Loon Energy Inc.
TSX VENTURE : LEY

Loon Energy Inc.

September 20, 2007 11:59 ET

Loon Signs Production Sharing Contract- Syrian Arab Republic

CALGARY, ALBERTA--(Marketwire - Sept. 20, 2007) - Loon Energy Inc. ("Loon" or the "Company") (TSX VENTURE:LEY) is pleased to announce that it has formally signed a Contract for the Exploration, Development and Production of Petroleum ("PSC") with the Government of the Syrian Arab Republic, represented by the Ministry of Petroleum and Mineral Resources ("Ministry") and the Syrian Petroleum Company ("SPC") for Block 9, which encompasses an area of more than 10,000 square kilometres in northwest Syria.

Loon originally announced its award of the exclusive right to negotiate a PSC covering Block 9 on June 1, 2006 and today's signing was the culmination of a lengthy process of negotiation that followed the original award. As part of the signing process, Loon has posted a bank guarantee of US$7.5 million.

Block 9 is a large and under-explored area located at the northern edge of a hydrocarbon-producing basin called the Homs Basin which contains the large Palmyra, Cherrife Da and Ash Shaer fields. Despite its proximity to substantial oil and gas reserves, Block 9 contains only two exploration wells, one drilled in 1977 and the other in 1995. The area of Block 9 is approximately 43 square kilometres smaller than originally awarded as a two kilometre strip of land along the coast, together with the city limits of Latakia, has been excluded from the original contract area.

Under the terms of the Block 9 PSC, Loon has a first phase exploration period of four years during which it has committed to acquire 600 kilometres of 2D seismic and drill two exploration wells. The exploration period can be extended for up to nine years in phases by performing additional work on an agreed basis.

Loon has a 100% interest and is the operator of Block 9. ANSCO Inc., subject to the approval of the Ministry and SPC, has the right to acquire a 5% working interest in Block 9 on a heads-up basis.

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).

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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