TIDMFOG Falcon Oil & Gas Ltd.-Completion of Australian Beetaloo Basin Farm-Out and Commencement of Nine Well Exploration and Appraisal Program FOR: FALCON OIL & GAS LTD. TSX VENTURE SYMBOL: FO AIM SYMBOL: FOG ISE SYMBOL: FAC August 21, 2014 Falcon Oil & Gas Ltd.-Completion of Australian Beetaloo Basin Farm-Out and Commencement of Nine Well Exploration and Appraisal Program DUBLIN, IRELAND--(Marketwired - Aug. 21, 2014) - Falcon Oil & Gas Ltd. (TSX VENTURE:FO)(AIM:FOG)(ESM:FAC) (the "Company") is pleased to announce, that further to its press release of 2 May 2014, its 98% subsidiary, Falcon Oil & Gas Australia Ltd ("Falcon"), has completed its Farm-Out Agreement and Joint Operating Agreement (collectively "the Agreements") with Origin Energy Resources Limited, a subsidiary of Origin Energy Limited ("Origin") and Sasol Petroleum Australia Limited, a subsidiary of Sasol Limited ("Sasol"), (collectively referred to herein as the "Farminees"), each farming into 35% of Falcon's Exploration Permits in the Beetaloo Basin, Australia (the "Permits"). Key transaction details are: =- Falcon retains a 30% interest in the Permits. =- Falcon has received A$20 million cash from the Farminees. =- Origin is appointed as Operator with immediate effect. =- Farminees to carry Falcon in a nine well exploration and appraisal program over the next four years, detailed as follows: -- 3 vertical exploration/stratigraphic wells and core studies; -- 1 hydraulic fracture stimulated vertical exploration well and core study; -- 1 hydraulic fracture stimulated horizontal exploration well, commercial study and 3C resource assessment; and -- 4 hydraulic fracture stimulated horizontal exploration/appraisal wells, micro-seismic and 90 day production tests. =- Drilling/testing specifically targeted to take the project towards commerciality. =- 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 drilling programme will commence by mid 2015. =- Farminees to pay up to the full cost of the next four horizontally fracture stimulated wells, 90 day production tests and micro seismic with a capped expenditure up to A$101 million, any cost overrun funded by each Party in proportion to their working interest. =- As part of the agreements to reduce the overriding royalties from what was originally 12% to 1%, Farminees will pay their pro-rata share (US$14 million (approx. A$15 million)) of the two five year call options entered into by Falcon as part of agreements announced on 1 November 2013 with CR Innovations AG and 17 December 2013 with the TOG Group, should Farminees and Falcon decide to exercise the call options. =- Farminees may reduce or surrender their interests back to Falcon only after: -- the drilling of the first five wells or -- the drilling and testing of the next two horizontally fracture stimulated wells. Philip O'Quigley, CEO of Falcon commented: "I am delighted to announce we have completed the Agreements with Origin and Sasol for our transformational Farm-out of our Beetaloo acreage. Together with A$20 million cash up front, the deal is worth up to approximately A$200 million to Falcon. We look forward to the immediate commencement of the nine well exploration and appraisal program.