FX Energy Cites Sixth Consecutive Rise in Reserves Value
FX Energy's proved oil and gas reserves at year-end 2009 rose to 50.4 billion cubic feet equivalent ("Bcfe"). This figure is 4.5 Bcfe, or 10%, above the year-end 2008 figure of 45.9 Bcfe. Over the last six years the Company has enjoyed a 30% compound annual growth rate in proved oil and gas reserve volumes.
296 Percent Reserve Replacement Builds Net Value
Total extensions, discoveries and revisions for 2009 were 6.8 Bcfe. This represents reserve replacement of 296% compared to the 2.3 Bcfe of total production for the year. Exploration success helped drive significantly higher net values for total oil and gas reserves. The pre-tax net present value (discounted at 10 percent) of the Company's proved reserves rose to $169 million. This is $32 million, or 23%, higher than the 2008 year-end figure of $137 million. This is also the sixth consecutive annual increase in the Company's oil and gas reserves value.
The increases were the result of new reserves from the Company's Kromolice-2 discovery and the Grabowka development project, both in Poland, and the positive impact from increased oil and gas prices. Prices for the Company's domestic oil reserves increased from $24.58 per barrel in 2008 to $47.67 in 2009. Polish gas prices increased from $5.29 per mcf in 2008 to $5.95 in 2009.
Andy Pierce, Vice President Operations, remarked, "We are especially pleased with these reserve results. This year, many US producers have had challenges replacing and growing reserves with US natural gas prices being so unpredictable. In contrast, gas prices in Poland were relatively strong and stable, and our exploration efforts there have continued to bear fruit. Our efforts over the last several years resulted in new gas field discoveries at Sroda, Roszkow and Kromolice in our Polish Fences concession, which have substantially boosted our reserves and our cash flow base."
Plans for 2010
Mr. Pierce continued, "Consequently, we will continue to devote the bulk of our exploration resources to Poland. Our current plans for 2010 include three new exploratory wells in the Fences concession and a new re-entry project in the Zakowo field in Poland. Any of these four projects could materially boost our reserves. We also plan to bring on new production from four of our prior discoveries. Three of these could be completed as early as year-end, which would add significantly to 2011 production and cash flow."
- FX Energy is Reading Szymanowice-1 Well for Production (Dec 31)
- FX Energy Tests Poland Tuchola-3K Well (Apr 29)
- FX Energy 'Disappointed' over Polish Mieczewo Well (Apr 08)