Falcon Oil & Gas Ltd - Interim Results for ...

FOR:  FALCON OIL & GAS LTD.

TSX VENTURE SYMBOL:  FO
AIM SYMBOL:  FOG

May 29, 2014

Falcon Oil & Gas Ltd - Interim Results for Three Months Ended 31 March 2014

DUBLIN, IRELAND--(Marketwired - May 29, 2014) - Falcon Oil & Gas Ltd. (TSX VENTURE:FO)(AIM:FOG)(ESM:FAC)
("Falcon" or the "Company") announces that it has filed its results for the three months ended 31 March 2014.

The following should be read in conjunction with the complete Interim Financial Statements and the accompanying
Management's Discussion and Analysis for the three months period ended 31 March 2014 filed with the TSXV. These
filings are available at www.sedar.com and on Falcon's website at www.falconoilandgas.com.

Highlights

/T/

--  Transformational Farm-Out Agreement and Joint Operating Agreements ("the
    Agreements") of Beetaloo permits, Northern Territory, Australia to carry
    Falcon in a nine well exploration and appraisal program over five years
    with Origin Energy Resources Limited, a subsidiary of Origin Energy
    Limited ("Origin") and Sasol Petroleum Australia Limited, a subsidiary
    of Sasol Limited ("Sasol"), "the Farminees".
    --  Drilling to commence following completion of the Agreements.
    --  Origin and Sasol to pay Falcon A$20 million cash on completion of
        the Agreements.
    --  Origin and Sasol to each earn 35% interest in the Permits.
    --  Falcon to retain a 30% interest in the Permits.
    --  Origin to be the Operator.
    --  Farminees will pay for the full cost of completing the first five
        wells estimated at A$64, million, and will fund any cost overruns.
        This work is expected to be completed within the first three years.
    --  Farminees to pay the full cost of the following two horizontally
        fracture stimulated wells, 90 day production tests and micro seismic
        with a capped expenditure of A$53 million.
    --  Farminees to pay the full cost of the final two horizontally
        fracture stimulated wells and 90 day production tests capped at A$48
        million.
--  Spudding of the second well in Hungary, fully carried by Naftna
    Industrija Srbije JSC ("NIS"),
--  Continued focus on strict cost management and efficient operation of the
    portfolio.
--  Strong financial position, debt free with cash and cash equivalents at
    US$6.9 million (31 December 2013: US$8.4 million).

/T/

Philip O'Quigley, CEO of Falcon commented:

"2014 has been a busy year for Falcon with the execution of the Agreements with Origin and Sasol of our
Beetaloo permits in the Northern Territory Australia. Together with the A$20 million, the deal is worth up to
approximately A$200 million to Falcon. I can confidently state that this carry and work programme is a great
deal for our shareholders. In addition, we have spudded the second well in Hungary with our partner NIS. I look
forward to updating the market and making further announcements on the Group's progress in due course."

Australia

Farm-out of Beetaloo permits, Northern Territory, Australia

As announced on 2 May 2014, Falcon Australia has executed definitive agreements including a 9 well Farm-Out
Agreement and Joint Operating Agreements (collectively "the Agreements") with Origin and Sasol, to each farm
into 35% of Falcon's Exploration Permits in the Beetaloo Basin, Australia. The Agreements are subject to
conditions inter alia Government, statutory authority consents and relevant Stock Exchange approvals.

Hungary Drilling

Spudding of second well in Hungary

As announced on 16 May 2014, the second of three exploration wells "Besa-D-1", with our partner NIS to evaluate
the gas potential of the Algyo Formation at a depth of approximately 3,000 meters in the Mako Trough, Hungary
has been spudded. The well testing operations on the first well, Kutvolgy-1 are now completed. The testing
indicated that well production did not meet commercial rates. Falcon, with our partner NIS, has discontinued
testing Kutvolgy-1, the well is to be plugged and abandoned. Falcon and NIS are now focused on Besa-D-1.

Results for operating activities

Falcon incurred a loss of US$0.3 million in the three months ended 31 March 2014, decreasing from a loss of
US$4.7 million in the three months ended 31 March 2013.

Falcon's cash and cash equivalent balance at 31 March 2014 was US$6.9 million (31 December 2013: US$8.4
million).

Appointment of Communication Adviser

Falcon has retained Camarco as its communication adviser to provide ongoing strategic and business advice with
shareholders and investors. The initial fee is GBP 5,000 per month which will increase to GBP 6,000 after 3
months. Termination clauses are included in the contract, which are at both parties' discretion. Engagement
with FTI Consulting, Falcon's previous communication adviser has now ended.

The appointment of Camarco is subject to TSXV approval.

About Falcon Oil & Gas Ltd.

Falcon is an international oil & gas company engaged in the acquisition, exploration and development of
conventional and unconventional oil and gas assets, with the current portfolio spread between Australia, South
Africa and Hungary. Falcon is incorporated in British Columbia, Canada and headquartered in Dublin, Ireland
with a technical team based in Budapest, Hungary.

For further information on Falcon Oil & Gas Ltd. please visit www.falconoilandgas.com

About Camarco

Camarco is a financial and corporate communications adviser with specialist sector knowledge, particularly in
energy and resources, financial services, and the consumer industries.

For further information on Camarco please visit www.camarco.co.uk

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.

Certain information in this press release may constitute forward-looking information, including comments made
with respect to the type and number of wells and expected costs of the work program under the Farm-out and the
project being brought towards commerciality. 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 statements. 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.

