FX To Plug and Abandon Ostrowiec-1

FX Energy, Inc. on Thursday reported that drilling operations at the Ostrowiec-1 wildcat well have stopped and the well will be plugged and abandoned.

The decision not to continue drilling was made after the well encountered extremely high pressure non-flammable nitrogen gas with 4.6% hydrogen sulfide content and lost circulation while coring the Main Dolomite Ca2 target reservoir. During efforts to control the inflow of gas nearly 1.6 million pounds of mud were lost into the formation. The Ostrowiec-1 well is owned 49% by the Polish Oil and Gas Company (POGC) and 51% by FX Energy.

"The combination of extremely high pressure hydrogen sulfide gas and lost circulation problems were determining factors in the decision by both FX Energy and POGC to abandon the well," said Andy Pierce VP of Operations for FX Energy. "Attempts at continued drilling to test the remaining section of the Main Dolomite and the deeper potential target in the Rotliegend would unduly expose both companies to financial risks and possible health and safety hazards," said Pierce.

"We recognize and accept the high risks associated with high potential exploration. That is why we carry out our exploration work with the financial support of industry partners, as was the case with the Ostrowiec well. We intend to continue our exploration activities in this manner, while focusing the majority of our resources on our main business of developing reserves in our core Fences area. To that end we are mapping some promising targets in the Fences concession. We anticipate being able to show these targets next month and actually start drilling the first of them later this year," said David Pierce, president of FX Energy.

FX Energy is an independent oil and gas exploration and production company with production in the US and Poland. The Company's main exploration activity is focused on Poland's Permian Basin where the gas-bearing Rotliegend sandstone is a direct analog to the Southern Gas Basin offshore England.