##### 





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number:
    000-30586
  
 IVANHOE ENERGY INC.
 (Exact name of registrant as
    specified in its charter)
  Yukon, Canada

98-0372413(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)654-999
    Canada Place
    Vancouver, British Columbia, Canada(Address of principal
    executive offices)

V6C 3E1(Zip Code)   (604) 688-8323
 (Registrants telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the
    Act:
 None
 Securities registered pursuant to Section 12(g) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Shares, no par value

Toronto Stock Exchange NASDAQ Capital Market   o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
      Class

Outstanding at March 10, 2008Common Shares, no par value

244,873,349 shares   DOCUMENTS
    INCORPORATED BY REFERENCE
    None




---



##### 





TABLE OF
    CONTENTS
  PagePART IItems 1 and 2


Business and PropertiesGeneral


4Corporate Strategy


4Heavy to Light Oil Upgrading Technology


7Gas-to-Liquids Technology


8Oil and Gas Properties


9Employees


13Production, Wells and Related Information


13Item 1A


Risk Factors


15Item 1B


Unresolved Staff Comments


20Item 3


Legal Proceedings


20Item 4


Submission of Matters to a Vote of Security Holders


20PART IIItem 5


Market for Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities


20Item 6


Selected Financial Data


25Item 7


Managements Discussion and Analysis of Financial Condition
    and Results of Operations


26Item 7A


Quantitative and Qualitative Disclosures About Market Risk


48Item 8


Financial Statements and Supplementary Data


51Item 9


Changes in and Disagreements with Accountants on Accounting and
    Financial Disclosure


101Item 9A


Controls and Procedures


101Item 9B


Other Information


103PART IIIItem 10


Directors, Executive Officers and Corporate Governance


103Item 11


Executive Compensation


106Item 12


Security Ownership of Certain Beneficial Owners and Management
    and Related Stockholder Matters


115Item 13


Certain Relationships and Related Transactions, and Director
    Independence


117Item 14


Principal Accountants Fees and Services


118PART IVItem 15


Exhibits and Financial Statement Schedules


120  2




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##### 



CURRENCY
    AND EXCHANGE RATES
  dollars $ Cdn.$
  2007


2006


2005


2004


2003Closing

$
1.01


$
0.86


$
0.86


$
0.83


$
0.77Low

$
0.84


$
0.85


$
0.79


$
0.72


$
0.63High

$
1.09


$
0.91


$
0.87


$
0.85


$
0.77Average Noon

$
0.94


$
0.88


$
0.83


$
0.77


$
0.71     ABBREVIATIONS
  Form 10-K,
  Boe


= barrel of oil equivalentBbl


= barrelMBbl


= thousand barrelsMMBbl


= million barrelsMboe


= thousands of barrels of oil equivalentBopd


= barrels of oil per dayBbls/d


= barrels per dayBoe/d


= barrels of oil equivalent per dayMboe/d


= thousands of barrels of oil equivalent per dayMBbls/d


= thousand barrels per dayMMBls/d


= million barrels per dayMMBtu


= million British thermal unitsMcf


= thousand cubic feetMMcf


= million cubic feetMcf/d


= thousand cubic feet per dayMMcf/d


= million cubic feet per day   equivalents
  SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
   3




---



##### 



AVAILABLE
    INFORMATION
  Form 10-K, Form 10-Q, Form 8-K http://www.ivanhoe-energy.com/ http://www.sec.gov/
  ITEMS 1
    AND 2
    BUSINESS
    AND PROPERTIES GENERAL  Ivanhoe Energy Ivanhoe
      300-204
 CORPORATE
    STRATEGY  Importance
    of the Heavy Oil Segment of the Oil and Gas Industry
       4




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##### 



Ivanhoes
    Value Proposition
  RTPtm Process HTLtm Technology or
    HTLtm
  tm tm tm tm
  tm tm
  and/or
        tm
  tm
 5




---



##### 



Implementation
    Strategy
    tm tm tm tm
    Build a portfolio of major
    HTLtm
    projects. tm
  Advance the
    technology.
  Enhance our financial position in anticipation of
    major projects.
  Build internal capabilities in advance of major
    projects. tm EOR
  Build the relationships that we will need for the
    future.
  MENA (Sunwing
  tm tm tm tm
 6




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##### 



HEAVY TO
    LIGHT OIL UPGRADING TECHNOLOGY  RTPtmLicense and Patents
  Ensyn tm tm tm tm tm
  Commercial
    Demonstration Facility
  CDF Aera 1,000 barrels-per-day 300 barrels-per-day.
  VTBs tm
  tm
  Feedstock
    Test Facility
  tm FTF (15-20 Bbls/d), tm
 7




---



##### 



HTLtmBusiness Development
  tm tm SAGD tm
  tm tm
    INPEX tm
  tm
  tm
 GAS-TO-LIQUIDS
    TECHNOLOGY  Syntroleum
    License
  Syntroleum GTL Technology GTL Syntroleum
    Processtm
 8




---



##### 



GTL
    Business Development
  (EGAS HKRE 600 MMcf/d 20-year FEED
 OIL AND
    GAS PROPERTIES      12/31/2007


Percentage of2007


Percentage of


Proved


Total EstimatedProduction


Total 2007


Reserves


ProvedProperty

Location

(In MBoe)


Production


(In MBoe)


ReservesSouth Midway

Kern County, California


178



26
%


982



40
%West Texas

Midland County, Texas


20



3
%


208



8
%Other

California


2



0
%






0
%Total U.S.




199



29
%


1,191



48
%Dagang

Hebei Province, China


464



68
%


1,195



48
%Other

China


19



3
%


85



4
%Total China




483



71
%


1,280



52
%Total




682



100
%


2,471



100
%   Note: Form 10-K,
 9




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##### 



Special
    Note to Canadian Investors
  SEC Form 10-K. National Instrument
    51-101 
    Standards of Disclosure for Oil and Gas Activities NI
    51-101 51-101 51-101 COGE Handbook
  Form 10-K Regulation S-X 51-101. 51-101
  
    SEC registrants apply SEC reserves definitions and prepare their
    reserves estimates in accordance with SEC requirements and
    generally accepted industry practices in the U.S. whereas
    NI 51-101
    requires adherence to the definitions and standards promulgated
    by the COGE Handbook;
    the SEC mandates disclosure of proved reserves the
    Standardized Measure of Discounted Future Net Cash Flows and
    Changes Therein calculated using year-end constant prices
    and costs only; whereas NI
    51-101
    requires disclosure of reserves and related future net revenues
    using forecasted prices, with additional constant pricing
    disclosure being optional;
    the SEC mandates disclosure of proved and proved developed
    reserves by country only whereas NI
    51-101
    requires disclosure of more reserve categories and product types;
    the SEC does not require separate disclosure of proved
    undeveloped reserves or related future development costs whereas
    NI 51-101
    requires disclosure of more information regarding proved
    undeveloped reserves, related development plans and future
    development costs; and
    the SEC leaves the engagement of independent qualified reserves
    evaluators to the discretion of a companys board of
    directors whereas NI
    51-101
    requires issuers to engage such evaluators and to file their
    reports.  51-101 51-101
  United
    States
   Production
    and Development
  South
    Midway
   10




---



##### 



West
    Texas
    Other
  880 gross-acre follow-up
     Exploration
    Knights
    Landing
  15,700 gross-acre
  3-D
 11




---



##### 



Aera
    Exploration Agreement
  AMI
  Other
    China
   Production
    and Development
  30-year CNPC Dagang
    field 20-year
  Richfirst CITIC
  ODP
 12




---



##### 



WTI
   Exploration
  30-year Zitong
    Contract Mitsubishi
  Phase 1 Zitong Partners Phase 2
   EMPLOYEES   PRODUCTION,
    WELLS AND RELATED INFORMATION  Form 10-K,
 13




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##### 



Average Sales Price


Average Operating Costs2007


2006


2005


2007


2006


2005Crude Oil and Natural Gas ($/Boe)U.S.

$
61.71


$
54.86


$
44.01


$
21.72


$
19.54


$
15.64China

$
64.86


$
62.04


$
49.97


$
26.88


$
20.58


$
8.27     2007


2006


2005Oil Wells


Gas Wells


Oil Wells


Gas Wells


Oil Wells


Gas WellsGross


Net


Gross


Net


Gross


Net


Gross


Net


Gross


Net


Gross


NetU.S.


92



74.9



1



0.2



89



73.5



2



1.0



87



69.3



3



1.5China


44



36.1











42



34.4
(1)










43



21.2







     (1)
    
    After giving effect to the 40% farm-in/out of Richfirst to the
    Dagang field.    Exploratory
  Productive Wells


Dry Wells2007


2006


2005


2007


2006


2005Oil


Gas


Oil


Gas


Oil


Gas


Oil


Gas


Oil


Gas


Oil


GasU.S.


















1.5



0.2











0.6
(1)










1.8
(2)China






























0.9















1.0Total


















1.5



0.2







0.9



0.6











2.8     (1)
    
    Includes 0.6 (1 gross) net exploratory wells drilled during
    2005 which were determined to be dry in 2006.(2)
    
    Includes 0.8 net (2 gross) exploratory wells drilled
    during 2001, which were determined to be dry in 2005.  Development
  Productive Wells


Dry Wells2007


2006


2005


2007


2006


2005Oil


Gas


Oil


Gas


Oil


Gas


Oil


Gas


Oil


Gas


Oil


GasU.S.


1.2







9.0







1.0



























China


4.1















10.8



























Total


5.3







9.0







11.8



























   Wells in
    Progress
   14




---



##### 



Acreage
    Developed Acres


Undeveloped AcresGross


Net


Gross


NetU.S.


8,051



3,826



81,010



20,318China(1)


3,169



2,599



886,869



794,252     (1)
    
    The number of developed acres disclosed in respect of our China
    properties relates only to those portions of the field covered
    by our producing operations and does not include the remaining
    portions of the field previously developed by CNPC.  ITEM 1A.
    RISK
    FACTORS    We may
    not be able to meet our substantial capital
    requirements.
  tm tm
  We
    might not successfully commercialize our technology, and
    commercial-scale
    HTLtm and GTL plants based on our technology may never be
    successfully constructed or operated.
  tm tm tm
  Our
    efforts to commercialize our
    HTLtm Technology may give rise to claims of infringement upon
    the patents or proprietary rights of others.
  tm
 15




---



##### 



Technological
    advances could significantly decrease the cost of upgrading
    heavy oil and, if we are unable to adopt or incorporate
    technological advances into our operations, our
    HTLtmTechnology could become uncompetitive or obsolete.
  tm tm tm
  The
    development of alternate sources of energy could lower the
    demand for our
    HTLtmTechnology.
  tm
  The
    volatility of oil prices may affect our financial
    results.
        Lower
    oil prices could negatively impact our ability to
    borrow.
   16




---



##### 



Our
    ability to sell assets and replace revenues generated from any
    sale of our existing properties depends upon market conditions
    and numerous uncertainties.
  tm tm
  We may
    be required to take write-downs if oil prices decline, our
    estimated development costs increase or our exploration results
    deteriorate.
    Government
    regulations in foreign countries may limit our activities and
    harm our business operations.
    Estimates
    of proved reserves and future net revenue may change if the
    assumptions on which such estimates are based prove to be
    inaccurate.
   17




---



##### 



Information
    in this document regarding our future plans reflects our current
    intent and is subject to change.
  tm
    Our
    business may be harmed if we are unable to retain our interests
    in licenses, leases and production sharing
    contracts.
    We may
    incur significant costs on exploration or development efforts
    which may prove unsuccessful or unprofitable.
  start-up and/or
  Our
    business involves many operating risks that can cause
    substantial losses; insurance may not protect us against all
    these risks.
     18




---



##### 



Complying
    with environmental and other government regulations could be
    costly and could negatively impact our production.
    clean-up
    We
    compete for oil and gas properties with many other exploration
    and development companies throughout the world who have access
    to greater resources.
    Our
    share ownership is highly concentrated and, as a result, our
    principal shareholder significantly influences our
    business.
      If we
    lose our key management and technical personnel, our business
    may suffer.
   19




---



##### 



ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS    PART II
  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Market
    Information
    NASDAQ
    CAPITAL MARKET (IVAN)
    (U.S.$)
  2007


20064th Qtr


3rd Qtr


2nd Qtr


1st Qtr


4th Qtr


3rd Qtr


2nd Qtr


1st QtrHigh


2.45



2.25



2.65



2.16



1.65



2.43



2.96



3.27Low


1.43



1.77



1.67



1.19



1.18



1.40



2.26



1.25   TORONTO
    STOCK EXCHANGE (IE)
    (CDN$)
  2007


20064th Qtr


3rd Qtr


2nd Qtr


1st Qtr


4th Qtr


3rd Qtr


2nd Qtr


1st QtrHigh


2.33



2.36



2.99



2.53



1.89



2.72



3.31



3.75Low


1.43



1.88



1.84



1.40



1.36



1.59



2.50



1.44     Exemptions
    from Certain NASDAQ Marketplace Rules
     20




---



##### 




    a board comprised of a majority of independent
    directors, and
    independent directors holding regularly scheduled meetings at
    which only independent directors are present,    Form 10-K,
  AGM
    Enforceability
    of Civil Liabilities
  Form 10-K Form 10-K.
  Holders
    of Common Shares
   21




---



##### 



Dividends
  Yukon Business Corporations Act
  Exchange
    Controls and Taxation
    Investment Canada Act Investment Act Canadian WTO investor
  Income Tax Act Convention
 22




