FX Energys Polish Natural Gas Prices Increase Again
FX Energy, Inc. reported that the Energy Regulatory Office in Poland has approved an 11.1% increase in the wholesale prices of natural gas. The new prices will take effect on November 1, 2008. FX Energy’s gas contracts in Poland are priced as a percentage of published wholesale prices. This move by the Polish regulator will translate directly to an 11.1% increase in the prices received by FX Energy in Poland.
Gas Prices Up 28% for 2008; Up 103% in Recent Years
Clay Newton, the Company’s Vice President of Finance, commented, “Historically, US gas prices are highly volatile and weather dependent. They appear to be softening just now because of economic pressures, reduced demand and supply increases. In contrast, gas markets in Europe are dominated by rapidly declining European domestic supply and by increasing dependence on a single supplier, Russia. In addition, there is upward price pressure in Poland as the government tries to reduce subsidies for its natural gas end users in order to conform to European Union regulations. These market conditions have now resulted in the second significant wholesale price increase this year. With this second increase, wholesale prices are now up 28% for the year. Over the past four years wholesale prices have been raised eight times for an aggregate increase of 103%. We have more confidence in the continuation of these long-term, upward price pressures in Poland than in the weather-dependent price patterns in the US.”
Mr. Newton continued, “This price increase has two significant benefits for FX. First, it will help drive higher revenues now and in the future from our Polish gas production. Second, it will increase the value of our already-discovered natural gas reserves in Poland.”
FX Energy is an independent oil and gas exploration and production company with production in the US and Poland. The Company’s main exploration 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 Market under the symbol FXEN. Website http://www.fxenergy.com.
