Loon Energy Inc.
TSX VENTURE : LEY

Loon Energy Inc.

February 26, 2008 13:28 ET

Loon Energy Inc.: Option Exercised on Brunei Block L

CALGARY, ALBERTA--(Marketwire - Feb. 26, 2008) - Loon Energy Inc. ("Loon" or the "Company") (TSX VENTURE:LEY) announces that Nations Petroleum Brunei Limited ("Nations Brunei") has given notice to Loon's wholly-owned subsidiary Loon Brunei Limited ("Loon Brunei") that, subject to the approval of Brunei National Petroleum Company Sdn. Bhd ("PetroleumBRUNEI"),, Nations Brunei exercises its option to have assigned to it a 50% interest in the Production Sharing Agreement and the Joint Operating Agreement with respect to Block L in Brunei Darussalam.

By exercising the option, Nations makes a commitment to fund the first US$20.5 million of expenditures in the exploration of Block L. A substantial portion of these initial expenditures will be for a planned 350 square kilometre 3D seismic survey. The survey, costing a total of approximately US$15.3 million, is expected to commence in Q1 of 2008. As part of the approval of is transaction Loon Brunei has agreed that the work commitment will increase to US$25 million, with the extra US$4.5 million to be spent on such additional work as will be agreed with PetroleumBRUNEI.

Block L is 550,000 acres (2,253 km2) in size covering much of eastern onshore Brunei and also containing an offshore component. There has been some historic production on Block L, however, no exploration or development activities have been undertaken in this area in approximately 20 years. The giant Champion and Seria oil fields are both located within 25 kilometres of Block L and a new gas discovery has been announced by Brunei Shell Petroleum Co. Sdn Bhd at Bubut less than 1 kilometre from the block.

Upon approval of the option exercise by PetroleumBRUNEI, Nations Brunei is also expected to be approved as the operator of Block L and the interests of the partners in Block L will be Loon Brunei 40%, Nations Brunei 50% and QAF Brunei Sdn Bhd10%.

Loon is an international oil and gas exploration and production company having direct interests in Brunei, Syria, Colombia, Peru, Tunisia and Slovenia and exposure to a major exploration and development program in Pakistan through its shareholding in Jura Energy Corporation. For further information, please refer to the Loon website (www.loon-energy.com).

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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