Ivanhoe Energy Inc. (TSX: IE.TO)
(NASDAQ: IVAN) announced the sale of its interest in the Zitong natural
gas project to a unit of Royal Dutch Shell (NYSE: RDS.A) for up to $160
million in cash, to focus on oil projects in Canada, Ecuador, Mongolia
and China.
The Canada-based heavy oil producer said its Sunwing Zitong Energy
subsidiary will divest its stake in the Zitong block in China's Sichuan
Basin to Shell's Chinese unit.
Under the terms of the agreement, Ivanhoe will receive a payment of
up to US$85 million as reimbursement for past qualified and recoverable
costs incurred and a further $75 million on completion of the deal.
Shell will also assume the $20 million bond that Ivanhoe was required
to post to the China National Petroleum Corporation (CNPC), as part of
completion of a supplementary agreement, the company said.
The deal is expected to close on Dec. 31, 2012.
Shares of the Calgary, Alberta-based company rose 4.3 percent to
$1.21 on the Toronto Stock Exchange. IVAN gained 3.5 percent on the
NASDAQ.