SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 18, 2000
Commission File Number: 0-25386
FX ENERGY, INC.
(Exact Name of Registrant as Specified in its Charter)
Nevada 87-0504461
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3006 Highland Drive
Suite 206
Salt Lake City, Utah 84106
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code:
(801) 486-5555
N/A
(Former name, former address, and formal fiscal year,
if changed since last report)
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ITEM 5. OTHER EVENTS
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IPAA Symposium Update
On April 18, 2000, at the IPAA Oil and Gas Symposium in New York, FX Energy CEO
David Pierce reported on development plans for the Wilga natural gas field in FX
Energy's Lublin Concession near Warsaw, Poland. The field, termed "a major
discovery for FX Energy," by Mr. Pierce, is the first natural gas discovery by a
western company in the Republic of Poland. The Wilga #2 discovery well was first
announced in January, with initial flow tests yielding a combined flow rate of
16.9 million cubic feet of gas and 570 barrels of condensate per day. FX Energy
owns a 45% interest in the field.
"We are just beginning to understand the potential of this discovery," said Mr.
Pierce. "Initially, we mapped the Wilga structure with 30 to 50 bcfe potential,
but subsequent in-depth analysis of test results, review of the Wilga #1 and the
nearby Stezyca field, and a new look at the seismic, suggest this well may be
part of a significantly larger accumulation, perhaps as much as several hundred
billion cubic feet of gas. We plan to position the Wilga #5 and #6 wells later
this year to test for a larger accumulation, after new seismic is available. In
the meantime, we are drilling the Wilga #3 now, and plan to follow immediately
with the Wilga #4, anticipating production and cash flow in the first quarter of
next year," stated Pierce.
Pierce also reported that FX had begun discussions with a commercial bank for
the purpose of establishing a credit facility to fund the development costs of
the Wilga project.
Mr. Pierce also discussed the Radlin Project, a 300,000 acre exploitation tract
in the Permian region of western Poland where FX Energy will be drilling several
wells this year. Over 80% of the known hydrocarbon reserves in Poland are
located in the Permian region.
"We are extremely pleased to have joined the Polish Oil and Gas Company's
exploitation program, and we fully expect to make additional discoveries on a
par with the Radlin field," noted Pierce. The Radlin field, a 420 bcf producing
gas field, is located inside the Project area but is not included in the
venture. FX Energy plans to acquire 3-D seismic and drill several wells in the
Radlin Project area this year.
FX Energy also plans to drill exploration wells in the Warsaw West, Pomerania
and Carpathian project areas during 2000. Seismic acquisition in the Pomeranian
project area was recently completed, and Warsaw West seismic acquisition will be
completed during April.
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FX Energy explores for oil and gas in Poland where it has exploration rights in
six project areas: Lublin, Carpathian, Pomeranian, Warsaw West, Radlin and
Baltic. For more information about FX Energy, visit FX Energy's web site at
www.fxenergy.com.
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This report contains forward-looking statements. Forward-looking statements are
not guarantees of future drilling or other exploration or development results,
the actual presence or recoverability of estimated reserves, the ability to
establish reserves equal to the potential of exploration targets, production
amounts or revenues, construction costs or schedules or similar matters.
Forward-looking statements are subject to risks and uncertainties outside FX
Energy's control. Actual events or results may differ materially from the
forward-looking statements. For a discussion of additional contingencies and
uncertainties to which information respecting future events is subject, see FX
Energy's 1999 annual report on Form 10-K and other SEC reports.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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The following is filed as an exhibit to this report:
SEC
Item No. Reference No. Title of Document
10 10.01 Agreement on Cooperation in Exploration of
Hydrocarbons on Foresudetic Monocline [Wilga Project
area], by and between Polskie Gornictwo Naftowe i
Gazownictwo S.A. and Marek Hoffmann, Director of
Geological Bureau GEONAFTA and FX Energy Poland Sp.
Zo.o dated April 11, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
Dated: April 26, 2000 FX ENERGY, INC.
