Brandenburg Metals Corp (TSX-V:BBM) ("
Brandenburg
" or the "
Company"), is pleased to announce that
it has signed a joint venture letter of intent
("
LOI") with Houston-based Holloman Energy
Corporation ("
HEC"), pursuant to which the company
can earn an undivided 44% working interest in two onshore
concessions known as Petroleum Exploration License 112
("
PEL 112") and Petroleum Exploration License 444
("
PEL 444")(PEL 112 and PEL 444
collectively, the "
PELs"). The PELs cover
1,125,000 acres in South Australia's Cooper Basin Western Flank Oil
Play. The Department of Primary Industries and Resources of
South Australia reports that the Cooper Basin has sourced over 4
billion barrels of oil and 5 trillion cubic feet of recoverable
gas. The Cooper Basin has in excess of 120,000 kilometers of
2-D seismic data and more than 1,200 wells in 65 oil and 20 gas
fields. The primary "target formations" in both of the licensed
areas are the Birkhead, Hutton and the Namur sandstones. Depth for
the formations range from 1500-1800 meters.
HEC and the Company intend to enter into a definitive earn-in
agreement in relation to the Company's right to earn a 44% working
interest in the PELs (the "Acquisition").
Under the terms of the LOI, the Company will earn an undivided
44% working interest in each of the PELs, as follows:
(a) With respect to PEL 112, by paying HEC:
(i) AUD$150,000, on or before June 1, 2011,
which will be paid into trust and transferred to HEC on execution
of a definitive agreement, to be used for seismic work area
clearance on the PEL 112;
(ii) AUD$450,000, on or before June 1, 2011,
which will be paid into trust and transferred to HEC on execution
of a definitive agreement, to be used for initiating a 3D seismic
acquisition program covering approximately 125 square kilometers on
PEL 112 (the "PEL 112 Seismic
Program");
(the "Conditional PEL 112
Payments")
(iii) AUD $3,050,000,
on or before July 1, 2011, to continue to complete the PEL 112
Seismic Program;
(iv) AUD$4,500,000, on or before July 1, 2011, which
will be paid into trust and transferred to HEC on completion of the
PEL 112 Seismic Program, for use in the conduct of a three well
drill program on the PEL 112 (the "PEL 112 Drill
Program"). In connection with the PEL 112 Drill
Program, the Company will sole fund, with up to AUD$4,500,000,
dry-hold costs of three wells on PEL 112. In the event any
well drilled as part of the PEL 112 Drill Program tests positively
for commercially viable production of oil or gas, HEC and the
Company will each pay 50% of the total aggregate completion costs
respecting the wells.
(b) With respect to PEL 444:
(i) AUD$150,000, on or before February 1, 2012, for use in
seismic work area clearance on PEL 444;
(ii) AUD$450,000, on or before February 1, 2012, for use in
initiating a 3D seismic acquisition program covering approximately
125 square kilometers on the PEL 444 (the "PEL 444 Seismic
Program");
(iii) AUD $3,050,000, on or before April 31, 2012, to continue
to complete the PEL 444 Seismic Program;
(iv) AUD$4,500,000, within 30 days following the initiation
of fieldwork on the PEL 444 Seismic Program, for use in the conduct
of a three well drill program on the PEL 444 (the "PEL 444
Drill Program"). In connection with the PEL 444 Drill
Program, the Company will sole fund, with up to AUD$4,500,000,
dry-hold costs of three wells on PEL 444. In the event any
well drilled as part of the PEL 444 Drill Program tests positively
for commercially viable production of oil or gas, HEC and the
Company will each pay 50% of the total aggregate completion costs
respecting the wells.
The Conditional PEL 112 Payments will be repaid to the Company
in the event HEC and the Company do not enter into a definitive
agreement.
The LOI is subject to a number of conditions including certain
approvals, and the execution of a definitive agreement.
Beach Energy ("Beach"), one of Australia's
largest independent producers, operates Petroleum Exploration
License 92 ("PEL 92") which directly abuts the
northern border of PEL 112. In 2009, Beach made several new
discoveries with an 80 percent success rate using 3D seismic in a
north to south line above PEL 112. Starting 30 kilometers north
with the Parsons field wells (two with initial production ("IP") in
excess of 3,000 barrels of oil per day ("BOPD"))
followed next by the Perlubie field (IP of 3000 BOPD), next the
Perlubie South (IP 740 BOPD) and ending less then 15 kilometers
North of PEL 112 with the Butlers Field Discovery (IP 2600
BOPD).
