IVAN STRONG SELL REPORT PART 1 of 3
Page 3/3 Cont’d
Promotion of Russia, Peru &
China Oil & Gas - Cont'd
2. FIRST UP – Russia & Peru In 1995 IVAN started promoting oil & gas development in Russia & Peru followed by China. They have since abandon both Russia and Peru prospects as noted in sec filings:
“In early 1995, we commenced our business as an acquirer, explorer and developer of oil and gas properties… In 1998, we commenced a diversification program aimed at expanding the geographical scope of our business beyond Russia and began acquiring oil and gas exploration property interests in Peru and California. We no longer operate in Russia or Peru”.
3. NEXT UP - China Continuing their pattern of pump, dump and change focus, and needing more capital, IVAN promoted China oil and gas development, including this Press release from 1999 suggesting IVAN would produce 36,000bbl/day of production by the end of this year (2003):
Wed Jul 21, 1999 - ”Ivanhoe Energy is preparing a preliminary, long-term development plan which provides for the drilling and reworking of 100 wells, including 56 of the 82 existing exploration wells. The plan envisions production of approximately 36,000 barrels a day by the end of 2003. Based on Chinese exploration data, Gilbert Laustsen Jung Associates Ltd., a leading Canadian independent petroleum consultantcy, has estimated that the Kongnan project area contains proven and probable oil-in-place of approximately 394 million barrels of 30-degree API oil.”
ivanhoe-energy.com.
4. CHINA DEVELOPMENT – Not new IVAN’s China development is not new, as evidenced by the above 1999 PR which states IVAN’s development started in 1996.
5. CHINA DEVELOPMENT – Where’s The Beef? Thus far, Rather than IVAN’s projected 36,000 bbl/day, production after 7 years and millions of dollars invested, IVAN has developed a handful of low producing wells that combined pump approximately 500bbl/day amounting to revenue of $1.02mm for 3 the months ending Sept 30, 2003…
6. CHINA DEVELOPMENT – What Contracts? Reviewing the SEC filings and IVAN PR’s leaves us curious as to IF and HOW IVAN can possibly perform on their end of the “contract”. Here’s what’s stated in the October 31, 2003 SEC filing on the matter:
“Under the (China production sharing) contract, Sunwing operates the project and funds 100% of the development costs to earn 82% of the net revenue from oil production until cost recovery, at which time Sunwing’s entitlement reverts to 49%…. The Plan contemplates expenditures of approximately $185 million over a three-year period and will involve drilling 115 new wells and reworking an additional 29 of the 82 existing wells.”
“Sunwing also holds a production-sharing contract covering an area of approximately 900,000 gross acres… Under the contract, Sunwing has agreed to conduct an exploration program … two phases, each three years in length. During the first phase, Sunwing must incur minimum expenditures of $18 million and additional expenditures of at least $16 million during the second phase.
7. IVAN NEEDS ***$219MM*** - They Don't Have it? Neither IVAN or their subsidiary Sunwing has close to $219mm to satisfy either contract – and raising capital by selling stock would SERIOUSLY dilute IVAN shareholders.
Pluvia Securities Research, their agents, associates and or employees have investment positions consistent with the above-stated investment opinion. All comments are the EXPRESS opinion of the Author(s) - All rights reserved.
IVAN REPORT ONE OF THREE
pg 3 of 3 |
