Ivanhoe Energy 2007 Third Quarter Results and Operations Update



    VANCOUVER, Nov. 8 /CNW/ - Ivanhoe Energy Inc. (NASDAQ:   IVAN and TSX: IE)
today will file its Quarterly Report on Form 10-Q for the quarter ended
September 30, 2007.

    
    Heavy Oil Activities

    In the third quarter, Ivanhoe Energy built on the momentum of the first
half of 2007 as the company continued to focus on and gear up for full-scale
HTL(TM) commercial heavy oil operations.

    -   Ivanhoe Energy made concrete progress in identifying, prioritizing
        and analyzing key heavy oil targets, primarily in Canada, that would
        be excellent candidates for the company's first commercial HTL
        facility. Discussions are underway related to key opportunities.

    -   Significant progress was made with AMEC, Ivanhoe Energy's Tier 1
        contractor, in advancing the design and engineering of full-scale HTL
        facilities.

    -   Ivanhoe Energy released technical data related to the Athabasca
        bitumen test that was carried out in June, pursuant to a long-
        standing technical agreement with ConocoPhillips Canada. This, and
        other test run data, correlated the performance of the Commercial
        Demonstration Facility (CDF) with earlier runs on the smaller-scale
        pilot facility and validated the assumptions in Ivanhoe Energy's
        economic models.

    -   Integrated HTL/Steam Assisted Gravity Drainage (SAGD) financial
        models for Athabasca were updated and refined, incorporating newly
        revised capital costs from AMEC and revised price assumptions and
        currency exchange rate changes. These updated models show that HTL
        integration represents robust added value for thermal bitumen
        projects in Western Canada.

    -   Work was initiated with AMEC in its Canadian and U.K. offices to
        evaluate the benefits of HTL/SAGD integrated projects.
    

    Financial Highlights

    Cash flow from operating activities remained positive for the 12th
consecutive quarter, generating US$1.8 million. In the third quarter, a
$30 million Revolving/Term Credit Facility with an initial borrowing base of
$10 million was obtained from Standard Bank Plc for the Dagang project in
China.

    
    U.S. Oil and Gas Operations
    (unaudited; thousands of U.S. dollars except production amounts)

                           ----------------------------   -------------------
                                Three Months Ended         Nine Months Ended
                           ----------------------------   -------------------
                            Sept.30   June 30   Sept.30    Sept.30   Sept.30
                               2007      2007      2006       2007      2006
                           --------- --------- --------   --------- ---------
    Financial
    ---------
    Revenue                $  1,469  $  2,522  $  3,442   $  6,265  $  9,567
    Depletion and
     depreciation          $  1,306  $  1,482  $  1,445   $  4,402  $  3,906
    Capital investments    $    645  $    981  $  2,929   $  2,438  $  4,982
    Identifiable assets
     (at end of period)    $ 42,328  $ 40,308  $ 43,296

    Operating
    ---------
    Net production
     (after royalties):
      Barrel of oil
       equivalent (BOE)      43,374    50,014    57,058    150,233   166,656
      BOE/day for the
       period                   471       550       627        550       610
    

    South Midway
    ------------
    Ivanhoe Energy has 67 wells in the 1,400-acre South Midway heavy oil
field in California, with a working interest of 100%. Production from this
field, which makes up the majority of the company's U.S. production, fell in
the second and third quarters of 2007 due to the lack of steam generation at
this cyclic steam heavy oil operation for part of the year. A second steam
generator was put into service at the start of September and production in
September rebounded to an average of 522 barrels of oil per day.

    
    China Oil and Gas Operations
    (unaudited; thousands of U.S. dollars except production amounts)

                           ----------------------------   -------------------
                                Three Months Ended         Nine Months Ended
                           ----------------------------   -------------------
                            Sept.30   June 30   Sept.30    Sept.30   Sept.30
                               2007      2007      2006       2007      2006
                           --------- --------- ---------  --------- ---------
    Financial
    ---------
    Revenue                $  7,286  $  6,998  $ 10,376   $ 21,180  $ 26,972
    Depletion and
     depreciation          $  4,537  $  4,328  $  5,910   $ 13,591  $ 17,573
    Capital investments    $  7,735  $  6,516  $  1,630   $ 18,053  $  6,292
    Identifiable assets
     (at end of period)    $ 82,384  $ 72,213  $ 84,036

