Hess Walks Out of Australian Shale Play

Falcon Oil & Gas has announces that Hess has decided not to commit to drilling the five wells required to earn their interest in the Beetaloo permits in Australia’s Northern Territory.

As a result of this move, Hess forfeits their right to earn 62.5% in three of the Beetaloo permits. The Beetaloo Basin is a Proterozoic and Cambrian age tight oil and gas basin that the Board believes is well suited for unconventional oil and gas projects.

Falcon's Board rejected a late request by Hess to defer the election date again for the following reasons.

• Falcon retains a 100 percent working interest in the four Beetaloo exploration permits which puts Falcon in a stronger position going forward
• Hess has transferred a perpetual, royalty-free and irrevocable license to Falcon over the 2,169 miles (3,490 kilometers) of seismic acquired by them
• The interpretation of 2,169 miles of new seismic data, acquired and processed at no cost to Falcon, is extremely encouraging
• Identification of a shale oil play in the northern part of the permits in addition to the shale gas and conventional plays throughout the acreage
• Unsolicited interest from major oil and gas companies
• Falcon had already granted Hess an extension from August 2012 to June 2013