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Last updated on April 17, 2014 at 1:21 EDT

Enhanced Oil Resources Inc. Provides 2011 Activity Update

January 19, 2011

HOUSTON, TX, Jan. 19 /PRNewswire/ – Enhanced Oil Resources Inc. (TSX-V: EOR) is
pleased to provide the following update regarding the Company’s
proposed activity for 2011.

The Company had previously announced on December 22(nd) 2010 that it had completed a $25 Million bank credit facility with
Regions Bank.  The credit facility capped a year where the Company
produced four straight quarters of positive cash flow, increased daily
oil production during the year from 369 bopd (average for 4(th) quarter 2009) to 488 bopd (average for 4(th) quarter 2010), increased proven oil reserve values from $30 Million to
over $60 million dollars and announced a gas purchase contract with
Kinder Morgan CO(2) Company, L.P. In the St. Johns helium/ CO(2) field in Apache County, Arizona the Company also completed three
additional obligation wells and received conditional approval from the
Arizona State Land Department to extend, by twelve months, the
remaining two commitment wells at the St Johns Helium/ CO(2) Unit. Parallel to the drilling in St Johns, Greenfire Energy announced
they had received a $2 million grant from the Department of Energy
(DOE) for field testing of potential geothermal energy at the St Johns
Dome.  Greenfire Energy was introduced as a potential joint venture
partner in the St Johns dome and would focus on testing the potential
for developing geothermal energy using CO(2) from the St Johns field.

With the developments of 2010 behind us, the Company’s focus for 2011 is
the accelerated development of the Company’s oil reserves at the
Milnesand, Chaveroo and Crossroads oilfields. Specifically, during 2011
the Company will focus on: 

  1. Initiating the Milnesand oil field 20 acre infill drilling program in
    New Mexico.
  2. Accelerate well reactivations and workovers  at both Milnesand and
    Chaveroo oilfields.
  3. Exploration and exploitation of behind pipe zones in existing wells in
    Crossroads.
  4. Completion of pipeline right of way for the Company’s proposed 40 mile
    pipeline from Kinder Morgan CO(2) Company LP’s Cortez pipeline to the Company’s Milnesand and Chaveroo
    oil fields.
  5. Preparation for the potential delivery of CO(2) to Milnesand.
  6. Continued evaluation of a helium project in our St Johns field.
  7. Continued evaluation of a geothermal project in our St Johns field.
  8. Market and industry exposure of Enhanced Oil Resources.

Oilfield Operations

The key focus for the Company in 2011 is to initiate and evaluate the
potential for 20 acre infill drilling at the Milnesand San Andres field
in Roosevelt County, New Mexico. As previously reported, independent
engineering studies have concluded that considerable remaining reserves
could be exploited at Milnesand through the development and infill
drilling of up to seventy, 20 acre locations. It is the Company’s plan
to initiate that program as soon as possible. In late 2010, the Company
met and discussed the upcoming drilling plan with the various federal
and state regulatory bodies who will be involved in authorizing any
drilling program in New Mexico.  Included in these discussions was the
need for an accelerated work program that would reactivate, remediate
and plug certain peripheral wells within both the Milnesand and
Chaveroo fields. The Company has prepared a plan for 2011 that will, at
a minimum, investigate the potential to add additional reserves and
production from existing wells and from new wells. Over 40 wells have
been identified for workover activity at Milnesand, Chaveroo and
Crossroads with the bulk of this activity being conducted within the
first 6 months of 2011. At Milnesand we have begun the process of
identifying existing wells that can be sidetracked at high angle into
the San Andres or drilled as horizontal wells to access potential
bypassed pay zones not accessed by the original, 40 acre, vertical
wells. Longer term, we anticipate drilling additional vertical infill
wells once the development plan and environmental approvals have been
granted.

Cortez to Milnesand Pipeline

In April 2010, the Company announced a CO(2) gas purchase contract with Kinder Morgan CO(2) Company, L.P.The Contract stipulates Kinder Morgan CO(2) Company, L.P.will sell CO(2) to Enhanced Oil Resources on a take or pay basis starting in September,
2012.  In preparation for the Company taking the gas, a pipeline spur
is being planned and constructed for the transportation of CO(2) from Kinder Morgan’s Cortez pipeline to our Milnesand and Chaveroo
fields.  Investigation and consultation of the pipeline spur began in
June of 2010 and has reached a point where the design has been
completed and the path to be used has been identified.  The pipeline,
anticipated to be 8 inches in diameter and 41 miles long, requires
approximately 6 months for construction.  The Company has started
purchasing the rights of way and is beginning to prepare the State and
Federal permitting required for the commencement of construction.  The
balance of 2011 will be focused on regulatory requirements with any
construction not being considered until the next calendar year. A
formal investment decision will be discussed at the board level within
the next few weeks.

