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1
A Unique Play on the Strong European Gas Market
July 2013
POLAND
NASDAQ: FXEN 2
Corporate Headquarters FX Energy, Inc. 3006 Highland Drive Salt Lake City, UT 84106 Ph: (801) 486-5555 website: www.fxenergy.com
Contact Scott Duncan VP Investor Relations [email protected]
FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including with respect to potential and probable reserves, cash flow, value, risked value, timing of drilling and exploration activities and revenue projections. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that might materially affect actual results, levels of activity, performance or achievements. For example, exploration, drilling, development, construction or other projects or operations may be subject to the successful completion of technical work; environmental, governmental or partner approvals; equipment availability, or other things that are or may be beyond the control of the Company. The Company’s exploration or development operations that are anticipated, planned or scheduled may be changed, delayed, take longer than expected, fail to accomplish intended results, or not take place at all. In carrying out exploration it is necessary to identify and evaluate risks and potential rewards. This identification and evaluation is informed by science but remains inherently uncertain. Subsurface features that appear to be possible traps may not exist at all, may be smaller than interpreted, may not contain hydrocarbons, may not contain the quantity or quality estimated, or may have reservoir conditions that do not allow adequate recovery to render a discovery commercial or profitable. Forward looking statements about the size, potential or likelihood of discovery with respect to exploration targets are certainly not guarantees of discovery or of the actual presence or recoverability of hydrocarbons, or of the ability to produce in commercial or profitable quantities. Estimates of potential typically do not take into account all the risks of drilling and completion nor do they take into account the fact that hydrocarbon volumes are never 100% recoverable. Such estimates are part of the complex process of trying to measure and evaluate risk and reward in an uncertain industry. Other factors that could materially affect actual results, levels of activity, performance or achievement can be found in the Company’s Annual Report on Form 10-K filed on March 14, 2013 and in the documents incorporated therein by reference. If any of these risks and uncertainties develop, or if any of our underlying assumptions prove to be incorrect, out actual results, levels of activity, performance or achievement may vary significantly from what we projected. Any forward looking statement contained in or made during this presentation reflects the Company’s current views with respect to such future events and is subject to these and other risks, uncertainties and assumptions. We assume no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events or developments or otherwise.
FX Energy – Forward Looking Statements
Prepared: July 25, 2013; Printed: July 26, 2013
NASDAQ: FXEN 3
FX Energy Today Solid production and revenues
• 2011: 12 Mmcfe/d (322 Mcme/d) net to FX; net revenues of approx. $26mm • 2012: 13.1 Mmcfe/d (354 Mcme/d) net to FX; net revenues of approx. $31mm • 2013: 14.0 Mmcfe/d (375 Mcme/d) net to FX 1Q2013; Lisewo facility scheduled to start 2H2013
Strong European gas prices • $8.98/mmbtu(1) ($317/Mcm) FX average wellhead price 1Q2013
Drilling activity ramping up • 2013 E&P commitments anticipated to be $60-70 million vs. $36 million 2012 capex • 2013: 2 wells drilled this year, one successful • 2013: 4-6 more wells planned for 2H2013 (of which 3 are to start drilling 3Q2013)
