SALE OF TWO GUSTO MSC CJ46-X100 JACK-UP DRILLING RIGS

The Board of Directors of Falcon Energy Group Limited (the ?

The novation fee payable by COSL Drilling Power Pte Ltd to TS Amber Limited and COSL Drilling Craft Pte Ltd to TS Pearl Limited (as the case may be) for the novation of each shipbuilding contract was arrived at on a " willing buyer willing seller" basis.

Both TS Amber Limited and TS Pearl Limited are wholly-owned by TS Drilling Pte. Ltd. (?

.Directors? and Substantial Shareholders? Interests

Save as disclosed above and save for the shareholding interests in the Company, none of the directors or substantial shareholders of the Company has any interest, direct or indirect, in the transaction.

Financial Impact

These transactions are expected to be positive for the Group for the financial year ending 31 March 2014.Company?, together with its subsidiaries, collectively referred to as the ?Group?) wishes to announce that its indirect subsidiaries, TS Amber Limited and TS Pearl Limited, have entered into two sale and purchase agreements and two novation agreements with COSL Drilling Power Pte Ltd and COSL Drilling Craft Pte Ltd respectively, to novate their rights and obligations under the shipbuilding contracts relating to the design, construction and delivery of the two Gusto MSC CJ46-X100 jack-up drilling rigs (?Rigs?).TS Drilling?), an indirect subsidiary of the Company. TS Drilling is a 70%-owned subsidiary of FTS Derricks Pte. Ltd., which is 65% owned by the Company and 35% owned by Mr Cai Wenxing (a director of the Company)