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Falcon Oil & Gas Ltd. Announces the Filing of Its 2013 Financial Statements, MD&A, AIF and Reserves Data

DUBLIN, IRELAND -- (Marketwired) -- 05/01/14 -- Falcon Oil & Gas Ltd. (TSX VENTURE: FO)(AIM: FOG)(ESM: FAC) ("Falcon") announces that it has filed its audited financial statements for the year ended 31 December 2013, the accompanying management's discussion and analysis ("MD&A") for year ended 31 December 2013 dated 29 April 2014, its Annual Information Form ("AIF") dated 29 April 2014 and the Statement of Reserves Data and Other Oil and Gas Information (National Instrument 51-101, Forms 51-101F1, 51-101F2 and 51-101F3) with the relevant provincial securities regulators. These filings are available for review at www.sedar.com. The audited financial statements and MD&A are also available on Falcon's website www.falconoilandgas.com.

The following should be read in conjunction with the complete audited financial statements for the year ended 31 December 2013 and the accompanying MD&A for the year ended 31 December 2013.

2013-2014 Highlights


--  Farm-out discussions advancing in Australia.
--  Consolidation of interest in Australian subsidiary completed.
--  The Overriding Royalty, Beetaloo Basin, Australia reduced.
--  Drilling and testing of first well in Hungary, fully carried by Naftna
    Industrija Srbije JSC ("NIS").
--  Admission to trading on AIM and ESM - successfully raising US$25.7
    million of new capital.
--  Focus on strict cost management and efficient operation of the
    portfolio.
--  Healthy financial position, debt free with cash and cash equivalents at
    US$8.4 million.

Philip O'Quigley, CEO of Falcon commented:

"We have had an extremely busy 2013 and Quarter 1 2014. Our immediate attention is now focused on securing a new farm-out partner for our acreage in Australia and the completion of testing of Kutvolgy-1. Progress to date on all of these fronts is in line with our expectations, we will make further announcements in due course."

Australia

Farm-out discussions in Australia advancing

Further to previous press releases, Falcon was approached by several oil and gas companies interested in farming into the Beetaloo Basin. Falcon is well advanced in its discussions with a number of those companies.

Consolidation of interest in Australian subsidiary

In July 2013 Falcon completed the acquisition of a 25.4% minority interest in Falcon Australia consolidating the Group's interest at 98% of the company.

Reducing the Overriding Royalty, Beetaloo Basin, Australia

On 1 November 2013, Falcon announced that Falcon Australia, had entered into an agreement ("the CRIAG Agreement") with CR Innovations AG ("CRIAG") to acquire its 4% Overriding Royalty Interest ("ORRI") relating to its exploration permits in the Beetaloo Basin. On 17 December 2013, Falcon announced that Falcon Australia, had entered into an agreement with Malcolm John Gerrard, Territory Oil & Gas LLC and Tom Dugan Family Partnership LLC (collectively "TOG Group") to acquire up to 7% (seven eighths) of the remaining 8% private ORRI over Falcon Australia's exploration permits in the Beetaloo Basin. The completing of the two agreements to acquire 8% of the privately held ORRI at a total cost of US$7 million, of which US$6 million is payable only upon completion of a Farm-Out in Australia. In addition, the Group has secured agreement to acquire a further 3% based on two five year call options granted to Falcon at a future combined cost of US$20 million leaving only a 1% royalty in private hands.

Hungary Drilling

The well testing operations on the Kutvolgy-1 well in Hungary have started. Kutvolgy-1 is the first of a three well drilling and testing programme fully funded by NIS, to evaluate the gas potential of the Algyo Formation in Falcon's Mako trough permit. The testing objectives are to determine reservoir quality and gas productivity from the target Algyo formation encountered in Kutvolgy-1.

Admission to trading on AIM and ESM

In March 2013, Falcon was admitted to trading on the AIM market of the London Stock Exchange and the ESM market of the Irish Stock Exchange of the Company's existing share capital and the additional 120,381,973 new common shares in the capital of the Company issued pursuant to the concurrent conditional brokered private placing, at a price of GBP 0.14 (CDN$0.215) per share, raising gross proceeds of $25.7 million.

Debt repayment

In June 2013, Falcon repaid the full amount outstanding on its Convertible Loan Note of CDN$10.7 million. This repayment means that the Group is now completely debt free.

Results for operating activities

Falcon incurred a loss of US$3.6 million in the year ended 31 December 2013, decreasing from a loss of US$17.7 million in the year ended 31 December 2012.

Falcon's cash and cash equivalent balance at 31 December 2013 was US$8.4 million (31 December 2012: US$2.9 million).


Falcon Oil & Gas Ltd.
Consolidated Statement of Operations and Comprehensive Loss

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                                                 Year ended      Year ended
                                                31 December     31 December
                                                       2013            2012
                                                    US$'000         US$'000
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Revenue
Oil and natural gas revenue                              17              21
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                                                         17              21
Expenses
Exploration and evaluation expenses                    (899)         (1,654)
Production and operating expenses                       (27)            (37)
Depreciation                                           (307)           (342)
General and administrative expenses                  (4,656)         (6,206)
Share based compensation                               (693)         (2,380)
Restructuring expense                                     -            (792)
Write-down of inventory                                   -            (552)
Foreign exchange gain                                   326               -
Other income                                            683             276
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                                                     (5,573)        (11,687)
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Results from operating activities                    (5,556)        (11,666)

Fair value gain / (loss) - outstanding
 warrants                                             3,895          (2,019)

