Holloman Energy Sign MoU in Acquisition Australian Exploration Asset

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Holloman Energy Corporation announces of a Memorandum of Understanding for the acquisition of additional Australian-based exploration rights and other assets.

Under the Agreement, Holloman Energy may acquire application rights in up to seven exploration permits (“EPCs’) targeting 1.65 million acres with coal-seam gas potential, together with certain drilling rigs and associated drilling equipment from an affiliated company. 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.

“It’s been 8 months since extraordinary flooding halted exploration by virtually all participants neighboring our Cooper Basin concessions,” stated Mark Stevenson, Holloman Energy CEO. “Some activity in the Cooper has restarted and with it, interest in our PEL 112 and PEL 444 acreage has begun to reignite. In addition, recent discussion with potential venture partners has highlighted an interest in certain Queensland-based acreage positions held by one of our affiliates,” Stevenson continued. “We’ve watched as the market’s focus on coal-seam gas has grown. We now believe it’s time to add our EPC application rights to the Holloman Energy portfolio. This is the first in a series of planned steps to diversify our on-shore exploration efforts and moderate the land-access risks, such as the flooding, we’ve faced in the past. Having a broader on-shore portfolio is a strategy that’s worked well for certain of our larger competitors, and we believe will make Holloman Energy a more attractive joint venture partner.”

The Queensland, Australia-based, EPCs under application target Permian and Jurassic coals. They cover more than 1,783 sub-blocks (6,666 sq km / 1,647,070 acres) largely in the Adavale Basin area. If the acquisition is finalized, the Company will undertake additional studies to determine whether economics support its pursuit of an Authority To Prospect for coal-seam gas resources. The inventory of drilling assets includes three drill rigs, a vehicle fleet and certain camp support equipment. Holloman Energy is performing a detailed review to determine what portion, if any, of the equipment inventory suits its current needs.

Agreement between Holloman Energy and its affiliate sets an acquisition price that approximates the cost basis of the individual assets selected for acquisition. The Agreement is subject to standard contingencies including; the completion of satisfactory due diligence, definitive agreements, and required approvals.