Ivanhoe Energy commences drilling at Zitong-1 in China

Preparations for second well location underway

CALGARY, June 15 /CNW/ - Ivanhoe Energy Inc. (TSX: IE, NASDAQ: IVAN) today announced that Sunwing Energy Ltd., the company's wholly-owned subsidiary, has commenced drilling at Zitong-1 located in Sichuan Province, China's most prolific gas producing region. Sunwing is the operator of the 659,840-acre (1,031 square miles) gas exploration block in Sichuan, and it holds a 90 percent Contractor Interest in a Petroleum Contract with PetroChina Company Limited. Mitsubishi Gas Chemical Company of Japan holds the remaining 10 percent Contractor Interest.

Zitong-1 is targeting the Guan structure, a massive 70-square-kilometre structure in the centre of Sunwing's block in Sichuan. Zitong-1 will target tight gas in fractured formations using horizontal drilling and established, multi-stage fracing technologies similar to those that have led to enormous gas developments in various tight gas projects in North America. Each target in the Guan structure is estimated to have potential of 0.3 to 0.5 trillion cubic feet of natural gas.

Total depth of the Zitong-1 well is planned to be approximately 4,500 metres and it is expected to take up to six months to drill and test the well. Zitong-1 is expected to cost US$14.5 million to US$17.5 million which includes plans to drill, test and case the well.

Yixin-2 - second well to begin drilling in July

Preparations for Sunwing Energy's second well location, Yixin-2, in the Zitong block are also underway and Sunwing expects to commence drilling this well in July 2010. Yixin-2 is being drilled as a twin well of Yixin-1, a well drilled by Sunwing in 2007 that generated flow rates of up to 4.0 million cubic feet per day before being shut down due to certain equipment failures during the testing program. Yixin-2 will be directionally drilled to allow the second wellbore to be located within 67 metres of the Yixin-1 at total depth.

Gas targets in the range of 0.3 to 0.5 trillion cubic feet

While Zitong-1 and Yixin-2 are targeting structures with natural gas potential in the range of 0.3 to 0.5 trillion cubic feet, any gas test with a minimum flow rate of 0.7 mmcf/d for eight hours will allow Sunwing to declare a commercial discovery. According to the terms of its Petroleum Contract, upon declaration of a commercial discovery, Sunwing is permitted to develop any of the various previously drilled structures on the block. These structures were drilled without the benefit of current technology and Sunwing's ability to access these additional structures would significantly enhance the value of the Zitong block.

"This is clearly an exciting time for us given the high-impact potential of these wells," said Gerald Moench, President of Sunwing Energy. "Any drilling success will have the potential to dramatically change the growth profile for Sunwing and Ivanhoe Energy."

Sichuan is the oldest and one of the most prolific gas producing regions of China. Sinopec and PetroChina have made significant gas discoveries from the Xu2 formation in blocks adjacent to Sunwing's Zitong Block. Any gas produced in Zitong will be fed directly into an existing regional gathering and sales distribution system.

Ivanhoe Energy Inc. is an independent, international heavy oil development and production company focused on pursuing long-term growth in its reserves and production using advanced technologies, including its proprietary, patented heavy to light upgrading process (HTL(TM)). Core operations are in Canada, Ecuador, China and Mongolia, with business development opportunities worldwide. Ivanhoe's shares trade on the NASDAQ Capital Market with the ticker symbol IVAN and on the Toronto Stock Exchange under the symbol IE.

For more information about Ivanhoe Energy Inc. please visit our web site at 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, statements concerning the estimated quantities of gas in each target in the Guan structure, the planned total depth of the Zitong-1 well, the anticipated amount of time required for, and the estimated cost of, drilling, testing and casing the well, the schedule for commencement of drilling the Yinxin-2 well and other statements which are not historical facts. When used in this document, the words such as "could", "plan", "estimate", "anticipate", "intend", "may", "potential", "should", and similar expressions relating to matters that are not historical facts are forward-looking statements. Although Ivanhoe Energy and Sunwing Energy believe that their 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 possibility that the company will be unable to raise financing, the potential that the company's projects will experience technological and mechanical problems, 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 the reserves, the risk associates with doing business in foreign countries, environmental risks, changes in product prices, our availability to generate cash flow and raise capital as and when required, competition and other risks disclosed in Ivanhoe Energy's Annual Report on Form 10-K files with the U.S. Securities and Exchange Commission on EDGAR and the Canadian Securities Commissions on SEDAR.

For further information: David Dyck: 1 [phone]; Ian Barnett: 1 [phone]; Dorreen Miller: 1 [phone]; [email protected]