Holloman Notes Weather Conditions, Ops in Cooper Basin

Holloman updated on its operations and the recent extraordinary rain and flooding in Australia. Although recent flooding has been largely focused east of Holloman's South Australian holdings, locally heavy rains continued to hit the Cooper Basin during the second half of 2010. As a result, road closings and access limitations continue to hamper progress on many fronts. There is some likelihood that additional rains and flooding could recur in February 2011.

Despite the rains, Holloman joins other Cooper Basin explorers in aggressive action to regain access to their properties. In news released in late December 2010, Beach Energy announced it has completed construction of upgraded roads and a bridge to provide vehicle access to field and exploration operations on Cooper's Western Flank. The 30 meter bridge spans the main Cooper channel between the Christies and Callawonga oil fields. Together with upgraded and rerouted roads, the bridge will provide access for drilling rigs to PEL 92 which directly abuts the border of Holloman's PEL 112 on the north-easternmost corner of its north-western panhandle. Holloman intends to pursue negotiations to piggyback PEL 112 work area clearance and seismic acquisition on Beach's upcoming activity.

"Beach's recent announcement of an 11 well drill program on PEL 92 is very good news," stated Mark Stevenson, Holloman's CEO. "We understand that certain of those wells are designed to target structures further to the west, away from the Permian kitchen. If successful, this should result in real value enhancement for our PEL 112 holdings. Regardless, the start-up in their activity provides the first real opportunity to pursue our seismic program since flooding began in February 2010."

Victoria Petroleum, Holloman's neighbor on PEL 444 has also announced aggressive plans to restart its operations. Contingent upon government approvals, Victoria Petroleum intends to build a road to its successful Growler oilfields beginning January 2011. The location and design of this access road should enable a rapid return to operations following any future inundation. Natural water bodies in area of PEL 444, however, are expected to delay access for seismic acquisition for some time. Holloman is pursuing further studies, including satellite reconnaissance, to determine its best strategy to regain land access to PEL 444 at the first opportunity.