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Falcon and Chevron to jointly Explore Karoo Basin in South Africa

December 12, 2012

TORONTO, Dec. 12, 2012 /CNW/ – Falcon Oil & Gas Ltd. (TSXV: FO)
(Falcon), a Toronto listed and Dublin headquartered company focused on
unconventional oil and gas exploration and producing assets in
Australia, Hungary, and South Africa, announced today that it has
entered into an Agreement (the Agreement) with Chevron Business
Development South Africa Limited (Chevron) which allows both parties to
jointly co- operate together in order to seek unconventional
exploration opportunities in the Karoo Basin, South Africa.

Falcon currently has a Technical Cooperation Permit (TCP), which gives
Falcon exclusive rights to obtain an Exploration Permit covering
approximately 7.5 MM acres in the southern part of the Karoo basin.

The Agreement today provides for Falcon to work exclusively with Chevron
for a period of five years in jointly obtaining Exploration Permits in
the Karoo Basin subject to the parties mutually agreeing participation
terms applicable to each permit and as such, there will be future
announcements by Falcon when an Exploration Permit is awarded.

Chevron will make immediate cash payment of up to $1 million to Falcon
as a contribution to past costs and from today will work with Falcon to
secure Exploration Permits.

Philip O’Quigley, CEO of Falcon commented: “Today’s Agreement with
Chevron is a major step forward towards realising the full potential of
our already significant acreage position in the Karoo Basin currently
held under a TCP. Chevron has over 100 years of experience of working
in South Africa but even more importantly has extensive experience in
commercially and sensitively developing unconventional oil and gas
resources. This Agreement is an encouraging endorsement of the
management’s confidence in the potential of the Karoo and we look
forward to making future announcements when an Exploration Permit is
awarded.”

About the Karoo Basin
The Karoo Basin is large (236,000 mi2), extending across nearly
two-thirds of the country, with the southern portion (70,800 mi2) of
the basin potentially favourable for shale gas. A significant portion
of Falcon’s TCP (11,719 mi2) is located within the prospective area,
along the southern boundary.

The Permian-age Ecca Group has three potential gas shales in the Ecca
Formation. The most promising of these is the highly organic-rich,
thermally mature shale of the Whitehall Formation. This unit is
regionally persistent in composition and thickness and can be traced
across most of the Karoo Basin.

An estimate of the undiscovered petroleum-initially-in-place, and the
prospective (or undiscovered) resources attributable to these shales
was carried out by Advanced Resources International (“ARI”) on behalf
of the US Energy Information Administration (“EIA”). The EIA’s April
2011 report titled “World Shale Gas Resources: An Initial Assessment”,
estimated that the Lower Ecca Group shales in this basin contain
approximately 1,834 trillion cubic feet of risked gas in-place, with
risked recoverable shale gas prospective resources of 485 trillion
cubic feet.

Please note that there is no certainty that any portion of the above
quoted resource volumes will be discovered. If discovered, there is no
certainty that it will be economically viable or technically feasible
to produce any portion of the resources.

About Falcon Oil & Gas Ltd.
Falcon Oil & Gas Ltd. is an international oil and gas exploration and
production company, Toronto listed under the symbol “FO.” It is
headquartered in Dublin, Ireland, with offices in Budapest, Hungary.

The company is focussed on unconventional and conventional oil and gas
exploration and production, and holds assets in three major
underexplored basins in Australia, Hungary, and South Africa.

For further information on Falcon Oil & Gas Ltd. please visit www.falconoilandgas.com

About Chevron Business Development South Africa Limited
Chevron Business Development South Africa Limited is a subsidiary of
Chevron Global Energy Inc. Chevron is one of the world’s leading
integrated energy companies, with subsidiaries that conduct business
worldwide. The company is involved in virtually every facet of the
energy industry. Chevron explores for, produces and transports crude
oil and natural gas; refines, markets and distributes transportation
fuels and lubricants; manufactures and sells petrochemical products;
generates power and produces geothermal energy; provides energy
efficiency solutions; and develops the energy resources of the future,
including biofuels. Chevron is based in San Ramon, California. More
information about Chevron is available at www.chevron.com.

Neither the TSX Venture Exchange not its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.

Forward-looking Statements
Forward-looking statements include, but are not limited to, statements
with respect to: the focus of capital expenditures; the sale, farming
in, farming out or development of certain exploration properties using
third party resources; the impact of changes in petroleum and natural
gas prices on cash flow; drilling plans; processing capacity; operating
and other costs; the existence, operation and strategy of the commodity
price risk management program; the approximate and maximum amount of
forward sales; Falcon’s acquisition strategy, the criteria to be
considered in connection therewith and the benefits to be derived
therefrom; Falcon’s goal to sustain or grow production and reserves
through prudent management and acquisitions; the emergence of accretive
growth opportunities; Falcon’s ability to benefit from the combination
of growth opportunities and the ability to grow through the capital
markets; development costs and the source of funding thereof; the
quantity of petroleum and natural gas resources or reserves; treatment
under governmental regulatory regimes and tax laws; liquidity and
financial capital; the impact of potential acquisitions and the timing
for achieving such impact; expectations regarding the ability to raise
capital and continually add to reserves through acquisition and
development; the performance characteristics of Falcon’s petroleum and
natural gas properties; and realization of the anticipated benefits of
acquisitions and dispositions.

Some of the risks and other factors, which could cause results to differ
materially from those expressed in the forward-looking statements
include, but are not limited to: general economic conditions in Canada,
the Republic of Hungary, the Commonwealth of Australia, the Republic of
South Africa and globally; supply and demand for petroleum and natural
gas; industry conditions, including fluctuations in the price of
petroleum and natural gas; governmental regulation of the petroleum and
natural gas industry, including income tax, environmental and
regulatory matters; fluctuation in foreign exchange or interest rates;
risks and liabilities inherent in petroleum and natural gas operations,
including exploration, development, exploitation, marketing and
transportation risks; geological, technical, drilling and processing
problems; unanticipated operating events which can reduce production or
cause production to be shut-in or delayed; the ability of our industry
partners to pay their proportionate share of joint interest billings;
failure to obtain industry partner and other third party consents and
approvals, when required; stock market volatility and market
valuations; competition for, among other things, capital, acquisition
of reserves, processing and transportation capacity, undeveloped land
and skilled personnel; the need to obtain required approvals from
regulatory authorities; and the other factors considered under “Risk
Factors” in Falcon’s annual information form ( AI”) dated December 31,
2011. Risks and uncertainties that could cause Falcon’s actual results
to materially differ from current expectations have not changed from
those disclosed in Falcon’s Management’s Discussion and Analysis
(MD&A)as at December 31, 2011. The AIF and MD&A have been filed with
Canadian securities regulatory authorities and are available at www.sedar.com.  The forward-looking statements contained in this press release are
expressly qualified by this cautionary statement.  Falcon disclaims any
intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise, except as required under applicable securities regulation.

In addition, other factors not currently viewed as material could cause
actual results to differ materially from those described in the
forward-looking statements.

SOURCE Falcon Oil & Gas Ltd.


Source: PR Newswire