Salt Lake City-based FX Energy Inc. (NasdaqGS:FXEN) has completed a drill stem test in the upper five meters (1542-1547) of a 45 meter pay zone in the main dolomite in the Frankowo-1 well.

The test was limited to three short flow periods with one initial shut-in period for pressure measurements. Gas flowed at a rate of approximately 2MMcfg/d with a small amount of condensate in the third flow period. The flow rate was achieved without any cleanout or stimulation of the well. The company kept flow periods brief because the main dolomite contains hydrogen sulfide (H2S), as is often the case with oil or natural gas. The gas includes approximately 22% hydrocarbons, including liquids, and approximately 78% inerts. "We only needed to ascertain that the well would flow sufficient quantities of gas and condensate to confirm the potential for commercial production," said Andy Pierce, VP of operations. "The presence of H2S, as expected in the Main Dolomite, requires more expensive than usual production facilities. We plan to assess the potential for more Main Dolomite accumulations which might be tied into a larger, regional production facility. We have identified more than a dozen additional Main Dolomite leads on existing seismic data, which should make this area an attractive exploration and development project going forward."

Data from the Frankowo-1 well are encouraging in terms of exploration potential in the company's 240,000 acre Block 246 in both the Rotliegend and Main Dolomite. In the Rotliegend the well encountered 38 meters of good sand with 17% average porosity and approximately 77-78% methane content, but did not trap at the target location. "We have discovered a Rotliegend trend with good quality gas and porosity; the challenge now is to shoot seismic and identify structural traps similar to the Fences wells," Pierce said. The company plans to acquire regional and prospect specific 2-D seismic this winter with a view to drilling one or more prospects in either or both of the Rotliegend and Main Dolomite during 2013.

The Frankowo-1 well is located in Block 246, a 240,000 acre concession in which FX Energy holds a 100% interest.

Tuchola-3
Well site preparation is underway for the Tuchola-3 well. Drilling and service contractors have been selected with drilling expected to begin within approximately 30 days. The Tuchola-3 well is planned to test a Main Dolomite target at approximately 2550 meters and an independent Devonian oil target at a depth of 3180-3820 meters. The Tuchola-3 well is located on one of four blocks that comprise the 880,000 acre Edge concession area in northern Poland. FX Energy holds a 100% interest and operates the Tuchola-3 well and the Edge concession area.

Mieczewo-1K
Well site preparation is underway for the Mieczewo-1K well. Well service companies have been selected and the drilling contract tender is in process. The well is expected to begin drilling prior to the end of the year. The Mieczewo-1K well is located in the western part of the 850,000 acre Fences concession, where Polish Oil and Gas Co. (PGNiG) is the operator. PGNiG holds a 51% interest in the Mieczewo-1K well; the company holds a 49% interest in the well.

Winna Gora Production Facility
The Winna Gora production facility and pipeline are expected to be completed within approximately two weeks with first production planned prior to the end of November. The Winna Gora well is located in the north-central part of the 850,000 acre Fences concession, where PGNiG is the operator. PGNiG holds a 51% interest and the Company holds a 49% interest.

Komorze-3
Recompletion of the Komorze-3 well is currently under way. A production test is expected to be carried out later this quarter. Komorze-3 penetrated a Rotliegend structure approximately 4 kilometers to the northeast of the Lisewo-1 discovery well, and compares favorably in terms of gas column and porosity to the Lisewo-1 well. Work is underway on a production facility and pipeline that will serve both the Lisewo-1K and the Komorze-3 wells, along with the Lisewo-2 well, now scheduled for drilling in the first half of 2013. Production from all three wells is forecast to commence in the second half of 2013. The wells are located in the eastern part of the 850,000 acre Fences concession, where PGNiG is the operator. PGNiG holds a 51% interest and the company holds a 49% interest.

Plawce-2
Negotiations are ongoing between PGNiG and Halliburton and a definitive date has not been determined for fracing the Plawce-2 well. The Plawce-2 well is located in the northwestern part of the 850,000 acre Fences concession. PGNiG is the operator and holds a 51% interest in the Plawce-2 well; the company holds a 49% interest.