2011.

Aurelian also updated investors on some of its other operations.

Work on the Siekierki gas processing facility is continuing, the final contract close is being agreed for major long lead Nitrogen Removal Unit (NRU), to treat Siekierki gas to sales quality. Construction will begin in early 2011, and first gas production is expected at the end of 2011.

A major seismic programme will get underway in across eight surveys in the Core Areas in 2011.
“Our 2011 seismic programme covering 1,455 km is extensive and, as well as firming up locations for our 2011 and 2012 drilling programme, it is also hoped that it will identify further prospects for drilling in 2013 and beyond,” Bainbridge added.

“There are a number of other activities ongoing in our business and I look forward to bringing you further updates on these in the near future.”
“2011 is already promising to be another exciting year for the company."

My Fair Value for FXEN sits at $7/share. I need to see an operations update. I'm expecting production to jump in the 1st quarter. If so, the Fair Value will go up. I also want to see what gas is selling for in Poland. Very cold there now.

It is very important to remember that oil trades on a global market but natural gas trades on regional markets. The price of natural gas is much higher in Europe (over $10/mcf today). This is why I remain quite bullish on FXEN.
Link below to Europe's natural gas price.
http://www.mongabay.com/images/commodit ... -ngeu.html