April 26, 2004

NEWS RELEASE 
 
Loon Granted Well License
 
Loon Energy Inc. (“Loon”) (TSX-V:LEY) announces that it has received a permit to drill a new well on its lands in the Petisovsci-Dolina area of eastern Slovenia. The PT-123 well, to be drilled to a projected depth of 2,100 metres, will evaluate multiple oil and gas targets. The primary target is the Petisovsci zone which has produced approximately 5.6 million barrel from an area downdip from, and to the west of, the PT-123 location. The Petisovsci reservoir is estimated to have oil-in-place of approximately 30 million barrels. Drilling is expected to commence during June, 2004. Loon will pay 40% of the costs of the well and will have a 30% working interest after cost recovery.

The Petisovsci and Dolina fields lie on a large anticlinal structure, approximately one-third of which is in Slovenia. The Lovaszi Field, which underlies the eastern two-thirds of the structure on the Hungarian side of the border, has produced 50 million barrels of oil and 34.3 Bcf of natural gas. The Petisovsci/Dolina area has produced 5.6 million barrels of oil and 34.3 Bcf of natural gas, less than 15% of the volumes produced at Lovaszi. Loon believes that potentially significant additional volumes of oil and natural gas remain to be produced from the Slovenian portion of the anticline covered by the permits granted to Loon et al.
 
Loon is focused on exploration and development projects in Slovenia and other countries in south-central Europe. Slovenia is bounded by Croatia (south), Hungary (east), Austria (north) and Italy (west). The principal project area is located in eastern Slovenia near to the borders with Hungary and Croatia approximately 210 kilometres south of Vienna, Austria and 180 kilometres northeast of Ljubljana, the capital of Slovenia. Slovenia joined NATO in April, 2004 and is scheduled to join the European Union (“EU”) in May of this year.