April 13, 2005
TSX-V:LEY

NEWS RELEASE

Loon Updates Drilling Plans For Colombia

Calgary, Alberta, April 13, 2005 — Loon Energy Inc. ("Loon") is pleased to announce that the conditions precedent to the finalization of a farmout agreement (the "Agreement") between Loon and Kappa Resources Colombia Ltd. ("Kappa"), a privately held oil and gas exploration and production company, have been satisfied and that drilling is expected to commence in late June.

The Agreement provides Loon the opportunity to earn a significant interest in Kappa's Abanico Association Contract area located in the prolific Upper Magdalena Valley of Colombia. The contract area is more than 200,000 acres (more than 312 square miles). The precedent condition for the finalization of the Agreement was satisfied with the closing of a $20,000,000 private placement on March 31, 2005 which provides Loon with sufficient funds to meet all of its obligations under the Agreement.

Under the terms of the Agreement, Loon will expend a minimum of US$6 million to earn 49% of Kappa's rights to the Abanico Association Contract. Loon will fund the drilling of a minimum of one development and up to three exploratory wells and will participate for a 49% interest in the shooting of a 20 km² 3-D seismic program. The seismic is expected to commence during the second quarter, the first well is scheduled to spud in late June and all of the wells are expected to be drilled by the end of the third quarter. The development well is designed to exploit shallow gas reserves (1-3 Bcf) previously discovered by Kappa above the main oil producing reservoirs in the Abanico Field. The exploratory wells will target up to three drill-ready prospects with combined recoverable reserves potential of up to 220 MMbo and 30 Bcf gas.

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.