THIS WARRANT, AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT, HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE
APPLICABLE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE PLEDGED, SOLD, ASSIGNED
OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THE ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS, OR UNLESS SUCH PLEDGE, SALE, ASSIGNMENT OR TRANSFER IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH STATE SECURITIES
LAWS.

18 December 2006

Void After Warrant Expiration Date

FX ENERGY, INC.

Common Stock Purchase Warrant

FX Energy, Inc., a Nevada corporation (the “Corporation”), hereby certifies that
for value received Royal Bank Project Investments Limited or its assigns, is
entitled to purchase, subject to the terms and conditions hereinafter set forth,
an aggregate of 110,000 (one hundred and ten thousand) shares (subject to
adjustment as hereinafter provided) of Common Stock, par value $.001 per share
(the “Common Shares”), of the Corporation at a purchase price of $6.00 per share
(subject to adjustment as set forth herein, the “Exercise Price”), payable as
hereinafter provided.

SECTION 1.

WARRANT EXPIRATION DATE.

As used herein, the term “Warrant Expiration Date” shall mean 5:00 p.m., New
York City time, on 18 December 2008 provided that if such date shall in the
State of New York be a holiday or a day on which banks are authorized to close,
then “Warrant Expiration Date” shall mean 5:00 p.m., New York City time, on the
next following day which in the State of New York is not a holiday or a day on
which banks are authorized to close. Notwithstanding the foregoing, the
Corporation shall deliver notice to the registered holder, by first class mail,
postage prepaid, addressed to the registered holder at the address of such
registered holder as shown on the books of the Corporation, of the expiration of
this Warrant at least 20 business days prior to the Warrant Expiration Date. If
such notice is not given, the Warrant Expiration Date shall be 20 business days
after such notice is received by the registered holder.

SECTION 2.

NOTICE.

In case at any time:

(a)

the Corporation shall pay any dividend or make any distribution (other than
regular cash dividends from earnings or earned surplus paid at an established
rate) to the holders of its Common Shares;

(b)

the Corporation shall offer for subscription pro rata to the holders of its
Common Shares any additional shares of stock of any class or other rights;

(c)

there shall be any capital reorganization or reclassification of the capital
stock of the Corporation or consolidation or merger of the Corporation with or
sale of all or substantially all of its assets to another corporation; or

(d)

there shall be a voluntary, involuntary or deemed dissolution, liquidation or
winding-up of the Corporation; then, in any one or more of such cases, the
Corporation shall give written notice, by first class mail, postage prepaid,
addressed to the registered holder at the address of such registered holder as
shown on the books of the Corporation of the date on which:

 

(i)

the books of the Corporation shall close or a record date shall be fixed for
determining the shareholders entitled to such dividend, distribution or
subscription rights, or

 

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(ii)

such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding-up, conversion, redemption or other event shall take place,
as the case may be. Such notice shall also provide reasonable details of the
proposed transaction and specify the date as of which the holders of record of
the Common Shares shall participate in such dividend, distribution or
subscription rights, or shall be entitled to exchange their Common Shares for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up, conversion, redemption or other event, as the case may be. Such
written notice shall be given at least 10 business days prior to the action in
question and not less than 10 business days prior to the record date or the date
on which the Corporation’s transfer books are closed in respect thereto.

SECTION 3.

EXERCISE.

(a)

Manner of Exercise.

This Warrant may be exercised at any time or from time to time, on any day which
is not a Saturday, Sunday or holiday under the laws of the State of New York,
for all or any part of the number of Common Shares purchasable upon its
exercise; provided, however, that this Warrant shall be void and all rights
represented hereby shall cease unless exercised before the Warrant Expiration
Date. In order to exercise this Warrant, in whole or in part, the holder hereof
shall deliver to the Corporation at its principal place of business, or at such
other office as the Corporation may designate by notice in writing:

 

(i)

this Warrant and

 

(ii)

a written notice of such holders election to exercise its Warrant substantially
in the form of Exhibit A attached hereto and shall pay to the Corporation by
check made payable to the order of the Corporation or wire transfer of funds to
an account designated by the Corporation an amount equal to the aggregate
purchase price for all Common Shares as to which this Warrant is exercised. In
lieu of such exercise of this Warrant, the holder may from time to time convert
this Warrant, in whole or in part, into a number of Common Shares determined by
dividing (a) the aggregate fair market value of Common Shares or other
securities otherwise issuable upon exercise of this Warrant minus the aggregate
Exercise Price of such Common Shares by (b) the fair market value of one Common
Share. The fair market value of the Common Shares shall be determined pursuant
to Section 11 hereof.

