FOR IMMEDIATE RELEASE (TSXV Symbol: FO) May 22, 2007
Falcon Oil & Gas Ltd. Receives Long-Term Production License in Hungary
Budapest, Hungary May 22, 2007 Falcon Oil & Gas Ltd. (TSXV: FO) (Falcon) today announced that it 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, Falcons 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(1)(2). 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 governments approval of the companys 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 www.Sedar.com).
Dr. Gyorgy Szabo, a member of Falcon's Board of Directors, stated, "Falcon has acquired more than 1,100 square kilometres 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.
Notes Regarding Contingent Resource Estimate:
(1) The resource estimate has been conducted using the definitions specified by the Canadian Oil and Gas Evaluation Handbook. The Mak Trough Resource falls under the Discovered Resources classification. The values refer to the probabilistically estimated recoverable fraction of Contingent Resources within that classification. Contingent resources are those quantities of oil and gas estimated on a given date to be potentially recoverable from known accumulations but are not currently economic. The economic nature of this resource has not yet been assessed due to the early stage of data gathering for the Mak Trough resource. The recoverable portion of this Contingent Resource is contingent upon the demonstration of productive capability of the various zones of interest through well testing and longer term production testing which has not occurred as of the effective date of the report.
(2) Estimates are as at August 15, 2006, the effective date of the Scotia Report.
About Falcon Oil & Gas Ltd.
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. Further information about Falcon is available at www.falconoilandgas.com.
Contacts:
Falcon Oil & Gas Ltd.
Marc A. Bruner, President, Chairman & CEO
Weber Shandwick Worldwide
Peter Duda
+1 (212) 445-8213
Falcon's discovered resources are not reserves. Only those quantities of oil and gas that are anticipated to be economically recoverable from discovered resources are classified as reserves. Until such time as Falcon's discovered resources are proven to be reserves, there is a risk that Falcon may not achieve ongoing operations from which it may generate significant revenue.
In the interests of providing Company shareholders and potential investors with information regarding the Company, including the Companys assessment of its and its subsidiaries future plans and operations, certain statements included in this press release may constitute forward-looking information or forward looking statements (collectively, forward-looking statements). All statements contained herein that are not clearly historical in nature are forward-looking, and the words anticipate, believe, expect, estimate and similar expressions are generally intended to identify forward-looking statements. Similarly, forward-looking statements in this press release include, but are not limited to anticipated developments of the Companys drilling project in Hungary and the timing thereof, the Companys drilling project in Romania and the timing thereof, capital investment levels and the allocation thereof, pipeline capacity, government royalty rates, reserve and resources estimates, the level of expenditures for compliance with environmental regulations, site restoration costs including abandonment and reclamation costs, exploration plans, acquisition and disposition plans including farmout plans, net cash flows, geographic expansion and plans for seismic surveys. In addition, please note that statements relating to reserves or resources are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described can be profitably produced in the future. Such statements represent the Companys internal projections, estimates or beliefs concerning, among other things, an outlook on the estimated amounts and timing of capital expenditures, anticipated future debt levels and incentive fees or revenues or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. These statements are only predictions. Actual events or results may differ materially. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause the Companys actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company and the foregoing list of important factors is not exhaustive. These forward-looking statements are made as of the date hereof disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise. Company shareholders and potential investors should carefully consider the information contained in the Companys filings with Canadian securities administrators at www.sedar.com before making investment decisions with regard to the Company.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
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