Ivanhoe Energy's estimated oil sands resource increased by 81% at Tamarack Project in Alberta

--New independent estimates of 441 million barrels of recoverable oil would support a 50,000 barrel-per-day HTL (heavy-to-light) project

Robert Friedland, Executive Chairman, President and Chief Executive Officer, and Ed Veith, Executive Vice President, Upstream, of Ivanhoe Energy Inc. (TSX: IE; NASDAQ: IVAN), announced today that a recently completed evaluation by independent engineers has estimated that Ivanhoe Energy's Tamarack Project, in the Athabasca region of Western Canada, contains best-estimate contingent resources of 441 million barrels of bitumen. This represents an increase of 81% over the best estimate announced in conjunction with the purchase of this asset in mid-2008. The new estimate would support a project with an estimated capacity of approximately 50,000 barrels per day for more than 30 years.

Lease 10 was purchased from Talisman Energy Canada (Talisman) in mid 2008 and has been renamed the Tamarack Project. It is the proposed home for Ivanhoe Energy's first integrated HTL heavy-oil project in Canada. Tamarack is a 6,880-acre contiguous block located approximately 10 miles (16 km) northeast of Fort McMurray, immediately south of Suncor's operating Steepbank and Millennium projects. The block adjoins leases held by ExxonMobil, Laricina Energy and E-T Energy. Ivanhoe Energy holds a 100% working interest in Tamarack and Talisman has back-in rights of up to 20% in Tamarack for a period ending in mid-2011.

At the time of the purchase, Ivanhoe Energy reported in its July 11, 2008, news release that independent reservoir engineers engaged by Talisman had estimated that Lease 10 contained best-estimate contingent resources of approximately 244 million barrels of bitumen, with low and high estimates of approximately 188 million and 313 million barrels, respectively.

The new Tamarack evaluation was conducted by GLJ Petroleum Consultants Ltd. (GLJ), independent reservoir engineers. This GLJ report follows significant analysis carried out by Ivanhoe Energy since the mid-2008 acquisition, including a) a detailed core description completed by Norwest Corporation, b) a petro-physical model developed and matched to the core data, and c) a facies analysis carried out and compared with analogue field performance data.

The new evaluation of Tamarack by GLJ estimates that Tamarack contains best-estimate contingent resources of approximately 441 million barrels of bitumen, with low and high estimates of approximately 320 million and 558 million barrels respectively, out of approximately 1.1 billion barrels of discovered petroleum initially-in-place.

Based on these recent estimates of contingent bitumen resources by GLJ, Tamarack ultimately would be capable of producing 50,000 barrels per day for more than 30 years.

Tamarack Reservoir Quality --------------------------

Ivanhoe Energy previously has reported that the information available suggested that Tamarack was believed to be a high-quality reservoir and an excellent candidate for thermal recovery production using the SAGD (steam-assisted gravity drainage) process. This view was based on a relatively high level of delineation of four wells per section.

The additional analysis carried out over recent months has provided Ivanhoe Energy with additional confidence of the high-quality nature of the Tamarack resource. Ivanhoe Energy believes Tamarack's reservoir characteristics are similar to those of Petro-Canada's nearby MacKay River project, situated across the Athabasca River from Tamarack. MacKay River is acknowledged to be one of the most successful and longest-running SAGD projects in the Athabasca oil sands.

Tamarack Schedule -----------------

Ivanhoe Energy has assembled an experienced, Calgary-based thermal heavy-oil team and is preparing the regulatory application for an integrated HTL project. The Company anticipates filing the regulatory application in mid-2010, after final delineation drilling in the winter of 2009-2010. The Company's current plan is to file an application for a multi-phase project ultimately capable of producing approximately 50,000 barrels per day (bitumen basis), with an initial Phase 1 capable of producing 20,000 barrels per day.

Tamarack Economics ------------------

The sharp decline in oil prices during the past six months has been accompanied by significant declines in steel prices and other relevant capital costs. Ivanhoe Energy has been working diligently with its banking and engineering advisors to evaluate the net impact of these market changes on the projected economics of the Tamarack Project.

These studies are ongoing, but progress to date suggests that an integrated HTL Tamarack Phase 1 could be developed in a low-oil-price/low-capital-cost environment that could provide after-tax, mid-teen percentage rates of return. These potential economics are enabled by the expected benefits of field-located, HTL integration. A project with reasonable economics anchored in a low-oil-price/low-capital-cost environment would benefit strongly from any recovery in oil prices in the future.

