Loon Announces Strategic Plans

  Loon Energy Inc. ("Loon" or the "Company") (TSX VENTURE: LEY) announces that its board of directors (the "Board") has approved a strategic plan to reorganize the business of Loon. The reorganization is intended to enhance overall shareholder value through a series of events including: 1) formation of a new company named "Loon Energy Corporation" ("Loon Corp"), which will own the assets of Loon located in Colombia and Peru, South America; 2) a listing of the common shares (the "Loon Corp Shares") of Loon Corp on the TSX Venture Exchange (the "TSXV"); 3) a delisting of the common shares of Loon from the TSXV, which will continue to hold the assets of the Company located in Brunei, Syria and Slovenia; 4) a change in the name of the Company to "Kulczyk Oil Ventures Inc." ("Kulczyk Oil"); and 5) the listing of the common shares (the "Kulczyk Oil Shares") of Kulczyk Oil on the Warsaw Stock Exchange (the "WSE"). The proposed reorganization of Loon will be completed by way of a plan of arrangement (the "Arrangement") pursuant to the Business Corporations Act (Alberta) (the "ABCA") and will require securityholder approval. A special meeting to consider approving the Arrangement has been scheduled to be held on December 9, 2008. An information circular and proxy statement (the "Information Circular") containing particulars of the Arrangement, together with information concerning Loon Corp and Kulczyk Oil following the implementation of the Arrangement, will be mailed to securityholders of Loon on or about November 7, 2008.

Steps one to four inclusive of the proposed reorganization are intended to occur coincident with the proposed closing of the Arrangement, which is expected to occur on or about December 10, 2008. Step five, the listing of the Kulczyk Oil Shares on the WSE, is expected to occur in May 2009. Once all of the steps are completed, shareholders of Loon will be entitled to own one Kulczyk Oil Share and one Loon Corp Share for each common share of Loon held.

Strategic Rationale

The management and board of directors of Loon believe that the current market price of Loon's common shares does not adequately reflect the potential of the Company and that a split of the Company into separate operating entities will enable a more focused and accurate valuation. The listing of Kulczyk Oil on the WSE is expected to improve Kulczyk Oil's cost of capital.

The initial focus of Kulczyk Oil will be in Europe, the Middle East and Asia while that of Loon Corp will be Latin America. This reorganization will provide shareholders with the option of involvement in the areas most familiar to them by continued involvement in Kulczyk Oil or Loon Corp or in both companies and will create a base which gives each company a more focused growth platform. The listing of the Kulczyk Oil Shares on the WSE is expected to improve the cost of capital of Kulczyk Oil as the time approaches for the first exploratory drilling on Kulczyk Oil's properties in Brunei and in Syria. Poland is one of Europe's fastest growing and most dynamic economies. Capital traditions in Poland date back to 1817 when the Warsaw Mercantile Exchange was established. The WSE began activity in its present form in 1991 and, as of September 30, 2008, the total market capitalization of companies listed on the WSE exceeded Euros 105 billion. One of the main operational centres of the Company's major shareholder, Kulczyk Investment House S.A. ("KIH"), seated Luxembourg, is located in Warsaw.

Special Securityholders Meeting

The special meeting of the securityholders of Loon will be held on December 9, 2008 in the Glacier Lily Room, Sheraton Suites Eau Claire, 255 Barclay Parade, Calgary, Alberta at 2:30 p.m. local Calgary time.

Put Right

In consideration to the holders of Kulczyk Oil Shares for the uncertainty over the length of time it will take to have the Kulczyk Oil Shares listed on the WSE, and the resulting lack of liquidity to their investment in Kulczyk Oil during this period, as part of the Arrangement, the holders of Kulczyk Oil Shares will also be given a right (the "Put Right") which, if exercised, would require Kulczyk Oil to purchase the holder's Kulczyk Oil Shares at a price of $0.25 per share. A maximum of $12 million will be available for holders of Kulczyk Oil Shares who decide to exercise the Put Right. It is possible, therefore, that depending on the number of shareholders who exercise their Put Right, that shareholders may receive cash on a pro rata basis, with the balance being accounted for in Kulczyk Oil Shares. To provide Kulczyk Oil with the funds necessary to finance the Put Right, KIH has agreed to subscribe for 48,000,000 Kulczyk Oil Shares at the same price as the Put Right, for gross aggregate proceeds to Kulczyk Oil of $12 million. Details on how a shareholder may exercise the Put Right will be set forth in the Information Circular. Each of the directors, officers and insiders of Loon intend to retain all of their Kulczyk Oil Shares.

