Ivanhoe reported financial results and operating highlights for the second quarter of 2011. Ivanhoe Energy has filed its quarterly financial report on Form 10-Q with the United States Securities and Exchange Commission and its Interim Financial Statements with the Canadian Securities Administrators for the period ended June 30, 2011.
"During the quarter we continued to prudently position Ivanhoe Energy to advance our heavy oil and conventional oil and gas projects," said President and Chief Operating Officer, David Dyck.
"In particular, the Company enhanced the intrinsic value of our heavy-to-light (HTL) upgrading technology by successfully testing it on Ecuadorian heavy crude and by securing patent protection to 2028 in key jurisdictions. We also put in place attractive new convertible debt financing to underwrite our operations and business development efforts."
Ivanhoe's wholly-owned subsidiary, Sunwing Energy, submitted the Provisional Overall Development Plan to the Joint Management Committee and PetroChina on June 30, 2011. As communicated in Ivanhoe's press release on June 15, 2011, this plan includes the acquisition of 3D seismic and the drilling of horizontal wells on the Block that will include multistage fracture stimulation. The Company is currently in discussions with PetroChina on final details of the Plan. This plan is to be conducted over the next 24 months.
Both the Yixin 2 and Zitong 1 wells have completed their respective long term built up tests and the down hole recorders have been recovered and the wells shut-in and secured. Data collected from these recorders has been delivered to contracted third-party tight gas experts to conduct detailed analysis and modeling of reservoir parameters and potential completion and stimulation techniques to assist the Company in developing exploitation programs on the Zitong Block.
Mongolia Block XVI
Sunwing is currently mobilizing the drilling equipment and supplies to N16-1E, its first exploratory drill site on Nyalga block XVI, which will be drilled on a structure approximately 32 sq km in size and to an approximate depth of 2500m. As of this date, the drilling rig is more than 75 percent assembled. Remaining minor drilling preparations will continue over the next few weeks, followed by the spud of Sunwing's first exploration well in Mongolia. Drilling of the well will take approximately 30 days, with completion and testing to be carried out as required. The Company intends to drill two wells initially, with the option to drill up to three additional wells, and remains optimistic of the potential to find oil resources in Mongolia.
Ecuador Seismic Program
As communicated in Ivanhoe's June 15, 2011 news release, Ivanhoe's wholly-owned Ecuadorian subsidiary commissioned a seismic program over the southern part of the Pungarayacu Block. The first phase of this program is now complete and analysis is still underway. Early interpretation is encouraging as it indicates deeper faulting, with the potential to trap lighter oil resources which could prove beneficial for blending purposes and overall project economics. Additionally, initial internal interpretations may also suggest an extension of the field beyond what was originally estimated.
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