Significant assets • $243 million NAV at 12/31/12 (P50 pre-tax reserves(2)); $4.56/share NAV before prospect and acreage value • 2.7 million gross (2.0 mm net) acres (over 8,000 net km2) in Poland – 14 licenses
Note: (1) Based on $1=pln3.26 avg. for full year 2012; at 7/24/2013 $1 ≈ PLN 3.20
(2) As per RPS Energy and Hohn Engineering as of 12/31/2012
NASDAQ: FXEN
Major Institutional Shareholders as of 3/31/2013 Financial Information as of 3/31/2013
Shareholder Split – Shares Outstanding
Number of Shares % Holding BlackRock Fund Advisors 3,328,469 6.1% Vanguard Group, Inc. 2,037,726 3.7% Clear Harbor Asset Management LLC 1,220,182 2.2% Jennison Associates LLC 1,220,001 2.2% Odey Asset Management LLP 1,123,191 2.1% BMO Asset Management Corp. 938,568 1.7% SSgA Funds Management 893,948 1.6% Wellington Shields & Co. 845,847 1.6% Northern Trust Investments 750,026 1.4% ING Investments Management 665,490 1.2% Erste Asset Management 555,419 1.0% National Asset Management, Inc. 466,604 0.9% Schroder Investment Management, Inc. 410,274 0.8% Tom Lovejoy 911,291 1.7% David Pierce 617,435 1.1%
Ordinary Shares Outstanding 53,246,620 Options 1,275,299 Fully Diluted Shares 54,521,919
4
Financial Overview Balance Sheet Data ($mm)
unaudited 3/31/13
audited 12/31/12
Current assets $39.5 $47.1
Property, net 58.8 57.1
Other assets 1.5 1.8
Total assets $99.8 $106.0
Current liabilities $14.7 $16.7
Long term debt 33.0 33.0
Other long term 1.5 1.4
Shldrs Equity 50.6 54.9
Total $99.8 $106.0
Income Statement Data ($mm) Audited
unaudited audited
1Q13 1Q12
Total revenues $9.5 $8.6
Operating Costs 1.0 1.5
Exploration Costs 6.4 3.0
Non-cash expenses 2.0 1.5
G&A 1.8 1.9
Total Costs 11.2 7.9
Operating inc. (loss) $(1.8) $0.7
Cash flow is after G&A but before exploration and development
(fully diluted)
$40
$25
$15
1/1/2013 Liquidity Sources (MM)
Cash
Cash Flow
Bank Facility
NASDAQ Symbol: FXEN Market Cap: $200 mm @ $3.80/sh 50 day avg. volume: 780,000 shares/day 52 week price range: $2.48 - $8.78
6.4%
37.0% 56.6%
Ownership by Shareholder Category
Officer andDirector
Institutional
Retail
Note: Bank facility increased by $10 MM 3Q2013
NASDAQ: FXEN 5
Oil & Gas Concessions in Poland
FX is producing and exploring for conventional fields with high value
FX has “first mover” advantage in conventional exploration in Poland
• Built an interactive database of nearly 2000 wells along with 2D/3D seismic
New players in Poland over the last few years came to investigate unconventional shale gas potential – lack of commercial results have prompted some to leave (ExxonMobil, Marathon, Talisman)
Shale gas?
Conventional gas
Tornquist Line
Fences Concession PGNiG; FX Energy Poland
X X
X
WHY POLAND?
6
Untapped conventional resources
Strong gas prices
Attractive economics
Sound economy; rule of law
NASDAQ: FXEN
Poland has significant hydrocarbon potential
• Geology doesn’t stop at the border; Poland is just under-explored
• Permian Basin extends across Europe: Permian (Rotliegend) gas fields in Poland are direct analogs to those found in the UK and Dutch sectors of the Southern North Sea and onshore Holland and Germany
• Only one company (state owned) was exploring Poland during the Iron Curtain decades
• The North Sea was (and is) explored by dozens of companies
7
Untapped Resources in Poland
North European
Permian Basin
150 Tcf 4.0 Tcm
40 Tcf 1.1 Tcm
60 Tcf 1.6 Tcm
5 Tcf 0.1 Tcm
FX
$0
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Polish Gas Price vs US Henry Hub ($/mcf)
Poland
US
8
Strong Gas Prices
NASDAQ: FXEN
Europe imports 1/2 of its gas supply, mostly from Russia
