Ivanhoe Energy Begins Bossier Drilling Program

Ivanhoe Energy along with its joint venture partner Unocal, have started drilling the first well on their Bossier Trend acreage in East Texas. The well, 1-Trinity Materials, is the first test planned for the Creslenn Ranch prospect located in Henderson County and is expected to take approximately one month to drill to a targeted depth of 12,000 feet. At that time, if results warrant, fracturing and testing operations should take an additional two to three weeks.

Since announcing the joint venture with Unocal in October, several prospects have been identified and the joint leasehold position has grown to approximately 48,000 gross acres in Henderson, Anderson and Freestone counties. The current drilling plan calls for up to four wells at the Creslenn Ranch prospect followed by two additional wells on a separate prospect in Freestone County. Unocal is operator and will invest $10 million toward initial drilling costs to offset the front-end exploration costs incurred by Ivanhoe. After investment equilibrium is reached, the companies will share exploration, development and infrastructure costs equally.

The Bossier trend consists of multiple fields and multiple pay zones. Typical Bossier wells will produce between two and four million cubic feet of gas per day at average depths of between 10,000 - 12,000 feet. Anadarko, the area's largest operator, has drilled more than 400 Bossier wells, achieving a success rate of virtually 100 per cent. Following a successful exploration phase, Ivanhoe intends to project finance its share of field development costs. Other companies participating in the Bossier trend include Anadarko, Apache, Gastar, Matador, Range Resources, Texaco and XTO Energy.