Enhanced Oil Resources provides the following update on the Milnesand CO(2) Pilot.

Since September 1st, 2008, approximately 80 million cubic feet (MMCF) of CO(2) has been injected in the Company's 40-acre, 5-spot test pattern. Current oil production attributed to CO(2) injection is 33-38 BOPD and the trend continues to improve. Through injection optimization, the Company continues to find the current oil response encouraging and ahead of the initial modeled predictions. Based on this response, the Company's technical team estimates the CO(2) pilot is close to reaching its intended objective of proving the applicability of tertiary oil recovery at the Company's wholly owned 6,800 acre Milnesand San Andres Field. The initial CO(2) slug injection phase is expected to reach completion by the beginning of Q3 2009 where it will then switch to the water-alternating-gas (WAG) phase evaluation stage of the CO(2) Pilot.

The Milnesand San Andres CO(2) pilot flood is located approximately 8 miles south east of the Company owned Chaveroo San Andres Field. Together, these two San Andres fields are located in Roosevelt and Chaves Counties, New Mexico along the northern margin of the Permian Basin. Several ongoing San Andres CO(2) floods are operating along the Texas side of the basin and the Milnesand pilot is the first such CO(2) pilot to be initiated on the New Mexico side. The Company's independent EOR consultants, Advanced Resources International (ARI), completed a proprietary study of these fields for the Company and in reports dated 7th January, 2007 and 9th October, 2007 has estimated that these two San Andres fields could recover an additional 53 million barrels of oil using state of the art CO(2) injection processes. These are categorized as contingent resources under NI51-101. ARI also estimates that these fields have the potential, once fully flooded, to reach an EOR peak production rate of over 15,000 barrels of oil per day. Under NI51-101, Contingent Resources are those quantities of oil and gas estimated, on a given date, to be potentially recoverable from known accumulations but currently not considered proven.

Tags: Enhanced Oil Resources