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Ivanhoe Energy Announces Closing Of $50 Million Public Offering Of Convertible Unsecured Subordinated Debentures

Insiders, together with other interested parties, support Company with over $23 million in concurrent private placement of debentures

CALGARY, June 9, 2011 /PRNewswire/ - Ivanhoe Energy Inc. (TSX: IE) (NASDAQ: IVAN) today confirmed the closing of its previously announced bought deal public offering of $50,000,000 principal amount of 5.75% convertible unsecured subordinated debentures (the "Debentures") at a price of $1,000 per Debenture (the "Public Offering"). At the holder's option, the Debentures may be converted into common shares of Ivanhoe ("Shares") at any time prior to the close of business on the earlier of June 30, 2016, the maturity date, and the business day immediately preceding the date specified by Ivanhoe for redemption of the Debentures. The conversion price will be $3.36 per Share (the "Conversion Price"), subject to adjustment in certain circumstances, including the declaration of dividends.

The Public Offering was underwritten by a syndicate led by TD Securities Inc. and included Macquarie Capital Markets Canada Ltd., RBC Dominion Securities Inc., UBS Securities Canada Inc., CIBC World Markets Inc. and Byron Capital Markets Ltd.

In connection with the Public Offering, Ivanhoe Energy granted the underwriters an over-allotment option to purchase up to an additional $7,500,000 aggregate principal amount of Debentures at the same price, exercisable in whole or in part at any time for a period of 30 days following June 9, 2011. As of the date hereof, the over-allotment option has not been exercised. If the over-allotment option is fully exercised, the total gross proceeds to Ivanhoe from the sale of the Debentures will be $57,500,000.

Ivanhoe Energy will use the net proceeds of the Public Offering for repayment of the $40,000,000 Convertible Promissory Note (the "Note") due to Talisman Energy Canada on July 11, 2011, operating expenses, capital expenditures on its properties and facilities and corporate and/or asset acquisitions, if any. The Note represents the final portion of consideration due to Talisman Energy for the 2008 acquisition of the Tamarack oil sands lease.

Ivanhoe Energy also announced today that it has sold, on a private placement basis and on the same terms as the Public Offering, over $23,000,000 principal amount of Debentures to certain directors, officers, insiders and other non-insiders (the "Private Placement"), including Ivanhoe's Executive Co-Chairman & CEO, Robert M. Friedland.

The combined net proceeds of the Public Offering and Private Placement, after repayment of the Note, will add approximately $31,000,000 to Ivanhoe's corporate treasury supporting the advance of project initiatives.

All Debentures sold in the Public Offering and Private Placement will mature on June 30, 2016. They will bear interest at an annual rate of 5.75%, payable semi-annually on the last day of June and December of each year, commencing December 31, 2011. The Debentures will not be redeemable before June 30, 2014. On and after June 30, 2014 and prior to the maturity date, the Debentures may be redeemed in whole or in part from time to time at Ivanhoe's option, provided that the volume-weighted average trading price of the Shares on the Toronto Stock Exchange during the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of the redemption is given is not less than 125% of the Conversion Price.

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registrations requirements of the Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.

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 Canada, Ecuador, China and Mongolia, with business development opportunities worldwide. Ivanhoe Energy trades on the Toronto Stock Exchange with the ticker symbol IE and on the NASDAQ Capital Market with the symbol IVAN. For more information about Ivanhoe Energy Inc. please visit our website at 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 concerning the completion, timing and amount and use of proceeds from the offerings. 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 general economic, business and market conditions 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.

SOURCE Ivanhoe Energy Inc.

Stock quotes in this article: IVAN 
Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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