HOUSTON, July 2 /PRNewswire-FirstCall/ - Enhanced Oil Resources Inc. (TSX-V: EOR) today provides the following update on the previously announced joint venture opportunity at the St Johns Helium and CO2 Field in Arizona and New Mexico.

As previously reported the Company engaged Tristone Capital in March 2009 to advise and assist the Company in the pursuit for potential joint venture partners to further develop the Company's interests in the St. Johns Helium and CO2 Field in Arizona and New Mexico.

Tristone initiated a targeted marketing process beginning in March, 2009. In total, 10 companies executed confidentiality agreements and participated in the data review in either the physical or virtual data room. The data room was open to interested parties until May 22nd. At that time of the data review, the market was at a standstill with few to no deals being announced. Companies were focused on trimming capital expenditures and maintaining cash reserves in the face of depressed commodity prices. Capital markets were frozen with little to no debt or equity being raised. Most of the companies that had the greatest likelihood of being interested in the Project were large public companies that, because of the timing, and no means to access the capital markets and raise funds, were internally reducing capital expenditures budgets, and, therefore, were not willing to commit to the large capital investments that the St. Johns Project requires. Since the first quarter of 2009 the credit markets have opened up somewhat; however, debt remains expensive and companies are being very selective about what projects to fund. Tristone commented that most E P companies that reviewed the Project data, viewed the St. Johns Field project as an attractive long-term strategic project, however, to date, no formal proposals have been submitted. With the capital markets showing signs of rebounding and some capital starting to be available, it is hoped that further discussions between Tristone and interested parties may result.

In the meantime, EOR is proceeding with the Project on its own and is focusing its efforts on a smaller Phase 1 Helium project that will deliver approximately 100 million cubic feet per day of CO(2) to its own oil fields in the Permian Basin for enhanced oil recovery.

Barry Lasker, President and Chief Executive Officer of Enhanced Oil Resources said: "While we are disappointed not to have completed a transaction, we believe a transaction can ultimately be completed in the long term. In the meantime, our CO(2) pilot flood at Milnesand is nearing completion and the results to date indicate that a considerable volume of oil can be recovered from our San Andres oil fields with access to CO(2). With the reduction in risks at both St Johns and our Permian Basin oilfields we will now look to finance a project that maximizes the rate of return from our oilfields with the currently recovering oil price. By reducing the scope of the project to our own tertiary recovery efforts the blended rate of return on a smaller project could be significantly higher than that of the larger project and, as a result, we believe will be more attractive to closing the necessary financing to proceed."

    About Enhanced Oil Resources Inc.
    ---------------------------------

    Enhanced Oil Resources Inc. is an early-stage company, with two principal
business segments of

    (i)  Crude oil and natural gas production through enhanced oil recovery
         ("EOR") projects it is initiating in the Permian Basin on oil fields
         acquired by the Company in 2007 and 2008 for that purpose.

    (ii) Helium and CO(2) resource exploration and production through
         property interests it controls in approximately 251,000 gross acres
         of land within the St Johns Helium/CO(2) field in Arizona and New
         Mexico, and where the Company is developing what is thought to be
         the largest undeveloped helium and carbon dioxide field in North
         America.

    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.

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