(b)

Issuance of Common Shares.

Upon receipt of the documents and payments described in Section 3(a), the
Corporation shall, as promptly as practicable, and in any event within 3
business days thereafter, execute or cause to be executed, and deliver to such
holder a certificate or certificates representing the aggregate number of Common
Shares issuable upon such exercise, together with an amount in cash in lieu of
any fraction of a share, as hereinafter provided. The stock certificate or
certificates so delivered shall be in the denomination specified in said notice
and shall be registered in the name of the holder hereof. This Warrant shall be
deemed to have been exercised and a certificate or certificates for Common
Shares shall be deemed to have been issued, and the holder hereof or any other
person so designated to be named therein shall be deemed to have become a holder
of record of such shares for all purposes as of the date said notice, together
with this Warrant and the documents and payments described in Section 3(a), is
received by the Corporation as aforesaid. If this Warrant shall have been
exercised in part, the Corporation shall, at the time of delivery of said
certificate or certificates, deliver to the holder hereof a new Warrant
evidencing the rights of such holder to purchase the unpurchased Common Shares
called for by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.

 

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SECTION 4.

RESERVATION OF COMMON SHARES; STATE SECURITIES LAWS.

(a)

The Corporation covenants that it will at all times until the Warrant Expiration
Date reserve and keep available out of its authorized and unissued Common
Shares, solely for the purpose of issue upon exercise of this Warrant, such
number of Common Shares as shall then be issuable upon the exercise of this
Warrant.

(b)

If any securities to be reserved for the purpose of exercise of this Warrant
require approvals or registrations under applicable state “blue sky” or federal
securities laws, or any such approval or registration is required for the
exercise of this Warrant, then the Corporation will use its best efforts to
obtain such approvals or registrations as may be appropriate as soon as
reasonably practicable.

SECTION 5.

NEGOTIABILITY.

This Warrant is issued upon the following terms, to all of which each holder or
owner hereof by the taking hereof consents and agrees:

(a)

Title to this Warrant may be transferred by the holder by endorsement (by the
holder hereof executing the form of assignment attached hereto as Exhibit B) and
delivery in the same manner as in the case of a negotiable instrument
transferable by endorsement and delivery; and

(b)

Until this Warrant is transferred on the books of the Corporation, the
Corporation may treat the registered holder hereof as the absolute owner hereof
for all purposes, notwithstanding any notice to the contrary.

SECTION 6.

LOSS OR MUTILATION.

Upon receipt of evidence satisfactory to the Corporation of the loss, theft,
destruction or mutilation of this Warrant (including a reasonably detailed
affidavit with respect to the circumstances of any loss, theft or destruction of
such Warrant) and, if requested in the case of any such loss, theft or
destruction, upon delivery of an indemnity bond or other agreement or security
reasonably satisfactory to the Corporation, or, in the case of any such
mutilation, upon surrender and cancellation of this Warrant, the Corporation at
its expense will execute and deliver, in lieu hereof, a new Warrant of like
tenor.

SECTION 7.

SUBDIVISION OR COMBINATION OF COMMON SHARES.

If the Corporation at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) its outstanding Common Shares into a greater
number of Common Shares, the number of Common Shares issuable upon exercise of
this Warrant will be proportionately increased, and if the Corporation at any
time combines (by reverse stock split, recapitalization or otherwise) its
outstanding Common Shares into a smaller number of Common Shares, the number of
Common Shares issuable upon exercise of this Warrant will be proportionately
decreased.

 

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SECTION 8.CONSOLIDATION, MERGER, ETC.