Poland imports 2/3 of its gas supply, mostly from Russia/Gazprom • Domestic production: 440 Mmcf/day; 160 Bcf/year (4.3 bcm/year) • Natural Gas Imports: 1.1 Bcf/day; 400 Bcf/year (10.9 bcm/year)
Russian gas prices are still tied to oil; shale gas remains elusive in Europe; LNG moves toward high demand/price in Asia
Nord Stream now operational
NASDAQ: FXEN
$3.00 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00 $6.50 $7.00 $7.50 $8.00
300
400
500
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800
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1000
PLN
/000
m3
FXEN Avg. PLN Gas Price FXEN Avg. USD Gas Price
9
Lower costs in Poland than in US • Low taxes: 19% vs. 40% • Low lifting costs: $0.25 vs. $1.93 • Low royalties: 1% vs. 19% • FX 8 year F&D costs = $2.92/Mcfe
FX wellhead price (1Q2013) • $8.98/mmbtu ($317/Mcm) • $7.18/mcf ($254/Mcm) • FX gas is 80% methane / 20% nitrogen
(2) US Independents 2013 estimate (per JP Morgan 7/18/2013) a) wellhead price: $8.11/Mcfe (47% oil) b) royalty rate: 19% c) forecast 2012 LOE: $1.93/Mcfe d) US income tax rate: 40%
(1) FX Poland 1Q2013 a) wellhead price: $8.98/mmbtu; $7.18/Mcfe b) royalty rate: 0.60% c) LOE: $0.25/Mcfe d) Polish income tax rate: 19% of net income e) $1=PLN 3.18 average 1H2013
Attractive Economics
NASDAQ: FXEN
$0.04 $1.54 $0.25
$1.93
$0.75
$0.58
$2.92
$3.19 $3.22
$0.87
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
FX Poland JP Morgan
CashMargin
F&D
Taxes
LOE
Royalty
Production Economics - Poland v. US
NASDAQ: FXEN 10
Size: 312,000 sq. km (120,000 sq. mi.); comparable to Germany - or New Mexico
Population: 38 million people; well educated, multi-lingual, culturally homogeneous; (Germany has 80 million; France and UK have 60 million each)
Political stability: Poland is a member of the European Union (EU) and NATO; it has a long history of adhering to the rule of law
Economy:
• Poland is Europe’s sixth largest economy
• Poland has its own currency (zloty) and its own central bank
• Poland’s GDP has continued to see growth despite recession in the rest of the EU
Poland: Sound Economy; Rule of Law
NASDAQ: FXEN
David Pierce President and CEO, Director
Jerzy Maciolek VP International
Exploration, Director
Arnold Grundvig, Jr.
Non Exec. Director
Dennis Goldstein Non Exec. Director
Richard Hardman Non Exec.
Director, Chief Technical Advisor
Tom Lovejoy Executive VP and Chairman
11
Corporate Structure; Poland in-Country Team
H. Allen Turner
Non Exec. Director
Executive Directors Non-Executive Directors
In-Country Team
Zbigniew Tatys Country Manager
Geology/Geophysics 10 in Poland
Drilling 3 in Poland
Production Engineering 3 in Poland
1 in UK
Accounting/Administrative 3 in Poland
Jerzy Maciolek, Director, VP International Exploration – a proven explorer in Poland
• Brilliant explorationist and the driving force behind FXEN in Poland • Received Gulf Oil President’s award for outstanding research • Geophysical degrees from Mining and Metallurgical Academy, Krakow,
Poland
Zbigniew Tatys, Head of Warsaw Office – proven leader with extensive production experience in Poland
• 20 year career with PGNiG; former General Director of PGNiG’s Upstream E&P Division
Richard Hardman, CBE, Director – the leading figure in North Sea exploration • 40 year international exploration career; VP Exploration for Amerada
Hess 1983-2002 • Responsible for key Amerada N. Sea discoveries – Valhall, Scott, S. Arne • Awarded CBE; served as: Chairman, PESGB; Pres., Geological Society;
Pres., AAPG Europe
Jack Scott, Consulting Petroleum Engineer – analogous Rotliegend experience • Rotliegend experience with Ranger Oil (UK) and Pennzoil (Netherlands) • 35 years of international experience
