Mr. Philip O'Quigley reports

FALCON OIL & GAS LTD.: ACCELERATION OF EXPLORATION AND APPRAISAL DRILLING PROGRAMME INTO STAGE 2

Falcon Oil & Gas Ltd. has signed an agreement to amend the farmout agreement with Origin Energy B2 Pty. Ltd. to deem Stage 1 of the exploration and appraisal drilling program in the Beetaloo subbasin complete and to commence Stage 2 with a $15-million (Australian) increase to the Stage 2 cost cap.

Stage 1 early completion

Under the terms of the 2014 farmout agreement and joint operating agreement the joint venture parties (JV) drilled three vertical wells and one hydraulic fracture-stimulated horizontal well. The JV has agreed that, following the success of the fracture-stimulated horizontal well in 2016, accelerating into the Stage 2 horizontal drilling program is far more beneficial than fracture stimulating the final vertical well under Stage 1. The formal completion of Stage 1 is subject to government approval.

Stage 2 -- $15-million (Australian) cost cap increase

Under the agreements, the original Stage 2 cost cap was approximately $50-million (Australian) for the exploration and appraisal program including the drilling and hydraulic fracture stimulation costs of two horizontal wells. With the removal of the fracture stimulation of the vertical well and accelerating the commencement of Stage 2, Origin has agreed to increase the Stage 2 cost cap by $15-million (Australian), to approximately $65-million (Australian). Any portion of the $15-million (Australian) increase not utilized during Stage 2 will transfer to the Stage 3 cost cap, which currently stands at $48-million (Australian).

Stage 2 exploration and appraisal drilling program

The JV has agreed to evaluate the potential of the liquids-rich gas fairways in both the Kyalla and Velkerri plays. Exploration and appraisal activities planned for 2019 include the drilling of one vertical well and the drilling and hydraulic fracture stimulation of two horizontal wells. Preparations for this drilling program have started. This will allow for the assessment of three plays, including the Velkerri B dry gas play discovered in 2016, so that the most commercially prospective play can be targeted during Stage 3.

Stage 3 early capital commitments

The Stage 2 exploration and appraisal drilling program will determine the most commercially prospective play to be targeted during Stage 3. The JV has agreed to the early commitment of Stage 3 capital expenditure during 2019, allowing for an efficient transition from Stage 2 to Stage 3, in the case that Origin and Falcon agree to proceed to Stage 3.

Philip O'Quigley, chief executive officer of Falcon, commented: "Today's announcement is an exciting development for Falcon shareholders and is due to significant technical work carried out by Origin over the past 18 months. The agreed acceleration of the work program into Stage 2 is technically driven and the $15-million (Australian) cost cap increase provides Falcon with additional financial flexibility. We are very excited about the upcoming drilling program with the objective of appraising and assessing commerciality of the prospective plays."

About Falcon Oil & Gas Ltd.

Falcon Oil & Gas is an international oil and gas company engaged in the acquisition, exploration and development of conventional and unconventional oil and gas assets, with the current portfolio focused in Australia, South Africa and Hungary.

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