---



##### 



Securities
    Authorized for Issuance under Equity Compensation
    Plans
  Form 10-K.
  Performance
    Graph
  Form 10-K.
  Sales of
    Unregistered Securities
  Act
  
    in November 2007, we issued 2,000,000 common shares at a price
    of U.S.$2.00 to an institutional investor pursuant to the
    exercise of previously issued share purchase warrants in a
    transaction exempt from registration under Rule 903 of the
    Act.    
    in February 2006, we issued 8,591,434 shares in exchange
    for an additional 40% working interest in the Dagang field to
    CITIC in a transaction exempt from registration under
    Rule 903 of the Act;
    in March 2006, we issued 100 common shares at a price of
    U.S.$3.20 to an institutional investor pursuant to the exercise
    of previously issued share purchase warrants in a transaction
    exempt from registration under Rule 903 of the Act;
    in April 2006, we issued 11,400,000 special warrants at
    U.S.$2.23 per special warrant to institutional and individual
    investors in a transaction exempt from registration under
    Rule 903 of the Act. Each special warrant was exercised to
    acquire, for no additional consideration, one common share and
    one share purchase warrant following the issuance of a receipt
    for a prospectus by applicable Canadian securities regulatory
    authorities, which occurred in May 2006. Originally, one common
    share purchase warrant would entitle the holder to purchase one
    common share at a price of U.S.$2.63 exercisable until the fifth
    anniversary date of the special warrant date of issue. In
    September 2006 these warrants were listed on the Toronto Stock
    Exchange and the exercise price was changed to Cdn.$2.93.    
    in February 2005, we issued a convertible promissory note in the
    principal amount of $6.0 million to an arms length
    lender in a transaction exempt from registration under
    Rule 903 of the Act. The principal amount and all accrued
    and unpaid interest was convertible into common shares of the
    Company at a price of U.S.$2.25 per common share. The conversion
    rights were not exercised and expired in November 2005;
    in April 2005, we issued 4,100,000 special warrants at a price
    of Cdn.$3.10 per special warrant to institutional and individual
    investors in a transaction exempt from registration under
    Rule 903 of the Act. Each special warrant was exercised to
    acquire, for no additional consideration, one common share and
    one share purchase warrant following the issuance of a receipt
    for a prospectus by applicable Canadian securities regulatory
    authorities, which occurred in July 2005. One common-share
    purchase warrant will entitle the holder to purchase one common
    share at a price of Cdn.$3.50 exercisable until the second
    anniversary date of the special warrant date of issue;
    in April 2005, we issued 29,999,886 common shares in exchange
    for all of the issued and outstanding common shares of Ensyn in
    a transaction exempt from registration under
    Section 3(a)(10) of the Act;
    in May 2005, we issued a convertible promissory note in the
    principal amount of $2.0 million to an arms length
    lender in a transaction exempt from registration under
    Rule 903 of the Act. The principal amount and 23




---



##### 



all accrued and unpaid interest was convertible into common
    shares of the Company at a price of U.S.$2.15 per common share.
    The conversion rights were not exercised and expired in November
    2005;  
    in June 2005, we issued 1,500,000 common shares at a price of
    U.S.$1.10 to a Canadian institutional investor pursuant to the
    exercise of previously issued share purchase warrants in a
    transaction exempt from registration under Rule 903 of the
    Act;
    in July 2005, we issued 1,000,000 special warrants at a price of
    Cdn.$3.10 per special warrant to an institutional investor in a
    transaction exempt from registration under Rule 903 of the
    Act. Each special warrant was exercised in November 2005 to
    acquire, for no additional consideration, one common share and
    one share purchase warrant. One common share purchase warrant
    will entitle the holder to purchase one common share at a price
    of Cdn.$3.50 exercisable until the second anniversary date of
    the special warrant date of issue;
    in August 2005, we issued 1,500,000 common shares at a price of
    U.S.$1.10 to a Bahamian institutional investor pursuant to the
    exercise of previously issued share purchase warrants in a
    transaction exempt from registration under Rule 903 of the
    Act;
    in September 2005, we issued 1,514,706 common shares at a price
    of U.S.$1.87 to a Bahamian institutional investor pursuant to
    the exercise of previously issued share purchase warrants in a
    transaction exempt from registration under Rule 903 of the
    Act;
    in November 2005, we issued 2,000,000 common share purchase
    warrants to an arms length lender in a transaction exempt
    from registration under Rule 903 of the Act. Each common
    share purchase warrant is exercisable to purchase one common
    share of the Company at a price of U.S.$2.00 per common share at
    any time until November 2007; and
    in November 2005, we issued 11,196,330 special warrants at
    U.S.$1.63 per special warrant to four individual investors in a
    transaction exempt from registration under Rule 903 of the
    Act. Each special warrant was exercised to acquire, for no
    additional consideration, one common share and one share
    purchase warrant following the issuance of a receipt for a
    prospectus by applicable Canadian securities regulatory
    authorities, which occurred in December 2005. One common share
    purchase warrant will entitle the holder to purchase one common
    share at a price of U.S.$2.50 exercisable until the second
    anniversary date of the special warrant date of issue. 24




---



##### 



ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K. GAAP Form 10-K.
    December 312007


2006


2005


2004


2003(Stated in thousands of US dollars, except per share
    amounts)Results of OperationsRevenues


33,517



48,100



29,939



17,997



9,659Net loss


(39,207
)(1)


(25,492
)(1)


(13,512
)(1)


(20,725
)(1)


(30,179
)(1)Net loss per share  basic and diluted


(0.16
)


(0.11
)


(0.07
)


(0.12
)


(0.20
)Financial PositionTotal assets


236,916



248,544



240,877



118,486



106,574Long-term debt


9,812



4,237



4,972



2,639



833Shareholders equity


197,287



228,386



204,767



103,586



100,537Common shares outstanding (in thousands)


244,873



241,216



220,779



169,665



161,359Cash FlowCash provided (used) by operating activities


5,489



14,352



9,870



4,032



(1,522
)Capital investments


(31,638
)


(17,842
)


(43,282
)


(46,454
)


(15,391
)     (1)
    
    Includes asset write-downs and provisions for impairment of
    $6.1 million, $5.4 million, $5.6 million,
    $16.6 million and $23.3 million for 2007, 2006, 2005,
    2004 and 2003, respectively. See Note 4 to our financial
    statements under Item 8 in this Annual Report on
    Form 10-K.  Reconciliation
    to U.S. GAAP
  Form 10-K.
    December 312007


2006


2005


2004


2003(Stated in thousands of US dollars, except per share
    amounts)Results of OperationsNet loss


(27,392
)


(42,422
)


(12,106
)


(19,696
)


(27,086
)Net loss per share  basic and diluted


(0.11
)


(0.18
)


(0.06
)


(0.12
)


(0.18
)Financial PositionTotal assets


216,655



216,365



224,935



105,791



94,024Long-term debt


10,412



4,237



4,972



2,639



833Shareholders equity


170,545



188,829



188,745



90,892



87,987Cash FlowCash provided (used) by operating activities


11,501



13,340



5,042



2,222



(4,051
)Capital investments


(31,371
)


(16,830
)


(38,454
)


(44,644
)


(12,862
)     (1)
    
    Includes asset write-downs and provisions for impairment of
    $5.9 million, $23.5 million, $4.5 million,
    $15.0 million and $nil for 2007, 2006, 2005, 2004 and 2003,
    respectively. See Note 19 to our financial statements under
    Item 8 in this Annual Report on
    Form 10-K. 25




---



##### 



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  TABLE OF
    CONTENTS
  PageIvanhoe Energys Business


26Executive Overview of 2007 Results


27Financial Results  Year to Year Change in Net
    Loss


28Revenues and Operating Costs


29General and Administrative


32Business and Technology Development


34Write-off of Deferred Acquisition Costs


34Net Interest


35Unrealized Loss on Derivative Instruments


35Depletion and Depreciation


35Write-Down of
HTLtm
and GTL Development Costs


37Impairment of Oil and Gas Properties


37Financial Condition, Liquidity and Capital Resources


38Sources and Uses of Cash


38Outlook for 2008


39Contractual Obligations and Commitments


39Critical Accounting Principles and Estimates


402007 Accounting Changes


44Impact of New and Pending Canadian GAAP Accounting
    Standards


46Convergence of Canadian GAAP with International Financial
    Reporting Standards


46Impact of New and Pending U.S. GAAP Accounting
    Standards


46Off Balance Sheet Arrangements


47Related Party Transactions


47Certain Factors Affecting the Business


47      Ivanhoe
    Energys Business  RTPtm
    Process HTLtm
    Technology
 26




---



##### 



HTLtm EOR E&P GTL
    Technology GTL
  tm on-site tm tm tm
  tm tm tm
 Executive
    Overview of 2007 Results  tm
    Year Ended December 31,2007


2006


2005Oil and gas revenue

$
43,635


$
47,748


$
29,800Net loss

$
(39,207
)

$
(25,492
)

$
(13,512
)Net loss per share

$
(0.16
)

$
(0.11
)

$
(0.07
)Average production (Boe/d)


1,870



2,178



1,738Net operating revenue per Boe

$
38.56


$
39.77


$
34.99Cash flow from operating activities

$
5,489


$
14,352


$
9,870Capital investments

$
(31,638
)

$
(17,842
)

$
(43,282
)  27




---



##### 



Financial
    Results  Year to Year Change in Net
    Loss    Favorable





Favorable(Unfavorable)





(Unfavorable)2007


Variances


2006


Variances


2005Summary of Net Loss by Significant Components:Oil and Gas Revenues:

$
43,635






$
47,748






$
29,800Production volumes





$
(6,732
)





$
8,888Oil and gas prices






2,619







9,060Realized gain (loss) on derivative instruments


(1,647
)


(1,716
)


69



69



Operating costs


(17,319
)


(1,186
)


(16,133
)


(8,530
)


(7,603
)General and administrative, less stock based compensation


(9,372
)


(1,724
)


(7,648
)


(60
)


(7,588
)Business and technology development, less stock based
    compensation


(8,600
)


(1,379
)


(7,221
)


(2,416
)


(4,805
)Acquisition costs






736



(736
)


(736
)


Net interest


(312
)


(283
)


(29
)


982



(1,011
)Unrealized loss on derivative instruments


(8,939
)


(8,446
)


(493
)


(493
)


Depletion and depreciation


(26,524
)


6,026



(32,550
)


(18,103
)


(14,447
)Stock based compensation


(3,729
)


(808
)


(2,921
)


(808
)


(2,113
)Write-downs
of
HTLtm
and GTL development costs














636



(636
)Impairment of oil and gas properties


(6,130
)


(710
)


(5,420
)


(420
)


(5,000
)Other


(270
)


(112
)


(158
)


(49
)


(109
)Net Loss

$
(39,207
)

$
(13,715
)

$
(25,492
)

$
(11,980
)

$
(13,512
)        28




---



##### 



Revenues
    and Operating Costs
    Years Ended December 31,


Years Ended December 31,Net Boes


Percentage


Net Boes


Percentage2007


2006


Change


2006


2005


ChangeChina:Dagang


464,206



554,185



(16
)%


554,185



282,582



96
%Daqing


19,379



20,946



(7
)%


20,946



32,236



(35
)%483,585



575,131



(16
)%


575,131



314,818



83
%U.S.:South Midway


177,745



188,379



(6
)%


188,379



196,428



(4
)%Spraberry


19,587



23,242



(16
)%


23,242



27,940



(17
)%Others


1,513



8,309



(82
)%


8,309



95,306



(91
)%198,844



219,930



(10
)%


219,930



319,674



(31
)%682,429



795,061



(14
)%


795,061



634,492



25
%              29




---



##### 



China
   Production
    Volumes 2007 vs. 2006
     Production
    Volumes 2006 vs. 2005
       Operating
    Costs 2007 vs. 2006
     Operating
    Costs 2006 vs. 2005
    PRC Windfall
    Levy Measures
 30




---



##### 



Windfall Levy
  U.S.
   Production
    Volumes 2007 vs. 2006
     Production
    Volumes 2006 vs. 2005
       Operating
    Costs 2007 vs. 2006
     Operating
    Costs 2006 vs. 2005
   31




---



##### 



Year Ended December 31,2007


2006


2005China


U.S.


Total


China


U.S.


Total


China


U.S.


TotalNet Production:Boe


483,585



198,844



682,429



575,131



219,930



795,061



314,818



319,674



634,492Boe/day for the year


1,325



545



1,870



1,576



603



2,178



863



876



1,738   Per Boe


Per Boe


Per BoeOil and gas revenue

$
64.86


$
61.71


$
63.94


$
62.04


$
54.86


$
60.06


$
49.97


$
44.01


$
46.97Field operating costs


18.08



15.41



17.30



14.07



14.44



14.17



7.49



11.44



9.48Production tax (U.S.) and Windfall Levy (China)


7.68



1.25



5.81



5.74



1.15



4.47







0.83



0.42Engineering and support costs


1.12



5.06



2.27



0.77



3.95



1.65



0.78



3.37



2.0826.88



21.72



25.38



20.58



19.54



20.29



8.27



15.64



12.00Net operating revenue


37.98



39.99



38.56



41.46



35.32



39.77



41.70



28.37



34.99Depletion


39.73



29.38



36.71



40.57



24.23



36.05



29.77



15.53



22.60Net revenue (loss) from operations

$
(1.75
)

$
10.61


$
1.85


$
0.89


$
11.09


$
3.72


$
11.93


$
12.84


$
12.39  General
    and Administrative    2007 vs


2006 vs2006


2005Favorable (unfavorable) variances:Oil and Gas Activities:China

$
(705
)

$
739U.S.