    Operating
    ---------
    Net production
     (after royalties):
      Barrel of oil
       equivalent (BOE)     116,184   115,937   152,767    358,437   431,849
      BOE/day for the
       period                 1,263     1,274     1,679      1,313     1,582
    

    Dagang
    ------
    The average gross production rate in the third quarter of 2007 at the
Dagang project was 1,561 barrels of oil per day from 40 wells, compared to
1,549 barrels per day in the second quarter of 2007. Four of the five new
development wells were put on line during the third quarter of 2007 and the
fifth well began production in late October.

    Zitong
    ------
    Testing operations on the Xu 4 formation at the 4,045-meter (13,270-foot)
second exploratory well, Yixin No. 1, on the Zitong natural gas exploration
block were concluded during the third quarter of 2007. The Xu 4 zone tested
sub-economic rates of natural gas and has been temporarily suspended and
isolated. A 14-meter section of the upper Xu 5 Triassic zone is expected to be
perforated and tested in the fourth quarter.
    After completion of the testing of the Yixin No.1 well, Ivanhoe Energy
will evaluate the results and make an election, along with our partner
Mitsubishi Gas Chemical Company Inc., whether to enter into the next
three-year exploration phase. Ivanhoe Energy has received approval to extend
the Phase 1 exploration program to December 31, 2007, to allow for an
evaluation period following the final testing of the well. Ivanhoe Energy has
a 90% working interest in this project and is the operator.

    
    Consolidated Financial Highlights
    (unaudited; thousands of U.S. dollars except per share and production
    amounts)

                           ----------------------------   -------------------
                                Three Months Ended         Nine Months Ended
                           ----------------------------   -------------------
                            Sept.30   June 30   Sept.30    Sept.30   Sept.30
                               2007      2007      2006       2007      2006
                           --------- --------- ---------  --------- ---------
    Financial
    ---------
    Net loss               $ (7,232) $ (6,579) $ (4,388)  $(20,358) $(14,169)
    Net loss per share
     - basic and diluted   $  (0.03) $  (0.03) $  (0.02)  $  (0.08) $  (0.06)
    Cash flow from
     operating activities  $  1,766  $    199  $  5,353   $  4,566  $ 11,055
    Revenue                $  8,823  $  9,589  $ 14,015   $ 27,669  $ 36,963
    Depletion and
     depreciation          $  6,044  $  6,024  $  7,772   $ 18,960  $ 24,808
    Capital investments    $  9,100  $  8,123  $  5,019   $ 22,557  $ 13,622
    Total assets
     (at end of period)    $243,214  $235,761  $264,242
    Cash and cash
     equivalents (at end
     of period)            $ 14,779  $ 11,076  $ 19,535

    Operating
    ---------
    Net production
     (after royalties):
      Barrel of oil
       equivalent (BOE)     159,558   165,951   209,825    508,670   598,505
      BOE/day for the
       period                 1,734     1,824     2,306      1,863     2,192
    

    Summary of Third Quarter
    ------------------------
    Cash flow from operating activities remained positive for the 12th
consecutive quarter, generating US$1.8 million. Ivanhoe Energy's existing
production in the U.S. and China continued to meet the goal of funding the
business and technology development expenses associated with the planned
deployment of the HTL technology. Oil prices were higher in the third quarter;
however, revenue fell from the second quarter due to an increased loss on
derivative instruments that were put in place as part of the company's banking
facilities.

    Liquidity and Capital Resources

    On September 30, 2007, Ivanhoe Energy's cash position was
US$14.8 million. In the third quarter of 2007 the company obtained a $30
million Revolving/Term Credit Facility with an initial borrowing base of $10
million from Standard Bank Plc for the Dagang project in China. An initial
draw of $6.3 million (net of financing costs) was made in September 2007. The
facility is scheduled to expire in September 2010. In the third quarter, the
company also made a draw of $3 million on its existing $15 million Senior
Secured Revolving/Term Credit Facility.
    Capital investments of US$9.1 million for the third quarter of 2007 were
$1.0 million higher than the second quarter, primarily as a result of
increased development activities in China.

