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FX Energy Reports Improved First Quarter Results

SALT LAKE CITY, UT -- (Marketwired) -- 05/08/14 -- FX Energy, Inc. (NASDAQ: FXEN) today announced financial results for its first quarter ended March 31, 2014. The Company reported a first quarter net loss of $1.0 million, or $(0.02) per share. This compares to a net loss of $11.4 million, or $(0.22) per share, for the first quarter of 2013. Included in the Company's quarterly results were noncash, intracompany foreign exchange losses of $1.2 million and $9.1 million in 2014 and 2013, respectively. Without the foreign exchange losses, the Company would have recorded net income of $0.3 million for the quarter ended March 31, 2014, and a net loss of $2.3 million for the quarter ended March 31, 2013.

Higher Polish Gas Prices Offset Minor Production Declines

Total revenues for the first quarter of both 2014 and 2013 were $9.5 million. Oil and gas revenues increased by approximately $62,000 from quarter to quarter. Higher natural gas prices in Poland offset slight declines in production.

The average price received in Poland for the first quarter of 2014 was $7.42 per Mcf, compared to $7.18 per Mcf for the first quarter of 2013. The Polish low-methane tariff, which serves as the basis for the Company's gas sales agreements, increased by 3.1% effective February 1, 2014. In addition, period-to-period strengthening in the Polish zloty produced a higher U.S. dollar-denominated average price in the first quarter of 2014. Unlike the U.S., demand for natural gas exceeds domestic Polish supplies and Poland imports most of the natural gas it uses. The higher natural gas prices of Poland versus those in the U.S. is one of the reasons for the Company's focus on Poland.

Higher oil prices and production led to a slight increase in quarterly oil revenues. Oil revenues of $920,000 in the first quarter of 2014 were 2% higher than $900,000 during the first quarter of 2013. Oil prices averaged $76.91 per barrel in the first quarter of 2014, compared to $76.46 per barrel in the same quarter of 2013. Oil production increased by 2% over 2014 levels. Currently all of the Company's oil production is in the U.S., mostly from a relatively small and stable oil field in Montana. This oil is a relatively heavy grade of crude and sells at a discount to the standard WTI price.

Total net oil and gas production during the first quarter of 2014 was 1,229 million cubic feet equivalent (Mmcfe) a daily average of 13.6 Mmcfe/d. First quarter 2013 production was 1,261 Mmcfe, a daily average of 14.0 Mmcfe/d. Production declines at the Company's Roszkow and Zaniemysl wells were mostly offset by increases at the Winna Gora, Lisewo-1 and Komorze 3-K wells.

The Company expects production to begin at its Lisewo-2 well during the second half of 2014, which should add approximately 1.7 Mmcf/d of net production.

Operating Cash Largely Unchanged

Net cash provided from operating activities was $4.4 million during the first quarter of 2014, compared to $4.5 million during the 2013 first quarter. Exploration expenses during the first quarter of 2014 were $3.1 million lower than during the same quarter of 2013, most of which was attributed to a dry hole drilled during 2013. These lower costs were mostly offset by changes in other working capital items.

Noncash Charges Continue to Vary

The noncash foreign exchange losses of $1.2 million and $9.1 million for the first quarters of 2014 and 2013, 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. Two factors contributed to the lower foreign exchange loss during the 2014 quarter. First, during 2013, we converted approximately $45 million of loans between FX Energy Poland and FX Energy, Inc., to equity. The conversion was necessary in order to make future interest payments from FX Energy Poland to FX Energy, Inc., tax deductible in Poland. Second, exchange-rate fluctuation from year-end 2013 to March 31, 2014, of 1% was less than the exchange-rate fluctuation from year-end 2012 to March 31, 2013, of 2%. The lower amounts of intercompany loans outstanding and the decrease in exchange rate volatility resulted in a lower foreign exchange impact in 2014 compared to 2013.

Earnings Conference Call Today, Thursday, May 8, 2014, at 4:30 PM EDT (2:30 PM MDT)

The Company will host a conference call and webcast May 8, 2014, to discuss 2014 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: 888-430-8701; International dial-in-number: 719-325-2298; Passcode: 9873981. 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 additional 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,
                                                    2014           2013
                                               -------------  -------------
ASSETS

Current assets:
  Cash and cash equivalents                    $      14,258  $      11,153
  Receivables:
    Accrued oil and gas sales                          4,313          3,464
    Joint interest and other receivables               1,574          5,029
    VAT receivable                                       826          1,847
  Inventory                                              102            100
  Other current assets                                   336            234
                                               -------------  -------------
    Total current assets                              21,409         21,827
                                               -------------  -------------

Property and equipment, at cost:
  Oil and gas properties (successful-efforts
   method):
    Proved                                            90,631         85,244
    Unproved                                           2,527          2,404
  Other property and equipment                        12,079         11,857
                                               -------------  -------------
    Gross property and equipment                     105,237         99,505
                                               -------------  -------------
  Less accumulated depreciation, depletion,
   and amortization                                  (24,646)       (23,369)
                                               -------------  -------------
      Net property and equipment                      80,591         76,136
                                               -------------  -------------

Other assets:
  Certificates of deposit                                406            406
  Loan fees                                            2,178          2,323
                                               -------------  -------------
      Total other assets                               2,584          2,729
                                               -------------  -------------

