Enhanced Oil Resources Inks Agreement for 10-Well Program in AZ, NM
Further the last report to shareholders earlier this month, Enhanced Oil Resources has now signed an agreement with Animas Well Service for an additional 10 well program at the Company's St Johns Helium and CO2 Field located in Apache County, Arizona and Catron County, New Mexico. The Animas Rig 504 has rigged up on the 11-20-31 location and is expected to begin drilling operations by this weekend. This well has been permitted as a potential horizontal well in the Granite Wash/fractured basement reservoirs found productive at the 11-6-31 well located approximately 3 miles to the north.
As previously reported the Company has also been drilling the 11-29-31 well to evaluate the potential of the Amos Wash and Granite Wash intervals found productive elsewhere in the field. The 11-29-31 well has been drilled to the top of the Granite Wash interval and electric logs over the Amos Wash interval indicates approximately 145 ft of apparent pay. This apparent pay count is similar to other wells that have previously tested gas at rates greater than 2 million cubic feet per day. Casing has now been run to the top of the Granite Wash interval and the rig has moved off location to drill the 10-2-30 well approximately 3 miles to the south west of the 11-29-31 well. A smaller air drilling rig is being mobilized to the 11-29-31 location to drill the remaining Granite Wash and fractured basement reservoirs. These reservoirs will be drilled with air and will be tested once drilling is completed. The Amos Wash interval on all wells to be tested during this program will be re-drilled as a twin to the original deeper well to allow for air drilling and completions following logging of the section in the earlier deeper well. It is anticipated that the shallow Amos wash wells will be drilled approximately 50ft from the original well locations.
The Company anticipates that up to 12 pairs of wells will be drilled and tested over the next 3 months.
The Company also announces the grant of 1,200,000 incentive stock options entitling the purchase, for a period of five years, of 1,200,000 shares of the company at a price of $1.05 per share pursuant to the terms of the Company's Stock Option Plan approved by shareholders on September 13, 2007.