August 10, 2011

Ivanhoe Energy reports second quarter 2011 financial results and operating highlights

Focuses on execution, HTL(TM) patent extensions, convertible debt financing

Note:  All figures are quoted in U.S. dollars unless otherwise noted.

CALGARY, Aug. 10, 2011 /PRNewswire/ - Ivanhoe Energy Inc. (TSX: IE; NASDAQ:
IVAN) today reported financial results and operating highlights for the
second quarter of 2011. Ivanhoe Energy has filed its quarterly
financial report on Form 10-Q with the United States Securities and
Exchange Commission and its Interim Financial Statements with the
Canadian Securities Administrators for the period ended June 30, 2011.


        --  In June the Company obtained broader and more extensive patent
            protection for its HTLTM intellectual property in Canada. This
            patent builds on and complements other issued and/or filed
            patents related to the core HTLTM technology and its petroleum
            applications. The portfolio includes the core patent, issued in
            the first quarter of 2011 related to the underlying
            HTLTMtechnology, which expires in 2028.
        --  The Company announced that heavy crude oil extracted from its
            IP-5B well in the Pungarayacu field in Block 20 in Ecuador was
            successfully upgraded to local pipeline specifications using
            the Company's proprietary HTL upgrading process.
        --  The Company issued Cdn$73.3 million of convertible unsecured
            subordinated debentures, maturing on June 30, 2016.  A portion
            of the proceeds were used to repay a promissory note due to
            Talisman Energy Canada. The remaining balance of the funds
            raised will be used for ongoing capital and operating
        --  Revenues were $9.5 million in the second quarter of 2011
            compared to $6.1 million in the second quarter of 2010 due to a
            combination of stronger realized commodity prices and increased
            production. Higher volumes were allocated to Ivanhoe Energy for
            reimbursement of capital expenditures incurred at Dagang.
        --  In the second quarter of 2011, $6.5 million in cash flow was
            used in operations, consistent with $6.3 million of cash flow
            used in operations during the second quarter of 2010.
        --  The net loss for the second quarter of 2011 was $4.1 million
            compared to net income of $9.3 million for the second quarter
            of 2010, as a result of higher operating and general
            administrative expenses as well as lower non-cash foreign
            currency exchange and derivative instrument gains.
        --  General and administrative expenses were $11.7 million in the
            second quarter of 2011 compared with $9.1 million in the second
            quarter of 2010. The year-over-year increase stemmed from
            higher staff numbers associated with the Quito office build-out
            and our drilling operations in Sunwing, contract engineering
            work related to Ivanhoe's HTL technology and financing fees
            incurred in the recent Convertible Debentures issuance.
        --  The Company's cash and cash equivalents balance at June 30,
            2011 was $133.3 million, which will be used to continue
            advancing Ivanhoe's ongoing projects in Canada, Ecuador, China
            and Mongolia.

"During the quarter we continued to prudently position Ivanhoe Energy to
advance our heavy oil and conventional oil and gas projects," said
President and Chief Operating Officer, David Dyck.

"In particular, the Company enhanced the intrinsic value of our
heavy-to-light (HTL) upgrading technology by successfully testing it on
Ecuadorian heavy crude and by securing patent protection to 2028 in key
jurisdictions.  We also put in place attractive new convertible debt
financing to underwrite our operations and business development

Second quarter financial summary


                                   Three months ended   Six months ended
    (US$000s, except per share          June 30,            June 30,
    (unaudited)                      2010      2011        2010     2011


    Net income (loss)              (4,111)      9,259   (15,237)    2,454

    Net income (loss) per share,    (0.01)       0.03     (0.04)     0.01

    Net income (loss) per share,    (0.01)       0.01     (0.04)   (0.05)


    Cash and cash equivalents (end 133,308    116,667    133,308  116,667
    of period)

    Cash flow used in operating    (6,455)    (6,276)   (13,464) (11,707)


    Oil revenue                      9,389      6,047     17,508   11,377

    Capital expenditures            17,420     12,877     31,235   36,375

Oil revenue totalled $9.4 million in the second quarter of 2011 compared
with $8.1 million in the first quarter of 2011. This increase was due
to a combination of higher production volumes and stronger realized
prices.  Cash flow used in operating activities was $6.5 million during
the second quarter of 2011 compared to $6.3 million in the first
quarter of 2011. In the second quarter of 2011, capital investments
increased to $17.4 million compared to $14.3 million in the first
quarter of 2011.

