Ivanhoe Energy Inc. reports a significant gas discovery at Sunwing's Yixin-2 well in Southwest China.

Gas from the well flowed at rates of up to 13 million cubic feet per day, and averaged 9 to 10 million cubic feet per day during the initial 24-hour test period. Gas is flowing from the Xu-4 Formation, a well established gas-producing formation in the region.

'We're very pleased with these initial flow rates,' Mr. Dyck said. 'The rates recorded from the Xu-4 Formation demonstrate the discovery's strong potential and are incentive for Sunwing to continue with further development of the Xu-4 formation, and other structures in the Zitong Block.'

Following initial flow and pressure tests, the well has now been shut-in for pressure build-up.

Sunwing's 659,840-acre (1,031-square-mile) Zitong Block is in the Sichuan Province; the oldest and one of the most productive gas-producing regions in China. Sinopec and PetroChina have made significant gas discoveries from the Xu-2, Xu-4 and Permian formations in adjacent blocks.

'It has taken over ten years of perseverance and the application of industry-leading experience and know-how to reach this point,' said Mr. Friedland.

'Demand for natural gas in China is continuing to out-pace supply and now Sunwing Energy is in an excellent position to help supply this burgeoning market on very favourable commercial terms through an established collection and distribution system.'

Technical teams from Sunwing and PetroChina are working to develop a strategy to evaluate the Yixin structure, as well as the potential for further discoveries elsewhere on the Zitong Block.

Sunwing is the operator of the Zitong exploration block in Sichuan and holds a 90% Contractor Interest in a Petroleum Contract with PetroChina Company Limited. Mitsubishi Gas Chemical Company of Japan holds the remaining 10% Contractor Interest.

Tags: Ivanhoe Energy Inc.