Falcon Oil & Gas Ltd. is a global energy company that is focused on acquiring, exploring and developing large acreage positions of unconventional and conventional oil and gas resources. We focus on areas in politically and economically stable countries that are characterized by a high regional demand for energy with existing infrastructure allowing rapid delivery of oil and gas to market. Falcon holds almost 15 million acres in three major exploration projects in Hungary, Australia, and South Africa.

Our offices are in Denver, Colorado, and Budapest, Hungary. Shares of our company trade on the Toronto TSX Venture Exchange under the trading symbol ‘FO’.

Falcon Oil & Gas Ltd. headquarters located at: Denver Place South Tower 999 18th Street, Suite 1100 Denver, Colorado 80202 303.893.1800 FAX: 303.572.8927 contact@falconoilandgas.com
Hungarian Office — Budapest, Hungary TXM Exploration and Production LLC RiverPark Kft. Közraktár u. 30-32 H-1093 Budapest, Hungary +36 1 66 66 700 FAX: +36 1 66 66 776 View Map
Contact Investor Relations > Helen Mitchell Manager of Corporate Communications Falcon Oil & Gas Ltd. Phone: +1.303.951.1111 Email: hmitchell@falconoilandgas.com

Overview

Hungary

Falcon holds 100 percent interest in 245,775 acres in a production licence in the Makó Trough, southern Pannonian Basin in Hungary. The licence is held and operated by Falcon’s 100% subsidiary TXM OIL AND GAS EXPLORATION LTD.

Falcon’s licence is surrounded by the largest and longest producing fields in Hungary, with the Algyö field (2.5TCF and 220MMBO produced) just 5km to the west of the licence boundary. The area has existing infrastructure offering transport and access to local markets and larger distribution centers for European markets.

In the deeper Szolnok Formation, the Endrod, the Basal Conglomerate and the Synrift Sequence, an independent report effective March 31, 2008 estimates potentially recoverable contingent resources at 44TCF and 98 MMBO.

Full copy of the RPS Scotia Resource Estimate, Mako Trough, Hungary

History

Falcon has been operating in the Makó Trough since 2005 when it acquired two exploration licences, the Makó and the Tisza licences. Between 2005 and 2007, Falcon pursued an aggressive work program consisting of the acquisition of 1,000 sq km seismic and a six well drilling program. Each of the six wells had significant oil and gas shows proving pervasive hydrocarbons throughout the basin and in 2007, Falcon was awarded the long-term 35-year production licence.

Falcon conducted small vertical stimulations on all but two wells (Mako-4 and Mako-7). Each of the zones tested flowed hydrocarbons to surface. These were exploration wells and no horizontal wells have been drilled at this stage.

The 2009 Exxon operated Foldeak-1 well was drilled to test the Lower Szolnok Formation. The well tested into an open fracture system and showed high pressure gas and water (250 mcfpd and 250 bwpd).

Full testing of Mako-4 and Mako-7 wells serve as a potential work program for 2012.

Activity

In June, 2011 Falcon announced a letter of intent with Naftna Industrija Srbije, the major Serbian integrated oil company, to drill three wells targeting the shallower Algyö Formation. Falcon is planning for a full test of an existing well bore in the deeper formations in 2012.

Falcon is planning for a full test of an existing well bore in the deeper formations in 2012.

Image of a seismic anomaly from the 3D seismic survey
identifying and Algyö prospect

Depositional model of the Algyö formation

Australia

Photo Gallery >

Through its 73% owned subsidiary Falcon Oil & Gas Australia Limited, Falcon holds Exploration Permits EP 99, 98, 117, and 76, covering approximately seven million acres in the Beetaloo Basin in the Northern Territory, Australia. Falcon has identified six active petroleum systems in the basin with world class shale oil and gas resource as well as conventional potential in excess of 18 billion barrels of oil and 64 TCF.

For detailed information on Falcon’s operations in the Beetaloo Basin, Australia, please go to the website for Falcon Oil & Gas Australia Limited, located at www.falconaustralia.com.au.

In July 2011, Falcon Australia secured a Joint Venture with a subsidiary of exploration company Hess Corporation in EP 76, 117, and the majority of EP98 covering an area of approximately 6,225,000 acres. Under terms of the agreement, Hess Australia will acquire an extensive 2D seismic program. Hess may then elect to earn a 62.5 percent ownership in the joint venture by drilling a series of five wells to explore and appraise the area.

News release: Falcon Announces the Closing of the Beetaloo Basin Transaction with Hess >

Falcon Australia owns 100% interest in 100,000 acres surrounding the Shenandoah-1 well in the center of the Beetaloo Basin. This area is now referred to as the Shenandoah Area. In Q4 of 2011, Falcon conducted vertical tests on five intervals from the existing Shenandoah-1 wellbore. Data gathered from these tests will help guide our planning of future wells in this area.

News release: Falcon Announces Completion of Testing at Shenandoah-1 >

Video of Mid Velkerri Shendandoah-1 flare

Falcon Australia holds 100 percent interest EP99, the 650,000 acre permit located in the southernmost part of the basin. Technical work is ongoing to determine the optimum program for exploring EP99 with plans to include a seismic survey program in 2012.

Overview

Falcon holds interest in a 7.5 million acre Technical Cooperation Permit in the southwest Karoo Basin. In August 2010, Falcon submitted an application for an exploration license covering the same area.

The Karoo Basin reaches 600,000 sq km in central and southern South Africa and contains thick, organic rich shales such as the Permian Whitehill Formation. Until recently, the Karoo Basin was not considered prospective for productive hydrocarbons resulting in very limited modern hydrocarbon exploration onshore in South Africa.

With the advances in modern drilling technology and shale exploration, the United States Energy Information Administration’s April 2011 report “World Shale Gas Resources: An Initial Assessment”

estimates 485 TCF of technically recoverable shale gas resources in South Africa’s Karoo Basin. (pg. 288/365)

Location map of Falcon's TCP and Exploration Lisence application area.

Activity

In 2009, Falcon applied for and was granted a 7.5 million acre Technical Cooperation Permit in the southwest Karoo Basin. The area is positioned in the heart of the basin is strategically placed in the most geographically accessible area. In August 2010, Falcon applied for an Exploration Licence in which it proposed a three year exploration program consisting of seismic acquisition only.

In late 2010, Falcon engaged in a public consultation to discuss Falcon's future work program with landowners in the application area and other affected parties. The process was held in English and Afrikaans and consisted of notification documents, a series of consultation meetings and newspaper advertisements.

Falcon’s Exploration Licence is pending approval while South African Department of Minerals and Resources conducts an environmental study on the effects of hydraulic stimulation and develops a system to regulate onshore exploration activities. The results are scheduled for release in early 2012.

Area map of Falcon's location in the Karoo Basin and surrounding permits.