Falcon Resumes Mako-6 Testing in Hungary

Falcon Oil & Gas Ltd. has resumed testing operations on the Mako-6 well in the lowermost part of the Basal Conglomerate, after fracture stimulating ("fracing") this interval in April 2007 with 79,000 pounds of proppant and 3,100 bbls of frac fluid.

Prior to this current testing operation, Falcon opened the well for flow, had gas flow to surface immediately and, due to the presence of manageable levels of H2S, the well was shut-in to wait for the correct equipment to flow the well safely. The well was then shut-in with frac fluid load still remaining for over a month.

The well is currently being tested through perforations from 5,326 to 5,328 meters in the Lower Basal Conglomerate. The fracced interval being tested is from 5,279 meters to 5,365 meters, a total of 86 meters; 69 meters Basal Conglomerate and 17 meters Synrift. The Basal Conglomerate is 273 meters thick from 5075 meters to 5348 meters. This remaining 204 meters of Basal Conglomerate will be tested following the completed analysis of results from current test. Falcon is encouraged with the initial gas shows from this test and believes the gas shows will remain constant or will improve in the upper part of the Basal Conglomerate where rock quality increases and sand packages thicken. The company intends to announce details on the gas shows from this test after flow-back of frac fluid and bottom sediment has been completed.

On June 3, 2007, the test was resumed with an 8/64" choke. Within 8 hours of opening the well and recovering 208 bbls of frac fluid, gas surfaced in burnable quantities, which are too small to measure. After flow testing the well for 29 hours and recovering approximately 800 bbls of the frac fluid, it was noted that the flow-back was producing greater than expected quantities of bottom sediment. On June 4, the well was opened up to a 12/64" choke to assist in the clean-up. The well continued to produce gas in burnable quantities through the test separator throughout the day. On June 5, the well experienced a partial to complete tubing plug, which temporarily caused the well to cease flowing. After three hours of no frac fluid recovery, the well unloaded large quantities of bottom sediment, resulting in significant quantities of gas flow in and an 8-foot to 10-foot flare and increased flowing tubing pressures. Falcon will continue to flow test the well, recover as much of the frac load fluid as possible, ensure the tubing and perforations are free and clear of any obstructions, and, if required, assist the well bore unloading process via coil tubing-nitrogen. About two-thirds of the frac load water has been recovered.

Preparations to fracture stimulate the Magyarcsanad well are underway. Falcon is currently rigging up and will commence the well intervention and testing program in the coming weeks. Falcon is engineering a two stage frac that is designed to treat the effective Endrod interval through the existing perforation at 4,060 meters and introduce 4 sets of new perforations. The new perforations will straddle the existing perforations (2 sets above and below). The combined two stage frac will consist of approximately 350,000 pounds of proppant. The treatment is designed to stimulate the entire Endrod formation that is behind casing with a total effective frac height of nearly 300 meters. It is anticipated actual testing operation will commence the end of June.

Falcon Oil & Gas Ltd. is a British Columbia corporation that 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.