Falcon Oil & Gas Ltd. Announces Final Approval of A

Falcon Oil & Gas Ltd. Announces Final Approval of A Multi-Well
Drilling Exploration Program with Naftna Industrija Srbije Jsc
TORONTO, ONTARIO -- (Marketwire) -- 01/14/13 -- Falcon Oil & Gas Ltd.
(TSX VENTURE:FO), (Falcon or the "Company") the Toronto listed and
Dublin headquartered company focused on unconventional oil and gas
exploration and production in Hungary, Australia and South Africa,
announces that further to its press release dated July 31, 2012, its
Hungarian subsidiary TXM Oil and Gas Exploration LLC has executed the
agreement in relation to a significant exploration program with NIS,
a Serbian oil and gas company in which JSC Gazprom Neft has a 56%
stake (the "Transaction"). 
Transaction Summary 

--  NIS to drill three exploration wells targeting the shallow "Algyo Play"
--  Falcon to be fully carried on the drilling and testing estimated to cost
    a minimum of $20m 
--  NIS to make an immediate cash payment of $1.5m to Falcon 
--  Drilling preparations are already underway 
--  Falcon and NIS expect to commence drilling the first well by the end of
    March 2013 
--  Second and third wells likely to be completed by the end of Q3 2013 
--  NIS to earn 50% of any net production revenues from the 3 wells 
--  Falcon to retain 100% in the "Deep Mako Trough" potential below the

