Petrodorado Energy Ltd. and Loon Energy Corporation Announce Letter of Intent for Acquisition of Loon Energy Corporation

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. WIRE SERVICES

Petrodorado Energy Ltd. ("Petrodorado") (TSX VENTURE:PDQ) and Loon Energy
Corporation ("Loon") (TSX VENTURE:LNE) are pleased to announce that they have
entered into a non-binding letter of intent dated July 15, 2010 (the "Letter
Agreement"), pursuant to which, subject to the entering into of a definitive
agreement (the "Definitive Agreement") and certain other conditions, the parties
propose for the acquisition of all of the outstanding shares of Loon (the
"Proposed Transaction") by Petrodorado.


Loon has halted trading of its common shares on the TSX Venture Exchange
("TSXV") and the Market Surveillance Department of the Investment Industry
Regulatory Organization of Canada has also halted trading of Petrodorado's
common shares on the TSXV. It is expected that trading in the shares of
Petrodorado and Loon will resume later today.


The Proposed Transaction

The Proposed Transaction is an arm's length transaction pursuant to which
shareholders of Loon ("Loon Shareholders") would be entitled to receive common
shares of Petrodorado (the "Acquisition Shares") based upon an exchange ratio of
five (5) common shares of Loon for each one (1) common share of Petrodorado.
Petrodorado would issue approximately 19,200,000 Acquisition Shares to Loon
Shareholders under the Proposed Transaction. In addition, with respect to Block
127 in Peru owned by Loon, Petrodorado has agreed to issue additional
Acquisition Shares (the "Performance Shares") equal to a value of $3,000,000
upon the occurrence of the following:


(a) $1,500,000 of Performance Shares upon completion of 300 km of 3D seismic; and

(b) $1,500,000 of Performance Shares upon spud of the initial well.

The Performance Shares would be issued at the 10 day weighted average trading
price of Petrodorado's common shares immediately prior to each of the
occurrences listed above.


The Letter Agreement is non-binding except for obligations relating to a period
of exclusive dealing and confidentiality. If a Definitive Agreement is entered
into, the parties will cooperate to complete the Proposed Transaction as soon as
practical, subject to the receipt of all necessary regulatory and other
approvals and satisfaction of all other customary closing conditions. The
Proposed Transaction will be effected by way of a plan of arrangement,
amalgamation, share exchange or other similar form of transaction. The Proposed
Transaction may also be subject to the approval of the shareholders of Loon
and/or Petrodorado.


Further details concerning the Proposed Transaction will be announced if and
when a Definitive Agreement is entered into.


About Petrodorado Energy Ltd.

Petrodorado is primarily engaged in petroleum and natural gas exploration and
development activities in Colombia, Peru and Paraguay. Its head office is
located in Calgary, Alberta, Canada and Petrodorado's common shares are traded
on the TSXV under the trading symbol PDQ. 


Petrodorado was formed to explore for and develop petroleum assets in South
America, with an initial focus on Colombia, Peru and Paraguay. It's highly
experienced management team have acquired a significant portfolio of assets with
three low-risk blocks (blocks have an oil discovery) and six potential high
impact blocks.


Petrodorado currently has a 49.5% interest in the Buganviles block in Colombia
and assuming that the Proposed Transaction is completed, Petrodorado will own a
69.5% interest in the Buganviles block.


About Loon Energy Corporation

Loon is primarily engaged in petroleum and natural gas exploration and
development activities in Colombia and Peru. Its head office is located in
Calgary, Alberta, Canada and Loon's common shares are traded on the TSXV under
the trading symbol LNE.


Its principal assets are a 20% working interest in the Buganviles block in
Colombia along with Petrodorado and others and a 20% working interest in Block
127 in the Maranon Basin area of northeast Peru.


Significant Conditions to Completion of the Proposed Transaction

Petrodorado and Loon caution that a Definitive Agreement has yet to be entered
into among the parties, and accordingly, no assurances can be given that the
process contemplated by the Letter Agreement will lead to a Definitive Agreement
relating to the Proposed Transaction on the terms contemplated by the Letter
Agreement or at all. Neither Petrodorado nor Loon intend to make any further
announcements or communications regarding the Proposed Transaction until either
a Definitive Agreement has been entered into or discussions are terminated prior
to such event.


Completion of the Proposed Transaction is subject to a number of conditions,
including regulatory and shareholder approval (including on a disinterested
basis to the extent required). The Proposed Transaction cannot close until the
required shareholder approvals are obtained. There can be no assurance that the
Proposed Transaction will be completed as proposed or at all.


Investors are cautioned that, except as disclosed in the management information
circular to be prepared in connection with the Proposed Transaction, any
information released or received with respect to the Proposed Transaction may
not be accurate or complete and should not be relied upon. Trading in the
securities of either Petrodorado Energy Ltd. or Loon Energy Corporation should
be considered highly speculative.


If and when a Definitive Agreement between Petrodorado and Loon is entered into,
in accordance with the policies of the TSXV, Petrodorado and Loon will issue a
subsequent press release containing further details in respect of the Proposed
Transaction.


Cautionary Note Regarding Forward-Looking Statements 

This news release contains forward-looking statements relating to the Proposed
Transaction, including statements regarding the exchange ratio for the Proposed
Transaction, the anticipated acquisition of Loon, the anticipated timeline for
holding the meetings of Loon and/or Petrodorado shareholders to approve the
Proposed Transaction and other related matters, issuing further announcements
concerning the Proposed Transaction and other matters, the receipt of all
necessary regulatory approvals and satisfaction of all other customary closing
conditions in connection with the Proposed Transaction and other statements that
are not historical facts. Readers are cautioned not to place undue reliance on
forward-looking statements, as there can he no assurance that the plans,
intentions or expectations upon which they are based will occur. By their
nature, forward-looking statements involve numerous assumptions, known and
unknown risks and uncertainties, both general and specific, that contribute to
the possibility that the predictions, forecasts, projections and other
forward-looking statements will not occur, which may cause actual performance
and results in future periods to differ materially from any estimates or
projections of future performance or results expressed or implied by such
forward-looking statements. These assumptions, risks and uncertainties include,
among other things: the risk that the Proposed Transaction will not be completed
if a Definitive Agreement is not reached or that the necessary approvals and/or
exemptions are not obtained or some other condition to the closing of the
Proposed Transaction is not satisfied; the risk that closing of the Proposed
Transaction could be delayed if Petrodorado and Loon are not able to obtain the
necessary approvals on the timelines planned; the assumptions relating to the
parties entering into the Definitive Agreement in respect of the Proposed
Transaction and the timing thereof, the timing of obtaining required approvals
and satisfying closing conditions for the Proposed Transaction, state of the
economy in general and capital markets in particular, investor interest in the
business and future prospects of Petrodorado and Loon.


The forward-looking statements contained in this press release are made as of
the date of this press release. Except as required by law, Petrodorado and Loon
disclaim any intention and assume no obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by applicable securities law.
Additionally, Petrodorado and Loon undertake no obligation to comment on the
expectations of, or statements made, by third parties in respect of the matters
discussed above.


Not for distribution to U.S. Newswire Services or for dissemination in the
United States of America. Any failure to comply with this restriction may
constitute a violation of U.S. Securities Laws.
Petrodorado Energy (TSXV:PDQ)
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