By /s/ Scott J. Duncan
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Scott J. Duncan, Vice-President
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AGREEMENT
on Cooperation in Exploration of Hydrocarbons
on Foresudetic Monocline
This Agreement on Cooperation in Exploration of Hydrocarbons on Foresudetic
Monocline (this "Agreement") is made this 11th day of April, 2000 by and
between:
Polskie Gornictwo Naftowe i Gaxownictwo S.A with its seat in Warsaw, at ul.
Krucza 6/14, 00-537 Wasaw ("POGC"), represented by its attorney in fact, Mr.
Marek Hoffmann, Director of Geological Bureau GEONAFTA;
FX Energy Poland Sp. z o.o. with its seat in Warsaw, at al. Jana Pawia II 29,
00-867 Warsaw ("FX"), represented by Mr. J. Maciolek, member of the Management
Board; and
Hereinafter referred to jointly as "Parties."
WHEREAS:
On February 22, 2000, POGC presented to FX Energy Inc. an offer to for
cooperation in exploration of hydrocarbons on Foresudetic Monocline ("Project")
and on March 20, 2000, POGC and FX Energy Inc. signed Declaration of
Participation in respect of the Project.
The area covered by the Project is subject to mining usufruct agreements and
concessions for exploration of hydrocarbons granted to POGC.
POGC estimates at 16,000,000 (sixteen million) US dollars the value of work
performed so far on Project Area which identified interesting exploration
targets.
The Parties wish specify its mutual obligations with respect to the Project.
THE PARTIES REACHED THE FOLLOWING AGREEMENT:
1. Beginning from the effective date hereof the Parties shall cooperate in
exploration of areas located south-east of Poznan ("Project Area"), whose
coordinates are shown in a table and on a map constituting Attachment 1 and
Attachment 2 hereto, but excluding areas of POGC's hydrocarbon exploitation
concessions specified in Attachment 3 hereto.
2. The Parties shall negotiate and sign Joint Operating Agreement covering the
entire Project Area, regulating, among other things, the rules for joint
decision-making and conducting operations in respect of the Project. The
Joint Operating Agreement shall be based on the principle that voting as
well as all other rights and liabilities in respect of the Project are
divided according to the following proportion: POGC - 51% (fifty one
percent), FX - 49% (forty nine percent).
3. FX shall cover costs of performing exploration work, including but not
limited to drilling and completing of wells and/or acquisition of 3D
seismic, up to the amount being an equivalent of 16,000,000 (sixteen
million) US dollars. After this amount has been spent and invested, any
further expenditures hereunder shall be covered by the Parties in the
proportions specified in Section 2 above. For the avoidance of doubt, it is
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resolved that the costs of borne so far on Kleka 11 well by POGC pursuant
to the budget of this well shall be reimbursed by FX and shall be included
in the aforementioned amount of 16,000,000 US dollars.
4. If a commercial discovery of hydrocarbons is made, the Parties shall,
subject to approval of the Supervisory Board of POGC and the Minister of
the State Treasury, create, as soon as possible, a new business entity and
shall cause that it applies for a concession for exploitation of
hydrocarbons. The Parties' interest in the assets of this new entity shall
be in accordance with the proportions specified in Section 2 above.
5. Assignment of rights hereunder by FX shall require a written consent of
POGC.
6. Any disputes among the Parties arising in connection with this Agreement
shall be resolved amicably. In case a friendly resolution cannot be reached
the Parties undertake to settle such dispute before the Arbitration Court
at the Polish Chamber of Commerce in accordance with its rules. Decisions
of the Arbitration Court shall be final and binding upon the Parties.
7. This Agreement has been made in two identical copies in Polish and two in
English, Polish version prevailing for the interpretation hereof.
8. This Agreement is effective as of the date of its execution.
Accepted and agreed to by the Parties on the 11th day of April, 2000.
Polish Oil and Gas Company
/s/ Marek Hoffman
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Marek Hoffman, attorney-in-fact
FX Energy Poland Sp. z o.o.
/s/ Jerzy Maciolek
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member of the Management Board
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