Lima (Platts)--22Aug2007

Canada-based upstream minnow Loon Energy on Tuesday signed a contract
with Peruvian authorities to secure the exclusive right to explore an area of
the country's northern jungle known as block 127, where it expects to find
crude oil, company officials said late Tuesday.

     The project's initial phase will take two years, during which the company
will conduct seismic studies at a cost of about $20 million, said executive
chairman Norman Holton.

     If the first phase is successful, the exploration contract could last
seven years and involve three wells, Peruvian officials have said. They also
said the area occupies some 2.4 million acres and is one of the biggest
granted in concession in the country.  

     With the Loon Energy signing, Peru has a total of 65 signed exploration
accords, and expects to add another 13 more before the end of the year,
Peruvian officials said Tuesday.

     Outside Peru, Loon Energy is exploring or plans to explore in Brunei,
Syria, Tunisia and Pakistan. It also owns in partnership a 1.4 Mcf/day well in
Colombia and plans to drill three wells in that country later this year,
Holton said.