Canadian Oil Recovery and Remediation Enterprises Ltd. announced that SAR AS, the MENA operating partner of CORRE in SAR-CORRE MENA Limited (SCM), has been awarded a major multi-million dollar contract by the Kuwait Oil Company (KOC) to treat oil based mud (OBM) drill cuttings (KOC Contract). The KOC Contract includes the mobilization and construction of a fully equipped permanent facility to treat 26,000 tons of drill cuttings per year as specified in the contract. This facility will be built using the proven drill cuttings treatment technology and process of SAR's world class facility currently operating in Averoy, Norway, which has the capacity to treat 50,000 tons of drill cuttings per year.

The treatment capacity of the new facility can be increased if and when needed. The term of the KOC Contract is for 5 years with a one-year extension option during which 130,000-156,000 tons of drill cuttings are expected to be treated. The contract provides a 6 month mobilization period starting July 10, 2014.

Accordingly, the permanent facility is expected commence operations on or before January 10, 2015. The company is unable to disclose the total contract amount at the present time in order to safeguard the confidentiality of its proprietary processing rate and its bidding prices for similar ongoing high value drill cuttings contracts in the Gulf. At the present time, the company's operating partner is in the process of bidding for another major onshore drill cuttings treatment contract, and is also preparing to bid on an equally major drill cuttings contract located offshore.

Notwithstanding this current limitation for competitive purposes, the company is able to provide the following particulars pertaining to the KOC Contract: The estimated capital expenditures of the KOC Contract are approximately $8.5 million (45% of which will be CORRE's proportionate obligation in connection with its ownership interest in SCM); Upon completion of mobilization, a payment in the amount of $1.65 million will be due to SCM from KOC; Based upon company management's review of contracts awarded in the MENA and other regions for drill cuttings tenders during the past 4 years, the estimated range of the service industry average operating cost under such agreements is between $120 and $275 per ton and SCM's costs will be within this range. The three primary factors affecting the actual cost of operators under such agreements are: a. volume (economies of scale may result in lower operational costs); b. the technology being employed (for example, direct thermal desorption, as compared to indirect thermal desorption); and c. total overhead costs; and though the absolute contract value cannot be disclosed at this time, the company is able to confirm that the total revenue payable under the KOC Contract exceeds $18 million.