Falcon Oil & Gas Amends Terms of PetroHunter Transactions

Falcon Oil & Gas has entered into an amendment with PetroHunter Energy that amends the terms of the US $5 million temporary bridge loan to PetroHunter by extending the maturity date from January 30, 2009 to April 30, 2009 and changes the pledge portion of the security associated with the bridge loan from a pledge of US $7.5 million worth of the convertible securities issued to PetroHunter in connection with the Beetaloo Basin transaction to a pledge of 14,500,000 of the Falcon shares to be issued upon conversion of the Convertible Securities.

Falcon continues to retain its security for repayment of the bridge loan pursuant to a deed of trust covering PetroHunter's interest in five existing wellbores within PetroHunter's 20,000 acre Buckskin Mesa project in the Piceance Basin, Colorado. The Amendment also provides that in the event the bridge loan is not repaid by April 30, 2009, Falcon, at its discretion, can require that PetroHunter's subsidiary resign as operator of the 7 million acre Beetaloo Basin prospect in Northern Territory, Australia.

Falcon and PetroHunter have agreed to reallocate the US $7 million of completion capital that Falcon deposited into an escrow account for a testing and completion program on up to five wells within the Buckskin Mesa Project. US $5.3 million will be used for the testing and completion program, which was commenced in November, 2008, and the remaining US $1.7 million will be advanced directly to an unrelated third party creditor of PetroHunter who is due payment for obligations related to the Buckskin Mesa Project.

Falcon believes that the US $5.3 million will be sufficient to obtain all information necessary for Falcon to make an informed decision on whether to exercise its option to acquire a 50% working interest (37.5% net revenue interest) in the entire Buckskin Mesa Project, including the five wells.