907649--3/16/2009--FX_ENERGY

related topics

{gas, price, oil}

{operation, international, foreign}

{regulation, change, law}

{stock, price, share}

{stock, price, operating}

{interest, director, officer}

{acquisition, growth, future}

{provision, law, control}

{cost, regulation, environmental}

{personnel, key, retain}

{loss, insurance, financial}

Risks Relating to our Business Our success depends largely on our discovery of economic quantities of gas or oil in Poland. Our development efforts in Poland may be limited by the unavailability of additional borrowings. The over 70% decline in our stock price from its 2008 high and the prevailing condition in the equity markets make additional equity financing currently unlikely. The recent sharp decline in global oil prices below mid-2008 unprecedented highs could have a future negative impact on the price we receive for gas in Poland. We may incur additional losses due to exchange rate fluctuations. We have limited control over our exploration and development activities in Poland. We cannot assure the exploration models we are using in Poland will lead to finding gas or oil in Poland. We use various methods to evaluate various categories of potential gas or oil accumulations. We cannot accurately predict the size of exploration targets or foresee all related risks. We have had limited exploratory success in Poland. We may not achieve the results anticipated in placing our current or future discoveries into production. Privatization/Nationalization of POGC could affect our relationship and future opportunities in Poland. We have a history of operating losses and may require additional capital in the future to fund our operations. The loss of key personnel could have an adverse impact on our operations. Substantially all of the gas and oil currently produced in Poland is sold to a single customer or its affiliates. Gas and oil price decreases and volatility could adversely affect our operations and our ability to obtain financing. Our industry is subject to numerous operating risks. Insurance may not be adequate to protect us against all these risks. Risks Relating to Conducting Business in Poland Polish laws, regulations, and policies may be changed in ways that could adversely impact our business. Poland has a developing regulatory regime, regulatory policies, and interpretations. Our gas and oil operations are subject to changing environmental laws and regulations that could have a negative impact on our operations. Certain risks of loss arise from our need to conduct transactions in foreign currency. The interests that we hold in concessions and usufructs owned in the name of POGC may be jeopardized or lost, without compensation to us, in the event of POGC s bankruptcy, persistent breaches of laws such as environmental requirements, winding up, or other circumstances. Risks Related to an Investment in our Common Stock Our stockholder rights plan and bylaws discourage unsolicited takeover proposals and could prevent our stockholders from realizing a premium on our common stock. Our common stock price has been and may continue to be extremely volatile.

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907649--3/16/2009--FX_ENERGY_INC