SOURCE: Homeland Resources Ltd.

March 15, 2011 12:29 ET

Homeland Resources Provides Corporate Update

ALBUQUERQUE, NM--(Marketwire - March 15, 2011) - Homeland Resources Ltd. (OTCQB: HMLA) (OTCBB: HMLA) is pleased to provide this update outlining the recent corporate developments and near term prospects of the Company.

Homeland Resources Ltd. is an exploration and production company focused on developing oil and gas resources both in the United States and internationally. The Company is currently producing oil and gas at several of its projects in Oklahoma.

In 2010, Homeland participated in several successful oil and gas exploration drill programs in southern Oklahoma and the Company now generates monthly revenues from several producing wells. The Company intends to expand operations in the area and drill several offset wells to these currently producing wells throughout 2011. 

Also during in 2010, the Company made a significant investment in a comprehensive 3D seismic program in Oklahoma. At present, all surveying and permit acquisition has been completed and an extensive analysis of the project is being undertaken. Inital data review appears very promising. The Company expects that this seismic program will result in the identification of upwards of 50 potential well locations. Exploration drilling is expected to commence in the spring of 2011 and should continue for some time due to the potential magnitude of the project. Homeland also expects that the Liberty Ridge Project will draw the interest of major oil and gas companies once drilling commences. At that time, Homeland would consider all strategic options including potential sales, joint ventures, and capital raising opportunities.

"Homeland's developing financial strength and current cash flow have positioned the Company to proceed with numerous drilling locations that have already been identified on our projects," says Homeland President, Armando Garcia. "The potential we see at the Liberty Ridge Project is enormous, and in addition to taking full advantage of our current assets, we also look forward to locating and participating in new opportunities to provide growth and value to its shareholders."

The Company is currently participating in oil and gas exploration, production and development in two distinct geographic regions of Oklahoma. A brief overview of each, including recent developments, is outlined in the following:

Smoky Hill Project

The Smoky Hill Project has proven to be a great success for the Company in 2010 and early 2011. The Smoky Hill Drilling Program is located in south-central Oklahoma and involves four prospects -- the Marshall, Bradley, Patton, and McCarthur Prospects. Three are Basal Oil Creek Sand targets and one has a 2nd Bromide Sand objective. Expected total program reserves to be developed in the Smoky Hill Project could be in the range of 750,000 BO and 0.15 BCFG. At this time, one well has been drilled at each prospect. The company is expected to participate in the drilling of offset wells to the previously successful wells this spring. Homeland owns a 5 percent working interest in the Smoky Hill Project. Details of each of the four prospects are as follows:

The Marshall Prospect primary objective is the Basal Oil Creek Sand (BOC) at a depth of 6,200'. This closed structure, with at least 25 feet of height above closure and spill point as defined using proprietary 3D seismic, has potentially trapped 275,000 BO. In addition, the Layton, Deese, Viola, 1st Bromide and 2nd Bromide have been found productive in the area and should be considered for potential oil and gas production in the prospect as well.

The first well in this prospect (Marshall-1) is a production well and is generating monthly revenues for the company.

The Bradley Prospect primary objective is to test the 2nd Bromide Sand on a closed structural high at a depth of approximately 5,500'. The closed structure, as defined using our proprietary 3D seismic, has potentially trapped over 200,000 BO. Second Bromide production has been established 1/2 mile to the east and northeast and is trapped in the same type anticlinal feature. In addition, the Deese Sands, Viola and 1st Bromide Sands are prospective of oil and gas.

The first well in this prospect (Bradley-1) is a production well and is generating monthly revenues for the company.

The Patton Prospect primary zone of interest is the Basal Oil Creek Sand at a depth of 6,600'. 3-D seismic indicates a closed structure with a minimum height of 15' above the spill point. If found filled to the spill-point, this structure could produce over 150,000 barrels of oil. This structure also exhibits closure at the 2nd Bromide level at approximately 5,600'. The 2nd Bromide closure appears to have a minimum height of 10' above the expected spill point. If found filled to the spill-point this structure could produce up to 60,000 barrels of oil. The prospect is surrounded by BOC, 2nd Bromide, 1st Bromide, Viola and Deese production. All of these horizons are potential producers within the South Creek Prospect.

