Ivanhoe Energy agrees to sell interest in LAK Ranch Project
  by: OilOnline
  Wednesday, October 25, 2006

Ivanhoe Energy Inc. intends to sell its interest in the LAK Ranch field in Weston County, Wyoming to its partner Derek Oil & Gas Corporation. After review of 3-D seismic results and pilot production, Ivanhoe Energy has determined that this project is not large enough to support a heavy oil upgrading facility based on Ivanhoe Energy's proprietary HTL upgrading technology and does not fit with the company's principal strategy of deploying capital to further the development of the HTL technology.

Ivanhoe Energy has reached an agreement to sell its interest in the LAK Ranch Project to Derek Oil & Gas for US$800,000, comprised of US$600,000 due at closing and US$200,000 to be paid through a 5% gross overriding interest on future production from the LAK Ranch Project. The 5% royalty arrangement will terminate once US$200,000 has been paid. The agreement is subject to the negotiation of definitive documentation and Ivanhoe Energy and Derek Oil & Gas board approvals.