HOUSTON, July 16, 2013 /PRNewswire/ - Enhanced Oil Resources Inc. (TSX.V: EOR;
OTCQX: EORIF) ("EOR" or the "Company") is pleased to provide the
following update regarding the Company's operations results for the
second quarter of 2013.
The Company's key business objectives for 2013 are to continue our focus
towards increasing oil production and oil reserves at the Crossroads
and Milnesand oil fields, to further evaluate the infill potential at
the Chaveroo oil field, to further the permitting and potential
construction of our Cortez to Milnesand pipeline connecting Kinder
Morgan's Cortez CO2 pipeline to our Milnesand and Chaveroo oil fields by September 2015 and
to continue our successful compliance activity across our oil fields.
Oil production during the second quarter of 2013 has averaged 403
barrels of oil per day (bopd). At the Company's Crossroads field, oil
production has averaged 257 bopd during the second quarter. At the
Milnesand field, oil production for the second quarter of 2013 has
averaged approximately 88 bopd, similar to averages from last quarter.
After ten months of oil production from the recently drilled MSU #141
and #522 wells, production continues at approximately 20 bopd, a slight
decrease from the 22 bopd rates announced in May.
Crossroads production has averaged approximately 257 bopd with two wells
currently shut in pending resolution of water handling issues. A work
over rig is currently on location at the Crossroads #106 well and is
preparing the well for conversion to a second water injector. We expect
to have this work completed within the next week or so and expect to
increase our water handling volumes shortly thereafter. As previously
disclosed, two wells are currently shut in pending additional water
handling capacity. It is anticipated that these shut in wells could
add another 100 bopd to our production levels.
The twelve square mile, three-dimensional seismic survey, planned for
Crossroads field has been acquired and interpretation of that data is
ongoing. The seismic survey is intended to delineate potential infill
locations at the Crossroads field, improve structural mapping and fault
locations and contribute to the further evaluation of shallow
production previously encountered in the field.
After approximately ten months of production from our recently drilled
MSU #141 and #522 lateral wells, we continue to see a consistent
production trend. Based on current rates of production we expect to end
the initial twelve month production period at approximately 18 bopd per
well, which is within our pre-drill expectations and considerably
higher than the original vertical wells drilled to develop the field
over forty years ago. We continue to monitor well and service costs to
refine the economics of this play and confirm the need for the future
utilization of lateral well bores in the upcoming CO2 development project.
The advanced petrophysical analysis within the Milnesand field,
discussed in our May update, has been completed and information
collected from this study is now being incorporated into our ongoing
engineering studies to assess and identify potential waterflood
optimization opportunities that can be executed in 2013/2014 prior to
the implementation of CO2 flood operations. This work will involve such activities as
pattern-by-pattern cross section alignment opportunities, injection
rate adjustments, and pump upgrades.
In depth engineering studies regarding lateral application within the
Milnesand field are expected to be completed by the beginning of the
fourth quarter 2013.
Cortez to Milnesand CO2 Pipeline Update
The Company recently completed survey efforts on the proposed CO2 pipeline connecting Kinder Morgan's Cortezline 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
approximately $18mm, assuming current steel prices. The Company will
proceed with the necessary federal and state permitting work in 2013
and expects to begin purchasing rights of way in 2014. Delivery of CO2 to the Company's proposed pipeline is scheduled to commence no later
than September 2015.
Testing of the P3 interval was completed in two wells located within the
Jennifer unit of the Chaveroo field. The zones were perforated and acid
stimulated, followed by swab testing. P3 production results were below
expectations and the Company has moved the recompletion effort to focus
on re-stimulation of the P1/P2 intervals using state of the art
fracturing technology. We anticipate moving forward with the first
re-fracturing in the third quarter 2013.
Agreed Compliance Order (ACO)
In June 2013, the Company received approvals from the New Mexico Oil
Conservation Division for the next six month compliance period.
Pursuant to that order, the Company has obtained approval to drill
three lateral wells and convert a number of existing production wells
in the Milnesand field to injectors. These conversions will support
the Company's upcoming CO2development project. In addition, a number of wells in Milnesand are
being reactivated during this six month period and the MSU #311 well
has been plugged in accordance with the ACO.
The Company is pleased to report that, as of July 1, 2013, Mark Peavy
has been promoted to the newly created position of Chief Operating
Officer (COO) and is now responsible for all production and development
activity within the Company.
Mr. Barry Lasker states "I would like to congratulate Mark on a job well
done since joining EOR earlier this year. The promotion to COO is
testimony to his hard work and experience. I am looking forward to
working with Mark in this capacity as we grow our production and
reserves. It is also pleasing that we have a rig on location to convert
the Crossroads #106 well to our second water disposal well. The
completion of this workover will enable further production growth at
Crossroads by reentering additional wells and targeting other zones
within our leases.
The Company continues the process of implementing our Milnesand CO2 flood by September 2015. We are continuing with sub surface evaluation
and surface facility designs and expect to have these studies completed
later this year. Our oil production is holding steady and we expect
further increases in daily oil production will continue once our second
water injector at Crossroads is on line."
About Enhanced Oil Resources Inc.
Enhanced Oil Resources Inc. (TSX.V: EOR; OTCQX: EORIF) trades in Canada
on the TSX Venture Exchange under the symbol "EOR" and is quoted in the
United States on OTCQX under the symbol "EORIF". 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
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", "continue", "scheduled" 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 our water
injection limitations at Crossroads will be resolved, that the lateral
wells will be drilled as expected or result in commercial production or
that current oil production will continue or increase as expected or
indicated. Further, there can be no assurance that the Company will
commence or complete the construction of a connecting pipeline for the
transmission of CO2 as contemplated, or within the timeline required under its current CO2 contracts or be able to justify the related economics of the project or
complete it in the timeframes discussed or currently contemplated.
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.