Mongolia: Ivanhoe Energy drilling team mobilised on second planned test well in Mongolia.

David Dyck, President and Chief Operating Officer of Ivanhoe Energy, and Gerald Moench, President of Ivanhoe's wholly-owned subsidiary Sunwing Energy, announced that Ivanhoe's drilling team has begun moving the drilling rig to the site of the second exploration well in east-central Mongolia.

'Our drilling program was designed to advance our knowledge of Mongolia's Nyalga Basin, a highly prospective area with numerous potential structures that could be tested by drilling,' Mr. Dyck said. 'These initial wells are testing two different structures with diverse seismic characteristics.'

Mr. Dyck said testing has been completed at the first exploration well,N16-1E-1A, which was drilled to a depth of 2,003 metres. The first well has been plugged and abandoned and the rig disassembled for mobilization. 'While the testing of our first well did not encounter oil shows in the reservoir, it has provided vital information that we are combining with our seismic data to help guide our continuing drilling program.'

The second well is on an 8 sq km structure approx. 12 kms from the first well. Drilling of the second well is expected to begin by the end of this month toward a target depth of approx. 2,500 metres.

Ivanhoe and Sunwing are preparing to spud their second well in Nyalga Basin Block XVI

'Mongolia in general, and the Nyalga Basin in particular, is in the early days of oil exploration, requiring a great deal of study to understand its full potential. We remain optimistic that our exploration efforts will enable the discovery of oil resources at our Mongolian project,' Mr. Dyck added.

Sunwing Energy is party to a Production-Sharing Contract with the Mongolian Government for Block XVI, a 12,679-sq-km area that encompasses the Nyalga Basin and is adjacent to the north-south Trans-Mongolian Railway.

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Source: Ivanhoe Energy