Falcon Wins Long-term Production License in Hungary

Falcon Oil & Gas Ltd. has received final written approval from the Hungarian Mining Authority for a long-term production license (known as a "Mining Plot" under Hungarian law) covering all oil and gas in the identified Basin Centered Gas Accumulation ("BCGA") resource underlying Falcon's two exploration licenses.

On May 21, 2007, Falcon's Hungarian operating subsidiary, TXM Oil and Gas LLC, received formal written approval and issuance of the long-term production license ("Production License") that was applied for in October 2006. The issuance of the Production License was the final step necessary for Falcon to secure its right and ability to implement its drilling and development plan for this large hydrocarbon resource in southeast Hungary. The Production License will continue as long as Falcon continues operations on the properties.

CEO and Chairman, Marc A. Bruner, stated, "The issuance of the long-term production license is the culmination of years of dedicated work by Falcon and the cooperation and expertise of the Hungarian government in analyzing and recognizing the estimated recoverable portion of this Contingent Resource. Falcon extends its appreciation to the Mining Authority, environmental authorities and related mayors and municipalities, and commits to conduct its business and carry out a development program that will mutually benefit the company and the people of Hungary. We are excited about this project and our long-term future relationship with the Hungarian government and the people of Hungary."

The Production License follows the government's approval of the company's Closing Report on December 21, 2006, as previously announced. With its approval of the Closing Report, the Hungarian government validated and agreed with Falcon's geological and technical evaluation and conclusions about the existence, extent, and estimated recoverable portion of this BCGA Contingent Resource underlying Falcon's exploration licenses. The approved Mining Plot covers the area as defined by the Scotia Group, Inc., for its resource estimate, in an independent report ("Scotia Report") dated effective August 15, 2006 (previously filed at http://www.Sedar.com).

Dr. Gyorgy Szabo, a member of Falcon's Board of Directors, stated, "Falcon has acquired more than 1,100 square kilometers of 3D seismic, drilled five wells, commenced drilling of a sixth well, constructed a high capacity gathering pipeline and entered into a detailed testing and evaluating program. Now that Falcon has received approval of the Mining Plot, the company will put the necessary systems and personnel in place to develop this extensive resource, consistent with the results of our ongoing testing program."

Falcon Oil & Gas Ltd. is a British Columbia corporation which is in the business of oil and gas exploration and production. It has operations in Hungary through its wholly owned subsidiary TXM Oil and Gas Exploration and in Romania through its wholly owned subsidiary JVX Energy Corporation.