Ivanhoe Updates California Well Test

Ivanhoe Energy said that it is completing testing of the first and lowest zone at its North Yowlumne exploration well in California's San Joaquin Basin.

The company reports that the first of three zones has been tested in the 13,000-foot North Yowlumne 1-26 well. A minimal amount of light 32 degrees API oil was recovered from the zone. The operator is continuing to collect data from the lower zone, and testing of the higher second zone of three zones will commence later this week.

"The recovery of oil from this first zone is encouraging," said David Martin, Ivanhoe Energy's chairman. "The zone that has been tested was believed to be the least productive of the three zones. The presence of light oil is a positive sign for the testing of the remaining two upper zones."

Ivanhoe has acquired additional acreage at the North Yowlumne prospect. The company developed the 8,000-acre prospect after a 38 square mile 3-D seismic survey indicated that the Yowlumne Sand extends onto the company's block in the southern San Joaquin Basin area. This new North Yowlumne well is approximately two miles north of the oil-producing Yowlumne Field in Kern County, in Southern California's San Joaquin Valley. The Yowlumne Field was discovered in 1974 and has produced more than 110 million barrels of oil and 96 bcf of gas from the Yowlumne (Stevens) Sand.

Ivanhoe farmed out 87.5 prospect of this exploration prospect and resulting well. If the well is successful the farmin parties earn a 43.75-percent interest. Following payout of the first producing well, Ivanhoe will have a 56.25-percent working interest in the block and will be the operator for any subsequent operations.

Partners in the North Yowlumne prospect are Ivanhoe, 56.25 percent; NEG (operator of the exploration well), 6.25 percent; Salinas Energy, 25 percent; and Statesman Exploration 12.50 percent.