Jerzy Maciolek VP International
Exploration
Andy Pierce VP Operations
Clay Newton VP Finance
Eva Sokolowski Director of Operations
Administration
PRODUCTION and DEVELOPMENT
---
The Fences Concession
12
55% 45%
2013 Capital Allocation (est.)
Fences
Non-Fences
NASDAQ: FXEN 13
Reserves = $4.56/share
$243 million P50 (2P) reserves pv-10 pre-tax at 12/31/2012
Over 90% of 2012 Company wide reserves come from just 9 wells in the “Fences” concession
2-3 more Fences wells planned for 2013 (of which 2 are set to start drilling 3Q13); 10 more Fences wells in permitting
NASDAQ: FXEN
Reserves Growth Track Record
2012 Reserves Bcfe Bcm
PV-10 (pre-tax millions)
P90 (1P) 48 1.3 $178
P50 (2P) 79 2.1 $243
P10 (3P) 127 3.4 $296
Source: RPS Energy and Hohn Engineering
$0
$50
$100
$150
$200
$250
$300
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
P-50 Reserves - PV-10 (pre-tax millions)
PolandUS
0102030405060708090100
0
20
40
60
80
100
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
P-50 Reserves vs. Production (bcfe)
Year-endReservesProduction
NASDAQ: FXEN 14
Production Growth In a “no-success” case on all future drilling, FX still generates significant net revenue
from existing wells beyond 2022
Production growth set for 2013 and 2014 from wells already drilled, tested and completed
Above chart is from the FX Energy 12/31/2012 independent reserve reports as filed with the SEC(1), excluding undrilled wells. Based on $6.60/mcf held constant (SEC method: first-day-of-month average 2012 wellhead gas price). The average wellhead price during 1Q2013 was $7.18/mcf
Note: (1) As per RPS Energy and Hohn Engineering
Above chart is actual through 2012; 2013-2014 forecast from 12/31/2012 independent reserve reports as filed with the SEC(1), excluding undrilled wells.
0
100
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/day
Mm
cfe/
day
P90 Production Forecast - avg. daily
WG / Lisewo1 / K-3K
Existing Gas
Existing Oil
$0$5
$10$15$20$25$30$35$40$45
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Estimated Future Net Revenues from Producing Properties P50 ($millions)
12-31-2012 ReserveReport
NASDAQ: FXEN 15
Economics: Average of 9 Fences Wells (100%)*
Well cost (current estimate) $10 mm
Facilities cost (current estimate) $5 mm
Pre-tax 1P/2P value (PV-10) (avg.) $58/$72 mm
1P/2P cumulative undiscounted net cash flow (avg.)
$75/$112 mm
Pre-tax 1P/2P reserves (avg.) 15/21 Bcf (0.4/0.6 Bcm)
Initial production rate (avg.) 5.0 Mmcf/d (134 Mcm/d)
Royalty (current) $0.04/mcf
*NOTES: Averages based on 2012 SEC reserve report for all 9 Fences wells
Figures include only reserves in wells already drilled All figures are for 100% working interest
NASDAQ: FXEN
Long Lived Wells
-
2.0
4.0
6.0
8.0
10.0
12.0
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Mm
cf/d
ay
Year
Zaniemysl Well - Daily Production (Mmcfd) Actual Production
2006 Y/E P50 Forecast
2006 Y/E P90 Forecast
- 20 40 60 80 100 120 140 160 180
-
2.0
4.0
6.0
1 2 3 4 5 6 7 8 9 10 11 12
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e/da
y
Mm
cfe/
day
Year
Production Profile - Avg. of all 9 Fences Wells
P50 ProductionForecastP90 ProductionForecast
NASDAQ: FXEN
