Ivanhoe Energy Reports First Quarter 2012 Financial Results
Critical Projects Continue to Advance
Note: All figures are quoted in U.S. dollars unless otherwise noted.
CALGARY, May 10, 2012 /PRNewswire/ – Ivanhoe Energy Inc. (TSX: IE; NASDAQ:
IVAN) is reporting today its financial results and operating highlights
for the first quarter of 2012.
In the first quarter, Ivanhoe Energy started drilling the exploration
well in Ecuador, conducted seismic and took further steps in the
process to achieve regulatory approval for Tamarack, made progress in
establishing an HTL(TM) mid-stream partnership with Coban for the Republic of Guatemala,
conducted further testing in Mongolia and advanced previously disclosed
corporate development activities. All of these activities are critical
to building long-term shareholder value.
First Quarter Financial Summary
Ivanhoe Energy filed its quarterly financial report on Form 10-Q with
the Securities and Exchange Commission and its Interim Financial
Statements with the Canadian Securities Administrators for the period
ended March 31, 2012.
Threemonths (US$000s, except per share amounts) endedMar. 31, (unaudited) 2012 2011 Oil revenue 7,908 8,119 Net loss (10,662) (11,126) Net loss per share, basic and diluted (0.03) (0.03) Cash flow used in operating activities (6,892) (7,008) Capital investments 8,925 13,815 Cash and cash equivalents (end of period) 42,260 80,798 Restricted cash 20,500 -
In the first quarter of 2012, the Company posted a net loss of $10.7
million, as compared to $11.1 million net loss in the same period of
2011. This decrease in 2012 is mainly attributable to lower general
and administrative expenses.
Capital Expenditures, General and Administrative Expenses
The following summarizes the strategic investments made in the first
quarter to progress priority projects:
-- Pungarayacu IP-17 drilling expenditures were $5.4 million; -- Tamarack expenditures were $2.1 million for ongoing engineering activities, stakeholder engagement, and 2-D seismic acquisition and interpretation; and, -- Zitong related expenditures were $0.4 million, in preparation for 160 square kilometres of 3-D seismic to be completed in Q2 2012 and other related activities.
G&A expenses for the Company were $2.9 million lower in the three months
ended March 31, 2012, than in the comparable period of 2011. The
reduction is primarily due to $2.5 million in accruals in the first
quarter of 2011 that did not occur in 2012.
Liquidity and Capital Resources
Ivanhoe Energy is focused on enhancing its financial liquidity through
various corporate development initiatives. In the first quarter the
Company established a $50 million short-term secured credit agreement
that consists of an initial tranche of $30 million that is fully
underwritten by UBS AG, Canada Branch. The loan will mature after 12
months and includes an accordion feature which allows the Company to
increase the total amount by up to an additional $20 million, should
that be required.
Pungarayacu – Ecuador
In the first quarter the Company began drilling IP-17, a well that is
testing the potential of lighter oil resources in the southern portion
of Block 20. Success with this well could prove beneficial for
blending purposes with the heavier oil in the Block and improve overall
project economics. Drilling continues; however slower than planned due
to challenges in the Chapiza formation. Target depth for the well is
8,500 ft., and results are anticipated by mid-2012.
Tamarack – Canada
In the first quarter the Company conducted a 2-D seismic program over
the Tamarack lease, focused specifically on the areas where drilling
will occur in Phase 1 of the project. This data will support the
regulatory application and well path planning. Additionally,
significant work was completed to advance stakeholder relations. As is
customary, regulators have provided the second round of Supplemental
Information Requests (SIR’s) and the Company will provide responses to
this round of questions within the next two months.
Zitong – China
To satisfy the terms of the Supplementary Agreement, the Company is
currently conducting a 160 sq. km. 3-D seismic program over the two
largest structures on the Block, which will be completed by the end of
Nyalga – Mongolia
Cutting samples recovered from the second well drilled in east-central
Mongolia at the end of 2011 were sent for testing to two separate
laboratories to determine the oil quality within the reservoir.
Contracts have been tendered to conduct the necessary completion and
testing services on this well; however, completion operations are
contingent on the results obtained from the analysis.
Ivanhoe Energy is an independent international heavy oil exploration and
development company focused on pursuing long-term growth in its
reserves and production using advanced technologies, including its
proprietary heavy oil upgrading process (HTL(TM)). Core operations are in Canada, United States, Ecuador, China and
Mongolia, with business development opportunities worldwide. Ivanhoe
Energy trades on the Toronto Stock Exchange with the ticker symbol IE
and on the NASDAQ Capital Market with the ticker symbol IVAN.
For more information about Ivanhoe Energy Inc. please visit www.ivanhoeenergy.com.
FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements, including
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include, but
are not limited to, statements concerning the potential benefits of
Ivanhoe Energy’s heavy oil upgrading technology, the potential for
commercialization and future application of the heavy oil upgrading
technology and other technologies, statements relating to the continued
advancement of Ivanhoe Energy’s projects, the potential for successful
exploration and development drilling, dependence on new product
development and associated costs, statements relating to anticipated
capital expenditures, the necessity to seek additional funding,
statements relating to increases in production and other statements
which are not historical facts. When used in this document, the words
such as “could,” “plan,” “estimate,” “expect,” “intend,” “may,”
“potential,” “should,” and similar expressions relating to matters that
are not historical facts are forward-looking statements. Although
Ivanhoe Energy believes that its 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 the Company’s
projects will experience technological and mechanical problems, new
product development will not proceed as planned, the HTL(TM) technology to upgrade bitumen and heavy oil may not be commercially
viable, geological conditions in reservoirs may not result in
commercial levels of oil and gas production, the availability of
drilling rigs and other support services, uncertainties about the
estimates of reserves, the risk associated with doing business in
foreign countries, environmental risks, changes in product prices, our
ability to raise capital as and when required, competition and other
risks disclosed in Ivanhoe Energy’s 2011 Annual Report on Form 10-K
filed with the U.S. Securities and Exchange Commission on EDGAR and the
Canadian Securities Commissions on SEDAR.
SOURCE Ivanhoe Energy Inc.