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Enhanced Oil has February production of 365 bopd

2012-03-09 12:25 ET - News Release

 

Mr. Don Currie reports

ENHANCED OIL RESOURCES INC. PROVIDES MARCH OPERATIONS UPDATE

Enhanced Oil Resources Inc. has provided the following update regarding the company's operations activity for March.

As previously reported the company's goal for 2012 is, among other things, to add production and reserves through infill drilling at the Milnesand and Chaveroo oil fields, located in Chavez and Roosevelt counties, New Mexico, and to further the approval and construction of a 41-mile CO2 pipeline, by September, 2015, to connect Kinder Morgan's Cortez CO2 pipeline to the company's Milnesand and Chaveroo oil fields.

 

Oil production volumes for February averaged approximately 365 barrels of oil per day (bopd), an increase of approximately 65 bopd since January. The increase is principally related to the Crossroads 105 well, which has averaged over 70 bopd since being reactivated in early February. The company is currently working on the Crossroads 106 well to convert that well to a second water injector in order to add oil production capacity where the company believes it has additional productive potential in the field. It is reviewing its options to bring its 303 well back to production and will start that work once the 106 conversion is completed. The company expects that its oil production can increase substantially once its infill drilling activity at Milnesand and exploitation activity at Crossroads are initiated.

 

The company had previously announced that it would start its infill program at the Milnesand unit in early March, following meetings with the various regulatory bodies. The company has since been told that due to the lesser prairie chicken breeding season it cannot commence drilling until June 16, 2012, at the earliest. It should be noted that there are no active prairie chicken leks in the Milnesand unit, but the area is part of a broadly defined drilling moratorium on certain federal lands in New Mexico blanketed by the Department of the Interior. In the meantime the company is preparing the drilling locations for, and completing well bore integrity evaluations of, the initial three lateral infill wells which will be drilled utilizing existing well bores in the unit. The company is also designing and intends to initiate a modern fracture stimulation program for the unit on certain currently productive wells, which would commence in the spring. As part of its agreed compliance activities for the Milnesand unit, the company has also contracted a plugging rig to complete a four-well plugging obligation and has been advised that the contractor will arrive on location early next week.

 

At Crossroads field the company has contracted a three-dimensional seismic crew to acquire the first ever 3-D seismic survey at that field and expects to have that program completed by the end of second quarter 2012.

 

In Texas, the company has identified several wells as workover candidates and expects to initiate those operations shortly. It will continue to evaluate results from these properties to determine if further activity is then warranted.

 

Following the recent sale of the St. Johns field the company is in the process of updating and amending its website to reflect the new focus for the company. The company expects to have its new website on-line within the next few weeks.

 

The company will hold a conference call for shareholders and interested parties in April to outline the business plan for 2012. It will provide dial-in details once they are confirmed.

 

We seek Safe Harbor.