Total assets                                   $     104,584  $     100,692
                                               =============  =============



-Continued-


                     FX ENERGY, INC., AND SUBSIDIARIES
                        Consolidated Balance Sheets
                                (Unaudited)
                     (in thousands, except share data)
                                -Continued-

                                                 March 31,     December 31,
                                                    2014           2013
                                               -------------  -------------
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                             $       8,034  $       9,694
  Accrued liabilities                                    306            833
                                               -------------  -------------
    Total current liabilities                          8,340         10,527
                                               -------------  -------------

Long-term liabilities:
  Notes payable                                       50,000         45,000
  Asset retirement obligation                          1,721          1,620
                                               -------------  -------------
    Total long-term liabilities                       51,721         46,620
                                               -------------  -------------

      Total liabilities                               60,061         57,147
                                               -------------  -------------

Stockholders' equity:
  Preferred stock, $0.001 par value, 5,000,000
   shares authorized as of March 31, 2014, and
   December 31, 2013; no shares outstanding               --             --
  Common stock, $0.001 par value, 100,000,000
   shares authorized as of March 31, 2014, and
   December 31, 2013; 53,912,277and 53,733,398
   shares issued and outstanding as of March
   31, 2014, and December 31, 2013,
   respectively                                           54             54
  Additional paid-in capital                         227,394        226,060
  Cumulative translation adjustment                   15,631         15,025
  Accumulated deficit                               (198,556)      (197,594)
                                               -------------  -------------
  Total stockholders' equity                          44,523         43,545
                                               -------------  -------------

Total liabilities and stockholders' equity     $     104,584  $     100,692
                                               =============  =============



                     FX ENERGY, INC., AND SUBSIDIARIES
       Consolidated Statements of Operations and Comprehensive Income
                                (Unaudited)
                  (in thousands, except per share amounts)

                                                For the Three Months Ended
                                                         March 31,
                                               ----------------------------
                                                    2014           2013
                                               -------------  -------------
Revenues:
  Oil and gas sales                            $       9,508  $       9,446
  Oilfield services                                        5             42
                                               -------------  -------------
    Total revenues                                     9,513          9,488
                                               -------------  -------------
Operating costs and expenses:
  Lease operating expenses                             1,109            876
  Exploration costs                                    3,320          6,371
  Property impairments                                    46             --
  Oilfield services costs                                128            132
  Depreciation, depletion, and amortization            1,358          1,316
  Accretion expense                                       24             22
  Stock compensation                                     679            689
  General and administrative costs                     1,953          1,824
                                               -------------  -------------
    Total operating costs and expenses                 8,617         11,230
                                               -------------  -------------
Operating income (loss)                                  896         (1,742)
                                               -------------  -------------

Other income (expense):
  Interest expense                                      (656)          (628)
  Interest and other income                               14             52
  Foreign exchange loss                               (1,216)        (9,125)
                                               -------------  -------------
    Total other expense                               (1,858)        (9,701)
                                               -------------  -------------

Net loss                                       $        (962) $     (11,443)
                                               =============  =============

Basic and diluted net loss per common share    $       (0.02) $       (0.22)

Basic weighted average number of shares
 outstanding                                          53,232         52,704
                                               =============  =============

Diluted weighted average number of shares
 outstanding                                          53,232         52,704
                                               =============  =============

Other comprehensive loss:
  Foreign currency translation adjustment                606          5,876
                                               -------------  -------------
Comprehensive loss                             $        (356) $      (5,567)
                                               =============  =============



                     FX ENERGY, INC., AND SUBSIDIARIES
                   Consolidated Statements of Cash Flows
                                (Unaudited)
                               (in thousands)

                                                For the Three Months Ended
                                                         March 31,
                                               ----------------------------
                                                    2014           2013
                                               -------------  -------------
Cash flows from operating activities:
  Net loss                                     $        (962) $     (11,443)
  Adjustments to reconcile net income to net
   cash provided by operating activities:
    Depreciation, depletion, and amortization          1,358          1,316
    Accretion expense                                     24             22
    Property impairment                                   --            207
    Amortization of bank fees                            127            130
    Stock compensation                                   679            689
    Foreign exchange losses                            1,213          9,110
    Common stock issued for services                     655            694
  Increase (decrease) from changes in working
   capital items:
    Receivables                                        3,531          5,765
    Inventory                                             (2)            (1)
    Other current assets                                (102)           (14)
    Accounts payable and accrued liabilities          (2,121)        (1,977)
                                               -------------  -------------
      Net cash provided by operating
       activities                                      4,400          4,498
                                               -------------  -------------

Cash flows from investing activities:
  Additions to oil and gas properties                 (5,975)        (5,329)
  Additions to other property and equipment             (232)          (192)
                                               -------------  -------------
      Net cash used in investing activities           (6,207)        (5,521)
                                               -------------  -------------

Cash flows from financing activities:
  Proceeds from notes payable                          5,000             --
                                               -------------  -------------
      Net cash provided by financing
       activities                                      5,000             --
                                               -------------  -------------

Effect of exchange rate changes on cash                  (88)          (475)
                                               -------------  -------------

Net increase (decrease) in cash                        3,105         (1,498)
Cash and cash equivalents at beginning of year        11,153         33,990
                                               -------------  -------------

Cash and cash equivalents at end of period     $      14,258  $      32,492
                                               =============  =============

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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