29-05-08 Ivanhoe Energy has signed a preliminary agreement with Talisman Energy to acquire all of Talisman's interests in three leases located in the Athabasca oil sands region of Alberta for C$ 105 mm ($ 105.7 mm), Ivanhoe said.
Of the total purchase price, C$ 30 mm ($ 30.2 mm) is payable at closing, Ivanhoe said. It said the assets will allow it to apply the first commercial application of its proprietary heavy-oil upgrading technology in a major, integrated heavy-oil project.

Ivanhoe said that, based on an evaluation of the Talisman leases by independent reservoir engineers, "two of the three leases are estimated to contain, on a best estimate basis, approximately 294 mm barrels of contingent bitumen resources."
Ivanhoe said it will first use its heavy-oil technology on a lease near Fort McMurray, a lease it said is capable of between 30,000 and 50,000 bpd of oil. Under the deal with Talisman, that company will retain back-in rights of up to 20 % in all of the acquired leases for a period of three years, Ivanhoe said. During that period, Talisman will also have the right of first offer to acquire participation interests in heavy oil projects in Alberta that Ivanhoe sells, excluding the acquired leases.

"In addition, in order to allow Talisman to effectively monitor the commercial effectiveness of Ivanhoe's HTL technology, Ivanhoe and Talisman will sign an HTL Data Monitoring Agreement," it said.
Ivanhoe said its proprietary upgrading process "converts heavy oil to a transportable, partially upgraded synthetic crude oil and converts the upgrading by-products to onsite energy." The company says that its process "frees the heavy oil producer from the need to purchase diluent for transport, significantly eliminates the need to purchase natural gas to steam the reservoir, and allows the producer to capture the majority of the heavy oil-light oil value differential."