Falcon Oil & Gas Ltd.: Australia Drilling Programme Continues: Spudding of Amungee NW-1

DUBLIN, IRELAND--(Marketwired - Sep 8, 2015) - Falcon Oil & Gas Ltd. (TSX VENTURE:FO)(FOG.L)(FAC) is pleased to announce the spudding of the Amungee NW-1 well in the Beetaloo Basin, Australia. Amungee NW-1 is the second of Falcon's fully carried 2015 three well drilling and evaluation programme, the initial phase of a nine well drilling and evaluation programme.

Highlights:

• Amungee NW-1 is targeting the Middle Velkerri formation to assess hydrocarbon saturation and reservoir quality.
• The well is located approximately 25 kilometres east of the first well drilled, Kalala S-1, within exploration permit 98 with drilling estimated to be to a total depth of 2,700 meters.
• Rig 185, an ATS 400 originally commissioned for the drilling of Kalala S-1 from Saxon Energy Services Australia Pty. Ltd, will be used.
• Drilling is estimated to take between 35 and 50 days.
• The drilling of Amungee NW-1 will be operated by Origin Resources Limited ("Origin") (35%) with partners Sasol Petroleum Australia Limited ("Sasol") (35%) and Falcon (30%). Falcon retains a 30% interest in 4.6 million gross acres of the Beetaloo Basin.

The principal objectives of the 2015 three well drilling programme are to:

• penetrate the Middle Velkerri formation to assess hydrocarbon saturation and reservoir quality;
• evaluate oil versus gas maturity and determine the most prospective areas and depth window;
• provide further information on the aerial distribution of the target Middle Velkerri formation; and
• collect data points for subsequent vertical and horizontal drilling.

Formation evaluation and reservoir characterisation will be carried out from the initial three wells through petrophysical interpretation, core analysis, geomechanical studies and stimulation design.

Philip O'Quigley, CEO of Falcon commented:

"Amungee NW-1 is the second of our 2015 fully carried three well drilling programme with our partners Origin and Sasol and follows the successful drilling of the first well, Kalala-S1. This second well is designed to once again penetrate and acquire further data from the Middle Velkerri formation. We're currently evaluating the extensive sidewall core and wireline data and the geochemical analysis of cuttings acquired from Kalala- S1 and look forward to reporting our findings in the near future."

Background

On 2 May 2014, Falcon announced it had entered into a Farm-Out Agreement and Joint Operating Agreement with Origin and Sasol (collectively referred to herein as the "Farminees") with each farming into 35% of the Falcon's exploration permits in the Beetaloo Basin, Australia through its 98% subsidiary, Falcon Oil & Gas Australia Ltd. ("Falcon Australia"). The Farminees will carry the Group in a nine well exploration and appraisal programme from 2015 to 2018.

• Farminees will pay for the full cost of completing the first five wells estimated at A$64 million, and will fund any cost overruns, with work expected to be completed between 2015 and 2016.
• Farminees to pay the full cost of the following two horizontally fracture stimulated wells, 90 day production tests and micro seismic data collection with a capped expenditure of A$53 million, any cost overrun funded by each party in proportion to their working interest. This work programme is expected to be undertaken in 2017.
• Farminees to pay the full cost of the final two horizontally fracture stimulated wells and 90 day production tests capped at A$48 million, any cost overrun funded by each party in proportion to their working interest. This work programme is expected to be undertaken in 2018.
• Farminees may reduce or surrender their interests back to Falcon Australia only after:
  • The drilling of the first five wells or
  • The drilling and testing of the next two horizontally fracture stimulated wells.

This announcement has been reviewed by Dr. Gábor Bada, Falcon Oil & Gas Ltd's Head of Technical Operations. Dr. Bada obtained his geology degree at the Eötvös L. University in Budapest, Hungary and his PhD at the Vrije Aniversiteit Amsterdam, the Netherlands. He is a member of AAPG and EAGE.