Ivanhoe Energy : October 27, 2011 Ivanhoe Energy to conduct testing of second Mongolia well in early 2012
NEWS RELEASE Ivanhoe Energy to conduct testing of second Mongolia well in early 2012 CALGARY, CANADA (October 27, 2011) - David Dyck, President and Chief Operating Officer of Ivanhoe Energy Inc. (TSX: IE) (NASDAQ: IVAN), and Gerald Moench, President of Ivanhoe's wholly-owned subsidiary Sunwing Energy Ltd., announced today that Ivanhoe has successfully finished drilling the company's second exploration well on the Nyalga block in east-central Mongolia and have prepared the well for completion and testing early next year.
"Drilling and open-hole logging operations on the second Nyalga well have been completed to a total depth of 2,300 metres and the well has been cased and secured," said Mr. Moench.
"Oil staining, fluorescence and increases in background gas were observed in several sand sections, which are positive indicators of the presence of oil. The log results will be reviewed and analyzed to provide guidance on the best approach to completing the well once weather conditions permit, likely in the spring of 2012."
The well, N16-2E-B, was drilled on schedule and on budget, on an eight-square-kilometre structure approximately 12 kilometres from the first well drilled earlier this year. Like the first well, the second well has provided vital information that will be correlated with existing and future seismic data to help guide the ongoing drilling program. The drill rig will now return to China and appropriate equipment will be arranged to conduct the next phase of work. Ivanhoe Energy has invested US$11.7 million on all exploration activities to date on the block, fulfilling its obligations in the exploration phase of the Production-Sharing Contract.
"We look forward to testing the well and to beginning the next phase of exploration in Mongolia, including
further seismic and drilling," said Mr. Dyck.
"Mongolia is in the early days of oil exploration. Since it does not have the oil field operations infrastructure to enable continued operation through the harsh winter months, we will take time during the winter to correlate data and determine the best way to proceed."
Sunwing Energy Ltd. is party to a Production-Sharing Contract with the Mongolian Government for Block XVI, a 12,679-square-kilometre area that encompasses the Nyalga Basin and is adjacent to the north-south Trans- Mongolian Railway.
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 Canada, the United States, Ecuador, China and Mongolia, with business development opportunities worldwide. Ivanhoe Energy trades on The Toronto Stock Exchange with the symbol IE and on the NASDAQ Capital Market with the ticker symbol IVAN.
For more information about Ivanhoe Energy Inc. please visit www.ivanhoeenergy.com. 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 relating to the continued advancement of Ivanhoe Energy's projects, the potential for successful exploration and development drilling, statements relating to establishing resources 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, 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 including the risk that legislative changes could adversely affect the commercial viability of carrying on business in those countries, environmental risks, changes in product prices, our ability to raise capital as and when required, competition and other risks disclosed in Ivanhoe Energy's 2010 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 contact:
David Dyck
President and Chief Operating Officer
1 (403) 817 1155 info@ivanhoeenergy.com
For media enquiries contact:
Hilary McMeekin
Manager, Corporate Communications
1 (403) 817 1108 hmcmeekin@ivanhoeenergy.com
Greg Phaneuf
Executive Vice President, Corporate Development
1 (403) 817 1155 info@ivanhoeenergy.com
"Drilling and open-hole logging operations on the second Nyalga well have been completed to a total depth of 2,300 metres and the well has been cased and secured," said Mr. Moench.
"Oil staining, fluorescence and increases in background gas were observed in several sand sections, which are positive indicators of the presence of oil. The log results will be reviewed and analyzed to provide guidance on the best approach to completing the well once weather conditions permit, likely in the spring of 2012."
The well, N16-2E-B, was drilled on schedule and on budget, on an eight-square-kilometre structure approximately 12 kilometres from the first well drilled earlier this year. Like the first well, the second well has provided vital information that will be correlated with existing and future seismic data to help guide the ongoing drilling program. The drill rig will now return to China and appropriate equipment will be arranged to conduct the next phase of work. Ivanhoe Energy has invested US$11.7 million on all exploration activities to date on the block, fulfilling its obligations in the exploration phase of the Production-Sharing Contract.
"We look forward to testing the well and to beginning the next phase of exploration in Mongolia, including
further seismic and drilling," said Mr. Dyck.
"Mongolia is in the early days of oil exploration. Since it does not have the oil field operations infrastructure to enable continued operation through the harsh winter months, we will take time during the winter to correlate data and determine the best way to proceed."
Sunwing Energy Ltd. is party to a Production-Sharing Contract with the Mongolian Government for Block XVI, a 12,679-square-kilometre area that encompasses the Nyalga Basin and is adjacent to the north-south Trans- Mongolian Railway.
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 Canada, the United States, Ecuador, China and Mongolia, with business development opportunities worldwide. Ivanhoe Energy trades on The Toronto Stock Exchange with the symbol IE and on the NASDAQ Capital Market with the ticker symbol IVAN.
For more information about Ivanhoe Energy Inc. please visit www.ivanhoeenergy.com. 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 relating to the continued advancement of Ivanhoe Energy's projects, the potential for successful exploration and development drilling, statements relating to establishing resources 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, 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 including the risk that legislative changes could adversely affect the commercial viability of carrying on business in those countries, environmental risks, changes in product prices, our ability to raise capital as and when required, competition and other risks disclosed in Ivanhoe Energy's 2010 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 contact:
David Dyck
President and Chief Operating Officer
1 (403) 817 1155 info@ivanhoeenergy.com
For media enquiries contact:
Hilary McMeekin
Manager, Corporate Communications
1 (403) 817 1108 hmcmeekin@ivanhoeenergy.com
Greg Phaneuf
Executive Vice President, Corporate Development
1 (403) 817 1155 info@ivanhoeenergy.com
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