Enhanced Oil Resources
Enhanced Oil Resources controls approximately 235,000 acres of land within the St Johns Helium-Carbon Dioxide field in Arizona and New Mexico, where the Company is developing what is thought to be the largest undeveloped resource of helium and carbon dioxide gases in North America.
Development of the project could result in the Company becoming one of North America's largest Helium and CO2 suppliers and enhanced oil recovery producers. The Company’s helium reserves, once in production, will be sold to Air Liquide under an existing 15 year Take-or-Pay gas contract.
Enhanced Oil Resources Inc. – More acquisitions, more growth, more success
The buzz never subsides at Enhanced Oil Resources Inc. (TSXV: EOR). EOR has completed the acquisition of approximately 1900 acres of productive land adjacent to the Milnesand San Andres Unit currently 100% owned by the company. The acquired land package is estimated to contain approximately 24 million barrels of oil in place (OOIP), only 10% of which have been produced to date. More resources to the fold in close proximity to EOR’s existing projects clearly add value.
In addition to the obvious advantage of additional resources, the acquisition marks a logical later stage step-out to the Milnesand CO2 pilot flood. A delighted President/CEO Barry Lasker reckons that the success at Milnesand CO2 pilot flood should allow them to book additional Proved Undeveloped (PUD) to the company’s resource base. Lasker also opined that the acquisition is accretive to current cash flow as it increases EOR’s current daily production to approximately 190 barrels of oil.
Meanwhile, progress continues at Milnesand CO2 pilot flood. By week 7 the company had injected approximately 400 mcf per day of CO2 into the target area with early results consistent with EOR’s modeled results.
EOR is aware of the need to continue marketing efforts in parallel to development activities including acquisitions. The Company and its pipeline partner, Suncoast Energy, continue discussions with parties interested in CO2 supply from the St. Johns project. Interested parties have been directed to submit Letters of Intent (LOI). Upon closing of the LOI deadline, the Company is expected to secure definitive capacity contracts.
Unlike many other companies in the resource space, EOR is well financed. A cash balance of $15 million as of Sept 30 should finance EOR’s ambitious development plans and capital expenditure over the next 12 to 18 months. As a matter of prudence and in response to current market realities the management is revisiting all overhead expenses to ensure maximum operating efficiencies. Cuts, where appropriate, are expected in the 2009 budget.
Lasker remains upbeat about the progress and is well on target with all development activities. As the Milnesand CO2 pilot flood gathers pace, Lasker is keen to secure long term CO2 contracts for delivery into the Permian Basin for enhanced oil recovery projects. Much of the available funds are expected to be directed to development activities in an effort to augment shareholder value. With the ability to finance capital expenditure and development programmes, EOR’s aspirations to add value do not appear to be unrealistic.
About Enhanced Oil Resources
Enhanced Oil Resources, Inc. (EOR) is an early stage company focused on developing the St. Johns Helium/CO2 field, and producing oil via enhanced oil recovery processes using CO2 injection in the United States. The Company owns and operates the St. Johns Field, the largest undeveloped helium and CO2 field in North America.