Ivanhoe Energy

Capex

Future Plans

Company Restructure

In March 2008, the company announced Robert Friedland is assuming the leadership of Ivanhoe Energy Inc. and will serve as Executive Chairman and Chief Executive Officer to guide the company through a major corporate and management restructuring in preparation for the implementation of multiple, full-scale, commercial HTL(TM) heavy-oil projects in Canada and internationally.

The restructuring is planned to enhance Ivanhoe Energy's pursuit of its central mission to develop heavy-oil assets using its proprietary, HTL (Heavy-to-Light) oil-upgrading technology.

As part of the reorganization, Ivanhoe Energy will establish a number of geographically focused, self-funding entities. The parent company Ivanhoe Energy Inc. will aggressively pursue HTL opportunities in the Athabasca Oil Sands of Western Canada and will hold and manage the core HTL technology. Two new subsidiaries will be established, one for Latin America and one for the Middle East & North Africa, complementing Sunwing Energy Ltd., Ivanhoe Energy's existing, wholly owned company for China. David Martin will lead the subsidiary for Latin America as Chairman and CEO, and Leon Daniel will lead the subsidiary for the Middle East & North Africa as Chairman and CEO. Ivanhoe Energy Inc. initially will own 100% of each of these subsidiaries, although the percentages would be expected to decline as they develop their respective businesses and independently raise capital.

This structure will allow the development and financing of multiple HTL projects around the world, while minimizing dilution of Ivanhoe Energy's existing shareholders. This is in response to very significant heavy-oil opportunities Ivanhoe Energy has identified in Latin America, the Middle East and North Africa. Ivanhoe Energy's senior management believes this approach enhances Ivanhoe's ability to organize and focus its existing resources and to build the dedicated teams required to execute these large projects. In addition, the geographical alignment will facilitate financing from region-specific strategic investors, some of which already have been identified, and also will enhance flexibility in accessing global capital markets.

In addition to the establishment of the new regional business units for Latin America and the Middle East and North Africa, Ivanhoe Energy will continue to build its HTL capabilities around two centres: Houston, Texas, and Calgary, Alberta.

Four key components of the Ivanhoe Energy Group

The restructuring will create four geographically focused entities:
Ivanhoe Energy Inc. TSX, NASDAQ
Sunwing Energy, China
Ivanhoe Energy, Latin America
Ivanhoe Energy, Middle East & North Africa

Ivanhoe Energy Inc. will focus on Canada, the United States and other areas not addressed by its subsidiaries. The primary emphasis will be on HTL heavy-oil opportunities in the Athabasca Oil Sands. This company will incorporate the core HTL technology team and will hold the HTL intellectual property on behalf of the organization. Ivanhoe Energy will pursue joint ventures with heavy-oil asset owners and the outright acquisition of heavy-oil assets. Ivanhoe Energy also will include Ivanhoe's existing US conventional oil and gas activities.

Sunwing Energy Ltd., Ivanhoe's wholly-owned company with existing conventional operations in China, will focus on HTL heavy-oil opportunities as well as conventional oil and gas opportunities in China and Southeast Asia, including the significant heavy-oil deposits in Indonesia.

Ivanhoe Energy Latin America will focus on HTL heavy-oil opportunities in Latin America. Management will be led by Mr. Martin as Chairman and CEO, and is expected to include selected Ivanhoe Energy personnel currently based in Bakersfield, California, who have extensive Latin American experience. Mr. Martin currently is Executive Co-Chairman of Ivanhoe Energy Inc. Mr. Martin and Mr. Daniel, who is Deputy Chairman of Ivanhoe Energy Inc. and is expected to be on the Board of Directors of this subsidiary, have more than 50 years of combined experience in negotiating and executing major oil and gas projects in Latin America, primarily during their careers with Occidental Petroleum. This includes the 1.2-billion-barrel Cano Limon field in Colombia, with the associated 500-kilometre pipeline across the Andes, the 30,000-barrel per day Alturitas field in Venezuela, and various projects in Ecuador and Peru.

Ivanhoe Energy Middle East & North Africa (MENA) will focus on HTL opportunities in those regions. In addition, this company will incorporate Ivanhoe Energy's Gas-to-Liquids (GTL) technology team and GTL intellectual property, and will continue to advance the GTL project in Egypt.

Strategic discussions for Ivanhoe Energy Middle East & North Africa have been initiated with investors based in the United Arab Emirates and other Middle Eastern countries, and potential projects have been identified across the region, including in Egypt, Libya, Iraq, Oman, Kuwait, Bahrain and Syria.

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