Finance Income                                          601              81
Finance expense                                      (2,510)         (4,111)
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Net finance expense                                  (1,909)         (4,030)

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Loss and comprehensive loss for the year             (3,570)        (17,715)
----------------------------------------------------------------------------
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Loss and comprehensive loss attributable to:
Equity holders of the company                        (3,411)        (17,441)
Non-controlling interest                               (159)           (274)

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Loss and comprehensive loss for the year             (3,570)        (17,715)
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Loss per share attributable to equity
 holders of the company:
Basic and diluted                            $       (0.004) $        (0.03)
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Falcon Oil & Gas Ltd.
Consolidated Statement of Financial Position

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                                                          At             At
                                                 31 December    31 December
                                                        2013           2012
                                                     US$'000        US$'000
----------------------------------------------------------------------------
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Assets
Non-current assets
Exploration and evaluation assets                     74,517         74,019
Property, plant and equipment                          5,403          5,703
Trade and other receivables                               77            778
Restricted cash                                          615            873
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                                                      80,612         81,373
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Current assets
Cash and cash equivalents                              8,431          2,884
Trade and other receivables                              473          1,756
----------------------------------------------------------------------------
                                                       8,904          4,640

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Total assets                                          89,516         86,013
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Equity and liabilities

Equity attributable to owners of the parent
Share capital                                        382,853        339,334
Contributed surplus                                   42,463         41,858
Retained deficit                                    (350,605)      (334,279)
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                                                      74,711         46,913
Non-controlling interests                                737         10,882
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Total equity                                          75,448         57,795
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Liabilities
Non-current liabilities
Derivative financial liabilities                         448          5,292
Decommissioning provision                             11,138         10,955
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                                                      11,586         16,247
----------------------------------------------------------------------------

Current liabilities
Accounts payable and accrued expenses                  1,533          3,122
Convertible debentures                                     -          8,773
Derivative financial liabilities                         949             26
Decommissioning provision                                  -             50
----------------------------------------------------------------------------
                                                       2,482         11,971
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Total liabilities                                     14,068         28,218

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Total equity and liabilities                          89,516         86,013
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Falcon Oil & Gas Ltd.
Consolidated Statement of Cash Flows


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                     Year Ended 31 December
                                                          2013         2012
                                                       US$'000      US$'000
----------------------------------------------------------------------------

Cash flows from operating activities
Net loss for the year                                   (3,570)     (17,715)
Adjustments for:
  Share based compensation                                 693        2,380
  Depreciation                                             307          342
  Fair value (gain) / loss - outstanding warrants       (3,895)       2,019
  Net finance expense                                    1,909        4,030
  Other                                                   (383)           -
Contribution to past costs - Chevron                     1,000            -
Change in non-cash working capital                        (854)         668
Interest paid                                             (573)      (1,061)
Interest received                                          102           66
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Net cash used in operating activities                   (5,264)      (9,271)

Cash flows from investing activities
Decrease / (increase) in restricted cash                   258         (335)
Exploration and evaluation assets                       (1,964)      (2,834)
Proceeds from farm-out transaction - NIS                 1,500            -
Property, plant and equipment                              (32)        (325)
----------------------------------------------------------------------------
Net cash used in investing activities                     (238)      (3,494)

Cash flows from financing activities
Proceeds from exercise of share options                    112          152
Proceeds from private placement - March 2013            25,672            -
Transaction costs relating to private placement -
 March 2013                                             (2,157)           -
Repayment of 11% debenture                             (10,197)           -
Share acquisition in Falcon Oil & Gas Australia
 Ltd ("Falcon Australia")                               (3,000)           -
Transaction costs associated with share
 acquisition in Falcon Australia                           (97)           -
----------------------------------------------------------------------------
Net cash from financing activities                      10,333          152

Change in cash and cash equivalents                      4,831      (12,613)
Effect of exchange rates on cash & cash
 equivalents                                               716          139

Cash and cash equivalents at beginning of year           2,884       15,358

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Cash and cash equivalents at end of year                 8,431        2,884
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Glossary of terms


US$   United States dollar
CDN$  Canadian dollar

About Falcon Oil & Gas Ltd.

Falcon is an international oil & gas company engaged in the acquisition, exploration and development of conventional and unconventional oil and gas assets, with the current portfolio spread between Australia, South Africa and Hungary. Falcon is incorporated in British Columbia, Canada and headquartered in Dublin, Ireland with a technical team based in Budapest, Hungary.

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

Neither the TSX Venture Exchange nor 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.

Certain information in this press release may constitute forward-looking information, including comments made with respect to when payments due under the CRIAG and TOG agreements will be made and with respect to the progress of securing a Farm-out agreement. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. Falcon assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to Falcon.

Additional information identifying risks and uncertainties is contained in Falcon's filings with the Canadian securities regulators, which filings are available at www.sedar.com.

Contacts:
Falcon Oil & Gas Ltd.
Philip O'Quigley
CEO
+353 87 814 7042 or +353 1 417 1900

Falcon Oil & Gas Ltd.
John Craven
Non-Executive Chairman
+353 1 417 1900 or +353 1 417 1900
www.falconoilandgas.com

FTI Consulting
Edward Westropp
+44 207 269 7230

Davy (NOMAD & Joint Broker)
John Frain / Anthony Farrell
+353 1 679 6363

GMP Securities Europe LLP (Joint Broker)
Rob Collins / Liz Williamson
+44 20 7647 2800

Cantor Fitzgerald Europe (Joint Broker)
David Porter / Richard Redmayne
+44 207 894 7000

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