A positive read. Keeping my shares XXX

Falcon Oil & Gas Ltd. (TSX VENTURE:FO) (AIM:FOG) (ESM:FAC) announces its results for the nine months ended 30 September 2013.
The following should be read in conjunction with the complete Interim Financial Statements and the accompanying Management's Discussion and Analysis for the nine months period ended 30 September 2013 filed with the TSXV. These filings are available at www.sedar.com and on Falcon's website at www.falconoilandgas.com.

"As expected, we have had an extremely busy start to the second half of 2013. Our attention is focused on securing a new farm-out of our acreage in Australia, preparing for the testing of the Kútvölgy-1 well in Hungary and working with Chevron under our Cooperation Agreement in South Africa. We are delighted to report that progress to date on all of these fronts is in line with our expectations."

Australia

Farm out discussions advancing in Australia

Further to the announcement on 1 July 2013, Falcon has been approached by several oil and gas companies interested in farming into its assets in the Beetaloo Basin. Falcon is well advanced in its discussions with a number of those companies and is confident of securing an attractive farm - out with a large oil and gas company. Falcon will provide an update to the market when appropriate.

Consolidation of interest in Australian subsidiary

Falcon completed the acquisition of a 25.4% minority interest in its subsidiary Falcon Oil & Gas Australia Ltd ("Falcon Australia"). Falcon Australia is the registered holder of four exploration permits in the Beetaloo Basin, Northern Territory, Australia. Following the completion of the above transaction, Falcon holds 202,462,686 shares in Falcon Australia, representing 98.1% of its issued share capital.

Results of Seismic Program in Beetaloo Basin, Australia

Under the terms of the joint venture with Hess, in 2011 and 2012, Hess acquired 3,490 kilometres of 2D seismic data and invested approximately US$80 million during that period, substantially more than initially expected and at no cost to Falcon. The seismic database has now been passed on to Falcon and along with existing well data, provides a very solid platform to extrapolate a detailed structural and stratigraphic model for the main parts of the Beetaloo Basin.

All the necessary elements of a productive unconventional and conventional petroleum system have been identified in multiple shales and sand reservoirs, and it is now clear that the Beetaloo Basin is an active petroleum system.

Three hydrocarbon plays have been identified:

• the shale gas potential in the basin centre;
• a shale oil play in the northern part of the permits; and
• conventional prospects throughout the acreage.

Recent interpretation of the seismic database mapped out several conventional drilling targets that are promising areas of hydrocarbon accumulation in the form of structural closures and traps.

Reducing the Overriding Royalty, Beetaloo Basin, Australia

On 1 November 2013, Falcon announced that Falcon Australia, had entered into an agreement with CR Innovations AG ("CRIAG") to acquire its 4% Overriding Royalty Interest ("ORRI") relating to its exploration permits in the Beetaloo Basin ("the CRIAG Agreement"). The transaction details were:

• Falcon Australia made an initial payment to CRIAG of US$999,000 on signing the CRIAG Agreement;
• Falcon Australia to make a second payment to CRIAG of US$999,000 to acquire the first 3% of the ORRI;
• Second payment to be made upon completion of a farm - out deal in Australia;
• CRIAG has granted Falcon Australia a five year call option to acquire the remaining 1% for US$5 million; and
• All ORRI's acquired under the CRIAG Agreement have been immediately cancelled by Falcon Australia.

Falcon believes that this transaction should help to further progress the farm - out negotiations, which are at an advanced stage. Together with the significant seismic programme completed last year, this transaction further increases the value of the Group's assets in the Northern Territory.

Hungary Drilling

Drilling operations on the first joint well between NIS and Falcon, Kútvölgy-1 well were completed in July 2013, the well having reached total depth ("TD") of 3,305 metres. As anticipated, the top of the Algyo Formation was encountered at 2,985 metres; the well then penetrating an alternating sequence of sandstones, siltstones and shales over a gross interval of 320 metres to TD, with gas shows throughout. Two conventional cores were taken and extensive wireline logs were run. As planned the well has been cased to TD and is now suspended. The operations were conducted to a high standard with no accidents occurring during drilling.

Technical evaluation of the well results has been concluded and preparations are now well underway to complete and test this well. The process will involve conventional testing of up to 8 gas bearing intervals as a first phase. A decision on whether hydraulic fracturing of the penetrated tight sands is required will be made upon evaluating the results of conventional flow tests. We expect technical operations to commence in January 2014.

Preparations for drilling the second well have commenced. Actual drilling operations on this well are expected to start in Quarter 1 of 2014.

Results for operating activities

Falcon incurred a loss of US$3.7 million in the nine months ended 30 September 2013, decreased from a loss of US$16.6 million in the nine months ended 30 September 2012.

Falcon's cash and cash equivalent balance at 30 September 2013 was US$10.8 million (31 December 2012: US$2.9 million).