Ivanhoe Energy Completes Transfer of China's Zitong Block to Shell China

Ivanhoe Energy Completes Transfer of China's Zitong Block to Shell China 
The Company takes further steps on focused path to value creation 
Note: All figures are quoted in U.S. dollars unless otherwise noted. 
CALGARY, Dec. 27, 2012 /CNW/ - Ivanhoe Energy Inc. (TSX: IE; NASDAQ: IVAN) 
announced today that through its wholly-owned subsidiary Sunwing Zitong Energy 
(Sunwing), it has completed the previously announced transfer of the Company's 
participating interest in the Contract for Exploration, Development and 
Production in the Zitong Block (Petroleum Contract) to Shell China Exploration 
and Production Co. (Shell). 
In exchange for Sunwing's interest in the Zitong Petroleum Contract, the 
Company will receive total pre-tax cash proceeds of $105 million. Initial 
pre-tax proceeds of approximately $96 million were delivered on closing. Per 
the terms of the transaction, the Company will receive two remaining 
components of the proceeds as follows: 


    --  the remaining portion of the $85 million recoverable past costs
        supported by the 2012 seismic program, once China National
        Petroleum Corporation (CNPC) completes its annual cost recovery
        audit for 2012 expenditures; and,
    --  $5.1 million representing a customary holdback of 5 per cent of
        gross proceeds payable in six months.

With the completion of the transaction, Shell will assume the obligations 
under the Supplementary Agreement and will replace the Company's performance 
bond with its own. As a result, the collateral for that performance bond, 
currently presented as restricted cash on the Company's balance sheet, will be 
released.

The closing of this transaction, and the recently closed divestiture of 
Pan-China Resources announced on December 17, 2012, will provide Ivanhoe 
Energy with available pre-tax working capital of $170 million. Within the 
next 30 days the Company will retire the $50 million bridge loan outstanding 
as well as the $10 million owed to Ivanhoe Capital. This will leave Ivanhoe 
Energy debt-free, other than the CAD$73 million convertible debentures which 
will mature on June 30, 2016.

"In 2012, Ivanhoe Energy has taken significant steps to focus the Company, and 
enhance our liquidity. We now have a healthy balance sheet, and in 2013 we 
will be focused on making substantial progress in the commercialization of our 
Heavy to Light (HTL) technology, and developing the Tamarack Project in Canada 
and Block 20 in Ecuador," said Carlos A. Cabrera, Ivanhoe Energy's Executive 
Chairman.

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 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, 
statements relating to the timing and amount of proceeds of agreed upon and 
contemplated disposition transactions, statements relating to anticipated 
capital expenditures, statements relating to the timing and success of 
regulatory review applications, 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, our ability to complete agreed upon and 
planned asset dispositions, 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.

Hilary McMeekin Manager, Corporate Communications (403) 817 1108 
hmcmeekin@ivanhoeenergy.com

SOURCE: Ivanhoe Energy Inc.

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CO: Ivanhoe Energy Inc.
ST: Alberta
NI: OIL MNA 

-0- Dec/27/2012 14:17 GMT


 
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