HOUSTON, April 1 /CNW/ - Enhanced Oil Resources Inc. (TSX-V: EOR) is
pleased to provide the following update regarding the Company's
activity for the first quarter of 2011.
The Company had previously announced, on January 19, 2011, that its
principal focus for 2011 is the accelerated development of the
Company's oil reserves at the Milnesand, Chaveroo and Crossroads oil
fields. Specifically, during 2011 the Company intends to focus on:
Initiating the Milnesand oil field 20-acre infill drilling program in
Accelerate well reactivations and workovers at both Milnesand and
Chaveroo oil fields.
Exploitation of behind pipe zones in existing wells in Crossroads oil
Completion of pipeline right of way for the Company's proposed 41 mile
pipeline from Kinder Morgan CO2 Company LP's Cortez Pipeline to the Company's Milnesand and Chaveroo
Preparation for the potential delivery of CO2 to Milnesand oil field.
Continued evaluation of a helium project in our St Johns field.
Continued evaluation of a geothermal project in our St Johns field.
Market and industry exposure of Enhanced Oil Resources.
Oil Field Operations
The Company's crude oil production averaged approximately 410 barrels of
oil per day (bopd) for the first quarter of 2011. At Crossroads, March
average production totalled approximately 314 bopd, a reduction of
approximately 78 bopd since December, 2010. The reduction in daily
production is principally related to lower production at the # 307
Devonian and # 101 Morrow wells. Both wells are scheduled for reworking
in the next 60 days.
Since the start of the year, the Company has reactivated seven wells at
Chaveroo and has recently reactivated nine wells at Milnesand. The
Milnesand Plan of Development for 2011 has been presented to the Bureau
of Land Management (BLM) and we are currently waiting for their
approval to proceed. The engineering design for our proposed infill
lateral wells from existing wellbores at Milnesand has been completed
and we are currently soliciting vendors to commence this program as
soon as approvals are received and services can be provided. At
Crossroads, we are in the process of beginning a program to rework
several existing wells to increase production from the Devonian and
other reservoirs in an attempt to bring production back to previous
production levels. As previously reported, over 40 wells have been
identified for work-over activity at our oilfields with the bulk of
this activity being conducted within the first six months of 2011.
Cortez CO2 Pipeline Connection to Milnesand Field
In April 2010, the Company announced a CO2 gas purchase contract with Kinder Morgan CO2 Company, L.P (Kinder Morgan). The contract with Kinder Morgan calls for
a total of 27.4 billion cubic feet (bcf) of CO2 to be purchased by the Company over a five year period commencing no
later than August 31, 2012 ("Delivery Date"), and which requires the
Company to construct a CO2 pipeline from the Cortez connection point to our Milnesand oilfield.
The original agreement had a Commitment Date of February 28, 2011, at
which time the Company could cancel the contract upon surrendering the
US$1.0 million letter of credit securing the Company's obligations
Recently, the Company and Kinder Morgan agreed to a one-year extension
to the Commitment Date and the Delivery Date. As a result, the
Commitment Date has been extended to February 28, 2012 and the Company
now expects to begin taking delivery of the CO2 in the third quarter of 2013. The Company paid Kinder Morgan
US$100,000 in consideration of this extension.
Efforts to construct a 40 mile pipeline from the Cortez Pipeline through
the Company's Chaveroo oil field into its Milnesand oil field continue,
with right of way acquisition and survey work projected to extend into
the fourth quarter of 2011. Our efforts to date have identified habitat
issues related to the U.S. Endangered Species Act that will require
that field surveys and construction only take place during certain
times of the year. These anticipated delays necessitated the extension
with Kinder Morgan. The Company has started purchasing the rights of
way and is beginning to prepare the State permitting required for the
commencement of construction. The balance of 2011 will be focused on
regulatory requirements with any construction not being considered
until the next calendar year. The pipeline, anticipated to be eight
inches in diameter and 40 miles long, requires approximately six months
St Johns Helium
The Company also initiated work this month on the various permit
requirements for a 100 million cubic foot per day raw feedstock helium
extraction and liquefaction plant at its St Johns Field. The Company
expects that the permitting process will extend into the first or
second quarter of 2012, with plant construction possible in 2013.
However, any such plans are conditional on obtaining the required
permits and financing to move forward.
St Johns Geothermal
The Company had previously announced a relationship and potential joint
venture partnership with GreenFire Partners LLC (GreenFire) for the
purpose of investigating and potentially developing a geothermal energy
program using CO2 from the St Johns field. We are currently discussing an agreement that
would extend the relationship for several more years. Both companies
are hopeful a plan and project can be initiated in the third quarter of
this year. As previously announced, test wells could be drilled to
depths approaching 7,000 feet and would be used to test temperatures
and other variables critical to the use of CO2 in the production of geothermal energy. Any test of the wells would be
expected to last for up to two years before conclusions could be made.
Market and Industry Exposure
The Company continues to work on its intended plan for increasing oil
production, advancing the St. Johns project and increasing market
exposure. During the first quarter of 2011 we have presented at the
IPAA conference in Florida, the winter NAPE conference in Houston,
Texas and made various investor presentations in Vancouver, Toronto and
several cities in the US. We attended the Executive Oil Conference this
week in Midland, Texas and will present at the IPAA OGIS conference
next month in New York. Additional conferences are planned and these
will be announced in the near term.
The Company's President and CEO Mr. Barry Lasker states "The Company
continues with its stated goals of increasing oil production and
initiating infill drilling at the Milnesand field. Engineering design
for the sidetracking of existing wells has been completed, the
Milnesand Plan of Development has now been provided to the authorities
and we are eager to get started on this program. We continue to market
the Company and are excited by the work program we have in front of us
for the remainder of this year. As always, we thank the shareholders
for their support and we look forward to providing additional updates
as they occur."
Certain statements contained herein are forward-looking statements,
including statements relating to Enhanced Oil Resources' operations;
business prospects, expansion plans and strategies. Forward-looking
information typically contains statements with words such as "intends,"
"anticipate," "estimate," "expect," "potential," "could," "plan" or
similar words suggesting future outcomes. Readers are cautioned not to
place undue reliance on forward-looking information because it is
possible that expectations, predictions, forecasts, projections and
other forms of forward-looking information will not be achieved by
Enhanced Oil Resources. By its nature, forward-looking information
involves numerous assumptions, inherent risks and uncertainties. A
change in any one of these factors could cause actual events or results
to differ materially from those projected in the forward-looking
information. Although Enhanced Oil Resources believes that the
expectations reflected in such forward-looking statements are
reasonable, Enhanced Oil Resources can give no assurance that such
expectations will prove to be correct. Forward-looking statements are
based on current expectations, estimates and projections that involve a
number of risks and uncertainties which could cause actual results to
differ materially from those anticipated by Enhanced Oil Resources and
described in the forward-looking statements or information. The
forward-looking statements are based on a number of assumptions which
may prove to be incorrect. Readers should be aware that the list of
factors, risks and uncertainties set forth above are not exhaustive.
Readers should refer to Enhanced Oil Resources' current filings, which
are available at www.sedar.com, for a detailed discussion of these factors, risks and uncertainties.
The forward-looking statements or information contained in this news
release are made as of the date hereof and Enhanced Oil Resources
undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by
applicable laws or regulatory policies.
ON BEHALF OF THE BOARD OF DIRECTORS
Barry D Lasker, CEO
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE Enhanced Oil Resources Inc.
For further information:
visit our Website at www.enhancedoilres.com, or please call Don Currie on 1-888-990-3551