QUITO, Ecuador, Jan. 21, 2015 /PRNewswire/ - Ivanhoe Energy
Inc. (TSX: IE; NASDAQ: IVAN) (TSX: IE.DB) announced today that the
company is scaling back its activities in Ecuador in response to significantly lower oil
prices and a delay in discussions with Ivanhoe's partner on moving
ahead with development plans for Ivanhoe's Block 20 heavy-oil
project.
Block 20 is an area of approximately 426 square miles (1,103
square kilometres) located 125 miles (201 kilometres) southeast of
Quito, which contains the
Pungarayacu oil field. In furtherance of its previously disclosed
joint-venture strategy to finance the continued appraisal and
development of Block 20, Ivanhoe invited one of the world's largest
national oil companies (NOC), which has experience working in
Ecuador, to review Ivanhoe's
investment in Block 20. This resulted in an agreement in principle,
subject to the approval of the Ecuadorian government, for the NOC
to recognize Ivanhoe's investment to date in the project and farm
in to the project as the majority partner in, and operator of,
Block 20.
Ivanhoe and the NOC presented a joint proposal to the Ecuadorian
government in March, 2014. In mid May, Ivanhoe received a letter
from the Ecuadorian government indicating that the Secretariat of
Hydrocarbons was ready to move forward with final project
negotiations. In subsequent discussions, the NOC, which had
initially expected to complete its internal review by the end of
the third quarter of 2014, has indicated to Ivanhoe that the sharp
decline in oil prices and other factors have delayed its review,
making a final decision to proceed with Block 20 not possible at
this time.
While oil price volatility makes it challenging to move Block 20
forward in the short term, Ivanhoe remains willing to work with its
partner and the Ecuadorian government to explore development
alternatives for Block 20 over the medium and longer term.
Ivanhoe Energy is an independent international heavy-oil
exploration and development company focused on pursuing long-term
growth in its reserves and production using advanced technologies,
including its proprietary heavy-oil upgrading process
(HTL®). Core operations are in Canada, the United
States and Ecuador, with
business development opportunities worldwide. For more information
about Ivanhoe Energy Inc., please visit www.ivanhoeenergy.com.
FORWARD-LOOKING STATEMENTS: This document
includes forward-looking statements, including forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include, but are not
limited to the potential for commercialization and future
application of the heavy oil upgrading technology and other
technologies, statements relating to the continued advancement of
Ivanhoe Energy's projects, statements relating to the timing and
amount of proceeds of agreed upon and contemplated disposition
transactions, statements relating to anticipated capital
expenditures, statements relating to the timing and success of
regulatory review applications, and other statements which are not
historical facts. When used in this document, the words such as
"could," "plan," "estimate," "expect," "intend," "may,"
"potential," "should," and similar expressions relating to matters
that are not historical facts are forward-looking statements.
Although Ivanhoe Energy believes that its expectations reflected in
these forward-looking statements are reasonable, such statements
involve risks and uncertainties and no assurance can be given that
actual results will be consistent with these forward-looking
statements. Important factors that could cause actual results to
differ from these forward-looking statements include the potential
that the Company's projects will experience technological and
mechanical problems, new product development will not proceed as
planned, the HTL® technology to upgrade bitumen and
heavy oil may not be commercially viable, geological conditions in
reservoirs may not result in commercial levels of oil and gas
production, the availability of drilling rigs and other support
services, uncertainties about the estimates of reserves, the risk
associated with doing business in foreign countries, environmental
risks, changes in product prices, our ability to raise capital as
and when required, our ability to complete agreed upon and planned
asset dispositions, competition and other risks disclosed in
Ivanhoe Energy's 2013 Annual Report on Form 10-K filed with the
U.S. Securities and Exchange Commission on EDGAR and the Canadian
Securities Commissions on SEDAR.
SOURCE Ivanhoe Energy Inc.