September 11, 2006
TSX-V:LEY

NEWS RELEASE

Normal Course Issuer Bid

Calgary, Alberta, Canada, September 11, 2006 — Loon Energy Inc. ("Loon" or the "Corporation") announces that the TSX Venture Exchange ("TSX-V") has accepted a notice of intention to make a normal course issuer bid to purchase for cancellation up to a maximum of 4,800,000 common shares of Loon (the "Bid"). The proposed acquisition represents approximately 10% of the public float in Loon common shares. Loon currently has 70,911,344 common shares issued and outstanding.

All purchases made pursuant to the Bid will be made on the open market through the facilities of the TSX- V and all common shares purchased will be returned to Computershare Trust Company, the transfer agent and registrar for the common shares of Loon, for cancellation. Any purchases will be made in accordance with the regulations of the TSX-V and the price paid by Loon for any purchases made under the Bid will be the market price for the common shares at the time of acquisition. The bid will commence on September 13, 2006 and will expire 12 months thereafter on September 12, 2007. The bid will be conducted through Blackmont Capital Inc. of Calgary, Alberta.

The board of directors of Corporation have decided to undertake the Bid because they believe that the market price of the common shares of Loon does not currently, and may not in the future, reflect the underlying value of the Corporation's assets.

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.