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October 14, 2003
IVANHOE ENERGY SCHEDULES HORIZONTAL WELL TO APPRAISE CALIFORNIA PROSPECT
BAKERSFIELD - Ivanhoe Energy (NASDAQ:IVAN and TSX:IE) has contracted to begin drilling the first well on its` Citrus prospect in Kern County, California in November. The Citrus #1 well will appraise the potential for light oil and natural gas in the Upper Antelope Shale directly offsetting existing production by other companies. The Upper Antelope Shale is located at a depth of approximately 7,000 feet and additional potential may exist in the deeper Antelope and McDonald Shale formations down to 9,000 feet. The prospect has an estimated reserve potential of up to 15 million barrels of oil equivalent in the primary objective, with additional upside from deeper horizons. Approximately half of the reserve estimate is related to the potential for natural gas.
"The Citrus prospect is one of many prospects in our San Joaquin portfolio we intend to drill over the next several months," said David Martin, Ivanhoe Chairman. "This particular prospect exploits our unique acreage position to extend an existing producing field and we plan to use horizontal drilling technology to more effectively develop this reservoir. A horizontal well can expose up to ten times the amount of reservoir and result in higher production volumes for less than twice the cost of drilling a vertical well."
The Citrus prospect will test the southern extension of the currently producing Lost Hills field, which is unrelated to the deep-gas prospect at Northwest Lost Hills located 15 miles to the north. The company has acquired an interest in over 1,700 potentially productive acres offsetting Lost Hills field where there has been recent development drilling. Ivanhoe will be the operator and owns interests ranging between 83% and 100% in the prospect leases.
The Company expects to have the well completed and tested by year-end. The horizontal drilling techniques planned for the well at Citrus are similar to those that have successfully developed in other Antelope Shale reservoirs in the nearby North Shafter and Rose fields. If further development is warranted, the company estimates that there could be up to 20 additional horizontal drilling locations at Citrus. Ivanhoe may also plan future wells to test deeper formations.
Ivanhoe Energy`s mission is to create value for its shareholders and host countries, initially by focusing on: (1) production of cleaner burning fuels from natural gas, using proven gas-to-liquids (GTL) technology; (2) conventional exploration and production (E&P), primarily natural gas in the U.S.; and (3) enhanced oil recovery (EOR) and natural gas projects, on a production-sharing basis with national petroleum companies.
Ivanhoe Energy trades on the NASDAQ SmallCap market with the ticker symbol IVAN and on the Toronto Stock Exchange with the symbol IE.
Information contacts:
John MacDonald
Vice president, Investor Relations
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