/T/

Falcon Oil & Gas Ltd.
Interim Condensed Consolidated Statement of Operations and Comprehensive
 Loss
(Unaudited)

----------------------------------------------------------------------------
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                                     Three months ended  Three months ended
                                          31 March 2014       31 March 2013
                                                  $'000               $'000
----------------------------------------------------------------------------
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Revenue
Oil and natural gas revenue                          10                   3
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                                                     10                   3

Expenses
Exploration and evaluation expenses                (198)               (198)
Production and operating expenses                    (7)                 (5)
Depreciation                                        (43)               (145)
General and administrative expenses              (1,019)             (1,185)
Share based compensation                           (195)                (95)
Foreign exchange loss                               (33)                  -
Other income                                        137                 237
----------------------------------------------------------------------------
                                                 (1,358)             (1,391)
----------------------------------------------------------------------------

Results from operating activities                (1,348)             (1,388)

Fair value gain / (loss) -
 outstanding warrants                               991              (1,881)

Finance income                                       59                   8
Finance expense                                     (35)             (1,485)
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Net finance income \ (expense)                       24              (1,477)

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Loss and comprehensive loss for the
 period                                            (333)             (4,746)
----------------------------------------------------------------------------
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Loss and comprehensive loss
 attributable to:

Equity holders of the company                      (329)             (4,701)
Non-controlling interests                            (4)                (45)

----------------------------------------------------------------------------
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Loss and comprehensive loss for the
 period                                            (333)             (4,746)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Loss per share attributable to equity holders of the company:

Basic and diluted                               ($0.000)            ($0.007)
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Falcon Oil & Gas Ltd.
Interim Condensed Consolidated Statement of Financial Position
(Unaudited)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                            At 31 March      At 31 December
                                                   2014                2013
                                                  $'000               $'000
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Assets
Non-current assets
Exploration and evaluation assets                74,720              74,517
Property, plant and equipment                     5,366               5,403
Trade and other receivables                          78                  77
Restricted cash                                     604                 615
----------------------------------------------------------------------------
                                                 80,768              80,612
----------------------------------------------------------------------------

Current assets
Cash and cash equivalents                         6,879               8,431
Trade and other receivables                         742                 473
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                                                  7,621               8,904

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Total assets                                     88,389              89,516
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Equity and liabilities

Equity attributable to owners of the
 parent
Share capital                                   382,853             382,853
Contributed surplus                              42,658              42,463
Retained deficit                               (350,934)           (350,605)
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                                                 74,577              74,711
Non-controlling interests                           733                 737
----------------------------------------------------------------------------
Total equity                                     75,310              75,448
----------------------------------------------------------------------------

Liabilities
Non-current liabilities
Derivative financial liabilities                      -                 448
Decommissioning provision                        11,155              11,138
----------------------------------------------------------------------------
                                                 11,155              11,586
----------------------------------------------------------------------------

Current liabilities
Accounts payable and accrued
 expenses                                         1,518               1,533
Derivative financial liabilities                    406                 949
----------------------------------------------------------------------------
                                                  1,924               2,482
----------------------------------------------------------------------------
Total liabilities                                13,079              14,068

----------------------------------------------------------------------------
Total equity and liabilities                     88,389              89,516
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Falcon Oil & Gas Ltd.
Interim Condensed Consolidated Statement of Cash Flows
(Unaudited)

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                                                Three months ended 31 March
                                                   2014               2013
                                                  $'000               $'000
----------------------------------------------------------------------------

Cash flows from operating activities
Net loss for the period                            (333)             (4,746)
Adjustments for:
  Share based compensation                          195                  95
  Depreciation                                       43                 145
  Fair value (gain) / loss -
   outstanding warrants                            (991)              1,881
  Net finance (income) / expense                    (24)              1,477
  Other                                              33                (126)
Contribution to past costs - Chevron                  -               1,000
Change in non-cash working capital                 (161)               (168)
Interest received                                    17                   6
----------------------------------------------------------------------------
Net cash used in operating
 activities                                      (1,221)               (436)

Cash flows from investing activities
Exploration and evaluation assets                  (373)                  -
Proceeds from farm-out transaction -
 NIS                                                  -               1,500
Property, plant and equipment                        (8)                  -
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Net cash (used in) / generated by
 investing activities                              (381)              1,500

Cash flows from financing activities
Proceeds from private placement                       -              25,072
Transaction costs relating to
 private placement                                    -              (1,762)
----------------------------------------------------------------------------
Net cash from financing activities                    -              23,310

Change in cash and cash equivalents              (1,602)             24,374
Effect of exchange rates on cash &
 cash equivalents                                    50                (151)

Cash and cash equivalents at
 beginning of period                              8,431               2,884

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Cash and cash equivalents at end of
 period                                           6,879              27,107
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----------------------------------------------------------------------------

/T/

FOR FURTHER INFORMATION PLEASE CONTACT:

Falcon Oil & Gas Ltd. [phone]
Philip O'Quigley, CEO [phone]
John Craven Non-Executive Chairman [phone]

OR

Camarco
Billy Clegg [phone]
Georgia Mann [phone]

OR

Davy (NOMAD & Joint Broker)
John Frain / Anthony Farrell [phone]

OR

GMP Securities Europe LLP (Joint Broker)
Rob Collins / Liz Williamson [phone]

OR

Cantor Fitzgerald Europe (Joint Broker)
David Porter / Richard Redmayne [phone]

INDUSTRY:  Energy and Utilities-Oil and Gas
SUBJECT:   ERN

Falcon Oil & Gas Ltd.