"This financing assures that we have funds to maintain the momentum of two rigs drilling full time through 2005 and should be sufficient with cash on hand to fund the drilling of approximately 10 new exploration prospects and cover development costs of Zaniemysl field," said David Pierce, president of FX Energy.
Richard Hardman, director and chairman of the technical advisory panel said, "The level of drilling activity proposed for 2004 and 2005 should allow us to achieve a statistical success ratio that begins to approach the high levels of success achieved in exploring the Rotliegendes sandstone in the Southern North Sea over the past ten years using modern seismic processing and interpretation technology. In addition, cash flow from the Zaniemysl discovery and any other discoveries completed during 2004 should commence in late 2005."
"Up to now we have not required as much advance coordination with POGC because we were paying all the costs in Fences I and II. The Sroda and Rusocin wells will complete our earning requirements in both areas, so we have to meet the budget cycle of our partner if we wish to propose drilling new wells. POGC is now preparing its budget for 2005 and it is critical for FX to have funds in place now to credibly propose an active work program for 2005 that will maintain the momentum of the 2004 exploration program that was made possible by last year's fund raising. In addition, given the likelihood that POGC will be privatized during 2004, a stronger balance sheet may permit FX Energy to take advantage of any new opportunities which may arise," Mr. Pierce continued.
FX Energy elected to limit the offering to European investors in order to continue building a shareholder base with a clear appreciation of the potential of Poland. "When we completed the private placement with European investors in December 2003, funding part of our 2004 exploration program, we believed that would stimulate additional interest from European investors. This turned out to be correct. Our expectation is that getting the FX story to more institutional investors in connection with this offering will lead to a continued expansion of our shareholder base in Europe," Mr. Pierce continued.
FX Energy also reported that the operating committee comprised of representatives of FX Energy and POGC have initiated the drilling contract tender for the Sroda and Rusocin wells in compliance with Polish regulations adopted in anticipation of European Union accession which takes place in May. Upon completion of the tender process a drilling contract will be signed and drilling operations will begin for both wells in the third quarter. The Company expects to drill four exploratory wells in 2004 and six more in 2005.
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