Falcon Oil & Gas Ltd. Amends Escrow Agreement Dated April 1, 2005

Falcon Oil & Gas Ltd. Amends Escrow Agreement Dated April 1, 2005

Falcon Oil & Gas Ltd. (TSXV: FO) (the “Corporation”) announced today that MGI Securities Inc. (“MGI”) has agreed to a waiver (the “Waiver”) to release certain common shares of the Corporation that were placed into escrow pursuant to an escrow agreement, a copy of which is available at www.sedar.com (the “Escrow Agreement”) in connection with the Corporation’s acquisition of the shares of Mako Energy Corporation completed on April 1, 2005. The Waiver provides for the immediate release of certain common shares of the Corporation from escrow as well as for a reduction in the term of the escrow for the remaining common shares held in escrow. The reduction shortens the term of the escrow from six years to the three year minimum escrow period required by the policies of the TSX Venture Exchange.

Under the original terms of the Escrow Agreement, 140,000,000 common shares of the Corporation were placed in escrow on April 1, 2005 with such shares being released from escrow in tranches every six months for a period of six years, which to date has provided for the release of 14,000,000 common shares. As a result of the Waiver, an additional 42,000,000 common shares will be released from escrow immediately as freely tradeable common shares, with the remaining 84,000,000 common shares being released from escrow as freely tradeable common shares in four equal tranches. The first of such four tranches is scheduled for October 12, 2006 with the remaining three tranches to occur in subsequent six month intervals ending on April 12, 2008.

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.

In the interests of providing Company shareholders and potential investors with information regarding the Company, including the Company’s 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 Company’s drilling project in Hungary and the timing thereof, the Company’s 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 Company’s 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 Company’s 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 Company’s 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.

For further information

Falcon Oil & Gas Ltd., Marc A. Bruner, President, CEO and Chairman Michael K. Lam, Corporate Development


Source: Falcon Oil & Gas Ltd.

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