FX Energy Inc., Salt Lake City, Utah, (Nasdaq: FXEN) has reported the start of drilling on the Kutno-2 well in the company's 700,000 acre Kutno concession. The Kutno-2 well is planned to test a large (approximately 35,000 acres or 140 square kilometers) 2-D defined Rotliegend structure at a depth of approximately 6,500 meters (21,000 feet).

"FX Energy is pleased to be joined in this project by PGNiG, the most experienced explorer in Poland," says David Pierce, the company's CEO. "Given that Poland currently imports approximately one-third of a Tcf of gas annually, and the Kutno prospect could have an EUR of up to 9.5 Tcf, both companies recognize that this project has the potential to change the energy balance in the entire region."

The current rig will be used to drill the first sections of the well prior to moving Nafta Pila's larger IDM 2000 rig with 500 ton load capacity onto location for the bottom sections of the well. Drilling is expected to take approximately eight to nine months. FX Energy is the operator and will be 50% owner of the Kutno concession; PGNiG will earn 50%.

Plawce-2

The Plawce-2 tight gas well reached total depth of 4,200 meters. Gas shows were encountered as expected throughout the Rotliegend sandstone reservoir. Cores and logs are currently being analyzed. Based upon the results of this analysis, the well is expected to be perforated at the deepest part of the well to determine whether the entire Rotliegend reservoir is water-free. Thereafter, current plans call for perforating and fraccing approximately 50 meters of Rotliegend in the upper portion of the well where porosity is approximately 9-10%. After testing, the well is expected to be completed as a vertical producer.

The Plawce-2 well is located on an uplifted tight Rotliegend block that could contain as much as 500 Bcf of gas in place within the Fences concession. The company holds a non-operating 49% interest in the Fences concession and the Plawce-2 well; PGNiG operates and holds 51% interest.