March 16, 2006
TSX-V:LEY

NEWS RELEASE

Update on Brunei & Colombia Activity

Calgary, Alberta, March 16, 2006 — Loon Energy Inc. ("Loon") (TSX.V-LEY) is pleased to provide an update on its activities in Brunei and Colombia.

Colombia
Drilling operations on the Duna-1 well have reached a total depth of 4,672 feet. Duna-1 had been targeting dual objectives within a structural feature on the Abanico Block, located within the Upper Magdalena Valley in Colombia. Neither of the primary objectives is capable of production at this location.

A potentially prospective interval at 3,030 feet was perforated but did not produce hydrocarbons. The zone is currently shut-in for pressure buildup. A shallower zone, above 2,500 feet, with an indicated gas show is expected to be tested at a later date.

This was the third well to be drilled as part of Loon's ongoing work program at Abanico and has fulfilled, in part, Loon's commitment to expend a minimum of US$6 million to earn 49% of the interest of Kappa Resources Colombia Ltd. ("Kappa") in the Abanico Association Contract. Drilling operations are operated by Kappa and earning is subject to the approval of Ecopetrol, the Colombian national oil company. The Abanico Contract area covers >200,000 acres (>300 square miles).

Loon and Kappa will now work toward drilling one of the prospects from the inventory currently delineated on the Abanico Block.

Brunei
The first round of negotiations with PetroBrunei on a production sharing contract took place in early March and a second round of negotiation is scheduled for the first week of April.

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.