Trading on the WSE

All trades in shares that are listed on the WSE, and which occur on that stock exchange, must ultimately be executed through a Polish brokerage firm. Therefore, to make purchases or sales of Kulczyk Oil Shares once those shares are listed on the WSE, Shareholders who are not resident in Poland must either use a brokerage firm who has a relationship with a brokerage firm in Poland who can effect those transactions on its behalf, or must open an account directly with a Polish-based brokerage firm. Shareholders should consult with their investment advisors to determine which of these alternatives is best for them. Kulczyk Oil will post additional information on its website with respect to trading of Kulczyk Oil Shares on the WSE.

Kulczyk Oil

The assets of Kulczyk Oil will consist of Loon's current interests in oil and gas exploration properties in Brunei and Syria together with a minor interest in Slovenia and an investment in common shares of Jura Energy Corporation (TSX: JEC), a Pakistan-focused oil and gas exploration and development company.

In Brunei, Loon Brunei Limited, a wholly-owned subsidiary of Kulczyk Oil, owns a 40% interest in a Production Sharing Agreement which gives it the right to explore for and produce oil and gas from Block L, a 550,000 acre exploration block on which a 350 km2 3D seismic program is currently underway. Kulczyk Oil is carried through the first US$22.75 million of costs in Brunei.

In Syria, Loon Latakia Limited, a wholly-owned subsidiary of Kulczyk Oil, owns a 100% interest in a Production Sharing Contract which gives it the right to explore for and produce oil and gas from Block 9, a 2.4 million acre exploration block located in northwest Syria.

Drilling is expected to commence on Brunei Block L in 2009 and on Syria Block 9 in late 2009 or early in 2010.

In Slovenia, Kulczyk Oil holds minor working interests in a small land area with potential for deep gas production.

Kulczyk Oil will have a seven member board of directors consisting of five members of the current board of directors of Loon together with Dr. Jan Kulczyk and Dariusz Mioduski both of KIH. Dr. Kulczyk will be the Chairman of Kulczyk Oil and Norman Holton, currently the Executive Chairman of Loon, will become Vice Chairman. The management of Kulczyk Oil, with Timothy Elliott as President and Chief Executive Officer, will otherwise remain unchanged from that of Loon.

Loon Corp

The assets of Loon Corp will consist of Loon's current interests in oil and gas properties in Colombia and Peru.

In Colombia, Loon Colombia Limited, a wholly-owned subsidiary of Loon Corp will own a 49% working interest in a suspended gas well at Ventilador and a 20% working interest in a new oil discovery and associated lands at Buganviles.

In Peru, Loon Corp will own a 20% working interest in a Exploration License Contract which gives it the right to explore for and produce oil and gas from Block 127, a 2.4 million acre exploration block in the Amazon Basin area of northeast Peru. Loon Corp will be carried through approximately US$25 million in costs on Peru Block 127.

Loon Corp will have a seven member board of directors consisting of six members of the current board of directors of Loon together with one officer (Jock Graham, Executive Vice President) of Kulczyk Oil. Timothy Elliott will be the Chairman of the board of directors and Norman Holton will be the President and Chief Executive Officer of Loon Corp.

Board Recommendation

The Board has unanimously concluded that the Arrangement is in the best interests of the securityholders of Loon and has unanimously resolved to recommend that the Loon securityholders vote in favour of the Arrangement.

Advisors

Tristone Capital Inc. has provided the Board with its written opinion that the consideration to be received by the shareholders of Loon pursuant to the Arrangement is fair from a financial point of view to the Loon shareholders. Lazard & Co. Ltd. acted as strategic and financial adviser to KIH.

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.

Contacts: Loon Energy Inc. - Calgary, Canada Norman W. Holton Executive Chairman [phone] Email: [e-mail] Loon Energy Inc. - Dubai, UAE Timothy M. Elliott President and Chief Executive Officer [phone] Email: [e-mail] Loon Energy Inc. - Dubai, UAE Jock M. Graham Executive Vice President [phone] Email: [e-mail] Website: www.loon-energy.com Brisco Capital Partners Corp. (Calgary) Gordon Aldcorn Investor Relations [phone] Email: [e-mail]