Ivanhoe Energy, a heavy-to-light oil developer backed by billionaire mining magnate Robert Friedland, is officially bankrupt.
The company, which entered into creditor protection in February, announced June 3 it has been unable to reach a restructuring and refinancing deal with creditors.
The company owes $1 billion to creditors, according to documents filed with EY, its trustee.
The largest creditor is the Bank of New York Mellon: $94 million. Friedland is the next largest creditor at $6.4 million.
The company will now begin selling off its assets. Its main asset is the Tamarack oil sands property in Alberta, where it had been trying to develop a new SAGD (steam assisted gravity drainage) project. It also owns intellectual property related to the SAGD technology it planned to use.
As reported by Business in Vancouver in February, the company began running into problems even before last year’s 50% oil price drop.
The company had been trying to develop a $1.37 billion heavy-to-light oil project in Alberta but ran into regulatory problems.
Several SAGD projects were put on hold by the Alberta government
Following a number of environmental incidents related to other SAGD projects.
With a 17% share, Friedland – founder of Ivanhoe Mines Ltd. (TSX:IVN) – is a major shareholder in Ivanhoe Energy.