"We are pleased to be moving forward with the testing of this high-profile well, particularly with natural gas prices reaching unprecedented high levels," said Leon Daniel, Ivanhoe Energy's President and CEO. "This farm out allows us to test the well at no cash cost to us, while maintaining a significant interest in the well and the prospect." A drilling rig is expected on-site to commence completion activities in mid-September, with test results available in the fourth quarter of 2005. Ivanhoe Energy will retain a 28% working interest in the well and the 9,600-acre block.
The well is in Kern County, California and is operated by Aera Energy LLC. This well, designed to evaluate the natural gas and condensate reserve potential of the deep Temblor formation, began drilling in August 2001 and reached a depth of 21,000 feet in August 2002 after substantial delays and cost overruns resulting from difficult drilling conditions. While drilling, several high-pressure intervals which indicated the presence of natural gas were encountered. Liner was set to 19,620 feet in preparation for testing; however, operations were suspended by the operator in 2002 while a partner was sought to share the costs of the testing program, currently estimated at $7.7 million.
Ivanhoe Energy is an independent international oil and gas exploration and development company building long-term growth in its reserve base and production. Core operations are in the United States and China, with business development opportunities worldwide. Ivanhoe Energy is a leader in technologically innovative methods designed to significantly improve the company's reserve base and production, including the upgrading of heavy oil to light oil, state-of-the-art drilling techniques, enhanced oil recovery (EOR) and the conversion of natural gas to liquids (GTL).
Ivanhoe Energy trades on the NASDAQ SmallCap market with the ticker symbol IVAN and on the Toronto Stock Exchange (TSX) with the symbol IE. On the TSX, Ivanhoe Energy is listed and traded in both Canadian and U.S. dollars. The U.S. dollar trading symbol on the TSX is IE.U.
For more information: http://www.ivanhoe-energy.com
Copyright © 2004 Ivanhoe Energy. All Rights Reserved.
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