(342
)


(498
)Corporate


(849
)


(892
)(1,896
)


(651
)Less: stock based compensation


172



591$
(1,724
)

$
(60
)    General
    and Administrative 2007 vs. 2006
  China
   32




---



##### 



U.S.
  tm
  Corporate
  SOX
   General
    and Administrative 2006 vs. 2005
  China
    U.S.
    Corporate
   33




---



##### 



Business
    and Technology Development    2007 vs


2006 vs2006


2005Favorable (unfavorable) variances:HTLtm

$
(2,630
)

$
(2,506
)GTL


615



(127
)(2,015
)


(2,633
)Less: stock based compensation


636



217$
(1,379
)

$
(2,416
)    Business
    and Technology Development 2007 vs. 2006
  tm tm tm tm tm tm
   Business
    and Technology Development 2006 vs. 2005
  tm tm tm tm
 Write-off
    of Deferred Acquisition Costs  (CMA
 34




---



##### 



Net
    Interest   Net
    Interest 2007 vs. 2006
     Net
    Interest 2006 vs. 2005
   Unrealized
    Loss on Derivative Instruments     Depletion
    and Depreciation     Depletion
    and Depreciation 2007 vs. 2006
   35




---



##### 



China
      U.S.
      HTLtm
     Depletion
    and Depreciation 2006 vs. 2005
    China
    
    We suspended new drilling activity in December 2005 at our
    Dagang field in order to assess production decline performances
    on recently drilled wells, as well as maximizing cash flow from
    these operations. As a result, we reduced our estimate of the
    overall development program and our independent engineering
    evaluators, GLJ Petroleum Consultants Ltd., revised downward
    their estimate of our proved reserves at December 31, 2005. 36




---



##### 




    In the second quarter of 2005, we impaired the cost of our first
    Zitong block exploration well resulting in $12.5 million of
    those and other associated costs being included with our proved
    properties and therefore subject to depletion.    U.S.
    HTLtm
   Write-Down
    of
    HTLtmand GTL Development Costs  tm tm
  tm
 Impairment
    of Oil and Gas Properties     Impairment
    of Oil and Gas Properties 2007 vs. 2006
   37




---



##### 



 Impairment
    of Oil and Gas Properties 2006 vs. 2005
   Financial
    Condition, Liquidity and Capital Resources Sources
    and Uses of Cash     Operating
    Activities
     Investing
    Activities
  tm tm
     Financing
    Activities
   38




---



##### 



Outlook
    for 2008  tm
 Contractual
    Obligations and Commitments  and/or
  Payments Due by YearTotal


2008


2009


2010


2011


After 2011(Stated in thousands of U.S. dollars)Consolidated Balance Sheets:Long term debt  current portion

$
6,729


$
6,729


$



$



$



$
Long term debt


9,812







412



9,400







Asset retirement obligation


2,218







754











1,464Long term obligation


1,900







1,900











Other Commitments:Interest payable(1)


3,517



1,511



1,129



877







Lease commitments


3,536



1,136



907



788



565



140Zitong exploration commitment


22,500



4,500



9,000



9,000







Total

$
50,212


$
13,876


$
14,102


$
20,065


$
565


$
1,604  39




---



##### 



(1)
    
    This is the estimated future interest payments on our long term
    debt using the rates of interest in effect as at
    December 31, 2007, including accretion of discount.  and/or 30-day
 Critical
    Accounting Principles and Estimates        Full Cost Accounting AcG 16 country-by-country
      Oil and Gas Reserves
    
    determining whether or not an exploratory well has found
    economically recoverable reserves. Such determinations involve
    the commitment of additional capital to develop the field based
    on current estimates of production forecasts, prices and other
    economic conditions. 40




---



##### 




    calculating our unit-of-production depletion rates. Proved
    reserves are used to determine rates that are applied to each
    unit-of-production in calculating our depletion expense. In
    2007, oil and gas depletion of $25.1 million was recorded
    in depletion and depreciation expense. If our reserve estimates
    changed by 10%, our depletion and depreciation expense for 2007
    would have changed by approximately $2.6 million assuming
    no other changes to our reserve profile. See
    Depletion below.
    assessing our proved oil and gas properties for impairment on a
    quarterly basis. Estimated future net cash flows used to assess
    impairment of our oil and gas properties are determined using
    proved and probable
    reserves1
    See Impairment of Proved Oil and Gas Properties
    below.        Depletion 
        1 Proved Probable
 41




---



##### 



Impairment of Proved Oil and Gas Properties 
  ceiling test country-by-country
  Regulation S-X Article 4-10(c)4 2
  Asset Retirement  CICA
    2 Regulation S-X,
 42




---



##### 



Research and Development  tm tm tm
  tm tm
  tm
    Intangible Assets  tm tm tm tm
 43




---



##### 



2007
    Accounting Changes  CICA S.1506 S.1530 S.3251 S.3855 S.3861 S.3865
          Financial
    assets
       44




---



##### 



Financial
    liabilities
              Derivative
    Financial Instruments
             45




---



##### 



SFAS 133
 Impact
    of New and Pending Canadian GAAP Accounting
    Standards    S.1535 S.3862 S.3863
 Convergence
    of Canadian GAAP with International Financial Reporting
    Standards   Impact
    of New and Pending U.S. GAAP Accounting
    Standards  FASB SFAS No. 141(R) SFAS No. 160
 46




---



##### 



SFAS No. 159 contract-by-contract
  SFAS No. 157
 Off
    Balance Sheet Arrangements   Related
    Party Transactions   Certain
    Factors Affecting the Business  Competition
   47




---



##### 



Environmental
    Regulations
  tm
      Environmental
    Provisions
    Government
    Regulations
    ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    NON-TRADING
  Equity
    Market Risks
     48




---



##### 



Commodity
    Price Risk
        3
  Foreign
    Currency Rate Risk
      3
 49




---



##### 



Interest
    Rate Risk
    Credit
    Risk
    TRADING
   50




---



##### 



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Index to
    Financial Statements and Related Information
  PageReport of Independent Registered Chartered Accountants


52Comments By Independent Registered Chartered Accountants on
    Canada-United States of America Reporting Differences


52Consolidated Financial StatementsConsolidated Balance Sheets


53Consolidated Statements of Operations and Comprehensive loss


54Consolidated Statements of Shareholders Equity


55Consolidated Statements of Cash Flow


56Notes to the Consolidated Financial Statements


57Quarterly Financial Data in Accordance with Canadian and U.S.
    GAAP (Unaudited)


94Supplementary Disclosures About Oil and Gas Production
    Activities (Unaudited)


94  51




---



##### 



REPORT OF
    INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS  
               COMMENTS
    BY INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS ON
    CANADA-UNITED
    STATES OF AMERICA REPORTING DIFFERENCES         52




---



##### 



IVANHOE
    ENERGY INC.
  Consolidated Balance Sheets
  As at December 31,2007


2006(Stated in thousands of U.S. dollars, except share
    amounts)ASSETSCurrent AssetsCash and cash equivalents

$
11,356


$
13,879Accounts receivable (Note 3)


9,376



7,435Advance


825



Prepaid and other current assets


602



77322,159



22,087Oil and gas properties and development costs, net
    (Note 4)


111,853



121,918Intangible assets  technology (Note 5)


102,153



102,153Long term assets


751



2,386$
236,916


$
248,544LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesAccounts payable and accrued liabilities

$
9,538


$
9,428Debt  current portion (Note 6)


6,729



2,147Derivative instruments (Note 13)


9,432



49325,699



12,068Long term debt (Note 6)


9,812



4,237Asset retirement obligations (Note 7)


2,218



1,953Long term obligation (Note 8)


1,900



1,900Commitments and contingencies (Note 8)Going concern and basis of presentation (Note 2)Shareholders EquityShare capital, issued and outstanding 244,873,349 common shares;
    December 31, 2006 241,215,798 common shares


324,262



318,725Purchase warrants (Note 9)


23,078



23,955Contributed surplus


9,937



6,489Accumulated deficit


(159,990
)


(120,783
)197,287



228,386$
236,916


$
248,544     Approved
    by the Board:
  (signed) David R. Martin

(signed) Brian DowneyDirector

Director  53




---



##### 



IVANHOE
    ENERGY INC.
  Consolidated Statements of Operations and
    Comprehensive Loss
  Year Ended December 31,2007


2006


2005(Stated in thousands of U.S. dollars, except share
    amounts)RevenueOil and gas revenue (Note 3)

$
43,635


$
47,748


$
29,800Loss on derivative instruments (Note 13)


(10,587
)


(424
)


Interest income


469



776



13933,517



48,100



29,939ExpensesOperating costs


17,319



16,133



7,603General and administrative


12,076



10,180



9,529Business and technology development


9,625



7,610



4,978Depletion and depreciation


26,524



32,550



14,447Interest expense and financing costs


1,050



963



1,258Write off of deferred acquisition costs (Note 18)






736



Write-downs and provision for impairment (Note 4)


6,130



5,420



5,63672,724



73,592



43,451Net Loss and Comprehensive Loss

$
(39,207
)

$
(25,492
)

$
(13,512
)Net Loss per share  Basic and Diluted
    (Note 15)

$
(0.16
)

$
(0.11
)

$
(0.07
)Weighted Average Number of Shares (in thousands)


242,362



235,640



195,803    54




---



##### 



IVANHOE
    ENERGY INC.
  Consolidated
    Statements of Shareholders Equity
  Share Capital


Purchase


Contributed


AccumulatedShares


Amount


Warrants


Surplus


Deficit


Total(Thousands)(Stated in thousands of U.S. dollars, except share
    amounts)Balance December 31, 2004


169,665


$
183,617


$



$
1,748


$
(81,779
)

$
103,586Net loss and comprehensive loss


















(13,512
)


(13,512
)Shares and purchase warrants issued for:Merger, net of share issue costs (Note 18)


30,000



74,907















74,907Private placements, net of share issue costs (Note 9)


13,842



21,834



4,837











26,671Refinance of convertible debt (Notes 6 and 9)


2,454



4,000



313











4,313Exercise of purchase warrants (Note 9)


4,515



6,133















6,133Exercise of options (Note 10)


111



156







(41
)






115Services


192



441















441Compensation for stock option grants (Note 10)














2,113







2,113Balance December 31, 2005


220,779



291,088



5,150



3,820



(95,291
)


204,767Net loss and comprehensive loss


















(25,492
)


(25,492
)Shares and purchase warrants issued for:Acquisition of oil and gas assets (Note 18)


8,591



20,000















20,000Private placements, net of share issue costs (Note 9)


11,400



6,493



18,805











25,298Exercise of options (Note 10)


297



743







(252
)






491Services


149



401















401Compensation for stock option grants (Note 10)














2,921







2,921Balance December 31, 2006


241,216



318,725



23,955



6,489



(120,783
)


228,386Net loss and comprehensive loss


















(39,207
)


(39,207
)Shares issued for:Exercise of purchase warrants (Note 9)


2,000



4,313



(313
)










4,000Exercise of options (Note 10)


1,231



431







(52
)






379Services


427



793















793Expiry of purchase warrants (Note 9)










(564
)


564







Compensation for stock option grants (Note 10)














2,936







2,936Balance December 31, 2007


244,874


$
324,262


$
23,078


$
9,937


$
(159,990
)

$
197,287    55




---



##### 



IVANHOE
    ENERGY INC.
  Consolidated
    Statements of Cash Flow
  Year Ended December 31,2007


2006


2005(Stated in thousands of U.S. Dollars)Operating ActivitiesNet loss and comprehensive loss

$
(39,207
)

$
(25,492
)

$
(13,512
)Items not requiring use of cash:Depletion and depreciation


26,524



32,550



14,447Write-downs and provision for impairment (Note 4)


6,130



5,420



5,636Stock based compensation (Note 10)


3,729



2,921



2,113Write off of deferred acquisition costs (Note 18)






736



Unrealized loss on derivative instruments (Note 13)


8,939



493



Write off of debt financing costs










857Other


649



600



108Abandonment costs settled (Note 7)


(792
)






Changes in non-cash working capital items (Note 16)


(483
)


(2,876
)


2215,489



14,352



9,870Investing ActivitiesCapital investments


(31,638
)


(17,842
)


(43,282
)Merger, net of working capital (Note 18)










(10,096
)Merger and acquisition related costs (Note 18)






(736
)


(1,712
)Acquisition of joint venture interest (Note 18)










(6,750
)Proceeds from sale of assets (Note 4)


1,000



5,950



Recovery of
HTLtm
investments (Note 4)


9,000







Advance repayments (payments)


500



(125
)


(1,200
)Other


28



(116
)


(97
)Changes in non-cash working capital items (Note 16)


(1,177
)


(12,708
)


12,022(22,287
)


(25,577
)


(51,115
)Financing ActivitiesShares issued on private placements, net of share issue costs
    (Note 9)






25,298



26,671Proceeds from exercise of options and warrants (Notes 9
    and 10)


4,379



491



6,248Share issue costs on shares issued for Merger










(93
)Proceeds from debt obligations, net of financing costs
    (Note 6)


12,356



1,280



8,000Repayments of debt obligations (Note 6)


(2,460
)


(8,689
)


(1,667
)Other










(512
)14,275



18,380



38,647Increase (decrease) in cash and cash equivalents, for the period


(2,523
)


7,155



(2,598
)Cash and cash equivalents, beginning of year


13,879



6,724



9,322Cash and cash equivalents, end of year

$
11,356


$
13,879


$
6,724    56




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial Statements
 (all tabular amounts are expressed in thousands of U.S.
    Dollars, except share amounts)
  1.
    NATURE OF
    OPERATIONS  Company Ivanhoe Energy RTPtm HTLtm HTLtm EOR E&P GTL
    Technology GTL Syntroleum
  2.
    SIGNIFICANT
    ACCOUNTING POLICIES  GAAP
      Going
    Concern and Basis of Presentation
   57




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Principles
    of Consolidation
        Foreign
    Currency Translation
    Cash
    and Cash Equivalents
    Oil
    and Gas Properties
  Full
    Cost Accounting
  country-by-country
  Depletion
   58




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Impairment
    of Proved Oil and Gas Properties
  country-by-country
  Asset
    Retirement Costs
  tm CDF
      Development
    Costs
  tm MOU tm
  tm
 59




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  tm
  tm
  tm
  Furniture
    and Equipment
    Intangible
    Assets
    tm tm tm tm tm tm
  Oil
    and Gas Revenue
     60




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Earnings
    or Loss Per Share
    Income
    Taxes
    Stock
    Based Compensation
        Derivative
    Activities
    2007
    Accounting Changes
  CICA S.1506 S.1530 S.3251
 61




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  S.3855 S.3861 S.3865
          Financial
    assets
         62




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Financial
    liabilities
              Derivative
    Financial Instruments
               63




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Impact
    of New and Pending Canadian GAAP Accounting
    Standards
  S.3064 S.3062
  S.1535 S.3862 S.3863
  Convergence
    of Canadian GAAP with International Financial Reporting
    Standards
  AcSB
  3.
    CONCENTRATION
    OF CREDIT RISKS   64




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    Accounts Receivable


Oil and Gas Revenue for the Yearas at December 31,


Ended December 31,2007


2006


2007


2006


2005U.S. CustomersA

$
1,138


$
776


$
10,903


$
10,351


$
8,812B


207



142



1,011



1,094



1,166C


72



57



271



277



351D










74



236



1,607All others


27



17



11



107



2,1331,444



992



12,270



12,065



14,069China CustomerA


6,564



5,572



31,365



35,683



15,7318,008



6,564



43,635



47,748



29,800Receivables from partners


815



592











Other receivables


553



279











$
9,376


$
7,435


$
43,635


$
47,748


$
29,800    65




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  4.
    OIL AND
    GAS PROPERTIES AND DEVELOPMENT COSTS    As at December 31, 2007Oil and GasU.S.


