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Ivanhoe Energy has announced what it's calling a "significant" natural gas discovery at its subsidiary Sunwing in southwest China, expecting to help meet China's energy needs.



Calgary-based Ivanhoe said Tuesday the Yixin-2 well has initial flow rates of up to 13 million cubic feet per day recorded.



Shares of the company were ahead 15 per cent to $2.98 on the Toronto Stock Exchange.



"It has taken over 10 years of perseverance and the application of industry-leading experience and know-how to reach this point," said Robert Friedland, co-chairman of subsidiary Sunwing Energy Ltd.



"Demand for natural gas in China is continuing to out-pace supply and now Sunwing Energy is in an excellent position to help supply this burgeoning market on very favourable commercial terms through an established collection and distribution system."



Technical teams from Sunwing and PetroChina are working to develop a strategy to evaluate the Yixin structure, as well as the potential for further discoveries elsewhere on the Zitong Block, Ivanhoe said.



Sunwing's Zitong Block is in the Sichuan province, the oldest and one of the most productive gas-producing regions in China.



Ivanhoe Energy Inc. is an independent, international heavy oil development and production company. It has operations in Canada, Ecuador, China and Mongolia.



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