Enhanced Oil Resources Boosts Production to 585 BOPD
Enhanced Oil Resources today provides the following update on corporate and operational activity.
As previously reported, the Company has been actively pursuing a reactivation program at the Company's Crossroads, Milnesand and Chaveroo oilfields in New Mexico. In July 2009, production enhancement programs were commenced for the workover and reactivation of existing non-producing wells, with initial focus on the Crossroads Devonian Unit. As last reported, the Company had increased total Company owned production from an average of 186 barrels oil per day (BOPD) in July 2009 to 510 BOPD in January 2010. Average production for the month of February was 585 BOPD, an increase of 15% over January rates. This compares to production rates of 180 BOPD and 193 BOPD for January and February 2009, respectively.
At the Company's 98.5% owned Crossroads Devonian Unit, the Company has recompleted 6 additional wells following its purchase in July 2007. At the time of purchase, this field was producing an average of 36 BOPD from 1 well. Current production is averaging 490 BOPD for the month of February, an increase of 58 BOPD from January. In addition, we currently have 2 wells shut in due to high produced water rates. Each of these wells is capable of producing an additional 25 to 30 BOPD. These wells will be put back on production again once we increase our water handling system at Crossroads. The Company continues to review additional workover and recompletion opportunities within the Crossroads Unit and anticipates acting on those opportunities once an increase in water handling is achieved. As a result of the success with activities in this field, the Company has engaged a geophysical company to acquire and process a 3 Dimensional seismic survey over the Field to further define additional productive potential within the Devonian productive zone and shallower zones that have produced in nearby wells. The survey is expected to commence in the 2nd or 3rd quarter of 2010.
At the Company's Milnesand San Andres Unit and Chaveroo San Andres field, the Company has now completed a 20 well workover program that was announced in early February. That workover program is the first of up to 50 wells that the Company anticipates bringing back on production over the next 6 months. Current production increases at Chaveroo and Milnesand are approximately 40 bopd, however, additional field work is ongoing to optimize individual well performance that could increase this rate.
Mr. Barry Lasker reports "We continue to have positive results with our workover programs at Crossroads, Milnesand and Chaveroo with current production increasing by approximately 75 BOPD over the average for the prior month. We also expect to be able to add production from the Crossroads field once we complete additions to increase our water disposal capacity. This is the 6th significant production increase in as many months and we look forward to reporting additional production increases in the future."
"We have previously reported that the Company is generating positive cash from operations as a result of increasing oil production, improved oil pricing and reductions in lease operating expenses (per unit of production) and in general and administrative costs. The 585 BOPD average daily rate for the month of January was an historical high for the Company and we will continue to press forward with our reactivation program at Crossroads, Milnesand and Chaveroo fields to further add to this number."