The first well in this prospect (Patton-1) is a production well and is generating monthly revenues for the company.

The Macarthur Prospect primary zone of interest is the Basal Oil Creek Sand at a depth of 6,600'. 3-D seismic indicates a closed structure with a minimum height of 15' above the spill point. If found filled to the spill-point, this structure could produce over 150,000 barrels of oil. The prospect is surrounded by BOC, 2nd Bromide, 1st Bromide, Viola and Deese production.

Liberty Ridge Seismic Project

The objective at Liberty Ridge is to acquire approximately one hundred thirty five (135) square miles of 3-Dimensional (3-D) seismic data to locate and develop new 2nd Wilcox sand, 1st Wilcox sand, Trenton dolomite, Simpson dolomite, Viola limestone, Hunton limestone and Bartlesville and Redfork sand oil fields. A previous 2-D seismic survey in the same area revealed numerous structures that represent key targets that can pinpoint drill locations with the help of the 3-D survey.

Oilfields in the project area have produced from one million to four million barrels of oil from small structural closures of approximately thirty-nine acres up to about two hundred twenty-five acres. These six 2nd Wilcox oilfields have produced approximately 13,000,000 barrels of oil from a combined area of only about seven hundred eighty-five acres. The company believes that more analogous oilfields will be found in the project area as indicated on the accompanying structure maps and the twenty-six structural leads found thereon. In addition to locating and developing new productive structures from the sands, dolomites and limestones mentioned above, it is also believed that deeper productive structures will be found in the Tulip Creek sand, McLish sand, Oil Creek sand, Joins sands and Arbuckle limestone.

These formations are all productive in the general area; however, very few deep wells have been drilled in the project area. A total of fourteen pay zones offer potential for commercially productive reservoirs within the perimeter of the project area and of these, five are prolific Simpson sands. Further, the survey data will be used as a development tool to evaluate the currently productive reservoirs within the area. Our experience has shown that productive locations might not have been recognizable with conventional methods, leaving potentially highly productive locations yet undrilled within and on the boundaries of these known reservoirs. Homeland owns a 5 percent working interest in the Liberty Ridge Seismic Project. 

The Future

Homeland Resources is an expanding exploration and production company focused on developing North American and international oil and natural gas reserves. The Company's current focus is on the continued exploration, production and development of its present land portfolio as described above. Beyond these projects Homeland continues to seek to further expand its portfolio to include additional interests in North America and internationally. The Company is developing sufficient cash reserves that will allow for both continued development of existing projects as well as expansion into new prospects. The Company remains committed to actively develop and grow the Company by ensuring its profitability and subsequent value for its shareholders.

Statements which are not historical facts are forward-looking statements. The Company makes forward-looking public statements concerning its expected future operations, performance and other developments. Such forward-looking statements are necessarily estimates reflecting the Company's best judgment based upon current information and involve a number of risks and uncertainties, and there can be no assurance that other factors will not affect the accuracy of such forward-looking statements. It is impossible to identify all such factors but they include and are not limited to the existence of underground deposits of commercial quantities of oil and gas; cessation or delays in exploration because of mechanical, operating, financial or other problems; capital expenditures that are higher than anticipated; or exploration opportunities being fewer than currently anticipated. The Company has no official gas or oil reserves at this time and may not have sufficient funding to thoroughly explore, drill or develop its properties. Factors which could cause actual results to differ materially from those estimated by the Company include, but are not limited to, government regulation, managing and maintaining growth, the effect of adverse publicity, litigation, competition and other factors which may be identified from time to time in the Company's public announcements and filings.

Contact Information

  • For further information regarding Homeland Resources, contact:
    LiveCall Investor Relations for Homeland Resources
    E-mail: info@homelandresources.com
    Homeland Corporate: www.homelandresources.com
    Investor Community: www.livecallir.com
    Toll-free: (877) 503-4299

    Homeland Resources Ltd.
    6801 Los Trechos NE
    Albuquerque, NM 87109
    Corporate Office:
    (877) 503-4299