http://www.newswire.ca/en/releases/archive/July2009/13/c5824.html

Falcon Oil & Gas Ltd. announces agreements with Merrill Lynch and BMO Capital Markets as advisors for strategic partner initiative in Hungary

    (TSXV Symbol: FO)

    DENVER, July 13 /CNW/ - Falcon Oil & Gas Ltd. (TSXV: FO) ("Falcon") is
pleased to announce that it has entered into agreements (collectively, the
"Agreements") with Merrill Lynch Pierce Fenner and Smith, Inc. ("Merrill") and
BMO Capital Markets ("BMO") pursuant to which Merrill and BMO have been
engaged to provide advisory services with respect to strategic initiatives in
order to assist Falcon in maximizing the potential of the 391,400 acres which
are outside of the Falcon/ExxonMobil/MOL joint development project in Hungary
(the "100% Falcon Acreage").
    Falcon's Chairman and CEO, Marc A. Bruner, stated, "With the assistance
and capabilities of our world-class advisors, we're optimistic about
concluding one or more transactions that will add significant value to our
assets and will provide the capability to further define and determine the
commercial potential of these properties."

    The Merrill Lynch and BMO Agreements

    The execution of the Agreements is the first step in Falcon's strategic
partner initiative (the "2009 Initiative"). Under the 2009 Initiative, Falcon
will be seeking one or more third parties with the financial and/or technical
capabilities to participate in exploration and development activities on the
100% Falcon Acreage.
    Sean Mueller, project lead for Merrill, said, "Merrill Lynch has one of
the largest energy teams on Wall Street, with offices in nine countries, and
with a substantial track record in unconventional gas transactions. Production
from unconventional gas has completely changed the natural gas market in North
America. Marc A. Bruner has been an industry pioneer in unlocking the
potential at Jonah and Pinedale in the Rocky Mountains. He and his team have
now taken that experience and expertise and expanded internationally to
Hungary. Unconventional gas will become extremely important to Europe's
overall gas supply. Falcon's Mako interests represent a unique opportunity in
one of the most advanced unconventional plays in Europe."

    Hungary Strategic Partner Initiative - Production License and Exploration
Licenses

    As previously announced, under the transaction with ExxonMobil in April
2008, Falcon retained sole ownership and operatorship of 391,400 acres
(collectively, "100% Falcon Acreage") outside the Falcon, ExxonMobil, MOL
Contract Area, as follows:

    -   Falcon Lands in Mining Plot: Falcon has 100% ownership in the 25%
        portion (61,400 acres) of the Mining Plot (long-term "Production
        License") that is not part of the Contract Area.

    -   Exploration Licenses: Falcon has 100% ownership in 330,000 acres
        which are outside the boundaries of the Production License, and
        continue to be part of the original Makó Exploration License and
        original Tisza Exploration License.

    -   Shallow Rights: Falcon also owns 100% of those portions of the Mako
        and Tisza Exploration Licenses which are above 2,800 meters within
        the boundaries of the entire 246,000-acre Production License
        (including the 61,400 acres mentioned above).

    It is presently expected that the 2009 Initiative will result in Falcon
entering into one or more agreements under which third parties might acquire
an undivided interest within the 100% Falcon Acreage.
    Mr. Bruner commented, "ExxonMobil is now evaluating the Foldeak-1 well
for testing, and we're looking forward to seeing those results. We're pleased
with our relationship with ExxonMobil and MOL and the status of the joint
development project." Mr. Bruner continued, "However, when you consider the
areas to the east and north of the Falcon, ExxonMobil, MOL acreage, there is
significant Szolnok potential for further exploration and development. As we
approach the point in time when we will begin to see test results from the
Foldeak, we will apply that information to our 100% owned acreage, together
with the extensive data that we have separately developed throughout this
area, including the well data from our 2006-07 drilling program and our
seismic information. The initiative that we started in 2007 resulted in our
joint development agreement with ExxonMobil and MOL. Similarly, our plan is
that the 2009 strategic partner initiative will lead to one or more
transactions on our 100% owned acreage in Hungary."

    About Falcon Oil & Gas Ltd.

    Falcon Oil & Gas Ltd. is a British Columbia corporation in the business
of conventional and unconventional oil and gas exploration and production.
Falcon seeks to maximize value for its shareholders through strategic
relationships. It conducts operations in Hungary through its wholly owned
subsidiary TXM Oil and Gas Exploration, LLC, in Romania through its wholly
owned subsidiary JVX Energy Corporation, in Colorado through its wholly owned
subsidiary Falcon Oil & Gas USA, Inc., and in Australia through its wholly
owned subsidiary Falcon Oil & Gas Australia Pty Ltd. Further information about
Falcon is available at www.falconoilandgas.com.