The Algyo is a relatively shallow play between 2,300m and 3,500m. A
number of Falcon wells have been drilled through the Algyo in recent
years, some of which encountered gas shows, but to date no well has
ever tested the play concept at an optimal location as previous wells
targeted deeper intervals of up to 6,000m.  
Multiple Algyo prospects have subsequently been identified by Falcon
through extensive AVO analysis and the upcoming exploration drilling
program with NIS will be targeting three separate high-graded
Under the terms of the Transaction, NIS shall drill three exploration
wells targeting the "Algyo Play" within the Company's Mako Trough
production licence in the Pannonian Basin, Hungary. NIS will earn,
after undertaking the 3 well drilling obligation, 50% of the net
production revenues from the 3 wells drilled. In addition, NIS will
have an option to acquire a right of first negotiation for future
drilling operations in the "Algyo Play", sharing any potential future
costs and revenue 50:50 with Falcon. Falcon will still retain 100%
interest in the "Deep Mako Trough". 
Preparation for drilling operations is already underway and the
Falcon and NIS are planning to drill the first of the three wells
before the end of March 2013, subject to normal regulatory approvals. 
Philip O'Quigley, CEO of Falcon commented:  
"We are delighted to have successfully executed our Agreement with
NIS and we can now look forward to the start of a multi-well
exploration drilling program in Hungary. We are pleased to have NIS
as a partner and look forward to our cooperation with them which has
the potential to expand further in the region. Hopefully, this is
part of a series of deals that will see multi-well carried drilling
programs being carried out across our portfolio in the near future."  
About Falcon Oil & Gas Ltd.  
Falcon Oil & Gas Ltd. is an international oil and gas exploration and
production company, Toronto listed under the symbol "FO". It is
headquartered in Dublin, Ireland, with offices in Budapest, Hungary. 
The Company is focussed on unconventional and conventional oil and
gas exploration and production, and holds producing assets in three
major underexplored basins in Australia, Hungary, and South Africa.  
For further information on Falcon Oil & Gas Ltd. please visit
NIS is one of the largest, vertically integrated oil and gas
companies in Southeast Europe, focusing on exploration and production
of hydrocarbons, refining of crude oil and sales of a broad range of
petroleum products.  
The company's headquarters and main production assets are located in
Serbia, with part of the oil production coming from offshore Angola,
where NIS has been present since 1980. The company has two refineries
and a network of more than 450 filling stations which comprise the
backbone of its downstream operations. 
Since 2010 the NIS has increased its international activities by
acquiring a number of exploration and production as well as retail
assets in the region. At present the company operates in Bosnia and
Herzegovina, Hungary, Romania and Bulgaria with offices in Banja
Luka, Budapest, Bucharest, Timisoara, Sofia, Ashkhabad, Brussels,
Zagreb and Moscow. 
For further information on NIS please visit www.nis.rs. 
Certain information in this press release may constitute
forward-looking information. This information is based on current
expectations that are subject to significant risks and uncertainties
that are difficult to predict. Actual results might differ materially
from results suggested in any forward-looking statement. Falcon
assumes no obligation to update the forward-looking statements or to
update the reasons why actual results could differ from those
reflected in the forward-looking statements unless and until required
by securities laws applicable to Falcon. Additional information
identifying risks and uncertainties is contained in Falcon's filings
with the Canadian securities regulators, which filings are available
at www.sedar.com. 
Forward-looking Statements  
Forward-looking statements include, but are not limited to,
statements with respect to: the focus of capital expenditures; the
sale, farming in, farming out or development of certain exploration
properties using third party resources; the impact of changes in
petroleum and natural gas prices on cash flow; drilling plans;
processing capacity; operating and other costs; the existence,
operation and strategy of the commodity price risk management
program; the approximate and maximum amount of forward sales;
Falcon's acquisition strategy, the criteria to be considered in
connection therewith and the benefits to be derived therefrom;
Falcon's goal to sustain or grow production and reserves through
prudent management and acquisitions; the emergence of accretive
growth opportunities; Falcon's ability to benefit from the
combination of growth opportunities and the ability to grow through
the capital markets; development costs and the source of funding
thereof; the quantity of petroleum and natural gas resources or
reserves; treatment under governmental regulatory regimes and tax
laws; liquidity and financial capital; the impact of potential
acquisitions and the timing for achieving such impact; expectations
regarding the ability to raise capital and continually add to
reserves through acquisition and development; the performance
characteristics of Falcon's petroleum and natural gas properties; and
realization of the anticipated benefits of acquisitions and
Some of the risks and other factors, which could cause results to
differ materially from those expressed in the forward-looking
statements include, but are not limited to: general economic
conditions in Canada, the Republic of Hungary, the Commonwealth of
Australia, the Republic of South Africa and globally; supply and
demand for petroleum and natural gas; industry conditions, including
fluctuations in the price of petroleum and natural gas; governmental
regulation of the petroleum and natural gas industry, including
income tax, environmental and regulatory matters; fluctuation in
foreign exchange or 
interest rates; risks and liabilities inherent in
petroleum and natural gas operations, including exploration,
development, exploitation, marketing and transportation risks;
geological, technical, drilling and processing problems;
unanticipated operating events which can reduce production or cause
production to be shut-in or delayed; the ability of our industry
partners to pay their proportionate share of joint interest billings;
failure to obtain industry partner and other third party consents and
approvals, when required; stock market volatility and market
valuations; competition for, among other things, capital, acquisition
of reserves, processing and transportation capacity, undeveloped land
and skilled personnel; the need to obtain required approvals from
regulatory authorities; and the other factors considered under "Risk
Factors" in Falcon's annual information form ( AIF") dated December
31, 2011. Risks and uncertainties that could cause Falcon's actual
results to materially differ from current expectations have not
changed from those disclosed in Falcon's Management's Discussion and
Analysis (MD&A)as at September 30, 2012. The AIF and MD&A have been
filed with Canadian securities regulatory authorities and are
available at www.sedar.com. The forward-looking statements contained
in this press release are expressly qualified by this cautionary
statement. Falcon disclaims any intention or obligation to update or
revise any forward-looking statements whether as a result of new
information, future events or otherwise, except as required under
applicable securities regulation. 
In addition, other factors not currently viewed as material could
cause actual results to differ materially from those described in the
forward-looking statements. 
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release. 
Falcon Oil & Gas Ltd.
Philip O'Quigley
Chief Executive Officer
+353 (1) 417 1900 or +353(87) 814 7042
FTI Consulting, London and Toronto
Billy Clegg/Edward Westropp
+44 207 837 3113
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