Ivanhoe Energy Increases California Production
Ivanhoe Energy has dramatically increased oil production in California and sold lower producing assets in West Texas in a continuing effort to improve revenues and cash flow.
Ivanhoe began a steam-injection application earlier this year to improve heavy-oil production from wells operated in the Midway-Sunset field located in Kern County, California. To date, fourteen of twenty-two wells in the steam-injection plan have been treated and the overall production rate has increased by nearly 100%. This production growth rate is expected to continue as steam is applied to additional wells in the field. Subject to financing arrangements, expansion plans for undeveloped portions of South Midway-Sunset include a US$5-million, 20-well drilling and steaming program to commence next spring.
"The additional oil production increase of over 300 barrels a day at Midway-Sunset has more than offset the volumes sold with our divestments in West Texas which in turn have generated cash proceeds of US$3 million," said David Martin, Ivanhoe Chairman.
In West Texas, Ivanhoe has received cash proceeds of US$1.6 million from the sale of half its interest in twenty producing wells located in the Spraberry Trend of Midland County. This sale is in addition to US$1.4 million generated from the August 2002 divestment of seven wells in West Texas. The leases and wells included in these divestments exhibited lower than expected productivity levels and contained few opportunities for additional development. However, Ivanhoe has retained its ownership interests in the more promising Apache Flats area of the Midland Basin where the wells drilled to date have exhibited the potential for higher production rates.