If any consolidation or merger of the Corporation with another corporation, or
the sale of all or substantially all of its assets to another corporation (each
an “Extraordinary Event”) shall be effected, then, as a condition of such
Extraordinary Event, the Corporation shall cause lawful and adequate provision
to be made whereby the registered holder of this Warrant shall thereafter have
the right to purchase and receive, upon exercise hereof and the payment of the
Exercise Price, in lieu of the Common Shares of the Corporation immediately
theretofore purchasable and receivable upon the exercise of this Warrant, such
shares of stock, securities or property (including cash) as may be issued or
payable with respect to or in exchange for a number of Common Shares of the
Corporation immediately theretofore purchasable and receivable upon the exercise
of this Warrant had such Extraordinary Event not taken place, and in any such
case appropriate provision shall be made with respect to the rights and
interests of the holder of this Warrant to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the number of
shares purchasable upon the exercise of this Warrant) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock, securities
or property thereafter deliverable upon the exercise hereof. The foregoing
provisions shall similarly apply to successive Extraordinary Events. The
Corporation shall not effect any such consolidation, merger or sale unless,
prior to the consummation thereof, the successor corporation (if other than the
Corporation) resulting from such consolidation or merger or the corporation
purchasing such assets shall assume by written instrument executed and mailed to
the registered holder at the last address of such registered holder appearing on
the books of the Corporation, the obligation to deliver to such registered
holder such shares of stock, securities or property as, in accordance with the
foregoing provisions, such registered holder may be entitled to purchase or
receive.

SECTION 9.

ANTIDILUTION PROTECTION.

(a)

If at any time or from time to time after the date hereof, the Corporation
issues or sells, or is deemed by the express provisions of this subsection (a)
to have issued or sold, Additional Common Shares (as defined in subsection (d)
below), other than as a dividend or other distribution on any class of stock as
provided in Section 7 above, and other than a subdivision or combination of
Common Shares as provided in Section 7 above, for an Effective Price (as defined
in subsection (d) below) less than the then effective Exercise Price, the then
effective Exercise Price shall be reduced, as of the opening of business on the
date of such issue or sale (or deemed issuance or sale), to the price at which
such additional shares are issued or sold or deemed to have been issued or sold,
as the case may be. Upon any such reduction in the Exercise Price, the total
number of shares issuable upon exercise of this Warrant shall be proportionately
increased so that the total amount payable upon exercise in whole of this
Warrant shall not be modified.

(b)

For the purpose of making any adjustment required under this Section 9, the
consideration received by the Corporation for any issue or sale of securities
shall (i) to the extent it consists of cash, be computed at the net amount of
cash received by the Corporation after deduction of any underwriting or similar
commissions, compensation or concessions paid or allowed by the Corporation in
connection with such issue or sale but without deduction of any expenses payable
by the Corporation, (ii) to the extent it consists of property other than cash,
be computed at the fair value of that property as determined in good faith by
the Board of Directors of the Corporation (the “Board”); provided, however, that
if the Board cannot reach such a determination, the fair market value shall be
determined by an independent third party appraiser selected by the Board, and
(iii) if Additional Common Shares, Convertible Securities (as defined in
subsection (c) below) or rights or options to purchase either Additional Common
Shares or Convertible Securities are issued or sold together with other stock or
securities or other assets of the Corporation for a consideration which covers
both, be computed as the portion of, the consideration so received that may be
reasonably determined in good faith by the Board to be allocable to such
Additional Common Shares, Convertible Securities or rights or options; provided,
however, that if the Board cannot reach such a determination, the fair market
value shall be determined by an independent third party appraiser selected by
Board.

 

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(c)

