FX Energy, Inc. (NASDAQ: FXEN) reported proved oil and gas reserves for its combined Poland and domestic operations at year-end 2011 of 53.5 billion cubic feet equivalent ("Bcfe"). This represents an increase from the 2010 year-end reserves of approximately 9.7 Bcfe or 22%. The increase was due primarily to the Lisewo-1 discovery well that was completed in early 2011. The Company's independent reservoir engineer assigned the Lisewo-1 well proved reserves of 25 Bcf. FX Energy owns a 49% interest in the Lisewo-1 well which is located in the Fences concession area.

The Company's year-end 2011 proved plus probable (P50) reserves, which represent the most likely case, were 94.5 Bcfe, up 8% compared to 87.1 Bcfe at year-end 2010. At year end 2011 the pre-tax net present value (discounted at 10%) of the Company's proved P50 reserves was $289 million. This represents an increase of 18% from year-end 2010. In addition to the increase in reserves from the Lisewo-1 well, the value of the Company's reserves was also positively impacted by higher oil and gas prices. The weighted average prices used to determine year-end 2011 reserves were $6.19 per thousand cubic feet of gas (Mcf) and $84.61 per barrel of oil (Bbl), compared to $5.51 per Mcf and $68.12 per Bbl for 2010.

Production Update
Daily production from the Company's wells in Poland has grown from an average of 10 Mmcfe a day in 2010 to 12 Mmcfe per day in 2011. So far in 2012 the production has increased to a daily rate of about 14 Mmcfe. Work continues on the pipeline "bottleneck" south of the Kromolice 1, Kromolice 2 and Sroda wells which, when completed in the second quarter of this year, is expected to take production to approximately 15 Mmcfe a day. Another increase of roughly 2 Mmcfe per day is expected during the third quarter when production from the Winna Gora well is expected to come on line.

Current Operations

Fences Drilling
The first well in the Fences area this year will test a satellite structure near the Lisewo-1 discovery. The well is in the tender process. Drilling operations are expected to begin within the next 45 to 60 days.

Plawce-2 Frac
The Plawce-2 well was drilled in 2011 and encountered 480 meters of tight Rotliegend with no free water. The three stage vertical frac of the well covering three intervals in the upper Rotliegend is planned for early second quarter 2012.

Kutno
The Kutno well is currently drilling at a depth of approximately 3,756 meters (12,019 feet). This well is planned to test a massive Rotliegend structure at a depth of 21,000 feet. The well is projected to reach total depth mid year 2012. PGNiG will earn a 50% interest in the Kutno concession.

Alberta Bakken
The Company is currently testing the Anderson 14-29 well, a horizontal well drilled to a measured depth of 6,321 feet completed and fracced. Future plans are to drill two vertical wells in the area beginning next month. Following that, the Company plans to drill a 4,000 foot lateral and frac the BSO 15-13 which was drilled vertically late last year.