Requirements
There are no requirements to start looking for penguin spies, although they can be found almost anywhere in RuneScape, so you may need to have completed quests such as Underground Pass to reach areas they may have infiltrated.

Rewards
Because half of the penguin spies are in relatively easy locations to access, you will receive 1 point for each of these. The harder penguins to find will also be worth 1 Penguin point unless he trusts you, in which case they will be worth 2.
Penguin points can be traded in for either 6,500 coins per point, or experience in the skill of your choice.
You can earn a maximum of 15 Penguin points per week, and Larry will happily keep track of up to 50 points while you decide what you'd like to spend them on.