For the purpose of the adjustment required under this Section 9, if the
Corporation issues or sells any (i) stock or other securities convertible into
Additional Common Shares (such convertible stock or securities being herein
referred to as “Convertible Securities”) or (ii) rights or options for the
purchase of Additional Common Shares or Convertible Securities, and if the
Effective Price of such Additional Shares is less than the Exercise Price, the
Corporation shall he deemed to have issued at the time of the issuance of such
rights or options or Convertible Securities the maximum number of Additional
Common Shares issuable upon exercise or conversion thereof and to have received
as consideration for the issuance of such shares an amount equal to the total
amount of the consideration, if any, received by the Corporation for the
issuance of such rights or options or Convertible Securities, plus, in the case
of such rights or options, the minimum amounts of consideration, if any, payable
to the Corporation upon the exercise of such rights or options, plus, in the
case of Convertible Securities, the minimum amounts of consideration, if any,
payable to the Corporation (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities) upon the conversion
thereof; provided, that if in the case of Convertible Securities the minimum
amounts of such consideration cannot be ascertained, but are a function of
antidilution or similar protective clauses, the Corporation shall be deemed to
have received the minimum amounts of consideration without reference to such
clauses; provided, further, that if the minimum amount of consideration payable
to the Corporation upon the exercise or conversion of rights, options or
Convertible Securities is reduced over time or on the occurrence or
non-occurrence of specified events other than by reason of antidilution
adjustments, the Effective Price shall be recalculated using the figure to which
such minimum amount of consideration is reduced; provided, further, that if the
minimum amount of consideration payable to the Corporation upon the exercise or
conversion of such rights, options or Convertible Securities is subsequently
increased, the Effective Price shall be again recalculated using the increased
minimum amount of consideration payable to the Corporation upon the exercise or
conversion of such rights, options or Convertible Securities. No further
adjustment of the Exercise Price, as adjusted upon the issuance of such rights,
options or Convertible Securities, shall be made as a result of the actual
issuance of Additional Common Shares on the exercise of any such rights or
options or the conversion of any such Convertible Securities. If any such rights
or options or the conversion privilege represented by any such Convertible
Securities shall expire without having been exercised, the Exercise Price, as
adjusted upon the issuance of such rights, options or Convertible Securities
shall be readjusted to the Exercise Price which would have been in effect had an
adjustment been made on the basis that the only Additional Common Shares so
issued were the Additional Common Shares, if any, actually issued or sold on the
exercise of such rights or options or rights of conversion of such Convertible
Securities, and such Additional Common Shares, if any, were issued or sold for
the consideration actually received by the Corporation upon such exercise, plus
the consideration, if any, actually received by the Corporation for the granting
of all such rights or options, whether or not exercised, plus the consideration
received for issuing or selling the Convertible Securities actually converted,
plus the consideration, if any, actually received by the Corporation (other than
by cancellation of liabilities or obligations evidenced by such Convertible
Securities) on the conversion of such Convertible Securities.

(d)

“Additional Common Shares” shall mean all Common Shares issued by the
Corporation or deemed to be issued pursuant to this Section 9 (whether or not
subsequently reacquired or retired by the Corporation), other than: (i) Common
Shares issued pursuant to the exercise of options, warrants or convertible
securities outstanding as of the date hereof; and (ii) Common Shares issued
pursuant to a transaction for which an adjustment is made pursuant to Section 7
or 8 hereof. The “Effective Price” of Additional Common Shares shall mean the
quotient determined by dividing the total number of Additional Common Shares
issued or sold, or deemed to have been issued or sold by the Corporation under
this Section 9, into the aggregate consideration received, or deemed to have
been received by the Corporation for such issue under this Section 9, for such
Additional Common Shares.

 

5

 

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SECTION 10.          NOTICE OF ADJUSTMENT.

Upon any adjustment or other change relating to the securities purchasable upon
the exercise of this Warrant, then, and in each such case, the Corporation shall
give written notice thereof, by first class mail, postage prepaid, addressed to
the registered holder at the address of such registered holder as shown on the
books of the Corporation, which notice shall state the increase or decrease in
the number or other denominations of securities purchasable upon the exercise of
this Warrant setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based.

SECTION 11.

FRACTIONAL SHARES.

If the number of Common Shares purchasable upon the exercise of this Warrant is
adjusted pursuant to provisions hereof, the Corporation shall nevertheless not
be required to issue fractions of shares, upon exercise of this Warrant or
otherwise, or to distribute certificates that evidence fractional shares.
Whether or not fractional shares are issuable upon exercise of this Warrant
shall be determined on the basis of the total number of Common Shares the holder
is at the time acquiring and the number of Common Shares issuable upon such
aggregate exercise. With respect to any fraction of a share called for upon any
exercise hereof, the Corporation shall pay to the holder hereof an amount in
cash equal to such fraction multiplied by the current fair market value of such
fractional share, determined as follows:

(a)

If the Common Shares are listed on a national securities exchange or admitted to
unlisted trading privileges on such exchange the current fair market value shall
be the last reported sale price of the Common Shares on such exchange on the
last business day prior to the date of exercise of this Warrant or, if no such
sale is made on such day, the average closing bid and asked price for such day
on such exchange;

(b)

If the Common Shares are not listed or admitted to unlisted trading privileges,
the current fair market value shall be the mean of the last reported bid and
asked prices reported by the National Quotation Bureau, on the last business day
prior to the date of the exercise of this Warrant; or

(c)

If the Common Shares are not so listed or admitted to unlisted trading
privileges and bid and asked prices are not so reported, the current fair market
value shall be an amount determined in good faith by the Board; provided,
however, that if the Board cannot reach such a determination, the fair market
value shall be determined by an independent third party appraiser selected by
the Corporation and the holder.

