QUITO, Ecuador, Sept. 16 /CNW/ - Robert Friedland, Executive Chairman, President and CEO of Ivanhoe Energy Inc. (TSX: IE; NASDAQ: IVAN), and David Martin, Chairman and CEO of Ivanhoe Energy Latin America Inc., announced today that a new, independent review of earlier drilling has confirmed the world-scale status of Ivanhoe Energy Ecuador Inc.'s Pungarayacu heavy-oil field in Ecuador.
Ivanhoe Energy Ecuador signed a contract in October 2008 with Ecuador state oil companies Petroecuador and Petroproduccion to explore and develop the Pungarayacu field, utilizing Ivanhoe's proprietary Heavy-to-Light (HTL) heavy-oil upgrading technology.
The new review, prepared by leading industry consultant Gaffney, Cline & Associates (GCA), of Houston, Texas, concludes that the Pungarayacu Project contains a Best Estimate of 6.4 billion barrels of original oil-in-place. Based on a review of data from 27 wells drilled during the early 1980s by Petroproduccion, the report submitted by GCA contains a range of estimates from a low of 4.3 billion barrels to a high of 12.1 billion barrels of original oil-in-place.
GCA's evaluation was limited to estimates of oil-in-place. GCA was not requested to, and therefore did not, evaluate the quantity of oil that might eventually be recovered from Pungarayacu. There is no certainty that it will be commercially viable to produce any portion of this estimated oil-in-place.
Confirmation of this estimate would make the Pungarayacu field the largest accumulation of heavy oil in Ecuador and one of the largest in Latin America.
The 250-square-mile (647 sq. km) Pungarayacu heavy-oil field, which was discovered approximately 30 years ago, is part of Ecuador's Block 20, and is approximately 125 miles (200 kilometers) southeast of Quito, in the Amazon Basin. Ivanhoe Energy's contract covers project appraisal and development of Block 20, including production and upgrading of the heavy oil. Block 20 covers approximately 426 square miles (1,100 square kilometers, or 272,000 acres).
Ivanhoe has previously reported that the magnitude of the Pungarayacu oil field - together with access to the existing pipeline to Ecuador's Pacific Rim export terminal and transportation to Asian and North American seaborne energy markets - makes the project of significant interest to numerous international oil companies. Several large international oil companies already have approached Ivanhoe Energy Latin America and expressed serious interest in participating in the project. Under Ecuadorian law and the terms of the Block 20 contract, Ivanhoe must seek Petroproduccion's approval when specific strategic partners are introduced to the project.
Ivanhoe Energy Ecuador, a Canadian company, is a wholly-owned subsidiary of Ivanhoe Energy Latin America Inc., the parent company of Ivanhoe Energy Inc.'s Latin America corporate group.
Conference call today
Ivanhoe Energy will host a conference call today for investors and analysts at 4:30 pm EDT (1:30 pm PDT) to discuss the new independent review of Pungarayacu and HTL technology developments that are the subject of today's news releases.
The conference call may be accessed by dialing 1-800-731-5319 in Canada and the United States, or 1-416-644-3426 in the Toronto area and internationally. A simultaneous webcast of the conference call will be provided through www.ivanhoeenergy.com and www.newswire.ca/webcast. If you are unable to participate in the call, it will be archived for later playback by dialing 1-416-640-1917 and entering the pass code 21314257 followed by the number sign, or via www.ivanhoeenergy.com. The archived playback will be available until October 19, 2009.
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 Ivanhoe Energy Ecuador's agreement with Petroecuador and Petroproduccion to develop Block 20 in Ecuador, Ivanhoe Energy Ecuador's ability to obtain the financing necessary to fund this project, Ivanhoe Energy Ecuador's plan to establish an integrated HTL heavy-oil project on Block 20, the anticipated production capacity of the proposed HTL plant, the anticipated quantities of recoverable barrels of bitumen from Block 20 and other statements which are not historical facts. When use in this document, the words such as "could", "plan", "estimate", "anticipate", "intend", "may", "potential", "should", and similar expressions relating to matters that are not historical facts are forward-looking statements. Although Ivanhoe Energy and Ivanhoe Energy Ecuador believe that their 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 result to differ from these forward-looking statements include the possibility that the company will be unable to raise financing, 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, heavy oil samples from Block 20 may not have the product qualities 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, uncertainties about the estimates of the reserves, the risk associates with doing business in foreign countries, environmental risks, changes in product prices, our availability 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 files with the U.S. Securities and Exchange Commission on EDGAR and the Canadian Securities Commissions on SEDAR.
SOURCE Ivanhoe Energy Inc.
For further information: For further information: Investors Contact: Ian Barnett, (647) 203-6588; Bill Trenaman, (604) 688-8323; Media Contact: Bob Williamson, (604) 688-8323; Website: www.ivanhoeenergy.com