FX Energy Reports Higher First Quarter Production and Revenues; Earnings Down Due to Non-Cash Charge

FX Energy Reports Higher First Quarter Production and Revenues; Earnings Down 
Due to Non-Cash Charge 
SALT LAKE CITY, UT -- (Marketwired) -- 05/09/13 --  FX Energy, Inc.
(NASDAQ: FXEN), today announced financial results for its first
quarter ended March 31, 2013. The Company reported a first quarter
net loss of $11.4 million, or $(0.22) per share. This compares to net
income of $14.7 million, or $0.28 per share, for the first quarter of
2012. Included in the Company's quarterly results were noncash
foreign exchange losses of $9.1 million in 2013 and gains of $14.5
million in 2012.  
Polish Operations Drive Higher Production and Revenues 
Total revenues for the first quarter of 2013 were $9.5 million. This
was up 11% over the $8.6 million of the 2012 first quarter. Gains in
both production and natural gas prices contributed to the increase.  
Total net oil and gas production was 1,261 million cubic feet
equivalent (Mmcfe) during the first quarter of 2013, a daily average
of 14.0 Mmcfe/d. First quarter 2012 production was 1,205 Mmcfe, a
daily average of 13.2 Mmcfe/d. Production from our Kromolice-1,
Sroda-4, and Kromolice-2, or KSK, wells increased by 256,000 thousand
cubic feet of natural gas over 2012 first quarter levels, as first
quarter 2012 production at KSK was constrained due to a pipeline
bottleneck. In addition, new production at our Winna Gora well
combined with the KSK increase to offset production declines at our
Zaniemysl and Roszkow wells.  
Natural gas prices during the first quarter of 2013 were 19% higher
than during the same period of 2012. Natural gas production increased
by 6% in the 2013 first quarter. Together, these increases resulted
in a 26% increase in natural gas revenues from quarter to quarter.
2013 first quarter natural gas revenues were $8.5 million, compared
to $6.8 million during the same quarter of 2012, an increase of $1.7
million. Unlike the U.S., demand for natural gas exceeds domestic
Polish supplies and Poland imports most of the natural gas it uses.
Thus, natural gas pricing is driven by demand that exceeds domestic
supply. FX Energy has consistently cited the different natural gas
pricing dynamics of Poland versus those in the U.S. as one of the
reasons for the Company's focus on Poland. 
The average price receiv
ed in Poland for the first quarter of 2013
was $7.18 per Mcf, compared to $6.03 per Mcf for the first quarter of
2012. Zloty-denominated gas prices were 13.1% higher in the 2013
first quarter than in the same quarter of 2012. In addition,
period-to-period strengthening in the Polish zloty produced a higher
U.S. dollar-denominated average price in the first quarter of 2013. 
Lower oil prices and production dampened somewhat the effect of
higher gas prices and production. Oil revenues of $900,000 in the
first quarter of 2013 were 22% lower than $1.2 million during the
first quarter of 2012. Oil prices averaged $76.46 per barrel in the
first quarter of 2013, compared to $84.97 per barrel in the same
quarter of 2012. Currently all of the Company's oil production is in
the U.S. This oil is a relatively heavy grade of crude and sells at a
discount to the standard WTI price. 
New Production Expected in Second Half 
Clay Newton, FX's Vice President Finance, remarked: "The Company
expects production to begin at its Lisewo-1 and Komorze-3K wells
during the second half of 2013. Just as production from new wells and
facilities in Poland has boosted recent results, we expect Lisewo-1
and Komorze-3K will provide similar benefits in the second half of
this year." 
Operating Cash Reflects Higher Exploration Spending; Noncash Charges
Continue to Vary 
Net cash provided from operating activities was $4.5 million during
the 2013 first quarter, down 3% from $4.7 million recorded during the
first quarter of 2012. Exploration expenses during the first quarter
of 2013 were 115% higher than during the same quarter of 2012. These
higher costs were mostly offset by a reduction of year-end 2012
receivables.  
The noncash foreign exchange loss of $9.1 million and the foreign
exchange gain of $14.5 million for the first quarters of 2013 and
2012, respectively, are included in other income and expense. These
figures come primarily from recognition of gains and losses on U.S.
dollar-denominated, intercompany loans from FX Energy, Inc., to FX
Poland, its wholly owned subsidiary. These are noncash gains and
losses and could vary greatly depending upon future exchange rate
changes. 
Earnings Conference Call Today, Thursday, May 9, 2013, at 4:30 PM EDT
(2:30 PM MDT) 
The Company will host a conference call and webcast May 9, 2013, to
discuss 2013 first quarter results and update operational items at
4:30 p.m. Eastern Daylight Time. Conference call information is as
follows: US dial-in-number: 888-427-9411; International
dial-in-number: 719-325-2469; Passcode: 8125122. Request: FX Energy,
Inc. Conference Call. 
The call will also be webcast live and interested parties may access
the webcast through FX Energy's homepage at www.fxenergy.com. For
those who are unable to participate in the live call, a rebroadcast
will be available through the Company's website for two weeks
beginning one hour after the completion of the call. 
About FX Energy 
FX Energy is an independent oil and gas exploration and production
company with production in the US and Poland. The Company's main
exploration and production activity is focused on Poland's Permian
Basin where the gas-bearing Rotliegend sandstone is a direct analog
to the Southern Gas Basin offshore England. The Company trades on the
NASDAQ Global Select Market under the symbol FXEN. Website
www.fxenergy.com 
FORWARD-LOOKING STATEMENTS 
This report contains forward-looking statements. Forward-looking
statements are not guarantees. 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. 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 respecting exploration targets
are certainly not guarantees of discovery, the actual presence or
recoverability of hydrocarbons, or 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. 
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
addition
al contingencies and uncertainties to which information
respecting future events is subject, see FX Energy's SEC reports or
visit FX Energy's website at www.fxenergy.com. 


