Enhanced Oil Resources signs pipeline MOU with Suncoast Energy
  by: OilOnline
  Tuesday, March 18, 2008

Enhanced Oil Resources, Inc. has executed  Memorandum of Understanding (MOU) for the development of the Company's pipeline project with privately held SunCoast Energy Corporation.  The proposed pipeline will run 350 miles from the Company's St. Johns Helium/CO(2) field located on the borders of Arizona and New Mexico, to the Permian Basin of New Mexico and West Texas. The proposed pipeline will initially transport 350 million cubic feet per day (MMcfpd) of CO(2) for injection into depleted oil fields located within the Permian Basin. The pipeline is expected to be designed to transport 500 MMcfpd once expanded to full capacity. Details of the agreement include:

• SunCoast will have the rights to develop, own, operate and manage the pipeline project.
• EOR, Inc. has reserved the rights to the first 175 MMcfpd of capacity in the pipeline to inject into its own oilfields in the basin and for other targeted oilfields.
• EOR, Inc. will have the right to increase its capacity rights in the pipeline upon completion of the expansion.
• EOR, Inc. will deliver to SunCoast a reserve report which will underpin the construction of the pipeline. The reserve report, prepared jointly by William M. Cobb & Associates and Cawley, Gillespie & Associates, is slated for completion in mid-to-late second quarter.
• Both EOR, Inc. and SunCoast have certain obligations to fulfill over a six-month period following delivery of the reserve report.

EOR, Inc.'s President and CEO Barry Lasker said: "The execution of the pipeline MOU with SunCoast represents the achievement of another benchmark for our Company. We continue to execute our plan to actualize production from St. Johns by late 2010, and we look forward to working with John Baker and the SunCoast team."

SunCoast Chairman and CEO John Baker said: "The pipeline will connect a new indigenous supply source of CO(2) to enhanced oil recovery projects located in the Permian Basin, resulting in improvements in oil recovery efficiency thus increasing domestic oil production. We are confident the pipeline project will be supported by the producer community in the Permian Basin and look forward to obtaining firm capacity commitments sufficient to support the pipeline project."

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