Equator and Peak Continuing Talks on Bilabri Project

Bilabri and Owanare Fields
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In a News Release on March 5, 2007, Equator Exploration announced that it was in discussions with the leaseholder of OML 122, Peak Petroleum Industries Nigeria Limited regarding Peak's failure to pay cash calls on the Bilabri Oil Development. It was stated at that time that the Company had granted an extension to the period for Peak to pay the sum due, until April 27, 2007. Peak has the option of taking a carried interest from Equator for the whole of the Bilabri Oil Development, in which case Equator would receive a higher portion of the future revenues.

The Company is continuing the negotiations with Peak with respect to the detailed terms under which Peak will fund its outstanding financial obligations under the Finance and Service Agreement. In order to permit more time to conclude negotiations, the Company has granted Peak a further short term extension to the payment date. The Company intends to make a further announcement with regard to the outcome of these discussions no later than May 7, 2007.

Further to the Company's News Release of March 15th on Corporate Activity and Refinancing, the Company is still in very active discussions with the interested party, which may or may not lead to a transaction being concluded. A further announcement will be made in due course.

The Company is also in detailed negotiations with financiers with a view to securing additional short term working capital. A further announcement will be made as and when such financing is in place.

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