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FX Energy's Uptrend Is Just Getting Started

|Includes: FX Energy, Inc. (FXEN)

FX Energy (NASDAQ: FXEN) is up 21 percent over the last 30 days, but only 1.64 percent year-to-date. This means that a majority of this gain came in during December 2013, following a series of promising announcements from the oil and gas company.

FX Energy is an independent oil and gas exploration and production company which engages in the production, appraisal, and exploration of oil and gas properties primarily in Poland. The company focuses on the exploration of Rotliegend sandstones in the Permian Basin.

The company has a handful of wells in Poland including Lisowe-1, Lisowe-2, and Komorze-3 which are located in the Fences concession where the Polish Oil and Gas Company is the operator and owns 51 percent of the working interest, with FX Energy owning 49 percent. There are also other locations, like the Szymanowice-1 well (FX Energy owns 49 percent) and Tuchola-4K (FX Energy owns 100 percent), where the company looks to expand production within the next fifteen months.

On December 2, FX Energy announced that it had completed the Lisowe-2 Well for production, saying that that commercial production was set to begin during the second half of 2014. With this announcement, I believe that investors still acted with caution, because no commercial production has taken place yet. However, Q1, 2014 is here and the company should be making an announcement soon with regard to commercial production in Komorze-3.

The moment this happens, the real advance will begin. Also, note that there are other major announcements scheduled to follow shortly. The company plans to drill and test the Tuchola-4K well during the first half of 2014. In the second half of 2014, investors will be waiting to hear about the progress on Lisowe-2, while in Q1, 2015 Szymanowice-1 should be ready for commercial production. I see a huge opportunity here, especially because these new projects are expected to begin generating income. They will provide continuous revenue growth over the next 15 months, which could support a long-term uptrend for the stock. Additionally, the company also has seven other potential projects on the way, and following the success of Szymanowice-1, there is genuine appetite to accelerate the drilling schedule.

FX Energy annual revenues stand at about $35 million. However, with the prospective increase in production over the next 15 months, and with several others in the coming years, the company has the potential to continuously grow its revenues in the near future.

As of December 31, 2012, its estimated proved oil and gas reserves were 44.1 billion cubic feet of natural gas and 0.6 million barrels of oil, or a combined total of 47.7 billion cubic feet of natural gas equivalent. This is a clear proof of how big the opportunity is for FX Energy, and it seems to be making the right moves towards monetizing the opportunity.

Therefore, despite the 21 percent jump in December, FX Energy has a lot of room to run in 2014 and beyond. The rally has just started and there is still time to jump in before it is too late.