    Conference Call

    Ivanhoe Energy will host a conference call today, November 8, 2007, for
investors and analysts at 4:30 p.m. EST (1:30 p.m. PST) to discuss 2007 third
quarter results and provide an update on operations. The conference call may
be accessed by dialing toll-free 1-866-540-8136 in Canada and the United
States, or 1-416-340-8010 in the Toronto area and internationally. A
simultaneous webcast of the conference call will be provided through
www.ivanhoeenergy.com. If you are unable to participate in the call it will be
archived for later playback by dialing 1-416-695-5800 and entering the pass
code 3237896 followed by the number sign, or via www.ivanhoeenergy.com. The
archived playback will be available until December 10, 2007.

    This news release summarizes our 2007 third quarter results of operations
and financial condition and should be read in conjunction with our Quarterly
Report on Form 10-Q for the quarter ended September 30, 2007, which contains
condensed financial statements and Management's Discussion and Analysis of
Financial Condition and Results of Operations. The Form 10-Q is expected to be
filed today and copies may be obtained from the Ivanhoe Energy website at
www.ivanhoeenergy.com, on EDGAR at www.sec.gov or SEDAR at www.sedar.com.

    Ivanhoe Energy is an independent international heavy oil development and
production company focused on pursuing long-term growth in its reserves and
production using advanced technologies, including its proprietary heavy oil
upgrading process (HTL(TM)). Core operations are in the United States and
China, with business development opportunities worldwide. Ivanhoe Energy
trades on the NASDAQ Capital Market with the ticker symbol IVAN and on the
Toronto Stock Exchange with the symbol IE.

    FORWARD-LOOKING STATEMENTS: This document includes forward-looking
statements, including forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
include, but are not limited to, statements concerning the potential benefits
and costs of Ivanhoe Energy's heavy oil upgrading technology, the potential
for, and timing of, commercialization and future application of the heavy oil
upgrading technology, statements relating to the continued advancement of
Ivanhoe Energy's projects, the potential for successful exploration and
development drilling, statements related to anticipated capital expenditures
and other statements which are not historical facts. When used in this
document, the words such as "could," "plan," "estimate," "expect," "intend,"
"may," "potential," "should," and similar expressions relating to matters that
are not historical facts are forward-looking statements. Although Ivanhoe
Energy believes that its expectations reflected in these forward-looking
statements are reasonable, such statements involve risks and uncertainties and
no assurance can be given that actual results will be consistent with these
forward-looking statements. Important factors that could cause actual results
to differ from these forward-looking statements include the potential that the
company's projects will experience technological and mechanical problems, new
product development will not proceed as planned, the HTL technology to upgrade
bitumen and heavy oil may not be commercially viable, market acceptance of the
HTL technology may not be as anticipated, Ivanhoe Energy's lack of history in
developing commercial HTL opportunities, geological conditions in reservoirs
may not result in commercial levels of oil and gas production, the
availability of drilling rigs and other support services, the risk associated
with doing business in foreign countries, environmental risks, changes in
product prices, the ability to generate cash flow and raise capital as and
when required, competition and other risks disclosed in Ivanhoe Energy's
Annual Report on Form 10-K filed with the U.S. Securities and Exchange
Commission on EDGAR and the Canadian Securities Commissions on SEDAR.

    RESERVES DATA AND OTHER OIL AND GAS INFORMATION: Ivanhoe Energy's
disclosure of reserves data and other oil and gas information is made in
reliance on an exemption granted to Ivanhoe Energy by Canadian securities
regulatory authorities, which permits Ivanhoe Energy to provide disclosure in
accordance with U.S. disclosure requirements.

    The information provided by Ivanhoe Energy may differ from the
corresponding information prepared in accordance with Canadian disclosure
standards under National Instrument 51-101 (NI 51-101). Further information
about the differences between the U.S. requirements and the NI 51-101
requirements is set forth under the heading "Reserves, Production and Related
Information" in Ivanhoe Energy's Annual Report on Form 10-K.





For further information:

For further information: Cindy Burnett, (604) 331-9830; Website:
www.ivanhoeenergy.com

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