Fences concession: 850,000 acres (3,440 km2) surrounding PGNiG’s 390 Bcf (10.5 Bcm) Radlin Gas Field
16
Rotliegend gas potential • Rotliegend gas fields from the
1980’s showed area potential
• PGNiG had moved on to other plays (Zechstein) in Poland
• Seismic advances from the North Sea had not been applied
• FX saw high potential with limited “wildcat” risk
• Fences: FX earned 49%; PGNiG holds 51% and operates
Fences
Fences Concession – FX Core Area
Block 246 FX 100%
PGNiG’s Paproc field 267 Bcf (7.2 Bcm) disc. 1982
PGNiG’s Radlin field 390 Bcf (10.5 Bcm) disc. 1985
Fences FX 49%
FX 24.5%
Block 229 FX 100%
NASDAQ: FXEN 17
NASDAQ: FXEN
Results to Date in Fences Concession
(1) P50 Estimated Ultimate Recovery
9 commercial successes out of 13 wells (69%) targeting Rotliegend structural traps • Average well size: 22 Bcf 2P (0.6 Bcm) -- $72 million pre-tax pv10% • Komorze-3 and Lisewo-1 to start production 2H2013
Fences
Kromolice-1
Kromolice-2
Zaniemysl Lisewo-1
Kleka-11 (depleted)
Roszkow
Winna Gora
Sroda-4
Fences Concession
Komorze-3
Commercial Discoveries
Gross P50 Reserves(1) /well
Kleka-11 3 bcf 0.1 bcm
Zaniemysl 30 bcf 0.8 bcm
Sroda-4 25 bcf 0.7 bcm
Winna Gora 17 bcf 0.5 bcm
Roszkow 33 bcf 0.9 bcm
Kromolice-1 24 bcf 0.6 bcm
Kromolice-2 15 bcf 0.4 bcm
Lisewo-1 43 bcf 1.2 bcm
Komorze-3 7 bcf 0.2 bcm
Total 197 bcf 5.3 bcm
NASDAQ: FXEN 18
NASDAQ: FXEN
2013-2014 Plans
Fences
Lisewo-1 and Komorze-3 to start production 2H2013
Plawce East, Miloslaw
Komorze-4 Lisewo-2, Szymanowice
Fences Concession
Zaniemysl-3 sidetrack
Taczanow
2013/2014 Primary Focus: Lisewo Area • 10 individual prospects on new 3D seismic in Lisewo area • 2 of those prospects are already discoveries, scheduled to start production 2H2013 • 2-3 more wells to drill in Lisewo area in 2013 (2 to spud 3Q2013); 10 more wells being permitted
NASDAQ: FXEN 19
NASDAQ: FXEN
Lisewo Area Potential Lisewo area 3-D
• Lisewo-1 and Komorze-3 discoveries: aggregate 50 Bcf (1.3 Bcm) P50 gross; aggregate production rate est. 6-7 mmcf/d (161-188 Mmcm/d) gross
• production facility to start 2H2013 • 2-3 more Lisewo area wells
planned for 2013; 10 more permits in process
• Aggregate additional recoverable gas could be 200-400 Bcf (5.4 – 10.7 Bcm) gross
• FX holds 49%; PGNiG 51% and operates
Przybyslaw (Komorze-4)
Lisewo-1 discovery
Paruchow-W/E
Baraniec
Ciemierow
Tomice
Szymanowice
Szymanowice-S
Broniszewice
Fences Concession
Lisewo Area
Komorze-3 discovery
20
HIGH POTENTIAL EXPLORATION
---
Outside the Fences Concession
55% 45%
2013 Capital Allocation (est.)
Fences
Non-Fences
NASDAQ: FXEN 21
High Impact Exploration • High potential identified in large exploration
concessions covering over two million acres • 2-3 more new wells planned for 2013 in non-
Fences concessions (1 of them to start 3Q13) • High graded acreage to reduce exploration risk
FX Energy Exploration Concessions
Main gas distribution lines in red
Gross (mm acres)
Working Interest
Net (mm acres)
Net (km2)
Fences 0.85 49% 0.41 1,647 Block 229 0.23 100% 0.23 941 Block 246 0.24 100% 0.24 975 Warsaw S. 0.47 51% 0.24 976 Edge 0.88 100% 0.88 3,567 Block 287 0.01 100% 0.01 52 2.68 2.01 8,158
229
Fences
246
Warsaw S.
