Enhanced Oil Resources Inc. Announces Completion of the Sale of St. Johns Dome CO(2) and Helium Assets

HOUSTON, Feb. 1, 2012 /CNW/ - Enhanced Oil Resources Inc. (TSX-V: EOR) today announced that its indirect wholly-owned subsidiary, Ridgeway Arizona Oil Corp. (collectively with EOR, the "Company"), has completed the sale of its interests in the St Johns CO2 and Helium field. The transaction closed pursuant to a purchase and sale agreement announced November 16, 2011, as amended, with Kinder Morgan CO2 Company, L.P., a wholly owned subsidiary of Kinder Morgan Energy Partners, L.P. (NYSE: KMP), for all of the Company's rights, title and interest in the St Johns gas dome and certain related assets, located in Apache County, Arizona and Catron County, New Mexico.

Proceeds from the sale were cash of U.S. $29.7 million, including an escrow of U.S. $4.5 million in respect of post-closing adjustments, principally for potential environmental and helium appraisal drilling costs adjustments. In addition, the existing CO2 purchase agreement with Kinder Morgan was amended. This CO2 purchase agreement, which was negotiated by the Company to provide a CO2 source for injection into the Company's oilfields, was amended in this sale transaction to delay the date required to complete a connection to the Cortez Pipeline, the date required to first commence taking CO2 deliveries, and eliminating the termination fee payment, if notice of termination occurs before February 28, 2014.

The closing of the sale was delayed by renegotiation of the Company's existing helium sales contract with Air Liquide America, Inc., which was assigned to Kinder Morgan. The parties agreed to be contingently responsible for and to share in the costs of up to $5.0 million of future appraisal drilling costs to evaluate helium in certain areas of the St Johns dome field, only when and if a new CO2 pipeline is ultimately committed by Kinder Morgan.

Barry Lasker, President and Chief Executive Officer of Enhanced Oil Resources said: "We are pleased to finally close this transaction. The monetization of St Johns is an important step forward for the Company and will enable an acceleration of our infill oil development and exploitation program within our 27,000 acres of San Andres leases in New Mexico. Ultimately, we anticipate that the cash proceeds and other consideration provided from this sale will help finance our planned CO2 flood at the 5,000 acre Milnesand field and potentially at the adjacent 20,000 acre Chaveroo field. We are excited to move forward with our infill and horizontal drilling program at Milnesand and Chaveroo and we look forward to starting this program as soon as possible."

About Enhanced Oil Resources Inc.

Enhanced Oil Resources Inc. is an early-stage company, with a principal goal of increasing crude oil and natural gas production through enhanced oil recovery ("EOR") and infill drilling projects it is initiating in the Permian Basin on oil fields acquired by the Company in 2007 and 2008 for that purpose.

Forward-Looking Statements

Certain statements contained herein are "forward-looking statements" and "forward-looking information" under applicable securities laws, including statements regarding beliefs, plans, expectations or intentions regarding the future relating to Enhanced Oil Resources Inc.'s operations, business prospects, expansion plans and strategies. Such forward-looking statements include, among others, that the monetization of St. Johns will enable acceleration of the infill oil development and exploitation program, that the cash proceeds and other consideration provided will help finance the planned CO2 floods.

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 statements because it is possible that expectations, predictions, forecasts, projections and other forms of forward-looking information will not be achieved.  Forward-looking statements are based on the opinion and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements.  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.  Assumptions upon which such forward-looking statements are based include that the proceeds of the sale will enable acceleration of the infill oil development and exploitation program and will help finance the planned CO2 floods. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include the failure of the monetization of St. Johns to enable acceleration of the infill oil development and exploitation program and the failure of the cash proceeds and other consideration provided to help finance the planned CO2 floods. 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.



Barry D Lasker, CEO


SOURCE Enhanced Oil Resources Inc.

For further information:

For more information visit our Website at www.enhancedoilres.com or please call Don Currie on 1-888-990-3551

Profil de l'entreprise

Enhanced Oil Resources Inc.

Renseignements sur cet organisme


Jetez un coup d’œil sur nos forfaits personnalisés ou créez le vôtre selon vos besoins de communication particuliers.

Commencez dès aujourd'hui .


Remplissez un formulaire d'adhésion à CNW ou communiquez avec nous au 1-877-269-7890.


Demandez plus d'informations sur les produits et services de CNW ou communiquez avec nous au 1‑877-269-7890.