HOUSTON, Dec. 7, 2011 (GLOBE NEWSWIRE) -- Holloman Energy Corporation (OTCBB:HENC) updates its shareholders and other interested parties on the status of its Farm-In Agreement with Brandenburg Energy Corporation (the "Agreement"). On July 29, 2011, Holloman and Brandenburg finalized the Agreement under which Brandenburg could earn an undivided 44% working interest in Holloman's PEL 112 and PEL 444 licenses. Brandenburg's earn-in is subject to meeting certain milestones which include funding obligations totaling approximately AUD$16.3 million (USD$16.7 million).
Under the terms of the Agreement, Brandenburg was obligated to pay Holloman AUD$7.4 million (USD$7.6 million) on or before September 20, 2011 to fund seismic data acquisition and conduct a three (3) well drilling program on PEL 112. Due to delays in its capital formation, Brandenburg has been unable to pay this amount. On December 5, 2011, Holloman provided Brandenburg notice of its intent to terminate the Agreement and return escrowed funds. In accordance with contract terms, Brandenburg has thirty (30) business days in which to pay the past due amount.
As a result, Holloman has delayed its December acquisition of seismic data on PEL 112, and has initiated discussions with its seismic services provider to determine the next opportunity to undertake the survey. In connection with this delay, Holloman has requested a six month extension of the time allowed to complete the survey from the Australian Government.
Holloman is pursuing alternative farm-out opportunities with related and unrelated parties, and is also in discussions with a potential sponsor regarding the listing of its common stock on a recognized stock exchange.
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 Holloman Energy Corporation (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