Loon Spuds Aleli Deep Test in Colombia

Loon Energy has spud of the Aleli-D1 well. This is the second well to be drilled by Loon in Colombia as part of an on-going exploration program on the Abanico Block, located in the Upper Magdalena Valley in central Colombia.

The well will target a structure located approximately nine miles west of the Braspetro/Nexen Guando Field which is believed to contain roughly 120 MMBO of recoverable reserves. Seismic ties to the Guando Field suggest a continuation of the Guadalupe reservoir section over the seismically-defined Aleli-D1 location. The structure being tested by the Aleli-D1 well is large and, in the event that the thickness of the Guadalupe reservoir is similar to Guando, potential exists for recoverable oil reserves of up to 100 million barrels.

As part of the drilling program, Loon and its operating partner Kappa Resources Colombia Ltd. will re-enter and deepen a shallow earning well previously drilled at the location and utilize the pre-existing lease and surface casing. Planned total depth for the well is 7,800 feet (2,377 meters) and total time estimated for drilling and casing to TD is in the order of 25 to 30 days.

The drilling of Aleli-D1 will fulfill, in part, Loon's commitment to expend a minimum of US$6 million to earn a 49% interest in the Abanico Association Contract which covers more than 200,000 acres (greater than 300 square miles) in a hydrocarbon-prone area of Colombia.