The work reported here covers Budget Phase I of the project. The principal tasks in Budget Phase I are the Reservoir Analysis and Characterization Task and the Advanced Technology Definition Task. Completion of these tasks have enabled an optimum carbon dioxide (CO2) flood project to be designed and evaluated from an economic and risk analysis standpoint. Field implementation of the project has 8 been recommended to the working interest owners of the South Cowden Unit (SCU) and approval has been obtained. The project focused on reducing initial investment cost by utilizing horizontal injection wells and concentrating the project in the best productivity area of the field. An innovative CO2 purchase agreement (no take or pay requirements, CO2 purchase price tied to West Texas Intermediate (WTI) crude oil price) and gas recycle agreements (expensing cost as opposed to large capital investments for compression) were negotiated to further improve project economics. A detailed San Andres reservoir characterization study was completed by an integrated team of geoscientists and engineers. The study consisted of detailed core description, integration of log response to core descriptions, mapping of the major flow units, evaluation of porosity and permeability relationships, geostatistical analysis of permeability trends, and direct integration of reservoir performance with the geological interpretation. The study methodology fostered iterative bidirectional feedback between the reservoir characterization team and the reservoir engineering/simulation team to allow simultaneous refinement and convergence of the geological interpretation with the reservoir model. The fundamental conclusion from the study was that South Cowden exhibited favorable enhanced oil recovery characteristics, particularly reservoir quality and continuity.