Robert Friedland, Executive Co-Chairman, President and CEO of Ivanhoe Energy Inc., and David Martin, Chairman, President and CEO of Ivanhoe Energy Latin America Inc., says that Ivanhoe Energy Ecuador Inc. intends to initiate drilling operations in the coming days on its first appraisal well in the Pungarayacu field in Ecuador.

This follows completion of final infrastructure preparations, including construction of a three-kilometre access road to the well-site. These works were carried out under the supervision of Ecuador's Ministry of the Environment.

The drill site, known as well IP-15, is located towards the north end of Ivanhoe Energy's Block 20, near the town of Archidona. The well is expected to be drilled to approximately 1,300 feet (400 metres), followed by an extensive coring, logging and testing program, which is slated to continue into January 2010. This testing program may include thermal testing and artificial lift techniques. This well is expected to confirm the nature of the reservoir and the characteristics of the oil, as well as proposed production methodologies.

Ecuador considers Pungarayacu to be the country's largest known, single accumulation of hydrocarbon resource. The project is based on the exploration and development of the 426-square-mile Block 20, located approximately 125 miles southeast of Quito. Block 20 contains the Pungarayacu heavy oil field, covering approximately 250 square miles that was discovered and partially delineated in the 1980s by Petroecuador. A Specific Service Contract between Ivanhoe Energy Ecuador and Petroecuador and Petroproduccion was signed on October 8, 2008, in a ceremony in Quito. The 30-year contract allows Ivanhoe Energy to explore, develop and produce oil throughout Block 20.

Tags: Ivanhoe Energy Inc.