Ivanhoe Energy and Unocal to explore Texas Bossier trend on a 50/50 joint-venture basis
The following news release was issued by Ivanhoe Energy.
BAKERSFIELD, CA, Sept. 24 - Ivanhoe Energy and Unocal have agreed to explore for oil and natural gas in East Texas on a 50/50 joint venture basis. The companies plan to jointly drill Bossier Sand prospects located over approximately 46,000 gross (37,000 net) acres primarily in Henderson, Anderson and Freestone counties amassed primarily by Ivanhoe.
"Our extensive leasehold position offsetting the existing and highly successful Bossier Play gives Ivanhoe and Unocal an excellent opportunity to extend this play to the north and east," said David Martin, Ivanhoe Chairman. "Drilling in such an active oil and gas region provides the added benefit of existing infrastructure. Successful wells in this area can begin producing and generating sales revenues within a month or two of initial discoveries."
Unocal will become operator of the joint venture and will fund the drilling costs for the first several exploration wells to offset the $10 million in leasehold, seismic and processing costs incurred by Ivanhoe. After investment equilibrium is reached, the companies will share exploration and development costs equally. The first well in this program is expected to begin drilling in November 2001 and the transaction is subject to finalization of a joint-venture agreement.
The Bossier sand trend consists of multiple fields and multiple pay zones. Typical Bossier wells will produce between two and four million cubic feet of gas per day at an average depth of approximately 12,000 feet. Anadarko Petroleum, the area's largest operator, has drilled more than 300 Bossier wells, achieving a success rate of virtually 100 per cent. Drilling is expected to begin on Ivanhoe's and Unocal's Lone Star and Creslenn Ranch prospects. Following a successful exploration phase, Ivanhoe intends to project-finance its share of field development costs. Other companies participating in the Bossier trend include Apache, Gastar, Matador, Range Resources, Texaco and XTO Energy.
Ivanhoe Energy's mission is to create value for its shareholders, initially 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.
Forward-LOOKING STATEMENTS: This document includes forward-looking statements as well as historical information. Forward-looking statements include, but are not limited to, the continued advancement of Ivanhoe Energy's oil and gas drilling programs. When used in this document, the words "anticipate," "believe," "estimate," "expect," "intent," "may," "project," "plan" "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 Ivanhoe's oil and gas drilling will experience technological and mechanical problems, fluctuations in oil and gas prices, the ability to implement corporate strategies, the ability to obtain financing and other risks disclosed in our registration statement on Form 10-K filed with the U.S. Securities and Exchange Commission, a copy of which may be viewed on our website at www.ivanhoeenergy.com.
Updated: September 2001