Falcon Oil & Gas Ltd. Announcement

VANCOUVER – July 25, 2006 - Falcon Oil and Gas Ltd., (TSXV: FO) announced today that in an effort to ensure its ongoing compliance with its regulatory obligations, Falcon would like to announce the following:

• The Scotia Group, Inc. (the "Scotia Group") has been engaged by Falcon to complete a National Instrument 51-101 ("NI 51-101") compliant resource evaluation report in respect of the Mako Trough, Pannonian Basin, Hungary (the "Resource Report") to include all available data from the Mako-6 well which has been cased to total depth. The Resource Report will supercede and replace the audit opinion letter prepared by the Scotia Group (the "Scotia Audit") referred to in the press release dated June 17, 2006 (the "June 17 Press Release"), which Scotia Audit was filed in a format which is not fully in accordance with NI 51-101. As a result of the foregoing as well as the additional information and updated estimate of resources to be provided in the Resource Report, Falcon is retracting the June 17 Press Release.

• Further to Falcon's press release dated February 6, 2006 announcing Falcon's entering of a non-binding letter of intent in connection with Macquarie Bank Limited ("Macquarie") providing Falcon with a US$250,000,000 credit facility and pursuant to several extension letters, Falcon and Macquarie have agreed to extend the due diligence period and the negotiation period from March 17, 2006 to September 30, 2006, which extension included the payment of a work fee by Falcon to Macquarie in the amount of US$150,000.

• Brisco Capital Partners Corp. ("Brisco"), an independent investor relations consulting firm based in Calgary, Alberta, has been providing investor relations services to Falcon for the Canadian market, including initiating and maintaining contact with the financial community, shareholders, investors and other stakeholders for the purpose of increasing awareness of Falcon and its activities, disseminating Falcon furnished information to such persons and groups, and organizing investment community meetings for Falcon over the course of the past nine months. To Falcon's knowledge, the principals of Brisco are Greame Dick and Scott Koyich. The investor relations services agreement entered into on October 20, 2005 (the "Brisco IR Agreement") with Brisco has an initial term of one year and contains an early termination provision. Pursuant to the Brisco IR Agreement, Brisco receives a fee of $5,000 per presentation in Canada arranged by Brisco and attended by Falcon's President and Chief Executive Officer, which amount could increase to a monthly retainer of $6,000 per month upon Falcon achieving certain drilling objectives. Brisco has also previously been granted 100,000 stock options as well as a conditional grant of 125,000 stock options, which options will be granted upon Falcon achieving certain drilling objectives. The stock options vest in stages over twelve months as to 25 percent at the end of each three-month period and expire at the earlier of thirty days following termination of the Brisco IR Agreement or five years from the date of grant. At the time of entering into the Brisco IR Agreement, it was Falcon's understanding that Brisco did not hold any Falcon common shares.

• 4-C Burvale Limited ("4C"), an independent investor relations consulting firm based in London, England, has been providing investor relations services to Falcon for the U.K. and European markets, including disseminating Falcon furnished information to the financial and trade media, investment community, and bank and statistical organizations over the course of the past seven months. Falcon's principal contact at 4C is Ms. Carina Corbett, one of the founders of 4C. The investor relations services agreement entered into with 4C dated January 12, 2006 (the "4C IR Agreement") had an initial term of six months and has since been continuing on a month to month basis until terminated. Pursuant to the 4C IR Agreement with 4C, 4C receives a fee of (pnds stlg) 3,000 per month and reimbursement of all expenses for which Falcon receives an invoice. Additionally, 4C has previously been granted 390,000 stock options subject to the completion of certain regulatory filings. At the time of entering into the 4C IR Agreement, it was Falcon's understanding that 4C did not hold any Falcon common shares.

In addition, Falcon would also like to announce that in an effort to solidify the permanence of its technical support team, Falcon has officially appointed Dr. James Edwards as Falcon's Chief Operating Officer from his previous position, held since April 1, 2005, as general manager of Falcon's Hungarian operations. Dr. Edwards has been actively involved in international oil and gas exploration and exploitation for more than 27 years. Dr. Edwards previously worked as chief geologist for Triton Energy Corp. (TSXV: TEZ). Since June 1991, he has been the president of Equinox Energy Corp., an oil and gas consulting company located in Dallas, Texas. Dr. Edwards holds advanced degrees in geology, including a Master of Science from the University of Georgia and a Ph.D. from Rice University.

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.

Contacts: Falcon Oil & Gas Ltd.
Marc A. Bruner, President, Chairman & CEO
Michael K. Lam, Corporate Development North America
(416) 303-8810