Falcon Oil & Gas Ltd. Announces Hungarian Operations Update

Budapest, Hungary – November 27, 2006 – Falcon Oil & Gas Ltd. (TSXV: FO) provided an update on two of the wells which Falcon is drilling as part of its oil and gas exploration activities in Hungary.

Makó-7 Well

The Crosco 801 rig is currently drilling the Makó-7 well to test a deep portion of the Makó Trough. The Makó-7 drill site is located approximately 6 kilometers north of the recently drilled Makó-6 location and 1 kilometer from the Hod-1 well, drilled 35 years ago by MOL. As of November 26, 2006, the Makó-7 reached a measured depth of 5,479 meters within the lower portion of the lower Endröd formation. Correlations with the Makó-6 and Hod-1 indicate, in the opinion of Falcon, that the Makó-7 wellbore is nearing the Basal Conglomerate zone. Based on electrical logs run in the well and the cuttings analyzed during drilling, Falcon is of the opinion that thicknesses, mud log shows, and general porosity levels within the Szolnok and Endröd formations of the Makó-7 well are similar to those encountered in the Makó-6 well.

As drilling continues at the Makó-7 with a mud weight of 17 pounds per gallon (ppg), Falcon expects to encounter additional gas-filled conglomerate layers interfingering with clays and marls similar to what was successfully logged as the Basal Conglomerate formation in the Makó-6 well. Strong seismic reflectors associated with this zone can be mapped over 500km² covering much of the central part of the Makó Trough. Below the Basal Conglomerate, Falcon plans on testing the underlying Syn-rift Conglomerate. The Makó-7 well is expected to reach total depth of approximately 6,000 meters in late December.

Magyarcsanad-1 Well

The Crosco 403 rig is presently drilling the Magyarcsanad-1 well located approximately 18 kilometers southeast of the Makó-6 well. The original primary objectives for the Magyarcsanad-1 well were to confirm the southeastern extension of the overpressured gas cell and to demonstrate the presence of gas charged reservoirs. Falcon encountered the Endröd formation at about 4,019 meters, and experienced a significant gas influx into the wellbore from the formation at 4,057 meters, with a mud weight of 12.16 ppg. The well started to flow back to surface. To prevent the continued influx of gas into the wellbore, the mud weight was raised to 16.91 ppg and drilling was able to continue. At 4,242 meters, total mud losses occurred and the mud weight was cut back to +/- 16.41 ppg. Losses continued to 4,257 meters and the mud weight was lowered to +/- 15.58 ppg. Losses were stabilized at this mud weight and drilling continued to a measured depth of 4,272 meters. At this depth, wellbore conditions caused the bottom part of the drill string to twist off. Efforts to retrieve the roughly 45 meters of drill pipe were hampered by the continuing loss of drilling mud into the overlying zones.
Consequently, on November 25, 2006, Falcon made the decision to run 5½ by 5-inch production casing in the Magyarcsanad-1 well. Falcon based this decision on the following four points:  First, extension of the Basin Centred Gas Accumulation to this southeastern corner of the Makó License was confirmed with the well encountering abnormally high pressures as evidenced by the increase of the mud weights and influx of gas. Second, there is more than 200 meters of gas-charged and likely fractured Endröd formation for testing consideration. This is sufficient volume for Falcon to evaluate the quality of the Endröd formation. Third, correlations with the Makó-2 (10 kilometers to the west-southwest) and 2D seismic data suggest that at a depth of 4,272 meters the Magyarcsanad-1 well was within +/- 250 meters of basement. Finally, rig safety was a strong component in the casing decision, since the high-pressure formation is without protection below a contingency liner, which was set at 3,863 meters.

Based on the results obtained from the Magyarcsanad-1 well, Falcon has met the two original primary objectives for this well, namely, to confirm the southeastern extension of the overpressured gas cell and to demonstrate the presence of gas charged reservoirs. 

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
Michael K. Lam, Corporate Development North America
(416) 303-8810
Alexander Hubbard-Ford, Corporate Development Europe
+44 (0) 79 8448 1541

Canada – Brisco Capital Partners Corp
Graeme Dick
(403) 313-9663

United Kingdom - 4C-Burvale
Carina Corbett
John Carrick-Smith
+44 (0) 20 7559 6710

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 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.

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