Falcon Oil and Gas Ltd.

FALCON OIL & GAS LTD. ANNOUNCES THE GRANTING OF STOCK OPTIONS

Under its stock option plan approved at the annual and special shareholders meeting held on June 28, 2011, Falcon Oil & Gas Ltd. has granted incentive stock options to purchase a total of six million common shares of Falcon. The stock option grants are all subject to regulatory approval.

Terms of the options include an exercise price of 10 cents per share, a vesting schedule allowing for one-third of the options to vest on the first anniversary of the grant with an additional one-third vesting each subsequent year until the options are fully vested on May 1, 2015, and an expiry date of the options of May 1, 2017.

A maximum of 10 per cent of the issued and outstanding shares of Falcon are reserved for issuance pursuant to Falcon's stock option plan.