HOUSTON, Jan. 7 /CNW/ - Enhanced Oil Resources, Inc. (TSX-V: EOR) today
provides the following update on corporate and operational activity.
The Company is continuing development plans for the St. Johns Helium and
CO2 field and continues to produce approximately 180 barrels of oil per day
(bopd) from its Oilfields in New Mexico. The Milnesand pilot project continues
with CO2 injection and is performing as expected.
As previously reported the Company continues to discuss opportunities
with parties interested in CO2 supply from the St. Johns Dome. To date, in
addition to our own internal needs, the Company has received Letters of Intent
for approximately 350 mmcfpd of long term CO2 usage and we continue to discuss
additional agreements with potential end users. We expect to move forward with
the formal CO2 contracting process over the course of the next few months.
While the Company cannot guarantee a formal agreement of any type, we remain
encouraged by the progress to date.
During the process of obtaining Letters of Intent for the third party gas
contracts mentioned above the Company was pleased to hear that many companies
with a need for C02 were interested in discussing not only purchase of the gas
but also a potential ownership stake in the source field. Accordingly, the
Company has decided to engage a senior industry investment banking firm to
assist in identifying, interviewing, negotiating with and selecting a
potential joint venture partner(s). The Company is currently finalizing the
selection of a senior industry investment banker and we anticipate announcing
this selection in due course. We will endeavor to keep all shareholders
updated as much as possible on the timing and efforts of the investment banker
once they commence.
At our oilfields in New Mexico we continue to reduce operating costs
where possible and continue to focus on the Milnesand CO2 pilot flood area. At
Chaveroo, we have implemented a production cycling program which has cut our
operating cost from $44.00 per barrel to $24.00 per barrel without affecting
overall production rates. We anticipate further decreases in operating
expenses as efficiencies improve and service costs begin to decrease. At
Milnesand, the CO2 pilot flood area has been under continuous CO2 injection
for four months and the positive upward trend in production announced last
month is continuing. The overall oil production from the pilot battery of
wells has increased by 42% since CO2 injection began and the overall water/oil
ratio has decreased from 45 barrels of water per barrel of oil to 32 barrels
of water per barrel of oil. To date, we believe that we have injected
approximately 4% reservoir pore volume of the initial 10% CO2 slug. Based on
the current modeling we expect peak CO2-EOR response to occur within the next
8 months. While it is early in the process we remain very encouraged with the
results to date.
Barry Lasker, President and Chief Executive Officer of Enhanced Oil
Resources said: "In these difficult times we must continue to execute on our
business plan. We are implementing cost cutting measures at our oilfields and
at the corporate level. We are aggressively pursuing the 3rd party gas
contracts and at the same time we have begun the formal process for bringing
in well funded industry partners to participate in the resource development.
At Milnesand, our CO2 pilot flood continues to perform well and we are
extremely encouraged with the progress to date. We will provide additional
updates as more data comes available."
About Enhanced Oil Resources Inc.
Enhanced Oil Resources Inc. (EOR) is an early-stage company focused on
developing the St. Johns Helium/CO(2) field, and producing oil via enhanced
oil recovery processes using CO(2) injection in the United States. The Company
owns and operates the St. Johns Field, the largest undeveloped helium and
CO(2) field in North America.
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
ON BEHALF OF THE BOARD OF DIRECTORS
Barry D Lasker, CEO
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information:
For further information: visit our Website at www.enhancedoilres.com or
please call Don Currie on 1-888-990-3551