SOURCE: Xun Energy, Inc.

December 14, 2010 08:45 ET

Xun Energy to Acquire a 51% Gross Royalty Interest in up to 500 Producing Oil and Gas Wells in Kentucky

PORTLAND, OR--(Marketwire - December 14, 2010) - Xun Energy, Inc. ("XNRG") (OTCBB: XNRG) On December 9, 2010 XNRG executed a Letter of Intent with Global Energy Acquisitions, LLC ("GEA") which provides in part for XNRG to acquire from GEA a 51% gross royalty interest in up to 500 producing oil and gas wells in Kentucky. GEA is in the business of exploring, developing, operating, and investing in, acquiring, selling, managing and drilling oil and gas properties. 

It is anticipated that GEA will form a new, wholly owned subsidiary (the "Subsidiary") and transfer the royalty interests in the oil wells to this entity. XNRG will then acquire 51% of the common stock of the Subsidiary and have a right of first refusal to purchase the remaining 49% in the Subsidiary.

"The asset acquisition, subject to closing, is the first step to move XNRG from a 'Shell' status to an operating company status," said XNRG president Peter Matousek, "This has been a very positive process and we are excited to have the ability to generate revenue with relatively low risk in the near future," he added.

GEA and affiliates have exclusive drilling rights to approximately 60,000 + acres of oil and gas bearing properties with landowners in central and south central Kentucky and Tennessee whereby GEA and affiliates will receive 100% of the net revenues after the landowner's royalty fee which will be between 12.5% and 28.125% and applicable transportation costs, per producing well. The Subsidiary will be responsible for the funding of the drilling and completion costs.

"We will immediately begin to develop an aggressive 15 well program with low fixed drilling and completion costs," stated Peter Matousek, XNRG's President. He further stated, "With our Gross Royalty position, we will not be subject to any monthly operating or maintenance costs."

The LOI will provide a framework for the Parties to enter into a Definitive Agreement which is anticipated to be approved by the respective Board of Directors on or before January 17, 2011 with a closing on or before January 31, 2011. The parties reserve the right to modify the structure of the transaction to facilitate any required regulatory approvals and to minimize the tax consequences of the transaction.

The Purchase Price for the acquisition of its equity position in the Subsidiary shall be paid in XNRG's common stock based upon the fair market value of the equity percentage of the Subsidiary's common stock. The LOI further contemplates that XNRG will redeem a percentage of the shares of common stock owned by XNRG's officers and directors in an amount equal to the proportionate share of the common stock issued to GEA. Additionally, Peter Matousek will tender 100 million shares of common stock for redemption by XNRG for nominal consideration.

Closing of the transaction is subject to further due diligence, execution of a definitive agreement, and satisfaction of conditions precedent including delivery of audited financial statements of the Subsidiary and a valuation prepared by an Independent Third Party. There can be no assurance that the parties will come to terms on a definitive agreement or that drill proposed transaction will in fact close.

For additional information, please see the 8K filing complete with Letter of Intent, link: http://www.sec.gov/Archives/edgar/data/1435936/000143593610000020/0001435936-10-000020-index.htm

About XUN ENERGY, INC.

Xun Energy, Inc. (XNRG) is a development stage company. We are a shell, which is a company that has very little assets, other than cash, and has no viable business plan at this moment. XNRG's mission is to purchase or develop a revenue producing asset.

This Press Release contains forward-looking information within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934 and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements provisions contained in the Private Securities Litigation Reform Act of 1995 and any amendments thereto. Such forward-looking statements by definition involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. In particular, there is no assurance that reserves, production, pricing levels or other factors pertaining to the oil and gas operations will be sustained at the expected rates or levels over time. Discussions of factors, which may affect future results, are contained in our recent filings. Under no circumstances does this Press Release constitute an offer to sell or a solicitation of an offer to buy the securities of the company described in this Press Release in which such offer, solicitation or sale of securities would be unlawful prior to registration, qualification or filing under the securities laws of any jurisdiction.

For Further information on this news release or on XNRG, please visit http://www.xunenergy.com/ or contact XNRG's Investor Relations Department, telephone: 1-775-200-0505, e-mail address: investor@xunenergy.com

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