Ivanhoe Energy announced that reported allegations contained in a recently filed lawsuit in Vancouver, British Columbia against Ivanhoe Energy, its subsidiaries Ivanhoe Energy Latin America and Ivanhoe Energy Ecuador and shareholder Robert Friedland, are false and without merit. The new suit, filed by Cotundo Minerales S.A. (Cotundo), an Ecuadorian corporation, contains recycled allegations about Ivanhoe Energy's contract on the Pungarayacu heavy oil field, which were dismissed previously in the United States (U.S.) federal court system.
The previous suit, alleging the same and even more extreme claims against these and other defendants, was filed in 2008 by Cotundo and its principal, Jack Grynberg, in Colorado. Mr. Grynberg has a long history of filing lawsuits as part of his business activities. The U.S. District Court for the District of Colorado dismissed the claims in September 2009 for lack of jurisdiction, denied the plaintiffs' attempt to have the case transferred to the U.S. District Court for the Eastern District of California, issued sanctions against the associated individuals and companies for making baseless allegations and subsequently ordered them to pay a substantial amount of the defendants' attorneys' fees, which was an unusual step in the U.S. courts. The Colorado District Court's decision rested, in part, on the conclusion that the allegations did not "likely have merit". In July 2012, the U.S. Court of Appeals for the Tenth Circuit strongly affirmed the District Court's rulings in a detailed 50-page written judgment.
The Company intends to vigorously defend the new lawsuit. Ivanhoe Energy does not believe that this lawsuit will impede its initiatives to develop Block 20 (including the Pungarayacu oil field).
