Enhanced Oil Resources Inc. recently announced the signing of a binding Purchase and Sales Agreement to purchase a producing oil field in New Mexico for $4.5m, from which it is estimated that the company could recover an extra 31 million barrels of oil using innovative CO2 injection processes.
The acquisition covers an 800 acre unit in a 2,400 acre mature oilfield and is expected to close on or before 15th June 2008 and will be immediately accretive to cash flow. The effective date is 1st May 2008.
The field is currently producing approximately 35 barrels of oil per day (bopd) and to date, the unit has produced around 22 million barrels of oil (MMBbl) out of the field’s previously recovered total of 44 MMBbl, a 35% recovery of the estimated 125 million barrels of original oil in place.
Enhanced Oil Resources’ independent enhanced oil recovery consultants completed a proprietary screening study of the field and estimated that the field could recover an additional 31 MMBbl using state of the art CO2 injection processes. It estimates that the field has the potential, once fully flooded, to reach an EOR (enhanced oil recovery) peak production rate of more than 8,000 bopd and the company intends to initiate a pilot CO2 flood of the property in the next seven months.
Enhanced oil recovery is a term for techniques in which the recovery of oil is furthered and the amount of oil recovered is increased, sometimes with up to 30-60% of the reservoir’s original oil extracted compared with 20-40%. Gas injection is the most commonly used method, using either CO2, natural gas or nitrogen for injection into the reservoir, where it expands and pushes additional oil to the wellbore – as well as lowering the oil viscosity and improving the flow rate.
Barry Lasker, President and CEO of Enhanced Oil Resources said, “Following the closing of this acquisition and together with our previously announced acquisitions, the company has acquired more than 70 MMBbl of contingent resources that could become proven reserves if a positive CO2 flood response is achieved.”
“As we have previously said, our mission is to build a reserve base in New Mexico where significant potential exists for enhanced oil recovery and leverages our large CO2 resource into opportunities that will add measurable value to the company and its shareholders. The potential acquisition of this latest field reinforces our ability to acquire additional EOR resources in the future.”
Enhanced Oil Resources Inc. is a company focused on developing the St. Johns Helium/CO2 field and producing oil via enhanced oil recovery processes, using CO2 injection, in the US. The company owns and operates the St. Johns Field, the largest undeveloped helium and CO2 field in North America