Falcon Oil files preliminary short-form prospectus

2009-05-26 07:51 ET - News Release

Mr. Marc Bruner reports

FALCON OIL & GAS LTD. ANNOUNCES THE FILING OF A PRELIMINARY SHORT FORM PROSPECTUS FOR AN OFFERING OF 11% UNSECURED CONVERTIBLE DEBENTURES AND COMMON SHARES

Falcon Oil & Gas Ltd. has filed a preliminary short-form prospectus with the securities regulatory authorities in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia and New Brunswick. The offering is for units at a price of $1,000 per unit. Each unit consists of one 11-per-cent convertible unsecured debenture in the principal amount of $900 that matures on the fourth anniversary of its issuance and a certain number of common shares in the capital of the company. The debentures contain certain automatic and optional conversion features, as well as certain redemption features. The offering will be conducted by Salman Partners Inc. as agent.

Final determination of the number of units to be sold under the offering and the number of unit shares to be issued will occur prior to the filing of the (final) short-form prospectus in respect of the offering.

Falcon expects to use the net proceeds from the offering for development of its properties in Hungary and for general working capital, as determined and approved by the board of directors of the company. In addition, an amount of the gross proceeds of the offering equal to the first two interest payments payable under the debentures will be deposited in escrow at closing.

Closing of the offering is expected to occur on or about June 16, 2009, and is subject to certain conditions, including but not limited to, receipt of all necessary securities regulatory approvals, including the approval of the TSX Venture Exchange.

We seek Safe Harbor.