China


HTLtm


GTL


TotalOil and Gas Properties:Proved

$
107,040


$
134,648


$



$



$
241,688Unproved


4,373



3,297











7,670111,413



137,945











249,358Accumulated depletion


(27,091
)


(58,583
)










(85,674
)Accumulated provision for impairment


(50,350
)


(16,550
)










(66,900
)33,972



62,812











96,784HTLtm
and GTL Development Costs:Feasibility studies and other deferred costs










389



5,054



5,443Feedstock test facility










4,724







4,724Commercial demonstration facility










9,903







9,903Accumulated depreciation










(5,159
)






(5,159
)







9,857



5,054



14,911Furniture and equipment


529



119



107







755Accumulated depreciation


(449
)


(77
)


(71
)






(597
)80



42



36







158$
34,052


$
62,854


$
9,893


$
5,054


$
111,853   66




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  As at December 31, 2006Oil and GasU.S.


China


HTLtm


GTL


TotalOil and Gas Properties:Proved

$
102,884


$
106,171


$



$



$
209,055Unproved


5,765



8,279











14,044108,649



114,450











223,099Accumulated depletion


(21,249
)


(39,372
)










(60,621
)Accumulated provision for impairment


(50,350
)


(10,420
)










(60,770
)37,050



64,658











101,708HTLtm
and GTL Development Costs:Feasibility studies and other deferred costs










6,615



5,054



11,669Feedstock test facility










405







405Commercial demonstration facility










11,700







11,700Accumulated depreciation










(3,789
)






(3,789
)







14,931



5,054



19,985Furniture and equipment Accumulated depreciation


530



115



80







725(414
)


(56
)


(30
)






(500
)116



59



50







225$
37,166


$
64,717


$
14,981


$
5,054


$
121,918   Oil
    and Gas Properties
       67




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    As at December 31, 2007

As at December 31, 2006

As at December 31, 2005West Texas



West Texas



West TexasIntermediate

Henry Hub

Intermediate

Henry Hub

Intermediate

Henry Hub(per Bbl)

(per Mcf)

(per Bbl)

(per Mcf)

(per Bbl)

(per Mcf)2006

NA

NA

NA

NA

$57.00

$10.502007

NA

NA

$62.00

$7.25

$55.00

$8.752008

$92.00

$7.50

$60.00

$7.50

$51.00

$7.502009

$88.00

$8.25

$58.00

$7.50

$48.00

$7.002010

$84.00

$8.25

$57.00

$7.50

$46.50

$6.752011

$82.00

$8.25

$57.00

$7.50

$45.00

$6.502012

$82.00

$8.25

$57.50

$7.75

$45.00

$6.502013

$82.00

$8.25

$58.50

$7.90

$46.00

$6.652014

$82.00

$8.45

$59.75

$8.05

$46.75

$6.752015

$82.00

$8.62

$61.00

$8.20

$47.75

$6.902016

$82.02

$8.79

$62.25

$8.40

$48.75

$7.052017

$83.66

$8.96

$63.50

$8.55

2% per year

2% per year2018

2% per year

$9.14

2% per year

2% per year

2% per year

2% per yearThereafter

2% per year

2% per year

2% per year

2% per year

2% per year

2% per year   Heavy-
    to-Light
  tm tm
  INPEX tm tm
  tm
    tm
 68




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Gas-to-Liquids
    5.
    INTANGIBLE
    ASSETS  TECHNOLOGY    HTLtmTechnology
  Ensyn tm tm tm
  Syntroleum
    GTL Master License
    tm
  6.
    LONG TERM
    DEBT    December 31,


December 31,2007


2006Variable rate bank note, (7.83%  8.48% at
    December 31, 2007), due 2008

$
4,500


$
1,500Variable rate bank note (9.338% at December 31,
    2007) due 2010


10,000



Non-interest bearing promissory note, due 2006 through 2009


2,876



5,33617,376



6,836Less:Unamortized discount


(139
)


(452
)Unamortized deferred financing costs


(696
)


Current maturities


(6,729
)


(2,147
)(7,564
)


(2,599
)$
9,812


$
4,237  69




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Bank
    Notes
  LIBOR
    Promissory
    Notes
      Revolving
    Line of Credit
   70




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    2008


6,9602009


4162010


10,000$
17,376     7.
    ASSET
    RETIREMENT OBLIGATIONS    2007


2006Carrying balance, beginning of year

$
1,953


$
1,780Liabilities incurred


20



139Liabilities settled


(792
)


Accretion expense


119



86Revisions in estimated cash flows


918



(52
)Carrying balance, end of year

$
2,218


$
1,953   8.
    COMMITMENTS
    AND CONTINGENCIES  Zitong
    Block Exploration Commitment
  CNPC Mitsubishi
  Phase
    1 PetroChina Zitong Partners Phase 2
 71




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    Long
    Term Obligation
  tm
  Income
    Taxes
  and/or
  Other
    Commitments
  FTF (15-20 Bbls/d), tm
     72




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Lease
    Commitments
      2008

$
1,1362009


9072010


7882011


5652012


140$
3,536   9.
    SHARE
    CAPITAL AND WARRANTS    Private
    Placements
     73




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Purchase
    Warrants
    CommonPurchase


SharesWarrants


Issuable(Thousands)Balance December 31, 2004


17,452



9,352Purchase warrants issued for:Private placements


16,296



16,296Refinance of convertible debt


2,000



2,000Purchase warrants exercised


(9,029
)


(4,515
)Purchase warrants expired


(1,250
)


(1,250
)Balance December 31, 2005


25,469



21,883Purchase warrants expired


(7,173
)


(3,587
)Private placements


11,400



11,400Balance December 31, 2006


29,696



29,696Purchase warrants exercised


(2,000
)


(2,000
)Purchase warrants expired


(1,200
)


(1,200
)Balance December 31, 2007


26,496



26,496         Purchase WarrantsPrice per







Common







Exercise

Value onYear of

Special







Shares







Price per

ExerciseIssue

Warrant

Issued


Exercisable


Issuable


Value


Expiry Date

Share

($U.S. 000)(Thousands)





($U.S. 000)2005

Cdn. $3.10


4,100



4,100



4,100


$
2,412


(1)

Cdn. $3.50

$
14,5662005

U.S. $1.63


10,996



10,996



10,996



1,861


(2)

U.S. $2.50


27,4902006

U.S.$2.23


11,400



11,400



11,400



18,805


May 2011

Cdn. $2.93(3)


33,90426,496



26,496



26,496


$
23,078






$
75,959     (1)
    
    In March 2007, the Company agreed that the warrants, which were
    to have expired on April 15, 2007, would be extended until
    the earlier of: (i) April 15, 2008; and
    (ii) thirty days following the date the closing trading
    price of the common shares of the Company on the Toronto Stock
    Exchange exceeds the exercise price of the warrants for a period
    of five consecutive trading days.(2)
    
    In October 2007, the Company agreed that these warrants, which
    were to have expired in November 2007, would be extended until
    the earlier of: (i) six months from their original expiry
    date; and (ii) thirty days 74




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  following the date the closing trading price of the common
    shares of the Company on the Toronto Stock Exchange exceeds the
    exercise price of the warrants for a period of five consecutive
    trading days.(3)
    
    Each common share purchase warrant originally entitled the
    holder to purchase one common share at a price of $2.63 per
    share until the fifth anniversary date of the closing. In
    September 2006, these warrants were listed on the Toronto Stock
    Exchange and the exercise price was changed to Cdn.$2.93.    (B-S
  10.
    STOCK
    BASED COMPENSATION        2007


2006


2005Expected term (in years)


3.7



5.5



4.0Volatility


73.5
%


82.5
%


77.0
%Dividend Yield


0.0
%


0.0
%


0.0
%Risk-free rate


4.1
%


4.4
%


3.5
%      75




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
      December 31, 2007


December 31, 2006


December 31, 2005Weighted-





Weighted-





Weighted-Number


Average


Number


Average


Number


Averageof Stock


Exercise


of Stock


Exercise


of Stock


ExerciseOptions


Price


Options


Price


Options


Price(Thousands)


(Cdn.$)


(Thousands)


(Cdn.$)


(Thousands)


(Cdn.$)Outstanding at beginning of year


12,370


$
2.34



10,278


$
2.21



8,246


$
2.65Granted


3,843


$
1.05



3,419


$
3.02



3,664


$
2.84Exercised


(1,477
)

$
0.62



(297
)

$
2.05



(111
)

$
1.52Cancelled/forfeited


(1,791
)

$
2.75



(1,030
)

$
3.40



(1,521
)

$
6.14Outstanding at end of year


12,945


$
2.37



12,370


$
2.34



10,278


$
2.21Options exercisable at end of year


6,932


$
2.24



7,720


$
1.92



6,547


$
1.74       Stock Options Outstanding

Stock Options ExercisableWeighted-Average





Weighted-AverageRange of

Number

Remaining

Weighted-Average

Number

Remaining

Weighted-AverageExercise Prices

Outstanding

Contractual Life

Exercise Price

Exercisable

Contractual Life

Exercise Price(Cdn.$)

(Thousands)

(Years)

(Cdn.$)

(Thousands)

(Years)

(Cdn.$)$0.50


2,479



0.6


$
0.50



2,479



0.6


$
0.50$1.52 to $2.25


2,998



4.4


$
1.97



708



4.4


$
1.97$2.29 to $3.44


6,560



3.9


$
2.90



3,017



3.7


$
2.99$3.53 to $3.62


328



2.9


$
3.55



148



2.8


$
3.56$5.37 to $7.00


580



0.9


$
5.78



580



0.9


$
5.78$0.50 to $7.00


12,945



3.2


$
2.37



6,932



2.4


$
2.24  76




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    Weighted-Number

Averageof Stock

Grant DateOptions

Fair Value(Thousands)

(Cdn.$)Outstanding at December 31, 2006


4,650


$
1.46Granted


3,843


$
1.09Vested


(2,052
)

$
1.43Cancelled/forfeited


(428
)

$
1.29Outstanding at December 31, 2007


6,013


$
1.12Unvested options outstanding at December 31, 2007 by
    type:Based on fulfulling service conditions


4,278Based on fulfulling performance conditions


1,7356,013     11.
    RETIREMENT
    PLAN  401(k) Plan
  12.
    SEGMENT
    INFORMATION  tm
  Oil
    and Gas
    HTLtm
  tm tm tm
 77




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  GTL
    Corporate
      Year Ended December 31, 2007Oil and GasU.S.


China


HTLtm


GTL


Corporate


TotalOil and gas revenue

$
12,270


$
31,365


$



$



$



$
43,635Loss on derivative instruments


(5,594
)


(4,993
)














(10,587
)Interest income


152



58











259



4696,828



26,430











259



33,517Operating costs


4,319



13,000















17,319General and administrative


2,018



2,042











8,016



12,076Business and technology development










8,807



818







9,625Depletion and depreciation


5,884



19,222



1,402



10



6



26,524Interest expense and financing costs


427



281



29







313



1,050Write-downs and provision for impairment






6,130















6,13012,648



40,675



10,238



828



8,335



72,724Net Loss

$
(5,820
)

$
(14,245
)

$
(10,238
)

$
(828
)

$
(8,076
)

$
(39,207
)Capital Investments

$
3,052


$
23,488


$
5,098


$



$



$
31,638Identifiable Assets (As at December 31, 2007)

$
40,726


$
73,298


$
102,456


$
15,073


$
5,363


$
236,916   78




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Year Ended December 31, 2006Oil and GasU.S.


China


HTLtm


GTL


Corporate


TotalOil and gas revenue

$
12,065


$
35,683


$



$



$



$
47,748Loss on derivative instruments


(424
)


















(424
)Interest income


139



63











574



77611,780



35,746











574



48,100Operating costs


4,299



11,834















16,133General and administrative


1,676



1,337











7,167



10,180Business and technology development










6,177



1,433







7,610Depletion and depreciation


5,378



23,345



3,812



10



5



32,550Interest expense and financing costs


290



156



10







507



963Write off of deferred acquisition costs






736















736Write-downs and provision for impairment






5,420















5,42011,643



42,828



9,999



1,443



7,679



73,592Net Income (Loss)

$
137


$
(7,082
)

$
(9,999
)

$
(1,443
)

$
(7,105
)

$
(25,492
)Capital Investments

$
5,550


$
9,086


$
2,722


$
484


$



$
17,842Identifiable Assets (As at December 31, 2006)

$
42,158


$
72,970


$
107,186


$
15,081


$
11,149


$
248,544   Year Ended December 31, 2005Oil and GasU.S.


