February 27, 2004

NEWS RELEASE
 
EXTENSION OF DEBENTURE / GRANT OF WARRANTS
 
Loon Energy Inc. (“Loon”) (TSX-V:LEY) announces it has entered into an Amending Agreement which extends the terms of convertible debentures and grants warrants to the debenture holders in consideration for the extension.  Loon initially issued convertible debentures in the aggregate amount of $800,000 to two insiders of the Company effective July 27, 2001.  The debentures were initially issued for a term of 2 years, bore interest at prime plus 2% per annum and were convertible at the option of the holders into 8,000,000 common shares of Loon.  The Amending Agreement extends the term of the debentures and the right of conversion to January 1, 2006.  The interest rate remains unchanged.  In consideration for the extension, the Company has granted the debenture holders an aggregate 1,600,000 share purchase warrants which entitle the holders thereof to acquire additional 1,600,000 additional common shares of Loon at a price of $0.10 per common share at any time prior to January 1, 2006.
 
Loon is an oil and gas exploration and production company with approximately 40 boepd of production in Canada and foreign exploration and development projects in southeastern Europe and other areas.

The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.