St Johns Helium

Enhanced Oil Resources continues to explore ways to exploit and/or
monetize the St Johns Helium/ CO(2) asset.  In 2010 we completed 3 wells, each located in the high helium,
northern end of the field. All 3 wells were successfully drilled into
the Amos Wash productive interval and were flow tested for 24 hours at
restricted rates of 500,000 cubic feet per day (cfpd) to 900,000 cfpd.
Helium content ranged from 0.72% to 0.9%, consistent with other helium
production obtained in this area of the field. The Company is currently
reviewing the potential for a liquid Helium plant with initial capacity
of 100,000,000 cfpd of raw feedstock gas. Final plant design is being
completed and final costs should be available within 3 months. Any
development of a Helium plant requires intensive permitting and capital
and a timeline of approximately 2 to 3 years.  With that in mind, the
Company will explore the initiative and expects to have a plan in place
by the end of the second quarter of this year.  Any plan would then be
conditional on obtaining the required permits and financing to move
forward.

St Johns Geothermal

The Company had previously announced a relationship and potential JV
partnership with Greenfire Energy Ltd for the purpose of investigating
and potentially developing a geothermal energy program using CO(2) from the St Johns field.  Any potential investigation of a program
would require many steps be taken, with one of the most important being
Greenfire Energy obtaining federal grant funding.  Greenfire announced
in the fourth quarter of 2010 they had received confirmation of $2
million
in federal funding focused on investigating geothermal energy
by using CO(2).  Greenfire Energy is now in discussions with the federal agencies
regarding their plan and how the funding will be utilised.   Upon the
conclusion of their talks with federal agencies, Greenfire and EOR will
finalise their plan and agreement.  Both companies are hopeful a plan
and project can be initialized in the 3(rd) quarter of this year.  As previously announced, test wells could be
drilled to depths approaching 10,000 feet below the surface and would
be used to test temperatures and other variables critical to the use of
CO(2) in the production of geothermal energy.  Any test of the wells would be
expected to last for up to 2 years before any conclusion can be made.

Market and Industry Exposure

Enhanced Oil Resources is a company with positive cash flow, proven oil
reserves, financing in hand and a business plan that lays out a path
for systematically improving daily oil production.   Key to increasing
oil production is the initiation of infill drilling at Milnesand either
through sidetracking of existing wells or by new 20 acre vertical
infill wells. The results from the initial infill program will go a
long way to increasing investor awareness and shareholder value.  The
confirmation that additional reserves and production can be achieved
through this infill program will result in a de-risking of the project
and potentially, by analogy, add significant additional reserve
potential at Chaveroo where over 180 infill wells could be added. With
efforts designed to bring production to 1000 barrels of oil per day and
beyond, we believe the Company is poised to garner new interest from
market investors and potential partners alike.  The production is
expected to increase with each infill well and potentially increase
further once CO(2) injection starts.  While the Company is receiving some industry
exposure, we have set out a plan to increase market awareness by
participating in road shows and conferences beginning in February at
the IPAA conference in Florida and shortly followed thereafter by the
NAPE conference in Houston. Additional conferences are planned and
these will be announced in the near term. 

The Company’s President and CEO Mr. Barry Lasker states “With the latest
bank financing now in place we can now begin to build on the foundation
that was laid down during 2010. We have several exciting projects in
place for 2011 and with continued positive results we believe 2011 will
be an exciting time as our company moves towards higher daily oil
production and cash flows.  Parallel to our oil projects we will
continue the investigation of our helium and geothermal projects.  As
always, we thank the shareholders for their support and we look forward
to providing additional updates as they occur.”

Forward-Looking Statement

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 policies.

ON BEHALF OF THE BOARD OF DIRECTORS

(signed)

Barry D Lasker, CEO

Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release. 

SOURCE Enhanced Oil Resources Inc.


Source: newswire