The latest field surveys conducted by project operator Denbury Resources show that the repressurising of the field through the sustained injection of CO2 and water has achieved surpassed an estimated minimum miscible pressure of 2256 PSI, and were last measured at 2480psi.
Elk's development plan for Grieve is predicated on restoring pressure in the field to more than 3000psi, at which time oil production is expected to begin.
At that level the field is expected to return to free-flowing status, avoiding the need to spend cash on installing artificial lift, reducing expenditures, including workovers.
Under the proposed development plan all of the CO2 produced will be recycled back into the field to recover more of the remaining oil.
Elk and Denbury have been injecting CO2 into the field since mid-2015 at an average 55-60 million cubic feet per day using CO2 purchased by Denbury from the ExxonMobil-operated La Barge CO2 gas field located in southwestern Wyoming.
Some 30 billion cubic feet has been injected to date.
The last survey, completed late in March, shows the pressure build is ahead of schedule and full field pressure could be restored ahead of the original full field repressurisation forecast of August 2017.
"The most recent field pressure survey shows the field is pressuring up consistently and now the injected CO2 is beginning to dissolve in to the oil," Elk managing director Brad Lingo said.
"With this blending starting to happen and since oil production will only commence once the field is fully repressured, our expectations are that the field should produce nicely once the production facilities are completed. This is something Elk shareholders have been very patient about and it feels great to be able to provide them with some really good news."
Elk and Denbury have been working on redeveloping Grieve as an enhanced oil recovery project since 2011.
Since December Elk and Denbury have been working on restructuring of the Grieve CO2 EOR project, with Elk wanting to move to a 49% interest under an agreement that would give it 70% of the revenue from the first two million barrels of oil production from the project.
But Elk needs to find $US55 million ($A72.7 million) to complete the project in return for Denbury agreeing to a fixed cost and schedule to completion and supplying all the required CO2 needed to complete and operate the project.
Elk shares were up almost 1.3% to $0.079 this morning.