EOR Reports Facility Operational Again

Enhanced Oil provided the following update on corporate and operational activity.

As previously reported, the Company has been working to upgrade the water handling facility at the Crossroads Siluro-Devonian Unit in order to increase injection rates at the key # 304 water injection well. The work had included shutting the injector well down, upgrading the handling capacity and reworking the applicable zone. The injector which was closed down on April 9th was approved by the State of New Mexico to re-open on June 2nd. The main issue of having the water injector well out of service during this time was the fact that 5 producing oil wells were temporarily shut in until the water injector was re-opened, thus lowering the Company's daily oil production.

The Company is pleased to report that water injection has recommenced at Crossroads and the 304 water injection well is now capable of injecting over 7,000 barrels of produced water a day. All but one production well has now been turned into the tanks and production at Crossroads has averaged approximately 300 bopd for the month of June. Total Company production for the same period has averaged 385 bopd. The Company is monitoring all wells and anticipates that production will level off at these levels until additional wells are brought back on and bigger pumps are brought in. The Company is also looking into opening behind pipe zones in some of the lower performing wells with the anticipation that the new production could be significantly higher than the lowest performing Devonian wells.

Mr. Barry Lasker reported, "We are pleased to report that our water injection facility is now operational again and that capacity has been improved as expected. The Company can now revisit several wells at Crossroads with the view to maximizing production from existing zones and by opening up new behind pipe zones. EOR continues to focus on the goal of ending 2010 producing 1000 barrels of oil per day and the re-activation of the 304 well puts us back on that track. We will provide additional information on the workover program as it comes to hand."


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