China


HTLtm


GTL


Corporate


TotalOil and gas revenue

$
14,069


$
15,731


$



$



$



$
29,800Interest income


30



7











102



13914,099



15,738











102



29,939Operating costs


5,001



2,602















7,603General and administrative


1,178



2,076











6,275



9,529Business and technology development










3,671



1,307







4,978Depletion and depreciation


5,039



9,378



13



11



6



14,447Interest expense and financing costs


311







4







943



1,258Write-downs and provision for impairment






5,000



357



279







5,63611,529



19,056



4,045



1,597



7,224



43,451Net Income (Loss)

$
2,570


$
(3,318
)

$
(4,045
)

$
(1,597
)

$
(7,122
)

$
(13,512
)Capital Investments

$
6,514


$
30,730


$
4,982


$
1,056


$



$
43,282Identifiable Assets (As at December 31, 2005)

$
48,070


$
65,020


$
107,869


$
14,609


$
5,309


$
240,877  79




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  13.
    FINANCIAL
    INSTRUMENTS  Commodity
    Price Risks
    Variations
    in Interest Rates
    Variations
    in Foreign Exchange Rates
      Credit
    Risk
    Derivative
    Instruments
       80




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  14.
    INCOME
    TAXES  :
  Year Ended December 31,2007


2006


2005Tax benefit computed at the combined Canadian federal and
    provincial statutory income tax rates

$
(12,593
)

$
(8,188
)

$
(4,543
)Effect of change in effective income tax rates on future tax
    assets


6,109



870



Foreign net losses affected at lower income tax rates


905



113



1,457Expiry of tax loss carry-forwards


2,440



1,583



1,734Effect of change in foreign exchange rates


(2,879
)


(14
)


(659
)Stock-based compensation not deductible for income tax purposes


1,001



1,031



756Losses on derivatives not deductible for income tax purposes


1,248







Tax credit carry-forward


607



(428
)


(362
)Change in prior year estimate of tax loss carry-forwards


(483
)


503



(368
)Other permanent differences


778



161



Other






(66
)


16(2,867
)


(4,435
)


(1,969
)Valuation allowance


2,867



4,435



1,969$



$



$
     As at December 31,2007


2006Future Income Tax


Future Income TaxAssets


Liabilities


Assets


LiabilitiesOil and gas properties and investments

$



$
(3,330
)

$



$
(22,694
)Intangibles






(36,976
)






(36,778
)Derivative contracts


1,989











Tax loss carry-forwards


61,152







78,834



Tax credit carry-forward


1,278







1,884



Valuation allowance


(24,113
)






(21,246
)


$
40,306


$
(40,306
)

$
59,472


$
(59,472
)      81




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    15.
    NET LOSS
    PER SHARE    Year Ended December 31,2007


2006


2005(Thousands of shares)Stock options


2,433



3,292



3,211Richfirst conversion rights






1,104



9,631Purchase warrants






121



8622,433



4,517



13,704   Richfirst
    Year Ended December 31,2007


2006


2005(Thousands of shares)Stock options


8,616



7,022



5,103Purchase warrants


28,898



25,184



9,689Convertible debt










1,16137,514



32,206



15,953  82




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  16.
    SUPPLEMENTAL
    CASH FLOW INFORMATION    Year Ended December 31,2007


2006


2005Cash paid during the period for:Income taxes

$
6


$
5


$
20Interest

$
479


$
430


$
1,138Investing and Financing activities, non-cash:Acquisition of oil and gas assets(see
    Note 18)Shares issued

$



$
20,000


$
Debt issued






6,547



Receivable applied to acquisition






1,746



$



$
28,293


$
Shares issued for Merger(see Note 18)

$



$



$
75,000Refinance of convertible debt (see Note 6)

$



$



$
4,000Changes in non-cash working capital itemsOperating Activities:Accounts receivable

$
(1,734
)

$
(1,375
)

$
(1,635
)Prepaid and other current assets


85



(434
)


16Accounts payable and accrued liabilities


1,166



(1,067
)


1,840(483
)


(2,876
)


221Investing ActivitiesAccounts receivable


(207
)


2,188



(2,982
)Prepaid and other current assets


86



(1
)


457Accounts payable and accrued liabilities


(1,056
)


(14,895
)


14,547(1,177
)


(12,708
)


12,022$
(1,660
)

$
(15,584
)

$
12,243   17.
    RELATED
    PARTY TRANSACTIONS    18.
    MERGER
    AND ACQUISITIONS  (CMA
 83




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    (Sunwing
  Ensyn Merger Merger
    Agreement Merger
    Shares
  CDF Joint Venture
 84




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  19.
    ADDITIONAL
    DISCLOSURES REQUIRED UNDER U.S. GENERALLY ACCEPTED ACCOUNTING
    PRINCIPLES    Consolidated
    Balance Sheets
    Shareholders
    Equity and Oil and Gas Properties and Development
    Costs
  As at December 31, 2007Assets


Liabilities


Shareholders EquityOil and GasProperties andDevelopment


Derivative


Share Capital


Contributed


AccumulatedCosts


Instruments


and Warrants


Surplus


Deficit


TotalCanadian GAAP

$
111,853


$
9,432


$
347,340


$
9,937


$
(159,990
)

$
197,287Adjustments for:Reduction in stated capital(i)










74,455







(74,455
)


Accounting for stock based compensation(ii)










(396
)


(3,352
)


3,748



Fair value adjustment of derivative instruments (iii)






5,786



(7,988
)


(564
)


2,766



(5,786
)Ascribed value of shares issued for U.S. royalty interests(iv)


1,358







1,358











1,358Provision for impairment(v)


(25,990
)














(25,990
)


(25,990
)Depletion adjustments due to differences in provision for
    impairment(vi)


9,334















9,334



9,334HTLtm
and GTL development costs expensed (vii)


(5,658
)














(5,658
)


(5,658
)U.S. GAAP

$
90,897


$
15,218


$
414,769


$
6,021


$
(250,245
)

$
170,545   85




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  As at December 31, 2006Assets


Liabilities


Shareholders EquityOil and GasProperties and





ShareDevelopment


Derivative


Capital and


Contributed


AccumulatedCosts


Instruments


Warrants


Surplus


Deficit


TotalCanadian GAAP

$
121,918


$
493


$
342,680


$
6,489


$
(120,783
)

$
228,386Adjustments for:Reduction in stated capital(i)










74,455







(74,455
)


Accounting for stock based compensation(ii)










(387
)


(3,361
)


3,748



Fair value adjustment of derivative instruments (iii)






6,378



(8,552
)






2,174



(6,378
)Ascribed value of shares issued for U.S. royalty interests(iv)


1,358







1,358











1,358Provision for impairment(v)


(26,270
)














(26,270
)


(26,270
)Depletion adjustments due to differences in provision for
    impairment(vi)


4,402















4,402



4,402HTLtm
and GTL development costsexpensed (vii)


(11,669
)














(11,669
)


(11,669
)U.S. GAAP

$
89,739


$
6,871


$
409,554


$
3,128


$
(222,853
)

$
189,829   Shareholders
    Equity
      (FASB (SFAS No. 123(R)
 86




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    SFAS No. 133
  Oil
    and Gas Properties and Development Costs
    country-by-country
 87




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    Ceiling Test Impairments


(Increase)U.S. GAAP


Canadian GAAP


DecreaseU.S. PropertiesPrior to 2004

$
34,000


$
34,000


$
2004


15,000



16,350



1,3502005


2,800







(2,800
)2006


7,600







(7,600
)2007










59,400



50,350



(9,050
)China PropertiesPrior to 2004


10,000







(10,000
)2004










2005


1,700



5,000



3,3002006


15,940



5,420



(10,520
)2007


5,850



6,130



28033,490



16,550



(16,940
)$
92,890


$
66,900


$
(25,990
)     tm tm tm
  Deferred
    Financing Costs
   88




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Consolidated
    Statements of Operations
    Year Ended December 31,2007


2006


2005Net


Net Loss


Net


Net Loss


Net


Net LossLoss


per Share


Loss


per Share


Loss


per ShareCanadian GAAP

$
(39,207
)

$
(0.16
)

$
(25,492
)

$
(0.11
)

$
(13,512
)

$
(0.07
)Stock based compensation expense(ii)


















1,788



0.01Fair value adjustment of derivative instruments (iii)


592







(692
)






2,866



0.01Provision for impairment (v and viii)


280







(18,120
)


(0.08
)


500



Depletion adjustments due to differences inprovision for impairment (viii)


4,932



0.02



2,840



0.01



1,080



0.01HTLtm
and GTL development costs expensed,net of write downs(ix)


(268
)






(958
)






(4,828
)


(0.02
)Recovery of
HTLtm
development costs(ix)


6,279



0.03















U.S. GAAP

$
(27,392
)

$
(0.11
)

$
(42,422
)

$
(0.18
)

$
(12,106
)

$
(0.06
)Weighted Average Number of Shares under U.S. GAAP (in thousands)






242,362







235,640







195,803        89




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Stock
    Based Compensation
    Net loss under U.S. GAAP

$
(12,106
)Stock-based compensation expense determined under the fair value
    based method for employee and director awards


(1,911
)Pro forma net loss under U.S. GAAP

$
(14,017
)Basic loss per common share under U.S. GAAP:As reported

$
(0.06
)Pro forma

$
(0.07
)Weighted Average Number of Shares under U.S. GAAP (in thousands)


195,803Stock options granted during the period (thousands)


2,889Weighted average exercise price

$
2.41Weighted average fair value of options granted during the year

$
1.52     Pro
    Forma Effect of Merger and Acquisition
    Year Ended December 31, 2005Net LossRevenue


Net Loss


per Share(Unaudited)As reported

$
29,939


$
(12,106
)

$
(0.06
)Pro forma adjustments


736



(730
)


$
30,675


$
(12,836
)

$
(0.06
)Pro Forma Weighted Average Number of Shares (in thousands)










204,186  90




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    Year Ended December 31,2006


2005Net Income


Net Income





Net Income


Net IncomeRevenue


(Loss)


(Loss) per Share


Revenue


(Loss)


(Loss) per Share(Unaudited)As reported

$
48,100


$
(42,422
)

$
(0.18
)

$
29,939


$
(12,106
)

$
(0.06
)Pro forma adjustments


1,051



809







9,336



3,419



0.02$
49,151


$
(41,613
)

$
(0.18
)

$
39,275


$
(8,687
)

$
(0.04
)Pro Forma Weighted Average Number of Shares (in thousands)










236,840











204,394   Income
    Taxes
  FIN 48
        Consolidated
    Statements of Cash Flow
  tm
 91




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    Additional
    U.S. GAAP Disclosures
  Oil
    and Gas Properties and Investments
    As at December 31, 2007


As at December 31, 2006U.S.


China


Total


U.S.


China


TotalProperty acquisition costs

$
22,196


$
31,137


$
53,333


$
21,494


$
31,137


$
52,631Royalty rights acquired


10,582







10,582



10,582







10,582Exploration costs


42,721



29,621



72,342



42,519



18,010



60,529Development costs


37,272



76,895



114,167



35,412



65,014



100,426HTLtm
facilities


14,412







14,412



12,104







12,104Support equipment and general property


637



411



1,048



685



329



1,014127,820



138,064



265,884



122,796



114,490



237,286Accumulated depletion and depreciation


(30,453
)


(51,643
)


(82,096
)


(24,717
)


(35,790
)


(60,507
)Provision for impairment


(59,400
)


(33,490
)


(92,890
)


(59,400
)


(27,640
)


(87,040
)$
37,967


$
52,931


$
90,898


$
38,679


$
51,060


$
89,739     Incurred inPrior toTotal


2007


2006


2005


2005Property Acquisition

$
869


$
100


$
69


$
40


$
660Royalty rights


659















659Exploration


6,174



257



373



2,766



2,778$
7,702


$
357


$
442


$
2,806


$
4,097     Incurred inPrior toTotal


2007


2006


2005


2005U.S.Knights Landing

$
2,158


$



$
310


$
1,848


$
San Joaquin Basin prospects  other


2,247



100



75



48



2,0244,405



100



385



1,896



2,024ChinaZitong Block


3,297



257



57



910



2,073$
7,702


$
357


$
442


$
2,806


$
4,097  92




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    Accounts
    Payable and Accrued Liabilities
    As at December 31,2007


2006Trade payables

$
6,896


$
6,451Accrued general and administrative expenses


722



926Accrued operating expenses


561



532Accrued capital expenditures


620



1,322Accrued salaries and related expenses


82



76Accrued interest


65



11Other accruals


592



110$
9,538


$
9,428   Impact
    of New and Pending U.S. GAAP Accounting
    Standards
  SFAS No. 141(R) SFAS No. 160
  SFAS No. 159 contract-by-contract
  SFAS No. 157
 93




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    QUARTERLY
    FINANCIAL DATA IN ACCORDANCE WITH CANADIAN AND U.S. GAAP
    (UNAUDITED)
  Quarter Ended2007


20064th Qtr


3rd Qtr


2nd Qtr


1st Qtr


4th Qtr


3rd Qtr


2nd Qtr


1st QtrTotal revenue

$
5,848


$
8,823


$
9,589


$
9,257


$
11,137


$
14,015


$
13,084


$
9,864Net loss:Canadian GAAP

$
(18,849
)

$
(7,232
)

$
(6,579
)

$
(6,547
)

$
(11,323
)

$
(4,388
)

$
(4,405
)

$
(5,376
)U.S. GAAP

$
(16,094
)

$
(2,551
)

$
(1,211
)

$
(7,536
)

$
(18,255
)

$
(5,422
)

$
(2,329
)

$
(16,416
)Net loss per share:Canadian GAAP

$
(0.07
)

$
(0.03
)

$
(0.03
)

$
(0.03
)

$
(0.05
)

$
(0.02
)

$
(0.02
)

$
(0.02
)U.S. GAAP

$
(0.07
)

$
(0.01
)

$



$
(0.03
)

$
(0.08
)

$
(0.02
)

$
(0.01
)

$
(0.07
)    SUPPLEMENTARY
    DISCLOSURES ABOUT OIL AND GAS PRODUCTION ACTIVITIES
    (UNAUDITED)



The following information about the Companys oil and gas
    producing activities is presented in accordance with
    U.S. Statement of Financial Accounting Standards
    No. 69, Disclosures About Oil and Gas Producing
    Activities.



