LION ENERGY TO AMMEND FARMOUT AGREEMENT WITH AFRICA OIL CORP.

VANCOUVER, Sept. 2 /CNW/ - Lion Energy Corp. (the "Company" or "Lion Energy") (TSX.V - LEO) is pleased to report that it has come to an agreement with Africa Oil Corp. ("Africa Oil") regarding certain amendments to the existing farmout agreement on all its east Africa assets. The amendment of the Lion farmout agreement with Africa Oil provides that Lion will reduce its interest in Block 10BB to 10% (originally 20%) and will not retain any interest in Block 10A (originally 25%). As consideration Africa Oil has agreed to pay Lion US$2.5 million in cash and to issue to Lion 2.5 million common shares of Africa Oil. Africa Oil has also agreed to the elimination of future expenditure promotes in Block 10BB and on the Company's projects in Puntland (Somalia) and the release of US$4.0 million in escrowed funds.

The resultant working interest in the Kenya and Somalia blocks upon closing the Lion amending agreement will be:

    
    Block 10BB (Kenya)   Tullow 50%       Africa Oil 40%   Lion10%

    Block 10A (Kenya)    Tullow 50%       Africa Oil 30%   EAX (Black
                                                            Marlin) 20%

    Block 9 (Kenya)      CNOOC 40%        OPIC 30%         Africa Oil 20%
                                                           Lion 10%

    Puntland (Somalia)   Africa Oil 65%   Range 20%        Lion 15%
    

The amendments to the farmout agreement are subject to the successful closing of a definitive farmout agreement between Tullow Oil plc ("Tullow") and Africa Oil whereby Tullow will acquire a 50% interest in, and operatorship of, three of Africa Oil's east African exploration blocks, comprised of two exploration blocks in Kenya and one exploration block in Ethiopia. Under the terms of the Tullow farmout agreement, Tullow will acquire a 50% interest in, and operatorship of, Blocks 10BB and 10A in Kenya.

Lion Energy President and CEO John Nelson stated "We are very pleased to have had the opportunity to change the terms of our farmount agreement with Africa Oil and as a result make it possible for Tullow to become Operator of the blocks. Tullow has gained significant technical and operational expertise from their Uganda Lake Albert Graben project which will benefit all parties involved in the exploration of Kenya's rift basins. The transaction will strengthen the balance sheet of Lion and will provide sufficient funding under more favorable un-promoted terms to complete our commitments on all the blocks retained. As a result of the deal the Company will now be a better position to pursue alternative exploration or development opportunities as well as have sufficient time to allow the Company's other investments to grow over the coming months."

Africa Oil is currently acquiring seismic in Block 10BB in Kenya. Drilling of the first exploration well on this block is expected to take place during the first half of 2011. The Company continues evaluation of a potential gas discovery and additional hydrocarbon potential in Block 9 in Kenya. Drilling plans in Puntland Somalia continue to progress but the first well on these blocks will likely be delayed until 2011.

The above transactions are subject to final approval of the Tullow farmout, host government approvals, waiver of any preemption rights by Africa Oil's partners and any applicable regulatory requirements.

About the Company: Lion Energy Corp. is a well-financed, Canadian exploration company with a vision to develop a significant presence in the developing oil and gas industry. The Company holds oil and gas interests in four petroleum blocks located in the Republic of Kenya and in Puntland, Somalia. The Company further holds a 21.04% interest in Encanto Potash Corp., a junior potash exploration company and a 18% interest in Sulphur Solutions Inc., an emerging fertilizer company developing state-of-the-art patented technology for the production of micronized sulphur fertilizer.

To find out more about the Company, please visit our website at www.lionenergycorp.com.

On behalf of the Board,

LION ENERGY CORP.

John R. Nelson

President and Chief Executive Officer

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This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address exploration drilling, exploration activities and events or developments that the Company expects to occur, are forward-looking statements. Forward-looking statements in this news release include statements regarding the Company's intentions or plans, whether of a corporate or exploratory nature. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploration and exploration successes, and continued availability of capital and financing and general economic, political, market or business conditions. These statements are based on a number of assumptions, including, among others, assumptions regarding general business and economic conditions, the timing and receipt of regulatory and governmental approvals for the transactions described herein, the ability of the Company and other parties to satisfy stock exchange and other regulatory requirements in a timely manner, the availability of financing for the Company's proposed transactions and programs on reasonable terms, and the ability of third-party service providers to deliver services in a timely manner. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected on the forward-looking statements. The Company does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law or regulatory policies.