Operations on the Rusocin-1 well are expected to begin later this month with a projected spud date in early October. The Rusocin-1 well will test a pinch-out target in the Rotliegendes sandstone at a depth of approximately 2,500 meters. POGC is the operator and owns 51% and FX Energy owns 49%. The Rusocin-1 well is located approximately 8 kilometers south of the Zaniemysl-3 well, a successful Rotliegendes discovery announced earlier this year.
FX Energy will pay 100% of the drilling costs on the Sroda and Rusocin wells, all of which will apply to the Company's earning requirements for the Fences I and II project areas. Upon completion of the drilling phase of the wells, the Company will have fully earned its interest in the Fences I and II project areas and will own a 49% interest in approximately 900,000 acres and a 24.5% in the 45,000 acre Zaniemysl area in Fences I.
FX Energy also reported that five new drilling prospects have been identified by the Company's technical team. FX Energy is in discussions with POGC in order to begin the approval process necessary prior to drilling. A seismic acquisition program to provide additional data for drillsite selection on three of the prospects has already been approved and is scheduled to be completed within the next 30 days. "In order to keep our drilling program on schedule for 2005 we need to get these prospects into POGC's approval and tender process so that we can be ready to begin drilling additional wells as soon as possible," said David N. Pierce, FX Energy's CEO.
Three of the prospects Dolsk (Gawrony), Donotowo and Lugi (Gola) are pinch-out type plays; the other two, Srem (Groblenka) and Mieczewo are structural plays. All of the prospect names are subject to change during the approval process with POGC.
Domestically, the Company plans to drill three wells in close proximity to its producing fields in Railroad Valley Nevada over the next several months. The cost of these wells is not expected to exceed $250,000.
In conjunction with the completion of the April 15, 2004 European offering and the subsequent sale of 950,000 shares of common stock to existing stockholders with contractual antidilution rights, their successors-in- interest and others, the Company's cash position now stands at approximately $35 million.
FX Energy holds interests in four project areas in Poland:
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