FO announces the filing of a preliminary short form prospectus for an offering of 11% unsecured convertible debentures and common shares

DENVER, May 26 /CNW/ - Falcon Oil & Gas Ltd. (TSXV: FO) ("Falcon" or the
"Company") today announced that it has filed a preliminary short form
prospectus with the securities regulatory authorities in the provinces of
British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia and
New Brunswick. The offering is for units (the "Units") at a price of $1,000
per Unit (the "Offering"). Each Unit consists of one 11% convertible unsecured
debenture in the principal amount of $900 (each, a "Debenture") that matures
on the fourth anniversary of its issuance and a certain number of common
shares in the capital of the Company (the "Unit Shares"). The Debentures
contain certain automatic and optional conversion features, as well as certain
redemption features. The Offering will be conducted by Salman Partners Inc. as
agent.

Final determination of the number of Units to be sold under the Offering
and the number of Unit Shares to be issued will occur prior to the filing of
the (final) short form prospectus in respect of the Offering.

Falcon expects to use the net proceeds from the Offering for development
of its properties in Hungary and for general working capital, as determined
and approved by the board of directors of the Company. In addition, an amount
of the gross proceeds of the Offering equal to the first two interest payments
payable under the Debentures will be deposited in escrow at closing.
Closing of the Offering is expected to occur on or about June 16, 2009
and is subject to certain conditions, including but not limited to, receipt of
all necessary securities regulatory approvals, including the approval of the
TSX Venture Exchange.

This news release does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities in the United States. The securities
have not been and will not be registered under the United States Securities
Act of 1933, as amended (the "U.S. Securities Act") or any state securities
laws and may not be offered or sold within the United States or to U.S.
Persons unless registered under the U.S. Securities Act and applicable state
securities laws or an exemption from such registration is available.

Source: cnw.ca