HOUSTON, May 12, 2011 (GLOBE NEWSWIRE) -- Holloman Energy Corporation (OTCBB:HENC) announces its execution of initial farm-out agreements with respect to its Australian Cooper Basin holdings. In a Letter of Intent dated May 11, 2011, Holloman accepted the terms of a farm-out with an undisclosed party through which that party may earn a 44% working interest in Holloman's PEL 112 and PEL 444 licenses by funding approximately $17,000,000 to $19,000,000 in exploration and development expenditures.
"We are very encouraged by the progress we've made in our farm-out negotiations," stated Mark Stevenson, Holloman CEO. "We believe the scope of the commitments we've negotiated are sufficient to provide a strong exploration and development opportunity on our acreage."
Though Holloman intends to release more details in the upcoming week, it disclosed that the general terms of the farm-out included funding of the costs of 3D seismic acquisition and a multiple well drilling program on each of its licenses. In connection with the farm-out opportunity, Holloman has also entered into a participation agreement under which all current working interest holders will contribute a portion of their working interest in satisfaction of the 44% working interest which may be earned by the third party. Holloman anticipates it will retain a 40% working interest in its licenses.
Both the farm-out transaction and the participation agreement are subject to a number of conditions including certain approvals, and the execution of definitive agreements.
About Holloman Energy
Holloman Energy Corporation is focused on exploring and producing oil in Australia's Cooper Basin. Holloman's Cooper Basin leases include interests in PEL 112 and PEL 444 which comprise 4,544 Sq km (1.125 million acres) in the southwest and northwest sectors of Australia's prolific Cooper – Eromanga Basin.
Forward-Looking Statements: This press release includes forward-looking statements as determined by the U.S. Securities and Exchange Commission (the "SEC"). All statements, other than statements of historical facts, included in this press release that address activities, events, or developments that the Company believes or anticipates will or may occur in the future are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to acquire and develop specific projects, the ability to fund operations and changes in consumer and business consumption habits and other factors over which the Company has little or no control. The Company does not intend (and is not obligated) to publicly update any forward-looking statements. The contents of this press release should be considered in conjunction with the warnings and cautionary statements contained in the Company's recent filings with the SEC.
ON BEHALF OF THE BOARD OF DIRECTORS
Holloman Energy Corporation
http://www.hollomanenergy.com