Ivanhoe Energy Successfully Demonstrates Final Key Commercial Configuration of Heavy Oil Upgrading Technology

    High Quality "Recycle" Configuration Applicable to Bitumen from Athabasca

    BAKERSFIELD, CA, June 6 /CNW/ - Ivanhoe Energy Inc. (NASDAQ:   IVAN and
TSX: IE) President and CEO Joe Gasca and Chief Technology Officer Dr. Robert
Graham today announced the successful demonstration of the third and final
processing configuration to be tested at the company's heavy oil upgrading
(HTL(TM)) Commercial Demonstration Facility (CDF) in California. Completion of
the successful test positions Ivanhoe Energy to proceed with the design and
construction of full-scale, commercial HTL facilities.
    The latest demonstration used a "Recycle" configuration, which is one of
the operating modes that can be used to produce a "High Quality" upgraded
product. High Quality modes typically would be applicable to bitumen
production, wherein higher levels of upgrading and viscosity reduction, as
well as significant by-product energy, are required. Bitumen production in the
Athabasca oilsands in Western Canada is expected to be the most significant
market for this mode of HTL operation.
    This is the third processing configuration to be successfully
demonstrated at the CDF. Ivanhoe Energy has previously announced successful
demonstrations of a High Yield mode, where liquid yields are maximized, as
well as a "Once Through" High Quality configuration that, similar to the
Recycle High Quality configuration, emphasizes product quality and on-site
energy production. The three configurations may be used independently, or in
various combinations, to match processing modes to feedstock characteristics
and production goals.
    The most recent run used California vacuum tower bottoms (VTBs), which
have an API gravity of 5.6 degrees. California VTBs are heavier than Athabasca
bitumen, which typically has an API gravity of approximately 8 degrees. The
properties of the upgraded oil produced in the Recycle High Quality
configuration will be released as appropriate along with additional test run
data. The next test run, scheduled for this quarter, will process Athabasca
bitumen that has been provided by a major international integrated oil
    "This successful demonstration of the Recycle mode complements other HTL
configurations previously demonstrated in our California CDF. Ivanhoe Energy
now has the full suite of tools to progress to full-scale commercial
facilities in a number of markets around the world, especially where fuller
upgrading and higher levels of on-site energy is required. The Athabasca
oilsands represents the primary market opportunity that requires the
configuration announced today," Joe Gasca said.
    Dr. Robert Graham added, "This successful demonstration of the Recycle
configuration fulfills the primary technical objectives that Ivanhoe Energy
established for the CDF. This latest configuration provides us with
significant flexibility to tailor our process to specific business
opportunities. Future CDF operations will be deal-driven and will focus on the
testing of heavy crudes in support of project development in Western Canada
and around the world."
    Ivanhoe Energy's proprietary, patented HTL(TM) heavy oil upgrading
technology produces lighter, more valuable crude oil from heavy oil and
bitumen at lower costs and in smaller-sized plants than conventional
technologies. The process also produces by-product energy that can be used to
generate steam or electricity.

    Conference Call
    Ivanhoe Energy will host a conference call today for investors and
analysts at 4:30 p.m. EDT (1:30 p.m. PDT) to discuss its latest HTL technology
developments. The conference call may be accessed by dialing toll-free
1-866-540-8136 in Canada and the United States, or toll 1-416-340-8010 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 toll 1-416-695-5800 and entering the
pass code 3225431 followed by the number sign, or via www.ivanhoeenergy.com.
The archived playback will be available until July 6, 2007.

    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 (HTLTM). 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
of Ivanhoe Energy's heavy oil upgrading technology, the potential for
commercialization and future application of the heavy oil upgrading technology
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
HTL process to upgrade heavy oil and bitumen 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,
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.

For further information:

For further information: Cindy Burnett, (604) 331-9830, Website:

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