February 7, 2006
TSX-V:LEY

NEWS RELEASE

Loon Awarded Contract Area in Brunei

Calgary, Alberta, Canada, February 7, 2006 — Loon Energy Inc. (“Loon”) (TSX.V-LEY) announces that a consortium led by Loon and QAF Brunei Sdn Bhd, has been awarded Block L which covers 2,253 square kilometers (880 square miles) by Brunei National Petroleum Company Sendirian Berhad (“PetroleumBRUNEI”) in Brunei Darussalam (Brunei). The Block is located mostly onshore but partly offshore on the northeastern part of Brunei. The award is subject to the finalization of a Production Sharing Contract between Loon et al and PetroleumBRUNEI.

Loon commenced its initial evaluation of the potential of Block L during the middle of 2005 and submitted its proposal on January 3, 2006.

Brunei Darussalam is located in south-east Asia on the northern coast of the island of Borneo. It occupies a total area of 5,770 square kilometres of which 5,270 square kilometres is land.

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 staevents 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.