Ivanhoe Energy subsidiary to merge with PanAsian Petroleum Inc in Mongolia

ULAANBAATAR, Mongolia — Ivanhoe Energy Inc. (TSX:IE) said Wednesday its Mongolian subsidiary would merge with Alberta-based PanAsian Petroleum Inc. in an all-stock deal.

The merger involves the issuance of up to three million Ivanhoe shares worth about $7.9 million, but no payment of cash to PanAsian's principals.

Ivanhoe said PanAsian holds oil and gas exploration and production rights to a large and highly prospective block in central Mongolia.

The company plans to combine PanAsian's Mongolian interests with Sunwing Energy Ltd., Ivanhoe's subsidiary for oil and gas operations in Asia.

PanAsian's corporate structure and its contractual relationship with the petroleum authority of Mongolia will not be altered by the merger.

"This is an exceptional opportunity for Ivanhoe and Sunwing," said Robert Abboud, Ivanhoe's co-chairman.

"Our objective is to develop additional sources of petroleum supply to permit Mongolia to become more self-sufficient in oil to help meet the needs of domestic consumers and support the realization of the nation's economic aspirations," he said.

Ivanhoe is an international heavy oil development and production company. It's shares closed at $2.64 Tuesday on the Toronto Stock Exchange.

Copyright © 2009 The Canadian Press. All rights reserved.

Source:Canadian Press


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