Enhanced Oil Recovery - Current Status

The United States leads the world in the volume of CO2 EOR oil production due to the favorable geologic formations found here, and there are a number of oil fields in the U.S. that have the characteristics necessary for economically successful EOR projects. The Permian Basin oil reservoirs in Texas have been the area of greatest activity for EOR projects to date, but there are also other areas around the country where large natural sources of CO2 gas are present that can be utilized for CO2 EOR projects. In Colorado, there are the McElmo and the Sheep Mountain Domes, both of which are connected to the Permian Basin by pipelines, and there is another CO2 source in New Mexico, the Bravo Dome, that is also connected by pipeline to the Permian Basin. In addition, there is a large source of CO2 gas in Mississippi at the Jackson Dome, and there is another source identified in Montana.

Most important for Enhanced Energy are four known large CO2 gas reservoirs in the state of Utah. One of those CO2 reservoirs, the Farnham Dome, is located 10 miles southeast of the town of Price, UT, and a significant part of the Farnham Dome acreage is comprised of the Clark Valley Unit (CVU). Enhanced Energy has acquired the lease rights to the minerals in the CVU, and the Company will be utilizing the large CO2 gas reservoir there as its initial source of CO2 gas that will be used for a variety of EOR projects that the Company will pursue.