17-09-09 Robert Friedland, the Executive Chairman, President and CEO of Ivanhoe Energy, and David Martin, Chairman and CEO of Ivanhoe Energy Latin America, have announced that a new, independent review of earlier drilling has confirmed the world-scale status of Ivanhoe Energy Ecuador's Pungarayacu heavy-oil field in Ecuador.
Ivanhoe Energy Ecuador signed a contract in October 2008 with Ecuador state oil companies PetroEcuador and PetroProduccion to explore and develop the Pungarayacu field, utilizing Ivanhoe's proprietary Heavy-to-Light (HTL) heavy-oil upgrading technology.

The new review, prepared by leading industry consultant Gaffney, Cline Associates (GCA), of Houston, Texas, concludes that the Pungarayacu Project contains a Best Estimate of 6.4 bn barrels of original oil-in-place. Based on a review of data from 27 wells drilled during the early 1980s by PetroProduccion, the report submitted by GCA contains a range of estimates from a low of 4.3 bn barrels to a high of 12.1 bn barrels of originaloil-in-place.
GCA's evaluation was limited to estimates of oil-in-place. GCA was not requested to, and therefore did not, evaluate the quantity of oil that might eventually be recovered from Pungarayacu. There is no certainty that it will be commercially viable to produce any portion of this estimated oil-in-place.

Confirmation of this estimate would make the Pungarayacu field the largest accumulation of heavy oil in Ecuador and one of the largest in Latin America.
The 250-sq-mile (647 sq km) Pungarayacu heavy-oil field, which was discovered approximately 30 years ago, is part of Ecuador's Block 20, and is approximately 125 miles (200 km) southeast of Quito, in the Amazon Basin. Ivanhoe Energy's contract covers project appraisal and development of Block 20, including production and upgrading of the heavy oil. Block 20 covers approximately 426 sq miles (1,100 sq km, or 272,000 acres).

Ivanhoe has previously reported that the magnitude of the Pungarayacu oil field -- together with access to the existing pipeline to Ecuador's Pacific Rim export terminal and transportation to Asian and North American seaborne energy markets -- makes the project of significant interest to numerous international oil companies.
Several large international oil companies already have approached Ivanhoe Energy Latin America and expressed serious interest in participating in the project. Under Ecuadorian law and the terms of the Block 20 contract, Ivanhoe must seek PetroProduccion's approval when specific strategic partners are introduced to the project.