Ivanhoe Energy Transfers China Tight Gas Block to Shell

Ivanhoe Energy has inked a deal to transfer its 90% interest in the Zitong Block, Sichuan Basin, China to Shell. The Zitong Block covers 900,000 acres and consists of deep high-pressure reservoirs that are classified as tight gas.

In January, the Canada based firm had signed a MoU with Shell to transfer the Block for $160 million.

Ivanhoe Energy and Shell anticipate closing the transaction by the end of 2012. Additional commercial terms have been negotiated that provide Ivanhoe Energy with $85 million in consideration, should the final condition be met after December 31, 2012.