Continued focus on Commercializing HTL, Financing and Growing Reserves
CALGARY, July 12, 2012 /PRNewswire/ - Ivanhoe Energy Inc. (TSX: IE; NASDAQ: IVAN) announced today that it is continuing to make progress with its priority initiatives and the following provides a summary of that activity.
The Company continues to advance its primary objectives of building reserves and commercializing the Heavy-to-Light (HTL TM) technology. By the end of 2012 the Company expects to make substantial progress on exploring, developing and upgrading heavy oil.
Heavy-to-Light (HTL) Commercialization HTL is an upgrading process which captures the price difference between heavy and light oil by converting heavy, viscous oil and bitumen into a lighter, transportable and more valuable synthetic crude oil (SCO).To support Ivanhoe's perspective on the value of HTL, the Company commissioned a number of consultants including Jacobs Consultancy, a world-class independent consulting firm, to conduct a formal evaluation of the economic feasibility of its HTL projects. The conclusion of their report is that HTL SCO will trade on par with Brent and this creates a significant opportunity for Ivanhoe and its potential HTL partners. The most significant opportunities include the potential for enhanced cash flows, superior economic returns and reduced financing risk due to the reduced capital intensity of constructing HTL facilities. A full explanation of this economic analysis is available on the Company's website. Ivanhoe Energy continues to focus its HTL commercialization efforts in 2012 on establishing midstream partnerships and business development activities are underway for several projects of this nature in Latin and Central America. Our relationship with the Guatemalan Government is one example. Ivanhoe Energy is providing industry input and supporting the Guatemalan Government's efforts to foster growth and energy self-sufficiency. Tamarack - Canada The regulatory approval process for the Tamarack project is progressing well. The Company has been working with the regulators to answer their technical questions and local area stakeholders to address their specific areas of interest. Responses to the regulator's second round of Supplemental Information Requests (SIRs) were submitted on July 6, 2012 and are now available on the Company's website. The Company continues to anticipate receiving regulatory approval by the end of 2012. Zitong - China Implementation of the previously announced transaction to assign Sunwing's interest in the Production Sharing Contract for the Zitong block in China's Sichuan Basin to Shell China Exploration continues to progress. Closing is expected to occur once all the necessary approvals are complete, and the Company will communicate at that time. Block 20 - Ecuador In the first quarter Ivanhoe Energy began drilling an exploration well (IP-17) to test the Hollin and Pre-Cretaceous horizons in the southern part of Block 20. To date, the Company has drilled to approximately 10,500 ft. The Company has successfully drilled through the challenging volcanic Chapiza formation and there has been evidence of hydrocarbons. Drilling is expected to continue following the completion of further analysis of the results to date and an improved geologic assessment by independent third-party experts. The Company anticipates having greater clarity on next steps following completion of this assessment. The Company continues to advance discussions with third parties to establish a potential financial partnership for Block 20 with the goal of finalizing the necessary commercial arrangements by the end of 2012.