so es geht weiter
+ 11 % auf 4,75 US Dollar
Ivanhoe Energy initiates exploration & development on Sichuan gas project in China
October 28, 2003 08:05:00 (ET)
BEIJING, Oct 28, 2003 /PRNewswire-FirstCall via COMTEX/ -- Ivanhoe Energy`s Chairman David Martin announced today that the company, through its wholly-owned subsidiary, Sunwing Energy, has initiated its exploration and development program on the company-operated 900,000-acre Zitong Block in China`s gas-rich Sichuan Basin. Based upon previous drilling data and seismic surveys conducted by the Chinese, Sunwing`s evaluations have indicated a potential gross natural gas resource of over five trillion cubic feet (tcf) on this large block.
"The Zitong project exposes Ivanhoe to very significant natural gas potential and will allow us to take advantage of numerous under-developed and under-explored natural gas structures at a time when China has a strong demand for a cleaner-burning energy source," said Mr. Martin.
Sunwing has a 30-year production-sharing contract with PetroChina, signed on September 19, 2002, to commercially develop the Zitong Block. To put the size of the potential resource at Zitong in perspective, five tcf of natural gas equates to 833 million barrels of crude oil on a heating-value (btu) basis. At US$3 per thousand cubic feet of gas and before costs such as, capital expenditures, production expenses and profit-sharing payments, the potential gross revenues from the Sichuan resource could amount to US$15 billion over the life of the project.
As a part of the initial exploration and development program, Sunwing has reprocessed a total of 1,650 miles of existing seismic data covering much of the Zitong Block. The company is currently evaluating this reprocessed data using state-of-the-art seismic analysis and is negotiating with local seismic contractors to commence shooting a new 2-D seismic program over areas of special interest in the block. This program will consist of up to 470 line-miles of seismic during the balance of 2003 and the first half of 2004. Following completion of the seismic program, Sunwing expects to begin a multi-year, exploration and development drilling program. Average drilling depths are expected to be approximately 13,000 feet.
The geologic interpretation from the existing 2-D seismic data by PetroChina has identified 16 structures with hydrocarbon-bearing potential on the block. To date, PetroChina has successfully drilled 22 gas wells - testing four of the 16 structures on the block. All four structures drilled by PetroChina tested commercial gas with initial test rates ranging between two and 32 million cubic feet of gas per day. Sunwing will receive approximately 75% of the net project revenues before payout and approximately 47% after payout. PetroChina may elect to participate through a working interest of up to 51%.
The Sichuan Basin, in central China approximately 930 miles southwest of Beijing, is the country`s largest gas-producing region with a natural gas resource potential estimated by Chinese officials to be 260 tcf. There is a strong and growing market for natural gas in Sichuan, with approximately 120 million people living within the basin. An existing gas transportation grid is moving more than 775 million cubic feet per day to many end users, including 800 industrial customers. A major natural-gas trunk line with an initial capacity in excess of 200 million cubic feet per day is under construction to ship gas from the Sichuan Basin to Eastern China, including Shanghai. Under existing delivery contracts, the price of gas to residential and commercial consumers is regulated in the range of US$2 to US$3.25 per thousand cubic feet.
Ivanhoe Energy`s mission is to create value for its shareholders and host countries, initially by focusing on: (1) production of cleaner burning fuels from natural gas, using proven gas-to-liquids (GTL) technology; (2) conventional exploration and production (E&P), primarily natural gas in the U.S.; and (3) primary oil development projects and natural gas projects, on a production-sharing basis with national petroleum companies.
Ivanhoe Energy trades on the NASDAQ SmallCap market with the ticker symbol IVAN and on the Toronto Stock Exchange with the symbol IE.
Supplemental Information:
-------------------------
Previous wells drilled on the Zitong block tested four geological structures (Wen, Zhe, Guan and Weicheng) and encountered the Xu formation. This formation is significantly fractured, typically over-pressured and contains primarily limestone-pebble conglomerate from the Triassic period. A completed well is expected to cost approximately US$ 5.5 million and apply high-angle or horizontal drilling technology. Approximately 80% of the wells drilled on the Zitong block have encountered natural gas or resulted in a commercial well even though these wells were drilled prior to shooting seismic, that is, the drilling locations were selected based upon surface features. Under the industry standard measurement method using British Thermal Units (btu), six thousand cubic feet of natural gas equates to the heating value of one barrel of oil.
FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, the continued advancement of Ivanhoe Energy`s exploration and development activities and estimates of the potential revenues from projects in China. When used in this document, the words "could," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are intended to be among the statements that identify forward-looking statements. Although Ivanhoe Energy believes that their 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 oil and gas drilling will experience technological and mechanical problems, geological conditions in the hydrocarbon structures may not result in commercial levels of oil or gas production, changes in product prices and other risks disclosed in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission.
SOURCE Ivanhoe Energy Inc.