Edge
NASDAQ: FXEN 22
NASDAQ: FXEN
Edge Concession – Tuchola-3K Well
Edge
Edge concessions
Tuchola discovery
Tuchola 3-K discovery
Apache Tuchola-2 (2001) tested gas
Edge Concessions
• 880,000 gross and net acres/3,567 km2; FX operates, holds 100%. • Earlier this year Tuchola-3K tested commercial; raises the possibility of
opening a significant new exploration play for FX in Poland • New 3D seismic underway; 1-2 more wells planned for later this year;
should go far in determining the size of this discovery
NASDAQ: FXEN
246
23 NASDAQ: FXEN
Block 246
Block 246 Concession • 240,000 acres/975 km2; FX operates, holds 100% • Carboniferous potential: updip from 1 Tcf (27 Bcm) Ca1 production in
Bronsko/Koscian fields • The Gorka Duchowna well, a Carboniferous test, to start drilling end of August • Frankowo-1 well opens up Rotliegend and Ca2/Main Dolomite potential in the
southeastern portion of Block 246 at shallow depth: 1500 to 2200 meters • New 3D seismic underway now; if good targets result, appraisal drilling in 2014
Frankowo-1
Map: Top Main Dolomite
Bronsko field 700 Bcf Koscian field
300 Bcf
Gorka Duchowna
Frankowo-1
3D seismic
NASDAQ: FXEN 24
NASDAQ: FXEN
Block 229
229
Block 229 Concession
• 232,500 gross and net acres; 941 km2; FX operates and holds 100%
• Five reef prospects: Ca2/Main Dolomite gas potential – analog to PGNiG’s BMB and LMG fields (reported 1 Tcfe (27 Bcme) recoverable oil and gas)
• 2D seismic planned for late 2013 to set up a well for 2014
Lead-1
Grundy 2: 23 meters of Ca2, porosity 10-30%
Lead-1
Block 229 Fences Concession
NASDAQ: FXEN
W-S
25 NASDAQ: FXEN
Warsaw South Concessions
Warsaw South Concessions • 470,000 acres/1,952 km2 gross; FX operates, holds 51% ; PGNiG earned 49% • Terminus of the Permian Basin; prime location for trapping; Ca1/reef,
Carboniferous and Rotliegend leads • FX’ first well (Machnatka-2, P&A) found no trap, but did see gas shows and good
porosity (over 50 net meters above 11% average) in lower Carboniferous sands • Waiting on government approval to acquire new seismic on two additional leads • Drilling planned for 2014 after new seismic
Machnatka P&A
Boglewice prospect
Grojec prospect
Potycz prospect
Warsaw South concessions
Zabienec prospect
40kms
Machnatka Grojec
Michrow
Major strat trap and structure potential
Boglewice
Potycz
Warsaw South concessions
NASDAQ: FXEN 26
FX 2012 year end reserves • 79 Bcfe (2.1 Bcme) of 2P(P50) reserves at 12/31/2012; $243 mm pre-tax pv10% • Each of the projects below has the potential to more than double those numbers
Fences concession: Lisewo area • Potential up to 100-200 Bcf (2.7–5.4 Bcm) net to FX fully developed from multiple prospects on
3-D seismic (plus Lisewo-1 and Komorze-3 discoveries)
• 2-3 new wells planned for 2H2013 in Lisewo area (of which 2 are set to start drilling 3Q2013)
Edge concession: Tuchola area • Tuchola-3K tested commercial; new seismic now in processing • 1-2 more wells planned for 2H2013 to determine the size of the discovery
Block 246 concession: Rotliegend area • Gorka Duchowna, a Carboniferous test, is scheduled to start drilling late August • The Frankowo-1 well provided data and encouragement; 3D seismic now underway for Main
Dolomite and Rotliegend; appraisal/development drilling in 2014 as warranted;
Block 229 concession: Main Dolomite area • Potential up to several hundred Bcfe including oil potential; analog to PGNiG’s 1Tcfe (27
Bcme) BMB and LMG fields; drillsite seismic this winter, first well in 2014
Upside Potential in 5 Project Areas
NASDAQ: FXEN 27
NASDAQ: FXEN
NAV and Forward Drilling Program
Note: estimated net value calculated at $3.07/mcf or $115/mcm; $3.07 is the average 2P (P50) pv-10 value in the Company’s 12/31/2012 reserve report. (The 1P (P90) value is $3.81/mcf.) Development costs are not shown and may be expected to vary considerably from project to project.