 
                                                                            
                                                                            
                   FX ENERGY, INC., AND SUBSIDIARIES                        
                      Consolidated Balance Sheets                           
                              (Unaudited)                                   
                            (in thousands)                                  
                                                                            
                                                   March 31,   December 31, 
                                                     2013          2012     
                                                 ------------  ------------ 
ASSETS                                                                      
                                                                            
Current assets:                                                             
  Cash and cash equivalents                      $     32,492  $     33,990 
  Receivables:                                                              
    Accrued oil and gas sales                           4,084         3,447 
    Joint interest and other receivables                  687         7,733 
    VAT receivable                                      1,401         1,136 
  Inventory                                               200           199 
  Other current assets                                    614           614 
                                                 ------------  ------------ 
    Total current assets                               39,478        47,119 
                                                 ------------  ------------ 
                                                                            
Property and equipment, at cost:                                            
  Oil and gas properties (successful efforts                                
   method):                                                                 
    Proved                                             66,131        63,821 
    Unproved                                            2,237         2,337 
  Other property and equipment                         11,072        10,717 
                                                 ------------  ------------ 
    Gross property and equipment                       79,440        76,875 
                                                 ------------  ------------ 
  Less accumulated depreciation, depletion, and                             
   amortization                                       (20,670)      (19,786)
                                                 ------------  ------------ 
    Net property and equipment                         58,770        57,089 
                                                 ------------  ------------ 
                                                                            
Other assets:                                                               
  Certificates of deposit                                 382           382 
  Loan fees                                             1,173         1,364 
                                                 ------------  ------------ 
    Total other assets                                  1,555         1,746 
                                                 ------------  ------------ 
                                                                            
Total assets                                     $     99,803  $    105,954 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                                                                            
                      FX ENERGY, INC., AND SUBSIDIARIES                     
                         Consolidated Balance Sheets                        
                                 (Unaudited)                                
                      (in thousands, except share data)                     
                                 -Continued-                                
                                                                            
                                                   March 31,   December 31, 
                                                     2013          2012     
                                                 ------------  ------------ 
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
                                                                            
Current liabilities:                                                        
  Accounts payable                               $      7,265  $      8,532 
  Accrued liabilities                                     407         1,192 
  Current portion of long-term debt                     7,000         7,000 
                                                 ------------  ------------ 
    Total current liabilities                          14,672        16,724 
                                                 ------------  ------------ 
                                                                            
Long-term liabilities:                                                      
  Notes payable                                        33,000        33,000 
  Asset retirement obligation                           1,516         1,431 
                                                 ------------  ------------ 
    Total long-term liabilities                        34,516        34,431 
                                                 ------------  ------------ 
                                                                            
      Total liabilities                                49,188        51,155 
                                                 ------------  ------------ 
                                                                            
Stockholders' equity:                                                       
  Preferred stock, $0.001 par value, 5,000,000                              
   shares authorizedas of March 31, 2013, and                               
   December 31, 2012; no sharesOutstanding                 --            -- 
  Common stock, $0.001 par value, 100,000,000                               
   shares authorizedas of March 31, 2013, and                               
   December 31, 2012; 53,415,522and 53,246,620                              
   shares issued and outstanding as ofMarch 31,                             
   2013, and December 31, 2012, respectively               53            53 
  Additional paid-in capital                          223,896       222,513 
  Cumulative translation adjustment                    23,903        18,027 
  Accumulated deficit                                (197,237)     (185,794)
                                                 ------------  ------------ 
  Tota
l stockholders' equity                           50,615        54,799 
                                                 ------------  ------------ 
                                                                            
