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/C O R R E C T I O N from Source — Ivanhoe Energy Inc./

August 10, 2011

In TO561 transmitted at 08:17e today, a clerical error occurred in the
“Second quarter financial summary” section. The table’s header should have
read: “2011″ above the first and third columns and “2010″ above the second and
fourth columns. Corrected copy follows:

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 /PRNewswire-FirstCall/ – 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.

    Highlights
    -   In June the Company obtained broader and more extensive patent
        protection for its HTL(TM) intellectual property in Canada. This
        patent builds on and complements other issued and/or filed patents
        related to the core HTL(TM) technology and its petroleum
        applications. The portfolio includes the core patent, issued in the
        first quarter of 2011 related to the underlying HTL(TM) technology,
        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 expenditures.

    -   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 efforts.”

    Second quarter financial summary
    -------------------------------------------------------------------------
                                             Three months       Six months
                                                ended             ended
    (US$000s, except per share amounts)        June 30,          June 30,
    (unaudited)                              2011     2010     2011     2010
    -------------------------------------------------------------------------

    Net income (loss)                      (4,111)   9,259  (15,237)   2,454
    Net income (loss) per share, basic      (0.01)    0.03    (0.04)    0.01
    Net income (loss) per share, diluted    (0.01)    0.01    (0.04)   (0.05)

    Cash and cash equivalents (end of
     period)                              133,308  116,667  133,308  116,667
    Cash flow used in operating
     activities                            (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, consistent with $6.5 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,
potentially increasing the original oil in place associated with the Hollin
formation.

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 www.ivanhoeenergy.com, on EDGAR at
www.sec.gov or SEDAR at www.sedar.com.

————————————————————————-

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
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 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.

——

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.

Highlights

  • In June the Company obtained broader and more extensive patent
    protection for its HTL(TM) intellectual property in Canada. This patent builds on and complements
    other issued and/or filed patents related to the core HTL(TM) technology and its petroleum applications. The portfolio includes the
    core patent, issued in the first quarter of 2011 related to the
    underlying HTL(TM )technology, 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 expenditures.
  • 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
efforts.”

Second quarter financial summary

         
(US$000s, except per share amounts)

(unaudited)

Three months ended

June 30,

  Six months ended

June 30,

2010 2011   2010 2011
           
Net income (loss) (4,111) 9,259   (15,237) 2,454
Net income (loss) per share, basic (0.01) 0.03   (0.04) 0.01
Net income (loss) per share, diluted (0.01) 0.01   (0.04) (0.05)
           
Cash and cash equivalents (end of period) 133,308 116,667   133,308 116,667
Cash flow used in operating activities (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 www.ivanhoeenergy.com, on EDGAR at www.sec.gov or SEDAR at www.sedar.com.

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 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 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.


Source: newswire



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