By OGJ editors
HOUSTON, May 29 -- Ivanhoe Energy Inc. signed a preliminary agreement with an affiliate of Talisman Energy Inc. to acquire all of Talisman's interests in three Athabasca oil sands leases.
Talisman Energy Canada is selling its holdings in the leases for $105 million (Can.).
Ivanhoe envisions the first commercial application of its proprietary heavy oil upgrading technology, HTL, in an integrated heavy-oil project on the leases being acquired.
Sproule Associates Ltd. estimates that two of the three leases contain 294 million bbl of contingent bitumen resources (with low and high estimates of 216 million and 394 million bbl, respectively) out of 752 million bbl of discovered original oil in place.
Ivanhoe's HTL heavy-oil project is planned for Lease 10 near Fort McMurray, Alta. Lease 10 is the principal block being acquired, Ivanhoe said. Sproule estimates contingent bitumen resources on Lease 10 could produce 30,000-50,000 b/d of oil.
Talisman will retain back-in rights of up to 20% in all of the acquired leases for 3 years, and it also has first-offer rights to acquire any participation interests in heavy oil projects in Alberta that Ivanhoe wishes to sell in that period, excluding the acquired leases.
In addition, Ivanhoe and Talisman plan to sign an HTL data monitoring agreement allowing Talisman to monitor the effectiveness of Ivanhoe's HTL technology.
Last year, Ivanhoe completed an Athabasca bitumen test run at its commercial demonstration plant in Bakersfield, Calif., using HTL (OGJ, June 29, 2007, Newsletter).
The test was carried out as outlined in a 2000 technology agreement with ConocoPhillips Canada, which provided Ivanhoe with the Athabasca bitumen. Ivanhoe is using information derived from the test to design and develop commercial projects in Western Canada (OGJ, Mar. 27, 2006, Newsletter).