Oil
    and Gas Reserves



Proved oil and gas reserves are the estimated quantities of
    crude oil, natural gas and natural gas liquids which geological
    and engineering data demonstrate with reasonable certainty to be
    recoverable in future years from known reservoirs under existing
    economic conditions.



Proved developed oil and gas reserves are reserves, which can be
    expected to be recovered from existing wells with existing
    equipment and operating methods.



Estimates of oil and gas reserves are subject to uncertainty and
    will change as additional information regarding the producing
    fields and technology becomes available and as future economic
    conditions change.

94




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
      Oil (MBbl)


Gas (MMcf)U.S.


China


Total


U.S.Net proved reserves, December 31, 2004


1,430



7,908



9,338



2,683Revisions of previous estimates


60



(6,293
)(1)


(6,233
)


(601
)(2)Extensions and discoveries


19







19



98Production


(237
)


(315
)


(552
)


(495
)Net proved reserves, December 31, 2005


1,272



1,300



2,572



1,685Revisions of previous estimates


54



179
(3)


233



(214
)Extensions and discoveries


189
(4)






189



Purchases of reserves in place






881
(5)


881



Production


(208
)


(575
)


(783
)


(66
)Sale of reserves in place


(87
)






(87
)


(988
)Net proved reserves, December 31, 2006


1,220



1,785



3,005



417Revisions of previous estimates


84



(22
)


62



(52
)Extensions and discoveries


23







23



Production


(192
)


(483
)


(675
)


(31
)Net proved reserves, December 31, 2007


1,135



1,280



2,415



334Net proved developed reserves as at:December 31, 2005


1,099



1,071



2,170



1,405December 31, 2006


1,003



1,330



2,333



417December 31, 2007


874



1,071



1,945



334     (1)
    
    The China oil and gas reserves reported by the Company and
    included as part of the reserve reports as prepared by our
    independent reserve evaluators for the years 2003 and 2004 were
    based on production results for wells drilled in our pilot
    program on two of the six blocks contained in the Dagang project
    and from existing PetroChina wellbores that were re-entered,
    re-completed and placed on production. There were over
    80 wells drilled on the Blocks, all were logged, but many
    were not production tested. Production and log data from the new
    wells drilled as part of the pilot program and production data
    from the re-entered wells along with the interpretation of the
    logs of these older wells, by analogy, indicated that there was
    considerable potential for a large development, and that new
    wells drilled offsetting older wells drilled by PetroChina would
    be productive. While this in general was the case, there was
    discovered during the initial development phase a lack of
    continuity in the reservoir sands in the two blocks that
    contained much of the potential, and also changes in the
    porosity and permeability of the reservoir as interpreted from
    the original logs. This new information that resulted from the
    initial development drilling resulted in a review of the
    potential scope of the overall project. Following this review,
    two of the blocks were relinquished at the end of 2005 and the
    number of proposed new wells in two of the three largest
    developable blocks was reduced. The block that contained most of
    the pilot wells was fully developed as originally proposed and
    the sixth block was relinquished in July 2007.(2)
    
    The initial reserve estimate for a new property was based on a
    short production history. The reservoir depleted faster than
    anticipated. 95




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
   (3)
    
    These technical revisions were due to production performance,
    plus ongoing production optimizations.(4)
    
    This adjustment was related to a new pool discovery in the
    Companys South Midway prospect.(5)
    
    In February of 2006 the Company re-acquired its 40% working
    interest in the Dagang field.  Standardized
    Measure of Discounted Future Net Cash Flows and Changes Therein
    Relating to Proved Oil and Gas Reserves
      
    future production from proved reserves will differ from
    estimated production;
    future production will also include production from probable and
    potential reserves;
    future, rather than year end, prices and costs will apply; and
    existing economic, operating and regulatory conditions are
    subject to change.    2007U.S.


China


TotalFuture cash inflows

$
99,301


$
118,911


$
218,212Future development and restoration costs


3,490



5,190



8,680Future production costs


38,935



52,446



91,381Future income taxes






1,010



1,010Future net cash flows


56,876



60,265



117,14110% annual discount


13,616



10,674



24,290Standardized measure

$
43,260


$
49,591


$
92,851   2006U.S.


China


TotalFuture cash inflows

$
65,101


$
103,526


$
168,627Future development and restoration costs


2,990



11,660



14,650Future production costs


31,691



38,369



70,060Future net cash flows


30,420



53,497



83,91710% annual discount


7,332



10,705



18,037Standardized measure

$
23,088


$
42,792


$
65,880   96




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  2005U.S.


China


TotalFuture cash inflows

$
83,418


$
76,533


$
159,951Future development and restoration costs


2,890



8,136



11,026Future production costs


32,699



12,828



45,527Future income taxes






1,584



1,584Future net cash flows


47,829



53,985



101,81410% annual discount


15,655



10,686



26,341Standardized measure

$
32,174


$
43,299


$
75,473     2007U.S.


China


TotalSale of oil and gas, net of production costs

$
(7,951
)

$
(18,365
)

$
(26,316
)Net changes in prices and production costs


22,823



16,322



39,145Extensions and discoveries, net of future production and
    development costs


465







465Net change in future development costs






(3,545
)


(3,545
)Development costs incurred during the period that reduced future
    development costs






10,188



10,188Revisions of previous quantity estimates


2,900



(898
)


2,002Accretion of discount


2,309



4,279



6,588Net change in income taxes






(925
)


(925
)Changes in production rates (timing) and other


(374
)


(257
)


(631
)Increase


20,172



6,799



26,971Standardized measure, beginning of year


23,088



42,792



65,880Standardized measure, end of year

$
43,260


$
49,591


$
92,851   97




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  2006U.S.


China


TotalSale of oil and gas, net of production costs

$
(7,766
)

$
(23,849
)

$
(31,615
)Net changes in prices and production costs


(4,851
)


(12,907
)


(17,758
)Extensions and discoveries, net of future production and
    development costs


1,355







1,355Net change in future development costs


(682
)


(7,800
)


(8,482
)Development costs incurred during the period that reduced future
    development costs


2,572



4,686



7,258Revisions of previous quantity estimates


319



5,187



5,506Accretion of discount


3,217



4,664



7,881Net change in income taxes






815



815Purchases of reserves in place






25,645



25,645Sale of reserves in place


(4,405
)






(4,405
)Changes in production rates (timing) and other


1,155



3,052



4,207Decrease


(9,086
)


(507
)


(9,593
)Standardized measure, beginning of year


32,174



43,299



75,473Standardized measure, end of year

$
23,088


$
42,792


$
65,880   2005U.S.


China


TotalSale of oil and gas, net of production costs

$
(9,068
)

$
(13,129
)

$
(22,197
)Net changes in prices and production costs


15,110



20,016



35,126Extensions and discoveries


1,051







1,051Net change in future development costs


(694
)


46,380



45,686Revisions of previous quantity estimates


(1,492
)


(150,588
)


(152,080
)Accretion of discount


5,078



26,798



31,876Net change in income taxes






24,993



24,993Increase (decrease)


9,985



(45,530
)


(35,545
)Standardized measure, beginning of year


22,189



88,829



111,018Standardized measure, end of year

$
32,174


$
43,299


$
75,473  98




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    For the Year Ended December 31,2007


2006


2005U.S.Property acquisitionUnproved

$
702


$
881


$
(1,682
)Exploration


202



1,230



6,169Development


3,087



3,465



2,9123,991



5,576



7,399ChinaProperty acquisitionProved






28,719



Exploration


11,611



2,485



6,931Development


11,881



6,153



23,75623,492



37,357



30,687Total

$
27,483


$
42,933


$
38,086   Unocal
    U.S.Year ended December 31, 2007

$
22.05Year ended December 31, 2006

$
22.11Year ended December 31, 2005

$
14.91ChinaYear ended December 31, 2007

$
32.73Year ended December 31, 2006

$
36.46Year ended December 31, 2005

$
27.00  99




---



##### 



IVANHOE
    ENERGY INC.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    2007


2006


2005U.S.


China


Total


U.S.


China


Total


U.S.


China


TotalOil and gas revenue

$
12,270


$
31,365


$
43,635


$
12,065


$
35,683


$
47,748


$
14,069


$
15,731


$
29,800Operating costs


4,319



13,000



17,319



4,299



11,834



16,133



5,001



2,602



7,603Depletion


4,381



15,832



20,213



4,858



20,967



25,824



4,756



8,507



13,263Provision for impairment






5,850



5,850



7,600



15,940



23,540



2,800



1,700



4,500Results of operations from producing activities

$
3,570


$
(3,317
)

$
253


$
(4,692
)

$
(13,058
)

$
(17,749
)

$
1,512


$
2,922


$
4,434  100




---



##### 



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Rules 13a-15(e) 15d-15(e))
  MANAGEMENT
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
    
    Pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of the Company;
    Provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures of the Company are being made
    only in accordance with authorizations of management and
    directors of the Company; and
    Provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of the
    Companys assets that could have a material effect on the
    financial statements.  Internal Control-Integrated Framework.
  /s/ Joseph I. Gasca


/s/ W. Gordon LancasterJoseph I. Gasca


W. Gordon LancasterPresident and Chief Executive Officer


Chief Financial OfficerFebruary 11, 2008  101




---



##### 



REPORT OF
    INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS
                     102




---



##### 



CHANGES
    IN INTERNAL CONTROL OVER FINANCIAL REPORTING
    ITEM 9B.
    OTHER
    INFORMATION   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    Name, Age and

Position with

Present Occupation andMunicipality of Residence

the Registrant

Principal Occupation for the Past Five YearsDAVID R. MARTIN, age 76
    Santa Barbara, California

Executive Co-Chairman of the Board (since May 2006) and Director
    (since August 1998)

Executive Co-Chairman of the Board, Ivanhoe Energy Inc., (May
    2006  Present); Chairman of the Board, Ivanhoe Energy
    Inc. (August 1998  May 2006); President, Cathedral
    Mountain Corporation (1997  present)A. ROBERT ABBOUD, age 78
    Barrington Hills, IL

Independent Co-Chairman and Lead Director (since May 2006)

President, A. Robert Abboud and Company, a private investment
    company (1984  present)ROBERT M. FRIEDLAND, age 57
    Singapore

Deputy Chairman  Capital Markets (since June, 1999)
    and Director (since February 1995)

Chairman and President, Ivanhoe Capital Corporation, a
    Singapore based venture capital company principally involved in
    establishing and financing international mining and exploration
    companies (1987  present); Chairman and Director,
    Ivanhoe Mines Ltd. (March 1994  present)E. LEON DANIEL, age 70
    Park City, Utah

Deputy Chairman  Projects and Engineering, (since May
    2006) and Director (since August 1998)

Deputy Chairman - Projects and Engineering, Ivanhoe Energy Inc.
    (May 2006  present);  President and Chief Executive
    Officer, Ivanhoe Energy Inc. (June, 1999  May 2006)JOSEPH I. GASCA, age 51
    The Woodlands, Texas

President and Chief Executive Officer (since January 2007)

President and Chief Executive Officer, Ivanhoe Energy Inc.
    (January 2007  present); President and Chief
    Operating Officer, Ivanhoe Energy Inc. (July 2006 
    January 2007); Region Technical Director  Europe/Asia
    BG Group (January 2006  June 2006); General
    Manager  Operations; BG Group (August 2004 --
    December 2005); Chief Operating Officer, Mosaic Natural
    Resources Ltd. (January  2003  July 2004); President,
    Star Insight Ltd. (May 2002- July 2004 103




---



##### 



Name, Age and

Position with

Present Occupation andMunicipality of Residence

the Registrant

Principal Occupation for the Past Five YearsSHUN-ICHI SHIMIZU, age 68
    Tokyo, Japan

Director (since July 1999)

Managing Director of C.U.E. Management Consulting Ltd.
    (1994  present)HOWARD R. BALLOCH, age 56
    Beijing, China

Director (since January 2002)

President, The Balloch Group (July 2001  present)
    President, Canada China Business Council (July 2001 
    2006); Canadian Ambassador to China, Mongolia and Democratic
    Republic of Korea (April 1996  July 2001)J. STEVEN RHODES, age 56
    Los Angeles, California

Director (since December 2003)

Chairman and Chief Executive Officer, Claiborne -Rhodes, Inc.
    (2001  present); Senior Vice President, First
    Southwest Company (1999  2001)ROBERT G. GRAHAM, age 54
    Ottawa, Ontario

Director (since April 2005)

Chairman of the Board of Directors, Ensyn Corporation (June,
    2007  Present);  President and CEO, Ensyn Corporation
    (April 2005  June 2007); Chairman and CEO, Ensyn
    Group (October 1984-- April 2005)ROBERT A. PIRRAGLIA, age 58
    Boca Raton, Florida

Director (since April 2005)

Executive Vice President, Ensyn Corporation (October
    2007  Present); Chief Operating Officer and Vice
    President, Ensyn Corporation (April 2005  October
    2007); Chief Operating Officer and Vice President, Ensyn Group,
    Inc. (September 1998  April 2005)BRIAN DOWNEY, C.M.A. age 66
    Lake in the Hills, Illinois

Director (since July 2005)

President, Downey & Associates Management Inc. (July
    1986  present); Financial Advisor, Lending Solutions,
    Inc. (January 2002  present) Partner/Owner, Lending
    Solutions, Inc. (November 1995  January 2002)PETER G. MEREDITH C.A.,
    age 65
    Vancouver, British Columbia

Director (since December, 2007)

Deputy Chairman, Ivanhoe Mines Ltd. (May, 2006 
    present): Chief Financial Officer, Ivanhoe Capital Corporation
    (1996  present) Chief Executive Officer, SouthGobi
    Energy Resources (June, 2007  present), Chief
    Financial Officer, Ivanhoe Mines Ltd. (June, 1999 
    November, 2001)W. GORDON LANCASTER, C.A.,
    age 64
    Vancouver, British Columbia

