Ivanhoe Energy Inc.

May 18, 2011 16:26 ET

Ivanhoe Energy Announces $50,000,000 Public Offering of 5.75% Convertible Unsecured Subordinated Debentures

Up to an Additional $25,000,000 of Debentures to Be Subscribed for by Directors, Officers and Other Insiders

CALGARY, ALBERTA--(Marketwire - May 18, 2011) -


Ivanhoe Energy Inc. ("Ivanhoe" or the "Company") (TSX:IE)(NASDAQ:IVAN) announced today that it has entered into an agreement to sell, on a bought deal basis to a syndicate of underwriters led by TD Securities Inc., $50,000,000 principal amount of 5.75% convertible unsecured subordinated debentures (the "Debentures") at a price of $1,000 per Debenture (the "Public Offering"). The Company has also granted the underwriters an over-allotment option to purchase up to an additional $7,500,000 aggregate principal amount of Debentures at the same price exercisable in whole or in part at any time for a period of 30 days following closing.

Ivanhoe also intends to sell, on a private placement basis, up to $25,000,000 principal amount of Debentures to certain directors, officers and insiders including Robert M. Friedland on the same terms as the Public Offering. These Debentures will be subject to a four month hold period.

The Debentures will mature on June 30, 2016 and will bear interest at an annual rate of 5.75% payable semi-annually on the last day of June and December of each year, commencing December 31, 2011. At the holder's option, the Debentures may be converted into common shares of Ivanhoe ("Shares") at any time prior to the close of business on the earlier of June 30, 2016 and the business day immediately preceding the date specified by Ivanhoe for redemption of the Debentures. The conversion price will be $3.36 per Share (the "Conversion Price"), subject to adjustment in certain circumstances, including the declaration of dividends.

The Debentures will not be redeemable before June 30, 2014. On and after June 30, 2014 and prior to the maturity date, the Debentures may be redeemed in whole or in part from time to time at Ivanhoe's option, provided that the volume weighted average trading price of the Shares on the Toronto Stock Exchange during the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of the redemption is given is not less than 125% of the Conversion Price.

Ivanhoe will use the net proceeds of the offerings for repayment of the $40 million Convertible Promissory Note due to Talisman Energy Canada on July 11, 2011 and for general corporate purposes.

The offerings are expected to close on or about June 9, 2011 and are subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals.

A preliminary short-form prospectus in respect of the Public Offering will be filed by May 25, 2011 with the securities regulatory authorities in all provinces of Canada except Quebec. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registrations requirements of such Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.

Ivanhoe Energy is an independent international heavy oil development and production company focused on pursuing long-term growth in its reserves and production using advanced technologies, including its proprietary heavy oil upgrading process (HTL). Core operations are in Canada, Ecuador, China and Mongolia, with business development opportunities worldwide. Ivanhoe Energy trades on the NASDAQ Capital Market with the ticker symbol IVAN and on the Toronto Stock Exchange with the symbol IE.

For more information about Ivanhoe Energy Inc. please visit our web site at www.ivanhoeenergy.com.


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 the completion, timing and amount and use of proceeds from the offerings. 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 general economic, business and market conditions and other risks disclosed in Ivanhoe Energy's 2010 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on EDGAR and the Canadian Securities Commissions on SEDAR.

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