Loon Energy Corporation

Loon Energy Corporation

October 13, 2009 11:26 ET

Loon Energy Corporation: Peru Seismic Program

CALGARY, ALBERTA--(Marketwire - Oct. 13, 2009) - Loon Energy Corporation (TSX VENTURE:LNE) ("Loon") is pleased to provide an update on seismic operations in Peru.

A 390 kilometre 2D seismic program acquisition program has been initiated on Block 127 in the Marañon Basin area of northern Peru with the first shot recorded in late September. The data acquisition phase of the program is expected to be completed in November 2009. A decision on the drilling of an exploration well on the block will be made after the processing and interpretation of the new seismic data has been completed – likely in the first quarter of 2010.

The seismic acquisition program is located in the northeastern and southeastern areas of Block 127 with 255 kilometres and 135 kilometres of 2D data to be acquired in each area. The closest part of the acquisition program is approximately 6 kilometres from the 10 million barrel oil field at Chambira Este which lies immediately to the east of Block 127 and is connected to the Trans-Andean pipeline system. The program is designed to complement and infill existing seismic data with the objective of defining potential drilling prospects. After the processing and interpretation of the newly-acquired seismic data, the partners will elect whether or not to enter into Phase 2 in which there is a one well drilling obligation.

CEPSA Perú S.A., a wholly-owned subsidiary of CEPSA, a large Spanish integrated oil company, is the operator of Block 127, one of the largest exploration licenses in the Amazon Basin area of Peru with an area of approximately 2.4 million acres. Under the terms of a farm-out arrangement with Loon, CEPSA Perú will pay the first US$10.75 million of exploration expenditures after which each party will pay their respective interest share (Loon 20%). Loon estimates that its share of total expenditures related to Phase 1, including the seismic program, will be in the order of US$900,000. 

Loon Energy Corporation is an international upstream oil and gas exploration and production company with principal interests in Colombia and Peru. Loon is reviewing new growth opportunities within South America and other strategic alternatives to maximize shareholder return. The main shareholder of the Company, holding approximately 39% of the currently issued Common Shares, is Kulczyk Investments S.A., an international investment house founded by Polish businessman Dr. Jan Kulczyk.

Some of the statements contained in this release may be forward-looking statements. Forward-looking statements may include, but are not limited to, statements concerning estimates of recoverable hydrocarbons, expected hydrocarbon prices, expected costs, statements relating to the continued advancement of the Company's projects and other statements which are not historical facts. When used in this document, and in other published information of the Company, the words such as "could," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are indicative of a forward-looking statement. Although the Company believes that its expectations reflected in the forward-looking statements are reasonable, the potential results suggested by such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Various factors, which could cause actual results to differ from these forward-looking statements, include the potential that the Company's projects will experience technical and mechanical problems, geological conditions in the reservoir which may negatively impact levels of oil and gas production and changes in product prices and other risks not anticipated by the Company or disclosed in the Company's published material. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties.

The TSX Venture Exchange neither approves nor disapproves of the information contained herein.

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