An anonymous director reports

FALCON OIL & GAS LTD. ANNOUNCES PARTICIPATION AGREEMENT WITH HESS AUSTRALIA FOR BEETALOO BASIN PROJECT

Falcon Oil & Gas Ltd.'s Falcon Oil & Gas Australia Ltd., Falcon's 73-per-cent-owned subsidiary, has signed a participation agreement with Hess Australia (Beetaloo) Pty. Ltd., an affiliate of Hess Corporation, for the acquisition of an interest in onshore exploration permits 76, 98 and 117 in the Beetaloo basin, Northern Territory, Australia.

The terms of the agreement remain as outlined in the letter of intent between the two companies announced on Feb. 22, 2011. In brief, and subject to certain regulatory approvals and standard conditions, Hess will earn a 62.5-per-cent working interest in approximately 25,200 square kilometres (6,227,500 acres) by making a payment to Falcon Australia, acquiring warrants in Falcon Oil & Gas Ltd., conducting an extensive seismic program, and drilling five wells to explore and appraise the agreement area. Hess has the right to withdraw from the project following the seismic evaluation and again following the drilling phase, in which event the entire interest would transfer back to Falcon Australia. In addition to its 37.5-per-cent working interest in the joint acreage, Falcon Australia will retain 100-per-cent ownership in the entirety of EP99 and 405 square kilometres (100,000 acres) in EP98.

The seismic survey is anticipated to commence once necessary government and land users' approvals are obtained. Falcon Australia will also carry out its work planned for the Shenandoah-1 well, commencing with reopening and casing the existing wellbore planned for the third quarter of 2011, followed by a comprehensive testing program.

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