FX Energy Adds Wells to 2012 Drilling Schedule
FX Energy, Inc. has added two new exploratory wells to those already scheduled for drilling in 2012. The new wells, Tuchola-3 and Frankowo, will test prospects in two of the Company's 100 percent-owned concessions in Poland. These wells will enable the Company to increase the momentum of its most active drilling year to date. The new wells will fit within the previously reported $60 to $70 million capital budget. The Company expects to fund its full capital budget from existing cash and liquidity resources.
The Frankowo well is located in FX's 100 percent held Block 246 concession in west central Poland. Rotliegend gas at approximately 7,218 feet (2,200 meters) will be the prospective target for this well. Though an exploratory or "wildcat" well, the Company has a history of successfully pursuing Rotliegend production in Poland. Total costs for this well are expected to be around $6 million.
The Tuchola-3 well is in the Company's 100 percent held Edge concession in north central Poland. Permian gas at approximately 6,890 feet (2,100 meters) and Devonian oil at possibly 10,335 feet (3,150 meters) will be the Tuchola-3 targets. Like the Frankowo well, the Tuchola-3 is also a wildcat well. Costs for the Tuchola-3 well are expected to total around $10 million. Both wells are expected to start drilling in the third quarter and test before year-end 2012.
The two new wells are in addition to the Kutno-2 and Komorze-3 wells already drilling in Poland, and the Mieczewo, Lisewo-2 and Lisewo-SE wells expected to start drilling in the second half of the year.
"A successful test at Kutno, Tuchola-3 or Frankowo when fully developed could add materially to our oil and gas reserves and production potential in Poland," said Zbigniew Tatys, the head of operations for FX Energy in Poland. "Perhaps equally important, success in any of these new areas would support our belief that Poland has considerable undiscovered hydrocarbon potential and can reward serious exploration effort."
Frankowo well to test potentially significant Rotliegend gas target
All of the Company's current Polish gas production comes from prolific Rotliegend sands in the 49 percent owned Fences concession. Immediately southwest of the Fences concession, the Company holds 100 percent interest in the 240,000 acre Block 246 concession. The Frankowo well targets gas potential in Rotliegend sands in Block 246 at the relatively shallow depth of 7,218 feet (2,200 meters). The immediate target has potential for up to approximately 50 Bcf of recoverable gas on full development (unrisked). Moreover, a successful test could be indicative of gas charged Rotliegend potential over a larger area in Block 246.
Tuchola-3 well targets Devonian oil along with lower risk Zechstein gas
The primary target of the Tuchola-3 well is gas in the lower Permian Zechstein Ca2. The well targets a structure at approximately 6,890 feet (2,100 meters). The Zechstein structure has potential for up to 90 Bcf of recoverable gas on full development (unrisked). After examining the Zechstein, plans call for the Tuchola well to be deviated and deepened to approximately 10,335 feet (3,150 meters) where the target is oil in a Devonian structure. The Company has identified a number of Zechstein and Devonian leads in its 100 percent held Edge concession area, which covers approximately 880,000 gross and net acres.
Previously reported operations proceeding
The Kutno-2 well, a major wildcat well for the Company, is now drilling below 15,420 feet (4,700 meters) toward a total depth of approximately 21,161 feet (6,450 meters). The next casing string is planned to be set at the top Zechstein at approximately 17,224 feet (5,250 meters). Kutno-2 targets a massive Rotliegend structure. Unknown reservoir and gas quality, along with depth, make this a very high risk well. Total costs to the Company for this well are expected to be approximately $10 million. The Polish Oil and Gas Company ("PGNiG") will earn a 50 percent interest in the Kutno concession in connection with its participation in the Kutno-2 well.
The Komorze-3 well is drilling below 9,186 feet (2,800 meters) toward a total depth of approximately 13,369 feet (4,075 meters) and a true vertical depth of 12,723 feet (3,878 meters). Komorze-3 targets a small satellite structure located less than 1.86 miles (3 kilometers) from the Company's 2011 Lisewo-1 Rotliegend gas discovery well. PGNiG is the operator of the well and holds 51 percent interest; the Company holds 49 percent interest.
Drillsite construction tenders are in process for the Mieczewo well, and contractor selection is expected by the end of May. The Mieczewo well is expected to start drilling in the third quarter. PGNiG is the operator of the well and holds 51 percent interest; the Company holds 49 percent interest.
Tenders have been opened for fracture stimulation and workover services on the Plawce-2 well. The final contract should be signed in early June. PGNiG is the operator of the well and holds 51 percent interest; the Company holds 49 percent interest.
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