FX Energy, Inc. announced that its year-end 2007 oil and gas reserves rose 11.3 billion cubic feet equivalent (bcfe), or 50%, to 34.1 bcfe. Year-end 2006 reserves were 22.8 bcfe. Year-end 2007 reserves were a new all-time record for the company.
Two new discoveries, the Roszkow and Winna Gora wells in the company's Fences Concession in Poland, provided virtually all of the gain. Both the 2006 and 2007 reserve estimates were prepared by independent oil and gas reserve engineers.
"The 50 percent gain in reserves shows, yet again, the success that can be achieved in Poland," Andy Pierce, vice president of operations, remarked. "Not only are we delighted with the reserve gain, but also that the gain was achieved at the very competitive finding cost of $1.18 per thousand cubic feet equivalent."
Net oil and gas discoveries, extensions and revisions were 13.8 bcfe. Total finding and development costs for 2007 were $16.2 million.
Record new net discoveries of 13.8 bcfe were 570% of 2007 oil and gas production of 2.4 bcfe. That production figure, too, was a new all-time production record for the company.
Discoveries and extensions for the year were 17.9 bcfe. Revisions were (4.2) bcfe. The negative revision was primarily attributable to the Wilga well in eastern Poland, outside the company's core area.
Pre-tax Present Value of the company's reserves, discounted at 10%, increased 70% from $67 million at year-end 2006 to $114 million at year-end 2007. The increase in reserve volumes was a major contributor to the boost in value. However, an 18% increase in the average year-end prices also helped. The average price for the 2006 reserve estimate was $5.43 per thousand cubic feet equivalent (mcfe). The average price at year-end 2007 rose to $6.42 mcfe. The increase in average prices came mostly from higher natural gas prices for the company's wells in Poland.
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