This Option Agreement (this "Agreement"), is entered into effective as of July 18, 1997, between and among
Polskie Gornictwo Naftowe I Gazownictwo S. A., Oddzial Buro Geologiczne - GEONAFTA, a Polish joint
stock company ("POGC") and FX Energy, Inc., a Nevada corporation ("FXEN") and APACHE Overseas, Inc.,
a Delaware corporation ("APACHE").
A. Through the support and cooperation of POGC, FXEN and APACHE (through Polish subsidiaries) have
acquired certain rights to explore for and exploit natural gas and oil in the Lublin region of Poland, southeast of
Warsaw, under the FX/APA Usufruct (as defined in this Agreement) pursuant to four Mining Usufruct
Agreements. A portion of these rights pertain to lands where POGC participation is required.
B. POGC has acquired certain rights to explore for natural gas and oil in the same region, under the POGC
Usufructs (as defined in this Agreement). In addition, POGC has acquired a substantial amount of geological and
geophysical data in the Lublin region, and has generously shared this data with FXEN and APACHE.
C In view of the mutual interests of POGC, FXEN and APACHE in the Lublin basin, FXEN and APACHE
wish to grant to POGC the option to participate with them in operations on the FX/APA Usufruct Area and
POGC wishes to grant to FXEN and APACHE the option to participate with POGC in operations on the
POGC Usufruct Area.
NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference,
and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties hereto agree as follows.
"Participation Interest(s) shall have the meaning described in Article 2.3.
"Hydrocarbon Concession Block(s)" refers to one or more of the 480 numbered rectangular areas, each
encompassing approximately 1,000 square kilometers, which in the aggregate comprise a grid promulgated by
the Bureau of Geological Concessions for the purpose o