Ivanhoe Energy successfully commissions its new Feedstock Test Facility for heavy-oil upgrading

<< Engineering underway for full-scale HTL commercial plants for Ivanhoe projects in Canada and Ecuador >>

Dr. Michael A. Silverman, Executive Vice President, Technology, of Ivanhoe Energy Inc. (TSX: IE; NASDAQ: IVAN), today announced the successful commissioning of the new Feedstock Test Facility (FTF) for the company's proprietary technology for field upgrading of heavy oil to light oil (HTL).

The state-of-the-art HTL testing facility will be used by Ivanhoe Energy in coming years to support detailed engineering and design of commercial-scale HTL plants for Ivanhoe Energy's Tamarack Project in Alberta, Canada, and Pungarayacu Project in Ecuador, and to test crudes associated with additional potential HTL projects.

The FTF was installed at Southwest Research Institute (SwRI) in San Antonio, Texas, last December. SwRI is a world-class technology center that operates testing facilities for numerous leading oil companies, as well as other technology-intensive organizations such as NASA, the Department of Energy and the Department of Defense.

The FTF is a very close analogue to a full-scale commercial HTL facility and is capable of operating under a wide range of conditions. The FTF is multi-purpose and will be used to:

    <<
    -  support the engineering and design of commercial HTL facilities for
       the Tamarack Project (Canada) and the Pungarayacu Project (Ecuador);
    -  generate commercial product for marketing;
    -  test heavy oil from additional target projects around the world;
    -  optimize and enhance the HTL process;
    -  generate new intellectual property and patents; and
    -  showcase HTL in a world-class location.
    >>

The FTF will supplant the 1,000 bpd Commercial Demonstration Facility (CDF) in Bakersfield, California, which has served its primary mission of proving that the HTL process can be scaled up to a commercial size.

The FTF processes whole, heavy crude oils with API's as low as 6. The unit has a) atmospheric and vacuum distillation columns, b) a reaction section, and c) the capability of recycling of unconverted bottoms to create an essentially bottomless, synthetic sour-crude product. The core proprietary hot section was designed to process pure vacuum bottoms with APIs as low as -2. The FTF processes 10-15 bbl/day of heavy oil on a continuous basis.

Designed by Ivanhoe Energy and constructed by Zeton Corporation at its headquarters in Burlington, Ontario, Canada, the FTF unit was built in four discreet modules and shipped to Southwest Research Institute in September 2008. The first oil was processed in the third week of December. Routine operation is expected to commence in early April 2009.

In addition to the newly commissioned FTF, Ivanhoe's technology group is executing the first commercial-scale HTL basic engineering design, along with Ivanhoe's Tier 1 contractor, AMEC U.K. This design is for a 20,000 bpd Athabasca bitumen plant at Ivanhoe's Tamarack property in Alberta. The basic engineering is 50% complete and will be followed by front-end engineering and a +20%/-15% Class III capital cost estimate.

Team Leaders of the HTL technology group

Operation of the FTF in San Antonio will be supervised by Ivanhoe Energy's HTL technology group in Houston, whose senior staff members are:

    <<
    -  Dr. Silverman, Executive Vice President, Technology. Dr. Silverman
       has almost 30 years of experience in technology development and
       management, including the commercialization and marketing of new
       technologies, and is a leading expert in fluid catalytic-cracking
       processes. Prior to joining Ivanhoe Energy, he held senior technology
       positions for 20 years as Vice President with KBR Inc. and was a
       Director at Shaw Stone & Webster Engineering.

    -  Jim G. Pelham, Vice President, Engineering. Mr. Pelham has more than
       34 years of experience in engineering and technology at ConocoPhillips
       and Mobil Oil in the U.S., as well as significant international
       experience. Most recently, he was located in Bartlesville, Oklahoma,
       as the Director of Oil Shale for ConocoPhillips. Mr. Pelham has broad
       experience in process design, refinery processes, infrastructure
       development, business development, refinery operations and technology
       development and commercialization.

    -  Stephen R. Pavel, Director, HTL Technology. Mr. Pavel has more than
       30 years of experience in developing oil refining technologies,
       including senior positions at Coastal Corporation, Total Petroleum and
       the Strategic Petroleum Reserve. Mr. Pavel is responsible for all HTL
       technology activities and works closely with the engineering team
       members at Ivanhoe Energy's various locations. Steve has had extensive
       experience in fluid catalytic-cracking modeling and process
       development and has overall responsibility for the FTF.
    >>

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, the anticipated production capacity of proposed HTL plants. 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 believes that its 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 in the future for any of its projects or to repay acquisition financing interest or principal, the potential that the company's projects will experience technological and mechanical problems, new product development will not proceed as planned, the HTL technology to upgrade bitumen and heavy oil may not be commercially viable, market acceptance of the HTL technology may not be as anticipated, Ivanhoe Energy's lack of history in developing commercial HTL opportunities, 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 associated 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 filed with the U.S. Securities and Exchange Commission on EDGAR and the Canadian Securities Commissions on SEDAR.

SOURCE: Ivanhoe Energy Inc.

Investors Contact: Ian Barnett, (647) 203-6588; Bill Trenaman, (604) 688-8323; Media Contact: Bob Williamson, (604) 688-8323; Website: www.ivanhoeenergy.com