Ivanhoe Energy Inc. announced Tuesday that Ivanhoe Energy Ecuador Inc. has spud its first appraisal well, IP-15, in the Pungarayacu field in Ecuador. Ivanhoe Energy Ecuador, a Canadian company, is a wholly owned subsidiary of Ivanhoe Energy Latin America Inc., the parent company of Ivanhoe Energy Inc.'s Latin America corporate group.
The commencement of operations was marked by a ceremony at the IP-15 well drill site, attended by several local government and indigenous leaders as well as other key officials including Julio Gonzales, Acting Minister of Non Renewable Resources and Andrew Shisko, Canada's Ambassador to Ecuador.
David Martin, Chairman and CEO of Ivanhoe Energy Latin America told guests at the ceremony, "Today is a historic day. IP-15 is our first appraisal well to be drilled in the Pungarayacu field, believed to be Ecuador's largest known accumulation of heavy oil. We look forward to the development of this important resource for the people of Ecuador."
The well is expected to be drilled to approximately 1,300 feet (400 metres) and operations will include capturing valuable core data from all identified oil bearing zones. Drilling and coring will be followed by an extensive logging and testing evaluation program and may continue into February 2010. State-of-the-art evaluation equipment and coring methods will be employed and steam equipment will be used if lower gravity oil is encountered. Ivanhoe will provide updates as key results are received. Completion of IP-15 will be followed by drilling and testing of additional wells in different areas of Block 20, three of which are already permitted. Permitting for 20 additional wells will begin in January 2010.
An independent review completed by Gaffney, Cline & Associates estimated that within the 250-square-mile delineated portion of the block, and within the formation of primary interest, the Hollin, there are 4.3 billion barrels (low case), 6.4 billion barrels (mid case) and 12.1 billion barrels (high case) of original oil in place. Ivanhoe Energy Ecuador holds a 100% working interest in the contract for the exploration and development of Block 20.
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, patented heavy-oil upgrading process (HTL(TM)). Core operations are in Canada, Ecuador, China and Mongolia, with business development opportunities worldwide.
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