Libertyville, USA -- Nov 7, Pluvia Securities Research Continues Coverage of IVANHOE ENERGY (NasdaqSC:IVAN), at the current price, with a STRONG SELL/SHORTSELL Recommendation and a target price of under $1.00
IVAN STRONG SELL REPORT PART 1 of 3
IVAN - HISTORY OF FALSE AND MISLEADING PROMOTION
Beginning with IVAN’s most recent Press Release and going back to 1996, it would seem IVAN has seriously exaggerated their potential, particularly when they need to sell securites to investors, while consistently failing to execute any significant business plan.
1. Derek Oil. On November 6, 2003 IVAN’s PR stated:
“…the company has reached an agreement in principle with Derek Oil and Gas to jointly develop the LAK Ranch field… Current estimates are that between 30% and 70% of the field's 100 million barrels of oil-in-place may be recoverable using the thermal recovery…”
What it failed to disclose:
1. Previous exploration activities at the LAK Ranch Property had been conducted by Texaco, Conoco, Parent Oil, Mapco and Surtek – significant well funded industry leaders, several with significant “Enhanced Oil Recover” programs/expertise. All had passed on developing the property after significant exploration due to high drilling and development costs vs the low production per well. nafinance.com
2. Recovery of the “cold oil” was determined to be non-ecomomical without new enhanced recover technology, and by Derek’s own admission the Steam Assisted Gravity Drainage (“SAGD”), technology planned for the project was “unproven”. nafinance.com
3. Derek had used SAGD on 2 wells located at the LAK property beginning in Feb 2001 and had not managed to make the project profitable, whereupon it was shut down. Even with SAGD, maximum flow rates were paultry - between 12.6-20 bbl/day. derekresources.com
4. There is no proven oil reserve at LAK, The “100 million barrels of oil in place” claimed in IVAN’s PR was simply an “in-house estimate” made by Surtek. nafinance.com
5. Since Jan 2002 IVAN PR’s make multiple claims of using SAGD on their Midway Sunset-Field properties in California, and yet their most recent quarterly report indicates production increases of only 28% and 38% for the three and nine-month periods ended September 30, 2003. sec.gov
2. IVAN Gas To Liquid (GTL) Promotion
1. IVAN’s GTL program is based on a license of Syntroleum Corporation technology.
2. Syntroleum SEC filings admit:
“To date, no commercial-scale GTL plant based on the Syntroleum Process has been constructed. A commercial-scale GTL plant based on the Syntroleum Process might never be successfully built either by us or by any of our licensees…”
“Many of our competitors have significantly more financial and other resources than our company, and GTL technologies developed by our competitors could become more commercially successful than our technology or render our technology obsolete…”
“Our competitors include major integrated oil companies that have developed or are developing competing GTL technologies, including BP, Conoco, Exxon, Sasol, including through its participation in a joint venture with Chevron, and Shell. Each of these companies has significantly more financial and other resources than us to spend for research and development…” sec.gov
IVAN REPORT ONE OF THREE
pg 1 of 3 Cont’d
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