Liquidity and Capital Resources

Ivanhoe Energy's cash and cash equivalents were $133.3 million at June
30, 2011. These funds will be allocated to both capital and operating
activities that advance Ivanhoe's project initiatives as well as
business development efforts to the point where appreciative valuation
milestones are recognized by independent parties.

CDN$73 million convertible debt financing

On June 9, 2011, the Company issued Cdn$73.3 million in 5.75%
convertible unsecured subordinated debentures ("the Debentures") at a
price of $1,000 per debenture. At the holder's option, the debentures
may be converted into common shares of Ivanhoe Energy prior to June 30,
2016, the maturity date, and the business day immediately preceding the
date specified by Ivanhoe Energy for redemption of the debentures. The
conversion price will be Cdn$3.36 per share, subject to adjustment in
certain circumstances. The proceeds were used to repay a Cdn$40 million
promissory note to Talisman Energy Canada with the balance to be used
for ongoing capital and operating expenditures.

Subsequent events

Zitong Block

Ivanhoe's wholly-owned subsidiary, Sunwing Energy, submitted the
Provisional Overall Development Plan to the Joint Management Committee
and PetroChina on June 30, 2011.  As communicated in Ivanhoe's press
release on June 15, 2011, this plan includes the acquisition of 3D
seismic and the drilling of horizontal wells on the Block that will
include multistage fracture stimulation. The Company is currently in
discussions with PetroChina on final details of the Plan.   This plan
is to be conducted over the next 24 months.

Both the Yixin 2 and Zitong 1 wells have completed their respective long
term built up tests and the down hole recorders have been recovered and
the wells shut-in and secured.  Data collected from these recorders has
been delivered to contracted third-party tight gas experts to conduct
detailed analysis and modeling of reservoir parameters and potential
completion and stimulation techniques to assist the Company in
developing exploitation programs on the Zitong Block.

Mongolia Block XVI

Sunwing is currently mobilizing the drilling equipment and supplies to
N16-1E, its first exploratory drill site on Nyalga block XVI, which
will be drilled on a structure approximately 32 sq km in size and to an
approximate depth of 2500m. As of this date, the drilling rig is more
than 75 percent assembled.  Remaining minor drilling preparations will
continue over the next few weeks, followed by the spud of Sunwing's
first exploration well in Mongolia. Drilling of the well will take
approximately 30 days, with completion and testing to be carried out as
required.  The Company intends to drill two wells initially, with the
option to drill up to three additional wells, and remains optimistic of
the potential to find oil resources in Mongolia.

Ecuador Seismic Program

As communicated in Ivanhoe's June 15, 2011 news release, Ivanhoe's
wholly-owned Ecuadorian subsidiary commissioned a seismic program over
the southern part of the Pungarayacu Block.  The first phase of this
program is now complete and analysis is still underway.  Early
interpretation is encouraging as it indicates deeper faulting, with the
potential to trap lighter oil resources which could prove beneficial
for blending purposes and overall project economics. Additionally,
initial internal interpretations may also suggest an extension of the
field beyond what was originally estimated.

This news release summarizes the Company's 2011 second quarter results
of operations and financial condition and should be read in conjunction
with its Quarterly Report on Form 10-Q for the period ended June 30,
2011, which contains its unaudited condensed consolidated financial
statements and Management's Discussion and Analysis of Financial
Condition and Results of Operations. The Form 10-Q was filed on August
9, 2011. Copies may be obtained from the Ivanhoe Energy website at, on EDGAR at or SEDAR at

Ivanhoe Energy is an independent international heavy oil development and
production 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 symbol IE and on
the NASDAQ Capital Market with the ticker symbol IVAN.

For more information about Ivanhoe Energy Inc. please visit

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 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 2010 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.