The company's activities in Latin America are carried out under our wholly-owned subsidiary Ivanhoe Energy Latin America Inc. Ivanhoe Energy Ecuador Inc., a Canadian company, is a wholly-owned subsidiary of Ivanhoe Energy Latin America Inc. and is responsible for the company's activities in Ecuador.

In Ecuador, Ivanhoe Energy is undertaking the appraisal and development of Block 20, named the Pungarayacu Project.

• Block 20 is an area of approximately 426-square-miles (1,103.34-square-kilometres) located 125 miles (201.17 kilometers) southeast of Quito.
• Block 20 contains the 250-square-mile (647.5-square-kilometre) Pungarayacu oil field.
• Pungarayacu was discovered and partially delineated approximately 30 years ago. The quality of the oil was not fully determined at that time.

Petroproduccion, Ecuador's state oil company, drilled 26 wells (core holes) in the Pungarayacu field during the 1980s. The field has been studied and evaluated by Petroproduccion, ARCO and other major oil companies. These third-party studies estimated that the 250-square-mile (647.5-square-kilometre) Pungarayacu field contains between 4.5 billion barrels (Petroecuador-ARCO) and 7.0 billion barrels (Petroecuador) of oil-in-place.

A new review, prepared by leading industry consultant Gaffney, Cline & Associates (GCA) in September 2009, concludes that the Pungarayacu Project contains a best estimate of 6.4 billion barrels of original oil-in-place. Based on a review of data from 27 wells drilled during the early 1980s by Petroproduccion, the report submitted by GCA contains a range of estimates from a low of 4.3 billion barrels to a high of 12.1 billion barrels of original oil-in-place*.

Ivanhoe intends to apply its proprietary HTL upgrading technology to the development of Pungarayacu reservoirs containing heavier crudes.

*Required to comply with Canadian reporting standards, under which oil in place must be reported as "undiscovered" until it can be established that it will flow to the surface.