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Enhanced Oil Resources making progress on St.Johns and Mexican oil fields

The company said it is continuing development plans for the St. Johns Helium and carbion dioxide field and continues to produce approximately 180 barrels of oil per day from its oil fields in New Mexico.

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Enhanced Oil Resources Inc said it is continuing development plans for the St. Johns Helium and carbion dioxide field and continues to produce approximately 180 barrels of oil per day (bopd) from its oil fields in New Mexico. The Milnesand pilot project continues with CO2 injection and is performing as expected.


As announced, it continues to discuss opportunities with parties interested in CO2 supply from the St. Johns Dome. To date it has received Letters of Intent for approximately 350 mmcfpd (million cubic feet per day) of long term CO2 usage and it continues 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,” it said.


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, Enhanced Oil has decided to engage a senior industry investment banking firm to assist in identifying, interviewing, negotiating with and selecting a potential joint venture partner or partners.


At its oilfields in New Mexico it continues to reduce operating costs where possible and continue to focus on the Milnesand CO2 pilot flood area. At Chaveroo, it has implemented a production cycling program which has cut operating cost from US$44.00 per barrel to US$24.00 per barrel without affecting overall production rates. It anticipates 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 in December 2008 is continuing. The overall oil production from the pilot battery of wells has increased by 42 percent 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. “While it is early in the process we remain very encouraged with the results to date,“ the company said.

Quick facts: Enhanced Oil Resources Inc

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TSX-V:EOR
Market: TSX-V
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