VANCOUVER, Dec. 16 /PRNewswire-FirstCall/ - Ivanhoe Energy (USA) Inc., a
subsidiary of Ivanhoe Energy Inc. (NASDAQ: IVAN and TSX: IE, IE.U), and
Ecopetrol S.A. (Ecopetrol) have signed a memorandum of understanding (MOU) for
a study of the heavy crudes from the large Castilla and Chichimene Oil Fields
in Colombia.
    In the initial step Ivanhoe will run tests on the two heavy crudes to
determine the value that could be added to these fields using Ensyn Petroleum
International Ltd.'s (Ensyn) RTP(TM) heavy-to-light oil (HTL) conversion
technology. On December 13, 2004 Ivanhoe announced the acquisition of Ensyn
Group Inc. and, through this acquisition, the acquisition of the 85% of Ensyn
Petroleum it did not already own.
    The RTP(TM) technology processes low value heavy oil, which is a viscous,
tar-like crude oil that does not flow well and is difficult to extract and
transport. RTP(TM) upgrades this oil in the field into lighter, more valuable
oil at lower costs and with smaller plants than conventional technology. The
upgraded oil, similar to conventional light crude oil, is easier to transport
and obtains a higher price at market. In addition, a RTP(TM) facility yields
large amounts of surplus energy for the production of steam and electricity
for on-site use.
    Leon Daniel, Ivanhoe's President and CEO, said, "After the recently
announced agreement related to the acquisition of Ensyn, we are very pleased
to announce another initiative based on Ensyn's leading-edge RTP(TM)
technology. The RTP(TM) heavy-to-light oil conversion technology has the
potential to significantly increase the volume and value of the production
from these heavy oil fields. This study is another important step toward
achieving our objective of utilizing new technologies to increase oil
production and reserves, and leverages the considerable successful experience
that our management team has in developing major projects in Colombia."
    The two oilfields are about 75 miles by paved road southeast of Bogota in
the Central Llanos Basin. This region is an active oil producing area and the
Castilla and Chichimene fields have successfully been producing oil since the
1970's.
    Ecopetrol S.A., formerly Empresa Colombiana de Petroleos, is a public
company with 100% of its shares currently owned by the Colombian State.
Ecopetrol is exclusively devoted to search for, produce, transport, store,
refine and market hydrocarbons and is the fourth largest national oil company
in Latin America. Gross oil production in 2003 by Ecopetrol and its associates
was 541,000 barrels per day, and year-end reserves were over 1.5 billion
barrels.
    Ivanhoe Energy trades on the NASDAQ SmallCap market with the ticker
symbol IVAN and on the Toronto Stock Exchange (TSX) with the symbol IE. On the
TSX, Ivanhoe Energy is listed and traded in both Canadian and U.S. dollars.
The U.S. dollar trading symbol on the TSX is IE.U.

    FORWARD-LOOKING STATEMENTS: This document includes forward-looking
statements. Forward-looking statements include, but are not limited to,
statements concerning general industry and market conditions, fluctuations in
oil and gas prices, dependence on new product development, statements relating
to the continued advancement of Ivanhoe Energy's projects, 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 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
Ensyn process to upgrade bitumen and heavy oil may not be commercially viable,
geological conditions in the reservoir may not result in commercial levels of
oil and gas production, the risk associated with doing business in foreign
countries, changes in product prices and other risks disclosed in Ivanhoe's
Annual Report on Form 10-K filed with the U.S. Securities and Exchange
Commission.

    RESERVES DATA AND OTHER OIL AND GAS INFORMATION: Ivanhoe's disclosure of
reserves data and other oil and gas information is made in reliance on an
exemption granted to Ivanhoe by Canadian securities regulatory authorities,
which permits Ivanhoe to provide disclosure in accordance with US disclosure
requirements.

    The information provided by Ivanhoe may differ from the corresponding
information prepared in accordance with Canadian disclosure standards under
National Instrument 51-101 (NI 51-101). Further information about the
differences between the US requirements and the NI 51-101 requirements is set
forth under the heading "Reserves, Production and Related Information" in
Ivanhoe's Annual Report on Form 10-K.

Link to this page: