HOUSTON, Dec. 14, 2009 (GLOBE NEWSWIRE) -- Holloman Energy Corporation (OTCBB:HENC) ("Holloman") shared the results of an indicative economic study of its Cooper Basin PEL 112 holdings today. In management's opinion, the study enhanced its already positive assessment of the lease. The study analyzed the before tax net present value ("NPV") of cash flows from potential oil discoveries over a range oil prices and prospective resource volumes.
Holloman has identified 38 leads on PEL 112. Five of the leads were targeted for evaluation and were determined to have mean unrisked in-place prospective resources ranging from 56 MMbbl to 70 MMbbl for a 100% working interest. The mean unrisked recoverable prospective resource potential for the five leads range from 19 MMbbl to 24 MMbbl and the total mean unrisked recoverable prospective resource potential for the five leads is greater than 100 MMbbl.
The indicative economic study was conducted by ISIS Petroleum Consultants Pty. Ltd. ("Isis") of Australia, an independent and internationally recognized petroleum geological, geophysical and engineering firm. The results of the study were that the NPV@10% for a 100% working interest in each hypothetical PEL 112 oil discovery of 5MMbbl recoverable resource was approximately US$100M, assuming a peak field oil production rate of 5,000 BOPD, a peak oil production rate per well of 500 BOPD and an oil price of $70 / bbl. The capital and operating cost assumptions were based on current costs in the basin.
The exploration risk for the five leads is approximately 1 in 4. Holloman plans to acquire, process and interpret a 3D seismic survey during the first half of 2010. The objective of the 3D seismic survey is to mature the current leads to drillable prospect status. Holloman then plans to undertake a multi well drilling program commencing sometime during the second half of 2010 or early in 2011. Additional work will be undertaken in the future to evaluate some of the remaining 33 leads on the lease.
Mark Stevenson, Chairman of Holloman Energy's Board of Directors, stated; "We believe this economic study reinforces management's opinion that our Cooper basin acreage represents a significant exploration opportunity. The Company's current efforts to joint venture with industry partners will further strengthen its ability to develop these assets."
Holloman Energy holds 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.
About Holloman Energy
Holloman Energy Corporation is an emerging exploration and development company. It currently holds working interests, varying between 66.66% and 100%, in three oil and gas permits awarded by the Australian government. These permits encompass in excess of 1.46 million acres in the Cooper and Gippsland basins.
Cautionary Note to U.S. Investors: The United States Securities and Exchange Commission (the "SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this press release, such as "mean unrisked in-place prospective resource" and "mean unrisked recoverable prospective resource," that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosures in our Form 10K/A, Form 10Q and other filings with the SEC available from us at 333 North Sam Houston Parkway East, Suite 600, Houston, Texas 77060. You can also obtain this information from the SEC on-line at www.sec.gov or by calling 1-800-SEC-0330.
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