Tamarack & Environmental Advantages of HTL ------------------------------------------

Ivanhoe Energy previously has reported on internal and external studies confirming the advantages of its field-located HTL upgrading approach with respect to greenhouse-gas emissions. The Company has continued to develop these studies, and is working with independent parties to rigorously calculate the expected total life-cycle greenhouse-gas impact and compare integrated HTL with conventional production schemes. These studies suggest the integrated, HTL field-located upgrading approach emits significantly less greenhouse gas than conventional "naked" SAGD methods that do not upgrade on site. Once these various studies are completed, the Company will report on them and will make them available on its corporate website.

Financing Tamarack ------------------

Capital requirements for Tamarack during the balance of 2009 are relatively low. Near the end of the year, the Company will award contracts for the final delineation-drilling program scheduled to take place in January and February 2010. This drilling program will be accompanied by increased expenditures for infrastructure commitments and engineering.

Financing plans for Tamarack include alliances or other arrangements with entities with the resources to support the Company's major projects. These discussions are focused primarily on national oil companies and other sovereign or government entities from Asian and Middle Eastern countries that have approached the Company and expressed interest in participating in Tamarack and/or the Company's other heavy-oil project in Ecuador, or other projects that the Company has identified around the world.

Discussions and/or due diligence with potential strategic partners for Tamarack are under way. These strategic-partnership initiatives would complement traditional financing, such as project financing, debt and mezzanine financing, or the sale of equity securities.

STATEMENTS CONCERNING RESOURCES. Cautionary Note to U.S. Investors: The Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this news release, such as contingent bitumen resources and discovered petroleum initially-in-place, which the SEC's guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to also consider closely the disclosure in our Form 10-K for the fiscal year ended December 31, 2008, available from our website. You also can obtain this form from the SEC website at www.sec.gov.

The determination of oil and gas resources involves the preparation of estimates that have an inherent degree of associated risk and uncertainty. The estimation and classification of resources requires the application of professional judgment combined with geological and engineering knowledge to assess whether specific classification criteria have been satisfied. Statements in this news release concerning "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, of the ability to produce in the future the resources described. Actual resources and, if commenced, future production will differ from the estimates provided herein, and the difference may be significant.

Except for volumes described as "discovered petroleum initially-in-place," all bitumen resource volumes referred to in this news release have been classified as "contingent resources" within the meaning of the Canadian Oil & Gas Evaluation Handbook (COGE Handbook). The term "contingent resources" is defined in the COGE Handbook as those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. It is appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. Contingent resources are further classified in accordance with the level of uncertainty associated with the estimates and may be subclassified based on project maturity and/or characterized by their economic status.

Estimates of resources, which always involve uncertainty, are quoted herein as a range according to the level of confidence associated with the estimates. The "best estimate" is considered to be the best estimate of the quantity of bitumen resources that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. The "low estimate" is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. The "high estimate" is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate.

The contingencies that currently prevent the contingent resources referred to herein from being classified as reserves are a lack of regulatory approval, the absence of a firm development plan, and the uncertainty of funding approval for development. There is no certainty that it will be commercially viable to produce any portion of the contingent resources referred to in this press release.

The term "discovered petroleum initially-in-place" is equivalent to discovered resources, and is defined in the COGE Handbook to mean that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of discovered petroleum initially-in-place includes production, reserves, and contingent resources; the remainder is unrecoverable.

The reference herein to production levels at Petro-Canada's MacKay River project is based on publicly available information. The reference herein to the similarity between the Tamarack reservoir characteristics and those of the MacKay River project is based on Ivanhoe's internal assessment.

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 Ivanhoe Energy's plan to establish its first integrated HTL heavy-oil project on Lease 10, the anticipated production capacity of the proposed HTL plant, the anticipated quantities of recoverable barrels of bitumen from lease 10, barrels of oil initially-in-place, the potential greenhouse gas reductions through the use of HTL field upgrading, the potential for developing a Phase 1 project in a low oil price/low capital cost environment with any expected rate of return, 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 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, samples from the Athabasca bitumen test may not have the product qualities anticipate, 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.