SECTION 12.

INFORMATION.

Each holder of this Warrant, and each holder of Common Shares acquired upon the
exercise of this Warrant, by acceptance hereof and thereof, agrees to furnish to
the Corporation such information concerning such holder as may be reasonably
requested by the Corporation which is necessary in connection with any
registration or qualification of the Common Shares purchasable hereunder.

SECTION 13.

WARRANT HOLDER NOT DEEMED STOCKHOLDER.

The holder of this Warrant shall not, as such, be entitled to vote or to receive
dividends or be deemed the holder of the Common Shares that may at any time be
issuable upon exercise of this Warrant for any purpose whatsoever, nor shall
anything contained herein be construed to confer upon the holder of this
Warrant, as such, any of the rights of a stockholder of the Corporation or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to receive dividends or subscription
rights, until such holder shall have exercised this Warrant and paid the
Exercise Price in accordance with the provisions hereof.

 

6

 

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SECTION 14.          RIGHTS OF ACTION; REMEDIES.

All rights of action with respect to this Warrant are vested in the holder of
this Warrant, and the holder may enforce against the Corporation its right to
exercise this Warrant for the purchase of Common Shares in the manner provided
in this Warrant. The Corporation stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Corporation in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.

SECTION 15.

MODIFICATION OF WARRANT.

This Warrant shall not be modified, supplemented or altered in any respect
except with the consent in writing of the holder hereof and the Corporation; and
no change in the number or nature of the securities purchasable upon the
exercise of this Warrant, or the Exercise Price therefor, or the acceleration of
the Warrant Expiration Date, shall be made without the consent in writing of the
holder hereof, other than such changes as are specifically prescribed by this
Warrant as originally executed.

SECTION 16.

MISCELLANEOUS.

This Warrant shall be governed by, and construed and enforced in accordance
with, the laws of State of New York, without regard to its principles of
conflicts of laws. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof. The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.

IN WITNESS WHEREOF, the Corporation has caused this Warrant to be duly executed
as of the date first written above.

FX ENERGY, INC.

By: /s/ Clay Newton

Name: Clay Newton

Title: Treasurer

 

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EXHIBIT A

EXERCISE FORM

(To be signed only on exercise of Warrant)

FX ENERGY, INC.

3006 Highland Drive

Suite 206

Salt Lake City, Utah 84106

United States of America

 

The undersigned hereby irrevocably elects to exercise the right to purchase
represented by the within Warrant for, and to purchase thereunder, ________
shares of the Common Stock, par value $.0001 per share (the “Common Shares”),
provided for therein, and requests that certificates for such Common Shares be
issued in the name of:

 

                                          
                                                                 

 

(Please print name, address, and social security number)

and, if said number of Common Shares shall not be all the Common Shares
purchasable thereunder, that a new Warrant for the balance remaining of the
Common Shares purchasable under the within Warrant be registered in the name of
the undersigned holder of the within Warrant or his Assignee as below indicated
and delivered to the address stated below.

NAME OF HOLDER OR ASSIGNEE:

 

(Please print)

ADDRESS OF HOLDER OR ASSIGNEE:

SIGNATURE OF HOLDER:

DATED: ____________

Note:

The above signature must correspond with the name exactly as written upon the
face of the within Warrant, unless the within Warrant has been assigned.

EXHIBIT B

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto
__________________________________ the right represented by the within Warrant
to purchase __________________________________ Common Shares of FX Energy, Inc.
to which the within Warrant relates, and appoints
__________________________________ to transfer such rights on the books of FX
Energy, Inc. with full power of substitution in the premises.

NAME OF HOLDER:

 

(Please print)

ADDRESS:

SIGNATURE OF HOLDER:

DATED:____________

Note:

The above signature must correspond with the name exactly as written upon the
face of the within Warrant, unless the within Warrant has been assigned.

SIGNED IN THE PRESENCE OF:

__________________________________