Loon Energy Inc.
TSX VENTURE : LEY

Loon Energy Inc.

September 21, 2005 13:40 ET

Loon Spuds Aleli Deep Test in Colombia

CALGARY, ALBERTA--(CCNMatthews - Sept. 21, 2005) - Loon Energy Inc. (TSX VENTURE:LEY) ("Loon") is pleased to announce the spud of the Aleli-D1 well. This is the second well to be drilled by Loon in Colombia as part of an on-going exploration programme on the Abanico Block, located in the Upper Magdalena Valley in central Colombia.

The well will target a structure located approximately nine miles west of the Braspetro/Nexen Guando Field which is believed to contain roughly 120 MMBO of recoverable reserves. Seismic ties to the Guando Field suggest a continuation of the Guadalupe reservoir section over the seismically-defined Aleli-D1 location. The structure being tested by the Aleli-D1 well is large and, in the event that the thickness of the Guadalupe reservoir is similar to Guando, potential exists for recoverable oil reserves of up to 100 million barrels.

As part of the drilling programme, Loon and its operating partner Kappa Resources Colombia Ltd. will re-enter and deepen a shallow earning well previously drilled at the location and utilize the pre-existing lease and surface casing.

Planned total depth for the well is 7,800 feet (2,377 metres) and total time estimated for drilling and casing to TD is in the order of 25 to 30 days.

The drilling of Aleli-D1 will fulfil, in part, Loon's commitment to expend a minimum of US$6 million to earn a 49% interest in the Abanico Association Contract which covers more than 200,000 acres (greater than 300 square miles) in a hydrocarbon-prone area of Colombia.

Forward Looking Statements - 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 inherrent risks and uncertainties.

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

Contact Information

  • Loon Energy Inc. (Calgary)
    Norman W. Holton
    (403) 264-8877
    or
    Loon Energy Inc. (Dubai)
    Timothy M. Elliott
    +971-4-339-5212
    or
    Loon Energy Inc. (Dubai)
    Jock M. Graham
    +971-4-339-5212