Chief Financial Officer (since January 2004)

Chief Financial Officer, Ivanhoe Energy Inc. (January
    2004  present); Vice President Finance and Chief
    Financial Officer, Xantrex Technology Inc. (July
    2003  December 2003); Vice President Finance and
    Chief Financial Officer, Power Measurement, Inc. (August
    2000  June 2003)MICHAEL SILVERMAN, age 55
    Houston, Texas

Executive Vice President, Technology and Chief Technology
    Officer (since September  2007)

Executive Vice President, Technology and Chief Technology
    Officer, Ivanhoe Energy Inc. (September, 2007 
    present); Vice President, Technology, Ivanhoe Energy Inc. (May,
    2007  September, 2007); Vice President Technology,
    KBR, Inc. (May, 2004  May, 2007); Director Technology
    Center, KBR, Inc. (May, 2000  May, 2004)EDWIN J. VEITH, age 49
    Frazier Park, California

Executive Vice President, Upstream (since September 2007)

Executive Vice President, Upstream, Ivanhoe Energy Inc.
    (September, 2007  present); Vice President, HTL
    Technology, Ivanhoe Energy (USA) Inc. (Nov., 2005 
    present); Chief Reservoir Engineer, Ivanhoe Energy (USA) Inc.
    (June, 2001  Nov., 2005) 104




---



##### 



Name, Age and

Position with

Present Occupation andMunicipality of Residence

the Registrant

Principal Occupation for the Past Five YearsPATRICK CHUA, age 52
    Hong Kong, China

Executive Vice-President (since June 1999)

Executive Vice-President, Ivanhoe Energy Inc. (June
    1999  present); Chairman, Sunwing Energy Ltd.
    (Bermuda) (April 2004  present); President, Sunwing
    Energy Ltd. (Bermuda) (March 2000  April 2004)GERALD MOENCH, age 59
    Lethbridge, Alberta

Executive Vice-President (since June 1999)

Executive Vice-President, Ivanhoe Energy Inc. (June,
    1999  present); President, Sunwing Energy Ltd.
    (Bermuda) (April 2004  present)   AGM
      Business Corporations Act
   105




---



##### 



Other
    Directorships
    Code
    of Business Conduct and Ethics
  Form 10-K. Suite 654-999 604-688-8323.
  ITEM 11.
    EXECUTIVE
    COMPENSATION  Named
    Executive Officers
 106




---



##### 



Summary
    Compensation Table
    Summary Compensation Table (U.S.$)Long Term CompensationAwardsSecuritiesAnnual Compensation


Under


RestrictedOther


Options/


Shares or


PayoutsAnnual


SARs


Restricted





All OtherName and










Compen-


Granted


Share


LTIP


CompensationPrincipal Position

Year


Salary


Bonus(3)(5)


sation


(#)


Units


Payouts


(U.S.$)(4)Joseph I. Gasca


2007



313,750























20,500President and Chief


2006



152,417











1,000,000











9,200Executive Officer(1)


2005



























W. Gordon Lancaster


2007



243,600























Chief Financial Officer


2006



231,000



80,000



















2005



225,000























David R. Martin


2007



281,250























20,500Executive Co-Chairman


2006



270,000



90,000



















20,0002005



270,000























16,200E. Leon Daniel


2007



310,000























20,500Deputy Chairman  Projects and


2006



340,000



100,000



















20,000Engineering


2005



340,000











500,000











16,200Ed Veith Executive Vice


2007



194,877











158,000











15,500President, Upstream(2)


2006



























2005



























     (1)
    
    Mr. Gasca was appointed President and Chief Operating
    Officer effective July 2006 and was designated the Chief
    Executive Officer effective January 29, 2007.(2)
    
    Mr. Veith was appointed as Executive Vice President,
    Upstream in September 2007.(3)
    
    Bonuses earned were paid in cash and common shares from our
    Employees and Directors Equity Incentive Plan at
    fair market value on the date of approval by the Compensation
    Committee.(4)
    
    Our matching contribution to the 401(k) plan, a U.S. defined
    contribution retirement plan available to U.S. employees.(5)
    
    As of the date of this report, our Compensation Committee has
    not made a final recommendation to the board of directors with
    respect to the payment of bonuses to our executive officers in
    respect of 2007. Pending the Compensation Committees
    recommendation and a decision by the board of directors to award
    bonuses to some or all of our executive officers, the amount of
    any bonuses payable to the Named Executive Officers in respect
    of 2007 cannot presently be determined.  Long Term
    Incentive Plan
    Options
    and Stock Appreciation Rights (SARs)
   107




---



##### 



Option/SAR Grants in Last Fiscal YearMarket Value ofPercent of Total





SecuritiesNumber of Securities


Options/SARs





UnderlyingUnderlying


Granted to


Exercise


Options/SARs onOptions/SARs


Employees in


or Base Price


the Date of Grant


ExpirationName

Granted


Financial Year


($/Security)


($/Security)


Date(a)

(#)(b)


(c)


(d)


(e)


(f)Ed Veith


158,000(1
)


4.9
%

U.S. $
1.92


$
303,360



October 4, 2012     (1)
    
    80% of these incentive stock options vest and become exercisable
    incrementally as certain business development milestones are
    achieved.(2)
    
    On March 5, 2008, in anticipation of Robert M.
    Friedlands appointment as Chief Executive Officer, the
    Board awarded Mr. Friedland 2.5 million incentive
    stock options, at an exercise price of Cdn.$1.61. Twenty percent
    of the incentive stock options vested on the date of the grant,
    with an additional 20% vesting upon the anniversary of the award
    date each year for the next four years.  Aggregated
    Option Exercises
    Aggregated Option Exercises in Last Fiscal Year and Fiscal
    Year End Option ValuesValue of UnexercisedNumber of Securities


In-the-MoneyUnderlying Unexercised


Options atShares





Options at


December 31, 2007Acquired on


Value


December 31, 2007


($U.S.)Exercise


Realized


(#)


Exercisable/UnexercisableName

(#)


($U.S.)


Exercisable/Unexercisable


(1)Joseph I. Gasca










500,000/500,000



W. Gordon Lancaster










250,000/0



David R. Martin


1,091,195



1,917,154



2,062,500/0



2,198,158/0E. Leon Daniel










466,667/200,000



177,629/0Ed Veith










168,694/332,040



     (1)
    
    The value of unexercised in-the-money options at financial
    year-end is the difference between the closing price of our
    common shares on December 31, 2007 on the Toronto Stock
    Exchange (Cdn$1.55) and the exercise prices. This value has not
    been, and may never be, realized. The actual gains, if any, on
    exercise will depend on the value of our common shares on the
    date of option exercise.  Option
    and SAR Repricings
    Defined
    Benefit and Actuarial Plan
  401(k) Plan
 108




---



##### 



Employment
    Contracts, Termination of Employment and
    Change-In-Control
    Arrangements
        Director
    Compensation
      
    during the year ended December 31, 2007, we paid J. Steven
    Rhodes a monthly fee of U.S.$4,950.00 for providing business
    development consulting services;
    during the year ended December 31, 2007, we paid a company
    controlled by Dr. Robert Graham fees for certain technical
    consulting services provided personally by Dr. Graham. We
    also paid additional amounts to a company in which
    Dr. Graham is a significant shareholder for services
    rendered to us by that company. See Item 13 Certain
    Relationships and Related Transactions and Director
    Independence  Certain Business
    Relationships; and
    during the year ended December 31, 2007, we paid a company
    controlled by Shun-ichi Shimizu certain fees and expenses for
    providing business development consulting and other services.
    See Item 13 Certain Relationships and Related
    Transactions and Director Independence  Certain
    Business Relationships. 109




---



##### 



Employees
    and Directors Equity Incentive Plan
  Plan Share
    Option Plan Share Bonus Plan Share Purchase Plan
    Share
    Option Plan
        Share
    Bonus Plan
    Share
    Purchase Plan
         110




---



##### 



General
      
    under the Plan to any one person may not exceed 5% of our issued
    and outstanding common shares; or
    under the Plan or under any other security-based compensation
    arrangement to our insiders may not exceed ten per cent (10%) of
    our issued and outstanding common shares.    
    under the Plan or under any other security-based compensation
    arrangement within any one-year period to our insiders may not
    exceed ten per cent (10%) of our issued and outstanding common
    shares; or
    under the Plan within any one-year period to any one of our
    insiders and his or her associates may not exceed five per cent
    (5%) of our issued and outstanding common shares.      
    an amendment to the aggregate number of common shares that may
    be reserved for issuance under the Plan;
    an amendment to the aggregate maximum number of common shares
    issuable under the Share Bonus Plan component of the Plan;
    an amendment to the Plans express limitations on the
    maximum number of common shares that may be reserved for
    issuance, or issued, to insiders;
    an amendment that would reduce the exercise price, or extend the
    expiry date, of an outstanding option granted to an
    insider; or
    an amendment to the amending provisions of the Plan.  Composition
    of the Compensation Committee
    Report on
    Executive Compensation
  Compensation
    and Benefits Committee and Approach to Executive
    Compensation
   111




---



##### 



Base
    Salary
      Annual
    Bonus
   112




---



##### 



Incentive
    Compensation
         113




---



##### 



Chief
    Executive Officer Compensation
  Change-In-Control
           114




---



##### 



Performance
    Graph
    
  As at December 31,(Cdn.$)2002


2003


2004


2005


2006


2007Ivanhoe Energy Inc.


$
100



$
674



$
422



$
171



$
218



$
215S&P/TSX Composite Index


$
100



$
127



$
145



$
180



$
211



$
232   Exchange Act Regulation S-K
  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    Name and Address of

Number of Shares


PercentageTitle of Class

Beneficial Owner

Beneficially Owned(1)


of ClassCommon Shares

Robert M. Friedland
    150 Beach Road
    #25-03 The Gateway West
    Singapore  189720


51,511,725
(2)


20.37Common Shares

Directors and Executive Officers
    as a Group (17 persons)


65,083,628
(3)


25.74     (1)
    
    Beneficial ownership is determined in accordance with the rules
    of the SEC and generally includes voting or investment power
    with respect to securities. Unissued common shares subject to
    options, warrants or other 115




---



##### 



convertible securities currently exercisable or convertible, or
    exercisable or convertible within 60 days, are deemed
    outstanding for the purpose of computing the beneficial
    ownership of common shares of the person holding such
    convertible security but are not deemed outstanding for
    computing the beneficial ownership of common shares of any other
    person.  (2)
    
    50,594,620 common shares are held indirectly through Newstar
    Securities SRL, Premier Mines SRL and Evershine SRL, companies
    controlled by Mr. Friedland.(3)
    
    Includes 5,777,407 unissued common shares issuable to directors
    and senior officers upon exercise of incentive stock options.  Security
    Ownership of Management
    Amountand Natureof Beneficial


Percentage


Incentive StockOwnership (1)


of Class


Options Included inTitle of Class

Name of Beneficial Owner

(a)


(b)


(a)(c)Common Shares

David R. Martin


3,712,364



1.47



2,062,500Common Shares

A. Robert Abboud


432,000



0.17



232,000Common Shares

Robert M. Friedland


51,511,725
(2)


20.37



500,000Common Shares

E. Leon Daniel


1,246,683



0.49



566,667Common Shares

Joseph I. Gasca


533,750



0.21



500,000Common Shares

Shun-ichi Shimizu


180,100



0.07



80,000Common Shares

Howard R. Balloch


220,000



0.09



170,000Common Shares

J. Steven Rhodes


331,000



0.13



325,000Common Shares

Robert G. Graham


5,315,112



2.10



290,000Common Shares

Robert A. Pirraglia


463,396



0.18



240,000Common Shares

Brian Downey


220,000



0.09



170,000Common Shares

Peter G. Meredith


30,000



0.01



30,000Common Shares

W. Gordon Lancaster


301,451



0.12



250,000Common Shares

Michael Silverman


104,000



0.04



104,000Common Shares

Edwin J. Veith


223,618



0.09



187,240Common Shares

Patrick Chua


96,265



0.04



10,000Common Shares

Gerald Moench


162,164



0.06



60,000Common Shares

All directors and executive officers as a group (17 persons)


65,083,628



25.74



5,777,407     (1)
    
    Beneficial ownership is determined in accordance with the rules
    of the SEC and generally includes voting or investment power
    with respect to securities. Unissued common shares subject to
    options, warrants or other convertible securities currently
    exercisable or convertible, or exercisable or convertible within
    60 days, are deemed outstanding for the purpose of
    computing the beneficial ownership of common shares of the
    person holding such convertible security but are not deemed
    outstanding for computing the beneficial ownership of common
    shares of any other person.(2)
    
    50,594,620 common shares are held indirectly through Newstar
    Securities SRL, Premier Mines SRL and Evershine SRL, companies
    controlled by Mr. Friedland. 116




---



##### 



Securities
    Authorized for Issuance under Equity Compensation
    Plans
    Equity Compensation Plan InformationNumber of SecuritiesNumber of Securities



Remaining Availableto be Issued

Weighted-Average

for Future IssuanceUpon Exercise of

Exercise Price of

Under Equity CompensationOutstanding Options,

Outstanding Options,

Plans (Excluding SecuritiesWarrants and Rights

Warrants and Rights

Reflected in ColumnPlan Category

(a)

(b)

(a))(c)Equity compensation plans approved by Security holders


11,944,764



Cdn. $2.30



3,034,400Equity compensation plans not approved by Security holders(1)


1,000,000



Cdn. $3.18



Total


12,944,764



Cdn. $2.37



3,034,400     (1)
    
    Consists of incentive stock options granted to Mr. Joseph
    Gasca as an inducement to accepting employment with the Company.
    These incentive stock options were not granted under the
    Companys existing Plan previously approved by shareholders
    and the common shares reserved for issuance to Mr. Gasca
    upon the exercise of these incentive stock options are not
    included in the total number of common shares reserved for
    issuance under the existing Plan. Under the rules and policies
    of the Toronto Stock Exchange, security based compensation
    arrangements offered as inducements to prospective employees do
    not require shareholder approval.  ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE  Transactions
    with Management and Others
    Certain
    Business Relationships
     117