Net Asset Value (NAV) Analysis ($ in millions, except per share amounts) Total per share per share P50 reserves value pre-tax 12/31/12 $243 $4.56 $4.56 Cash at 12/31/2012 $40 $0.75 $0.75 Long-term Debt at 12/31/2012 $(40) ($0.75) ($0.75) P-50 Net Asset Value $243 $4.56 $4.56
Undrilled Potential Potential FX Net Net Potential Est. Net Risked Unrisked Net Cost
Recoverable Interest Recoverable Chance of Value (mm) Value Value to FX (mm)
Prospect (Bcfe) (Bcme) after 1st well (Bcfe) (Bcme) Success * per share per share First Well Fences - Lisewo 9 structures 225 6.0 49% 110 3.0 75% $254 $4.76 $6.35 $5 Fences - Lisewo upside 240 6.4 49% 118 3.2 20% $72 $1.35 $6.77 $5 Fences - Miloslaw 50 1.3 49% 25 0.7 20% $15 $0.28 $1.41 $5 Fences - Plawce East 875 23.5 49% 429 11.5 20% $263 $4.94 $24.70 $5 Edge - Tuchola 110 2.9 100% 110 2.9 20% $68 $1.27 $6.34 $10 Edge - Unislaw 110 2.9 100% 110 2.9 20% $68 $1.27 $6.34 $12 Block 229 Main Dolomite 450 12.1 100% 450 12.1 20% $276 $5.18 $25.92 $12 Block 246 - Gorka Duchowna 50 1.3 100% 50 1.3 20% $31 $0.58 $2.88 $6 WS - Grojec 100 2.7 51% 51 1.4 20% $31 $0.59 $2.94 $5 WS - Boglewice 200 5.4 51% 102 2.7 20% $63 $1.18 $5.88 $5 WS - Potycz 90 2.4 51% 46 1.2 20% $28 $0.53 $2.64 $5 Total Risked Potential 2,500 67.0 1,600 42.9 $1,169 $21.92 $92.16 $75
Shares Outstanding (millions) 53.3 53.3 Risked Discovery Potential and Net Asset Value Per Share $26.48 $96.72
Zaniemysl Production Facility
Aug. 2, 2008
Kromolice-1 rig floor during drill stem test
Aug. 22, 1995
First FX Concessions David Pierce, Dr.
Krzysztof Szamalek, Marek Hoffmann,
Tomasz Minkiewicz
Ostrowiec Well Rig floor
May. 29, 2009
Aug. 7, 2003
Mar. 13, 2009
Kromolice-2 rig and production test flare
Aug. 6, 2003
Wilga Production Facility
Zbigniew Kulczak, Clay Newton, Tom Lovejoy, David Pierce, Zbigniew
Tatys
Feb. 14, 2007
Winna Gora production test flare
Jun. 3, 2009
Roszkow Production Facility Andy Pierce, Aleksander
Nowak
Jan. 26, 2007
Grabowka JV Jerzy Maciolek, Zbigniew
Tatys, Eva Sokolowski, David Pierce, Piotr Buszka
Mar. 9, 2009
Roszkow Production Facility
Oct. 30, 2003
Zaniemysl-3 Drilling
May 29, 2009
Ostrowiec Drill Pad
Oct. 25, 2003
Zaniemysl-3 Drilling
June 2, 2009
Ostrowiec Drillsite Henry Dytko, Andy Pierce,
Aleksander Nowak
May 29, 2009
Ostrowiec Well Oct. 1, 2008
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