Canadian heavy oil producer Ivanhoe Energy Inc said it discovered natural gas at a third well at its Zitong exploration block in the Sichuan Province in China.

Last month, Ivanhoe, which has operations in Canada, Ecuador, China and Mongolia, had discovered natural gas at two wells at the Zitong block.

The Zitong-1 well flowed at a restricted rate of about 750,000 cubic feet per day during the initial 24-hour test period, the company said in a statement.

"We look forward to production and cash flow in 2011 and further development activity in this area in the very near future," Chief Operating Officer David Dyck said.

The Calgary, Alberta-based company's shares closed at C$3.13 on Friday on the Toronto Stock Exchange.