---



##### 



ITEM 14.
    PRINCIPAL
    ACCOUNTANTS FEES AND SERVICES    Year Ended December 31,Cdn.($000)2007


2006Audit fees(a)

$
702


$
835Audit related fees(b)






112Tax fees(c)


80



135All other fees(d)






$
782


$
1,082     (a)
    
    Fees for audit services billed in 2007 and 2006 consisted of:  
    Audit of our annual financial statements
    Reviews of our quarterly financial statements
    Comfort letters, statutory and regulatory audits, consents and
    other services related to Canadian and U.S. securities
    regulatory matters
    Review of our internal controls over financial reporting in
    compliance with the requirements of the Sarbanes Oxley Act of
    2002.  (b)
    
    Fees for audit related services billed in 2006 consist of
    financial and tax analysis in contemplation of our proposed
    merger with China Mineral Acquisition Corporation.(c)
    
    Fees for tax services billed in 2007 and 2006 consisted of tax
    compliance and tax planning and advice:  
    Fees for tax compliance services totaled Cdn.$62,000 and
    Cdn.$71,000 in 2007 and 2006, respectively. Tax compliance
    services are services rendered based upon facts already in
    existence or transactions that have already occurred to
    document, compute, and obtain government approval for amounts to
    be included in tax filings and consisted of:        
    Fees for tax planning and advice services totaled Cdn.$18,000
    and Cdn.$64,000 in 2007 and 2006, respectively. Tax planning and
    advice are services rendered with respect to proposed
    transactions or that alter a transaction to obtain a particular
    tax result. Such services consisted of tax advice related to
    structuring certain proposed mergers, acquisitions and disposals.  (d)
    
    All other fees includes fees for services billed in
    2007 and 2006 other than the services reported as Audit
    fees, Audit related fees, or Tax
    fees. 118




---



##### 



Audit
    Committee Pre-Approval Policy
    Disclosure Categories Service
    List
     119




---



##### 



PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Form 10-K:
  Exhibits3
.1

Articles of Ivanhoe Energy Inc. as amended May 3, 2007.3
.2

Bylaws of Ivanhoe Energy Inc. as amended May 15, 2001 and
    further amended March 8, 200710
.1

Petroleum Contract for Kongnan Block, Dagang Oilfield of the
    Peoples Republic of China dated September 8, 1997
    between China National Petroleum Corporation and Pan-China
    Resources Ltd., as amended June 11, 1999 (Incorporated by
    reference to Exhibit 3.15 of
    Form 20-F
    filed with the Securities and Exchange Commission on
    February 28, 2000)10
.2

Master License Agreement Amendment No. 1 dated
    October 11, 2000 between Syntroleum Corporation and Ivanhoe
    Energy Inc. (Incorporated by reference to Exhibit 10.18 of
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 16, 2001)10
.3

Petroleum Contract dated September 19, 2002 between China
    National Petroleum Corporation and Pan-China Resources Ltd. for
    Zitong Block, Sichuan Basin of the Peoples Republic of
    China (Incorporated by reference to Exhibit 10.12 of
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 19, 2003)10
.4

Strategic Development Alliance Letter Agreement dated
    September 26, 2002 between Ivanhoe Energy Inc. and CITIC
    Energy Ltd. (Incorporated by reference to Exhibit 10.13 of
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 19, 2003)10
.5

Employees and Directors Equity Incentive Plan as
    amended May 3, 2007.10
.6

Amendment No. 2 to Master License Agreement between
    Syntroleum Corporation and the Company dated June 1, 2002
    (Incorporated by reference to Exhibit 10.6 of
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 15, 2006).10
.7

Amendment No. 3 to Master License Agreement between
    Syntroleum Corporation and the Company dated July 1, 2003
    (Incorporated by reference to Exhibit 10.17 of
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 15, 2004)10
.8

Terms of Agreement  Conversion of Participating
    Interest by Richfirst dated February 18, 2006 among
    Richfirst Holdings Limited, Pan-China Resources Limited, Sunwing
    Energy Ltd. and the Company (Incorporated by reference to
    Exhibit 10.2 of
    Form 8-K
    filed with the Securities and Exchange Commission on
    February 24, 2006)10
.9

Amended and Restated License Agreement dated December 8,
    1997 between Ensyn Technologies Inc. and Ensyn Group, Inc. and
    as amended on February 12, 1999 (Incorporated by reference
    to Exhibit 10.12 of
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 15, 2006).10
.10

Employment Agreement dated November 25, 2003 between
    Ivanhoe Energy Inc. and W. Gordon Lancaster (Incorporated by
    reference to Exhibit 10.22 of
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 10, 2005)10
.11

Employment Agreement, dated May 15, 2006 between Ivanhoe
    Energy Inc. and Joseph I. Gasca (Incorporated by reference to
    Exhibit 10.1 of
    Form 8-K
    filed with the Securities and Exchange Commission on
    May 26, 2006).10
.12

Stock Purchase Agreement, dated May 12, 2006 between
    Ivanhoe Energy Inc., Sunwing Holding Corporation, Sunwing Energy
    Ltd and China Mineral Acquisition Corporation (Incorporated by
    reference to Exhibit 10.1 of
    Form 8-K
    filed with the Securities and Exchange Commission on
    May 17, 2006).10
.13

Termination of Stock Purchase Agreement, dated August 31,
    2006, between Ivanhoe Energy Inc., Sunwing Holding Corporation,
    Sunwing Energy Ltd. and China Mineral Acquisition Corporation
    (Incorporated by reference to Exhibit 99.1 of
    Form 8-K
    filed with the Securities and Exchange Commission on
    September 1, 2006). 120




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##### 



Exhibits10
.14

Facility Agreement, dated September 14, 2007 between
    Pan-China Resources Ltd., Sunwing Energy Ltd., Sunwing Holding
    Corporation, Sunwing Zitong Energy Ltd., Standard Bank PLC and
    Standard Bank Asia Limited (Incorporated by reference to
    Exhibit 10.15 of
    Form 10-Q
    filed with the Securities and Exchange Commission on
    November 8, 2007).10
.15

Credit Agreement, dated October 30, 2006 between Ivanhoe
    Energy (USA) Inc. and LaSalle Bank N.A.10
.16

Indemnification Agreements entered into during the first quarter
    of 2008 between Ivanhoe Energy Inc. and its executive officers
    and directors.10
.17

Employment Agreement dated May 2, 2007 between Ivanhoe
    Energy Inc. and Michael Silverman.14
.1

Code of Business Conduct and Ethics as amended November 2,
    2007.21
.1

Subsidiaries of Ivanhoe Energy Inc.23
.1

Consent of GLJ Petroleum Consultants Ltd., Petroleum Engineers23
.2

Consent of Netherland, Sewell & Associates, Inc.23
.3

Consent of Deloitte & Touche LLP31
.1

Certification by the Chief Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200231
.2

Certification by the Chief Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200232
.1

Certification by the Chief Executive Officer Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 200232
.2

Certification by the Chief Financial Officer Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002  121




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##### 



SIGNATURES
      Joseph
    I. Gasca
   Title:
    President and Chief Executive Officer     Signature

Title

Date/s/  JOSEPH
    I. GASCAJoseph
    I. Gasca

President and Chief Executive Officer (Principal Executive
    Officer)

March 5, 2008/s/  W.
    GORDON LANCASTERW.
    Gordon Lancaster

Chief Financial Officer (Principal Financial and Accounting
    Officer)

March 5, 2008/s/  DAVID
    R. MARTINDavid
    Martin

Executive Co-Chairman of the Board and Director

March 5, 2008/s/  A.
    ROBERT ABBOUDA.
    Robert Abboud

Independent Co-Chairman and Lead Director

March 5, 2008/s/  ROBERT
    M. FRIEDLANDRobert
    M. Friedland

Deputy Chairman  Capital Markets and Director

March 5, 2008/s/  E.
    LEON DANIELE.
    Leon Daniel

Deputy Chairman  Projects and Engineering and Director

March 5, 2008/s/  SHUN-ICHI
    SHIMIZUShun-ichi
    Shimizu

Director

March 5, 2008/s/  HOWARD
    R. BALLOCHHoward
    Balloch

Director

March 5, 2008/s/  J.
    STEVEN RHODESJ.
    Steven Rhodes

Director

March 5, 2008/s/  ROBERT
    G. GRAHAMRobert
    G. Graham

Director

March 5, 2008 122




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##### 



Signature

Title

Date/s/  ROBERT
    A. PIRRAGLIARobert
    A. Pirraglia

Director

March 5, 2008/s/  BRIAN
    DOWNEYBrian
    Downey

Director

March 5, 2008/s/  PETER
    G. MEREDITHPeter
    G. Meredith

Director

March 5, 2008  123




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##### 



EXHIBIT INDEX
  Exhibit No.

Description3
.1

Articles of Ivanhoe Energy Inc. as amended to May 3, 20073
.2

Bylaws of Ivanhoe Energy Inc. as amended May 15, 2001 and
    further amended March 8, 200710
.1

Petroleum Contract for Kongnan Block, Dagang Oilfield of the
    Peoples Republic of China dated September 8, 1997
    between China National Petroleum Corporation and Pan-China
    Resources Ltd., as amended June 11, 1999 (Incorporated by
    reference to Exhibit 3.15 of
    Form 20-F
    filed with the Securities and Exchange Commission on
    February 28, 2000)10
.2

Master License Agreement Amendment No. 1 dated
    October 11, 2000 between Syntroleum Corporation and Ivanhoe
    Energy Inc. (Incorporated by reference to Exhibit 10.18 of
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 16, 2001)10
.3

Petroleum Contract dated September 19, 2002 between China
    National Petroleum Corporation and Pan-China Resources Ltd. for
    Zitong Block, Sichuan Basin of the Peoples Republic of
    China (Incorporated by reference to Exhibit 10.12 of
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 19, 2003)10
.4

Strategic Development Alliance Letter Agreement dated
    September 26, 2002 between Ivanhoe Energy Inc. and CITIC
    Energy Ltd. (Incorporated by reference to Exhibit 10.13 of
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 19, 2003)10
.5

Employees and Directors Equity Incentive Plan as
    amended May 3, 2007.10
.6

Amendment No. 2 to Master License Agreement between
    Syntroleum Corporation and the Company dated June 1, 2002
    (Incorporated by reference to Exhibit 10.6 of
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 15, 2006).10
.7

Amendment No. 3 to Master License Agreement between
    Syntroleum Corporation and the Company dated July 1, 2003
    (Incorporated by reference to Exhibit 10.17 of
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 15, 2004)10
.8

Terms of Agreement  Conversion of Participating
    Interest by Richfirst dated February 18, 2006 among
    Richfirst Holdings Limited, Pan-China Resources Limited, Sunwing
    Energy Ltd. and the Company (Incorporated by reference to
    Exhibit 10.2 of
    Form 8-K
    filed with the Securities and Exchange Commission on
    February 24, 2006)10
.9

Amended and Restated License Agreement dated December 8,
    1997 between Ensyn Technologies Inc. and Ensyn Group, Inc. and
    as amended on February 12, 1999 (Incorporated by reference
    to Exhibit 10.12 of
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 15, 2006)10
.10

Employment Agreement dated November 25, 2003 between
    Ivanhoe Energy Inc. and W. Gordon Lancaster (Incorporated by
    reference to Exhibit 10.22 of
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 10, 2005)10
.11

Employment Agreement, dated May 15, 2006 between Ivanhoe
    Energy Inc. and Joseph I. Gasca (Incorporated by reference to
    Exhibit 10.1 of
    Form 8-K
    filed with the Securities and Exchange Commission on
    May 26, 2006)10
.12

Stock Purchase Agreement, dated May 12, 2006 between
    Ivanhoe Energy Inc., Sunwing Holding Corporation, Sunwing Energy
    Ltd and China Mineral Acquisition Corporation (Incorporated by
    reference to Exhibit 10.1 of
    Form 8-K
    filed with the Securities and Exchange Commission on
    May 17, 2006)10
.13

Termination of Stock Purchase Agreement, dated August 31,
    2006, between Ivanhoe Energy Inc., Sunwing Holding Corporation,
    Sunwing Energy Ltd. and China Mineral Acquisition Corporation
    (Incorporated by reference to Exhibit 99.1 of
    Form 8-K
    filed with the Securities and Exchange Commission on
    September 1, 2006).10
.14

Facility Agreement, dated September 14, 2007 between
    Pan-China Resources Ltd., Sunwing Energy Ltd., Sunwing Holding
    Corporation, Sunwing Zitong Energy Ltd., Standard Bank PLC and
    Standard Bank Asia Limited (Incorporated by reference to
    Exhibit 10.15 of
    Form 10-Q
    filed with the Securities and Exchange Commission on
    November 8, 2007).10
.15

Credit Agreement, dated October 30, 2006 between Ivanhoe
    Energy (USA) Inc. and LaSalle Bank N.A. 128




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##### 



Exhibit No.

Description10
.16

Indemnification Agreements entered into during the first quarter
    of 2008 between Ivanhoe Energy Inc. and its executive officers
    and directors.10
.17

Employment Agreement, dated May 2, 2007 between Ivanhoe
    Energy Inc. and Michael Silverman.14
.1

Code of Business Conduct and Ethics amended November 2,
    2007.21
.1

Subsidiaries of Ivanhoe Energy Inc.23
.1

Consent of GLJ Petroleum Consultants Ltd., Petroleum Engineers23
.2

Consent of Netherland, Sewell & Associates, Inc.23
.3

Consent of Deloitte & Touche LLP31
.1

Certification by the Chief Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200231
.2

Certification by the Chief Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200232
.1

Certification by the Chief Executive Officer Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 200232
.2

Certification by the Chief Financial Officer Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002  129