FX Energy announced a capital budget for 2011 estimated at between $60 and $70 million. This budget is equal to all of the Company's capital expenditures over the last three years. The increase is a direct result of the planned increase in drilling activity. In 2011, the Company plans to drill one well in its Kutno concession, up to three wells in its Warsaw South concession, and up to three more wells in PGNiG's Fences concession, all in Poland. In the US the Company has initiated a program to determine the Bakken shale oil potential in its operated Montana properties. Drilling expenditures are expected to make up more than half of the budget, seismic approximately one-third, and production facilities the remainder. Seismic will focus on the Fences and Warsaw South concessions, but will also cover the Northwest, Edge and Block 246 concessions with a view toward possible drilling in 2012.
The operations covered by the 2011 budget are part of a two year program to test a number of high potential targets in several of the Company's concessions. During 2012 the Company expects to equal or exceed this year's budget, building on work done during 2011. The Company will continue to make the Fences concession its primary focus, but with increasing attention, in particular, on Warsaw South and Kutno.
David Pierce, FX Energy's President and CEO, said, "We have been in Poland for fifteen years studying conventional hydrocarbon potential. We believe our discoveries to date, while significant and successful, represent a small part of the potential of the portfolio. We now have both funds available and a backlog of identified prospects to commit to and carry out a focused and high impact exploration program over the next two years. It is critically important that we increase the momentum of our conventional exploration while we still have first-mover advantage among foreign companies. There are a number of conventional plays yet to be drilled in Poland and in our acreage. We plan to be at the forefront of this exploration activity while continuing to grow our already strong production base and ultimately building value for our shareholders."
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