FX Energy Says Lugi-1 Well a Dry Hole

FX Energy reports that test results on the Lugi-1 well in western Poland were determined to be uneconomic and that the well will be plugged and abandoned. "This well trapped and tested gas from a thin section of the Rotliegend target reservoir but is not economic," said Andy Pierce, FX Energy's COO. "Our technical team will use the results of this well to help evaluate the future potential of the pinchout target in our Fences I area," continued Mr. Pierce.

Richard Hardman, head of FX Energy's technical team stated, "The Lugi-1 well found a short porous Rotliegend section of some 9 meters with the top one and a half meters showing high gas saturations at a level normally associated with a long gas column. Gas shows were also recorded when the basement section below the Rotliegend was being cored. Until the well results are better understood, the impact of the well on the major Rusocin -- Lugi pinchout play can not be fully determined."

The Sroda-5 well is currently being cased to the top of the Rotliegend at a depth of 3,510 meters. Once the casing has been cemented, the well will be cored and tested. The Polish Oil and Gas Company owns a 51% interest in the Lugi-1 and Sroda-5 wells and is the operator; FX Energy owns 49%.

The Drozdowice-1 well in the Fences III area in Poland, where FX Energy is the operator and owns 100%, is currently in the process of building a location with drilling planned to begin in January 2006.