Enhanced Oil Resources Provides Operations Update
HOUSTON, Nov. 15, 2012 /PRNewswire/ - Enhanced Oil Resources Inc. (TSX.V: EOR; OTCQX: EORIF; FSE: RWP) (the "Company") is pleased to provide the following update regarding the Company's operations for October.
The Company continues execution of its primary business objectives for 2012 of increasing production and reserves through a work over program at the Crossroads field, infill drilling at the Milnesand oil field, located in Roosevelt County, New Mexico, evaluating the Chaveroo oil field for potential infill drilling and furthering the planning and permitting of a 41 mile CO2 pipeline to connect Kinder Morgan's Cortez CO2 pipeline to our Milnesand and Chaveroo oil fields by September 2015.
Oil production volumes for October averaged 456 barrels of oil per day (bopd), a decrease of 30 barrel oil equivalent per day (boepd) from September. The decrease in production is largely the result of shutting in the Crossroads #101 wellbore from a low rate gas well of 28 boepd to convert it to a second water injector. Oil production from the recently drilled MSU #522 and MSU #141 lateral wells continues at a combined stabilized rate of approximately 88 bopd, in line with our pre-drill estimates of production. The MSU #123 well, the third well drilled in this current campaign, continues to produce water on a rod pump at high rates with minimal oil cut. While the high fluid level is slowly coming down we are now looking to install a high rate pump to see if commercial production can be achieved. A review of the oil shows while drilling indicates that a highly water charged zone close to the beginning of the lateral may be impeding production from the toe of the lateral where excellent oil shows were encountered. We will continue to monitor the production and will provide further updates as they occur.
As previously discussed, the Company is in the process of converting the CDU #101 well from a low rate gas producer (approximately 160 mcf/day) to a water injector for the Crossroads Devonian Unit. This will be the second capacity upgrade to the water handling facilities in the Crossroads field in three years and is necessary due to our continuing success in increasing proved developed producing reserves on the Unit. The incremental production from the Crossroads CDU #105 and CD#106 wells resulting from the workovers of these wells in 2012 and the re-drill of the CDU #303 has increased our water handling capacity requirements necessary to simultaneously produce all the wells in the field at maximum operating and economic efficiency. The CDU #101 continues to be worked over and is expected to be connected to receive water in the next few weeks which, when completed, will also result in cash flow savings by reducing the cost of transporting and disposing of excess produced water off lease. The addition of this second water injector at Crossroads will increase our water handling capacity from approximately 8,000 barrels of water per day to an estimated 14,000 barrels of water per day. It is expected that once the CDU #101 is fully operational, the CDU #302 and the CDU #303 wells can be brought back on line at maximum rates.
The Company recently completed survey efforts on the proposed CO2 pipeline connecting Kinder Morgan's Cortez line to the Company's Milnesand and Chaveroo oil fields. Final survey results indicate a revised pipeline length of approximately 38 miles. Updated cost estimates suggest that the pipeline can be constructed for less than $20mm. The Company will proceed with acquiring the necessary rights of way in early 2013 with permitting work to begin later in 2013. Delivery of CO2 to the Company's proposed pipeline is schedule to commence no later than September 2015.
Mr Barry Lasker states "Enhanced Oil Resources continues to increase corporate values through our lateral infill drilling and work over of existing wells at Crossroads. We expect further increases in daily oil production will continue once our second water injector at Crossroads is on line and when the CDU #303, #102 and CDU #302 are brought on line in the next short while. Further infill drilling at Milnesand, where we have several years of potential drilling activity, is expected to add to daily production and reserve value when it continues.
Over the next few months the Company expects to highlight our established 3rd party proved hydrocarbon reserve values combined with daily oil production increases and strong financial position in presentations to potential investors and current supporters in our efforts to strengthen our share price and industry market value."
About Enhanced Oil Resources Inc.
Enhanced Oil Resources Inc. (TSX.V: EOR; OTCQX: EORIF; FSE: RWP) trades in Canada on the TSX Venture Exchange under the symbol "EOR" in the United States on OTCQX under the symbol "EORIF" and in Germany on the Frankfurt Stock Exchange under the symbol "RWP". Enhanced Oil Resources Inc. is an early-stage company, with a principal goal of increasing crude oil and natural gas production through enhanced oil recovery ("EOR") and infill drilling projects it is initiating in the Permian Basin.
Certain statements contained herein are "forward-looking statements" and "forward-looking information" under applicable securities laws, including statements regarding beliefs, plans, expectations or intentions regarding the future relating to Enhanced Oil Resources Inc.'s 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 statements because it is possible that expectations, predictions, forecasts, projections and other forms of forward-looking information will not be achieved. Forward-looking statements are based on the opinion and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. 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, that the lateral wells will be drilled as expected, that the lateral wells will result in commercial production and that oil production will continue as reported. 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
Barry D Lasker, CEO
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE
SOURCE Enhanced Oil Resources Inc.