Ivanhoe Energy begins Bossier drilling program
The following news release was issued by Ivanhoe Energy.
BAKERSFIELD - Ivanhoe Energy (NASDAQ:IVAN and TSE:IE) along with its joint venture partner Unocal (NYSE:UCL), have started drilling the first well on their Bossier Trend acreage located in East Texas. The well, 1-Trinity Materials, is the first test planned for the Creslenn Ranch prospect located in Henderson County and is expected to take approximately one month to drill to a targeted depth of 12,000 feet. At that time, if results warrant, fracturing and testing operations should take an additional two to three weeks.
Since announcing the joint venture with Unocal in October, several prospects have been identified and the joint leasehold position has grown to approximately 48,000 gross acres in Henderson, Anderson and Freestone counties. The current drilling plan calls for up to four wells at the Creslenn Ranch prospect followed by two additional wells on a separate prospect in Freestone County. Unocal is operator and will invest $10 million toward initial drilling costs to offset the front-end exploration costs incurred by Ivanhoe. After investment equilibrium is reached, the companies will share exploration, development and infrastructure costs equally.
"With strengthening natural gas prices and proximity to existing infrastructure, our Bossier exploration program has the opportunity to provide meaningful, near-term growth in gas production and revenues," said Ivanhoe Chairman David Martin. "The Bossier play is a blanket sand with a high probability of success due to existing well control. Each of our prospects also contains valuable secondary objectives at shallower depths."
The Bossier 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 average depths of between 10,000 -12,000 feet. Anadarko, the area's largest operator, has drilled more than 300 Bossier wells, achieving a success rate of virtually 100 per cent. Following a successful exploration phase, Ivanhoe intends to project finance its share of field development costs. Other companies participating in the Bossier trend include Anadarko, 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.
Information contact: John MacDonald - 281-565-7486 or 713-725-9244
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 Annual Report 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: November 2001