Enhanced Oil: Production Returns to Normal in Nm.

Enhanced Oil provided the following update on operational activity.

As previously reported, the Company had been working to upgrade the water handling capacity at the Crossroads Siluro-Devonian Unit in Lea County, New Mexico and that water injection recommenced at Crossroads in early June. Over the last month, production wells have been brought back on production, with production rates stabilizing over the last 2 weeks at Crossroads at a daily rate of 450 bopd. Total Company production for the same period has averaged 530 bopd. The # 304 water injection well is performing as expected and has averaged an injection rate of approximately 6,800 barrels of produced water a day. All but one production well (# 106) has now been turned into the tanks and it is expected that that well will also be brought on within the next few weeks.

The Company also reported that the Crossroads # 101 Morrow discovery well has received approvals for production from the New Mexico OCD and that a gas purchase agreement with a subsidiary of Targa Resources, Inc. has been signed. Surface equipment is now being installed and the production of natural gas and liquids is expected to commence once the new facilities are completed within the next 3 weeks.

Mr. Barry Lasker reported, "We are pleased to report that the Crossroads production has returned to pre workover levels and that our water injection facility is performing as expected. The Company will continue to revisit several wells at Crossroads with the view to maximizing production from existing zones and by opening up new behind pipe zones. Once the new production commences from the # 101 well, we expect that Company wide production should increase to over 600 Boepd, a new high for the Company. EOR continues to focus on the goal of ending 2010 with a production rate of 1,000 barrels of oil equivalent per day. We will provide additional information on the workover program as it comes to hand."


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