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Dagang Project
In February, 2004, Ivanhoe Energy's wholly-owned subsidiary, Pan-China Resources Ltd., successfully drilled and completed its first development oil well at the Dagang field in northeastern China. The project is being developed under a 30-year production-sharing contract with China National Petroleum Corporation covering an area of 12,100 gross acres within the field. Pan-China is operator of the project and funds all development costs to earn 82% of the net revenue from oil production until costs are recovered, at which time their shared entitlement will revert to 49%.
By the end of the second quarter of 2007, the company had 40 producing oil wells at this project and commenced a final five well drilling program.
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