Loon Energy Inc.
TSX VENTURE : LEY

Loon Energy Inc.

August 29, 2007 22:47 ET

Loon Second Quarter Financial Statements and MD&A

CALGARY, ALBERTA--(Marketwire - Aug. 29, 2007) - Loon Energy Inc. ("Loon") (TSX VENTURE:LEY) announces that it has filed its un-audited financial statements and its Management Discussion and Analysis ("MD&A") on SEDAR (www.sedar.com ) for the period ended June 30, 2007. The period was an active one for Loon with substantial progress made on a number of fronts.

Significant events impacting Loon during this period included:

- Loon Brunei Limited, a wholly-owned subsidiary of Loon, signing an option agreement with a subsidiary of Nations Petroleum Company Ltd. under which Loon granted an option to Nations to acquire a 50% interest in the Production Sharing Agreement for Block L in Brunei. Under the terms of the agreement, Nations will shoot more than 300 square kilometers of 3D seismic and expend a total of US$20.5 million in order to earn the interest; and

- Kulczyk Investment House S.a.r.l. purchasing a 17% interest in Loon from a third party and subscribing for 25 million common shares of Loon at $1.00 per common share. The private placement was approved by shareholders on June 27th and closed in mid-July increasing the ownership of the Kulczyk group in Loon to approximately 39%.

Since June 30th Loon has continued to be active with:

- Loon Energy Limited, a wholly-owned subsidiary of Loon, participating in the drilling of an exploration well in Tunisia which spud on July 30th. The primary target is reefal carbonates of Permian age contained within a large feature defined by 2D seismic. The well is currently drilling; and

- Loon Peru Limited, a wholly-owned subsidiary of Loon, signing the Exploration License Contract for the 2.4 million acre Block 127 in the Maranon Basin area of northeastern Peru on August 21st.

Loon is an international oil and gas exploration and production company having direct interests in Brunei, Syria, Colombia, Peru, Tunisia and Slovenia and an indirect interest in Pakistan through its shareholding in Jura Energy Corporation. Loon has offices in Calgary, Alberta, Canada, Dubai, United Arab Emirates and Bandar Seri Begawan, Brunei Darussalam. For further information, please refer to the Loon website (www.loon-energy.com ) or contact the following:

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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