>I agree with you without reservation. In fact the whole article in the VHG is without reference to actual sources from XOM and furthermore is full of misstatement of facts.

Actually, if you throw the amendments to the Production and Development agreement into the equation, and then re-read yesterdays stories, what was said makes a lot more sense. After all, the stories did not say that Exxon was not going to continue with the JV agreement, the stories said they were going to focus their efforts on the western side of the basin. That does not mean that Falcon gets left out in the cold.

Falcon Oil & Gas Ltd. Announces Amendment to Production and Development Agreement With ExxonMobil and MOL

Provides Updates on Drilling Program in the Makó Trough

DENVER, CO--(December 8, 2008) - Falcon Oil & Gas Ltd. (TSX-V: FO) today announced that it has entered into an amendment (the "Amendment") to its April 10, 2008 Production and Development Agreement (the "PDA") with Exxon Mobil Corporation affiliate ExxonMobil Hungary (Mako) Limited ("ExxonMobil") and MOL Hungarian Oil and Gas Plc. ("MOL"). Under the Amendment, the parties agreed to three principal matters: (1) the parties have agreed to use reasonable efforts to combine their respective exploration licenses and mining plots to form one unit consisting of all or part of the Makó Trough; (2) if ExxonMobil and MOL elect to proceed to the Appraisal Work Program, the parties agree to expand the area where wells may be located and apply a portion of the US$100 million Appraisal Work Program expenditures basin-wide in a combined work program, based on the optimum locations from a technical basin-wide appraisal standpoint; and (3) if ExxonMobil and MOL elect to proceed to the Development Work Program, the parties agree to apply 50% of the US$75 million payment due to Falcon to the same expanded basin-wide area in a combined work program.

Amendment to the PDA

Background to the PDA: As a result of the extensive technical data developed by Falcon, on May 22, 2007 the Hungarian Mining Authority granted to Falcon a production license (the "Production License"), which covers a significant part of the Makó Trough. A substantial portion of the remaining adjacent area in the Makó Trough is covered by licences, which are held by MOL and currently operated by ExxonMobil (the "MOL Area"). On April 10, 2008, Falcon announced the entering into of the PDA among Falcon, ExxonMobil and MOL, covering a part of the Production License (the "PDA Area"). ExxonMobil is the contract operator of both the MOL Area and the PDA Area.

The Amendment addresses three principal matters:

(1) Formation of Unit: Falcon, ExxonMobil and MOL all recognize the significant potential benefits, from an operating efficiency and technical analysis standpoint, of combining all or a portion of their jointly-owned interest into one unit. Therefore, they have agreed to commence technical discussions and use reasonable efforts to combine all or a portion of their respective interests in the Makó Trough. The Amendment provides that Falcon, ExxonMobil and MOL will pursue discussions toward that objective, beginning in the first calendar quarter of 2009.

(2) Application of Work Commitment Budget: Falcon, ExxonMobil, and MOL are continuing the Initial Work Program, Phase I of the PDA, on the PDA Area without any modifications. The Amendment does not affect any aspect of the ongoing Initial Work Program. If ExxonMobil and MOL elect to proceed to Phase II of the PDA, the Appraisal Work Program, there will be no change in the US$50 million which will be paid to Falcon at the time of such election.

Under the Amendment, a portion of the US$100 million expenditures which ExxonMobil and MOL will be committed to spend in Phase II for drilling wells and related expenditures, will now be applied on the basis of the optimum well locations from a technical appraisal standpoint. Specifically at least one well will be drilled on the PDA Area, with a minimum expenditure of US$25 million and a maximum of US$40 million. The balance of the US$100 million (the "Appraisal Program Balance") will be applied to wells either on the PDA Area or within the MOL Area. All seismic and technical data resulting from the Appraisal Work Program from both the PDA Area and the MOL Area will be shared among the parties. The parties will analyze all such data, discuss well locations, the combined work program and related expenditures through the three companies' joint Operating Committee, however, the final decision on location of such wells shall be an ExxonMobil/MOL decision.

(3) Reallocation of Third Payment: The Amendment further provides that Falcon agrees to reallocate one-half of the US$75 million payment that is due to Falcon if ExxonMobil and MOL elect to proceed to the Development Work Program. Those funds (US$37.5 million) will now be applied in the same manner as the Appraisal Program Balance to the optimum locations and operations on a basin-wide technical basis, to be discussed by the companies' joint Operating Committee, however, the final decision on location of such wells shall be an ExxonMobil/MOL decision.

Marc A. Bruner, Chairman and CEO of Falcon, stated, "We are pleased to enter into the amended terms with ExxonMobil and MOL. The Makó Trough is potentially an enormous resource, and Falcon regards these modifications to the April agreement as a significant step forward in optimizing the ultimate development of Falcon's assets. All parties have a single common goal, and will greatly benefit from a combined work program."