Total liabilities and stockholders' equity       $     99,803  $    105,954 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                                                                            
                    FX ENERGY, INC., AND SUBSIDIARIES                       
             Consolidated Statements of Comprehensive Income                
                               (Unaudited)                                  
                 (in thousands, except per share amounts)                   
                                                                            
                                                       For the Three Months 
                                                               Ended        
                                                             March 31,      
                                                       -------------------- 
                                                          2013       2012   
                                                       ---------  --------- 
Revenues:                                                                   
  Oil and gas sales                                    $   9,446  $   7,923 
  Oilfield services                                           42        659 
                                                       ---------  --------- 
    Total revenues                                         9,488      8,582 
                                                       ---------  --------- 
Operating costs and expenses:                                               
  Lease operating expenses                                   876        872 
  Exploration costs                                        6,371      2,964 
  Oilfield services costs                                    132        639 
  Depreciation, depletion, and amortization                1,316        926 
  Accretion expense                                           22         16 
  Stock compensation                                         689        551 
  General and administrative costs                         1,824      1,891 
                                                       ---------  --------- 
    Total operating costs and expenses                    11,230      7,859 
                                                       ---------  --------- 
Operating income (loss)                                   (1,742)       723 
                                                       ---------  --------- 
                                                                            
Other income (expense):                                                     
  Interest expense                                          (628)      (619)
  Interest and other income                                   52         84 
  Foreign exchange gain (loss)                            (9,125)    14,492 
                                                       ---------  --------- 
    Total other income (expense)                          (9,701)    13,957 
                                                       ---------  --------- 
                                                                            
Net income (loss)                                      $ (11,443) $  14,680 
                                                       =========  ========= 
                                                                            
Basic and diluted net income (loss) per common share   $   (0.22) $    0.28 
                                                                            
Basic weighted average number of shares outstanding                         
                                                          52,704     52,221 
                                                       =========  ========= 
                                                                            
Diluted weighted average number of shares outstanding                       
                                                          52,704     52,291 
                                                       =========  ========= 
                                                                            
Other comprehensive income (loss):                                          
  Foreign currency translation adjustment                  5,876     (9,567)
                                                       ---------  --------- 
Comprehensive income (loss)                            $  (5,567) $   5,113 
                                                       =========  ========= 
                                                                            
                                                                            
                                                                            
                                                                            
                    FX ENERGY, INC., AND SUBSIDIARIES                       
                  Consolidated Statements of Cash Flows                     
                               (Unaudited)                                  
                              (in thousands)                                
                                                                            
                                                       For the Three Months 
                                                               Ended        
                                                             March 31,      
                                                       -------------------- 
                                                          2013       2012   
                                                       ---------  --------- 
Cash flows from operating activities:                                       
  Net income (loss)                                    $ (11,443) $  14,680 
  Adjustments to reconcile net income to net cash                           
   provided by operating activities:                                        
    Depreciation, depletion, and amortization              1,316        926 
    Accretion expense                                         22         16 
    Property impairment                                      207         -- 
    Amortization of bank fees                                130        127 
    Stock compensation                                       689        551 
    Foreign exchange (gains) losses                        9,110    (14,484)
    Common stock issued for services                         694        666 
  Increase (decrease) from changes in working capital                       
   items:                                                                   
    Receivables                                            5,765      2,711 
    Inventory                                                 (1)         4 
    Other current assets                                     (14)       (90)
    Accounts payable and accrued liabilities              (1,977)      (455)
                                                       ---------  --------- 
      Net cash provided by operating activities            4,498      4,652 
                                                       ---------  --------- 
                                                                            
Cash flows from investing activities:                                       
  Additions to oil and gas properties                     (5,329)    (5,083)
  Additions to other property and equipment                 (192)      (178)
        
                                               ---------  --------- 
    Net cash used in investing activities                 (5,521)    (5,261)
                                                       ---------  --------- 
                                                                            
Cash flows from financing activities:                                       
                                                       ---------  --------- 
    Net cash provided by financing activities                 --         -- 
                                                       ---------  --------- 
                                                                            
Effect of exchange rate changes on cash                     (475)       861 
                                                       ---------  --------- 
                                                                            
Net increase (decrease) in cash                           (1,498)       252 
Cash and cash equivalents at beginning of year            33,990     50,859 
                                                       ---------  --------- 
                                                                            
Cash and cash equivalents at end of period             $  32,492  $  51,111 
                                                       =========  ========= 

  
SCOTT J. DUNCAN 
FX Energy, Inc.
3006 Highland Drive, Suite 206
Salt Lake City, Utah 84106
(801) 486-5555 
Fax (801) 486-5575
www.fxenergy.com 
 
 
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