In February 2011, Beach announced commencement of an 11 well
drill program on PEL 92.
During the period from February 23, 2011 to May 6, 2011, Beach
drilled 4 wells (Parsons-3, Parsons-4, Butlers-2 and Butlers-3) on
PEL 92, all of which were successful. The wells encountered oil
columns ranging from 9 to 3 meters in the Namur sandstone. The
Parsons-3 well flowed at a rate of more than 5,000 barrels/day of
oil during cleanup with no water. Beach expects the additional
production from the Parsons-3 and Parsons-4 wells will increase its
daily production from PEL 92 to around 6,000 barrels/day.
The Company has agreed to pay finders' fees, in relation to the
Acquisition, of a maximum issuance of 2,000,000 common shares
or units, to Acqua Capital Group, subject to TSX Venture Exchange
(the "Exchange") approval.
HEC (http://www.hollomanenergy.com) (OTCBB:HENC) is an
international oil and gas exploration and development independent.
It is a subsidiary of Houston-based Holloman Corporation
("Holloman") (http://www.hollomancorp.com), one of
the largest employee owned engineering, procurement and
construction companies in the United States. Holloman's operations
extend to three continents and include plant and pipeline
construction, oil & gas exploration, mineral exploration, and
international heavy-equipment leasing. Holloman's primary focus is
on the natural resource, water, and wastewater industries. Its
clients include some of the world's largest corporations.
"Holloman is very pleased to have Brandenburg join us in
exploring and developing our Cooper/Eromanga holdings," stated Mark
Stevenson, Chairman and CEO of HEC and President of Holloman. "We
believe PEL 112 and PEL 444 have real value and will provide the
basis for successful operations for both organizations. We look
forward to long and mutually beneficial relationship."
Brandenburg has assembled its technical team for this project.
Mr. Douglas M. MacLellan has joined Brandenburg as a 'technical
director' and has assumed the office of Chief Operating Officer. In
addition, Brandenburg has engaged the independent petroleum
engineering firm of Apex Energy Consultants Inc.
("Apex"). Apex provides energy related technical
services both domestically and internationally. Apex has extensive
experience in projects in Australia, working in the Cooper and
Eromanga basins. Most recently Apex was involved with Drillsearch
Energy N.L. on the PEL 92 concession, immediately adjacent to the
PEL 112 concession.
There has been substantial 2D seismic and geological work done
on PEL 112 and PEL 444. To date, in its review of available data
Brandenburg has identified 30 prospective oil leads on those
properties, of which 10 have been characterized as "high-priority".
Independent engineering studies indicate these high priority leads
have a risked, Potential Resource Estimate of 30 million barrels of
oil contained primarily in the three target formations.
The Company also wishes to announce that it will be conducting a
partially brokered partially non brokered financing (the
"Private Placement") for gross proceeds of up to
$12,500,000. The Private Placement will be an offering of
units of the Company at a price of $0.35 per unit, with each unit
comprised of one common shares and one half of one warrant (each
whole warrant, a "Warrant"). Each Warrant
will entitle the holder to purchase an additional share (a
"Warrant Share") of the Company for a period of
two years from the closing date of the Private Placement at a price
of $0.55 per Warrant Share.
The Company may pay commission consisting of 8% in cash and
issue 8% in broker's warrants in connection with the brokered
portion of the Private Placement. A Finder's Fee of 8% in cash may
be paid on the non-brokered portion of the Private Placement, which
may close separately from the brokered portion.
The proceeds from the Private Placement will be used for general
working capital and for drilling the PELs.
The Acquisition is a "Fundamental Acquisition" in accordance
with the policies of the Exchange. Both the Acquisition and
the Private Placement are subject to Exchange approval.
On behalf of the Board of Directors BRANDENBURG METALS
CORP. Karl Antonius President & CEO
We seek Safe Harbor.
Neither the TSX Venture Exchange nor any other regulatory
authority accepts responsibility for the adequacy or accuracy of
this release.
CONTACT: Karl Antonius
Telephone: 604.669.9330 or 604.218.9434