Bulford Dolphin Lands Contract Offshore Nigeria

Equator Exploration announced that it has issued a Letter of Intent to Dolphin Drilling Company, a subsidiary of Fred Olsen Energy ASA, to take five well slots for the Bulford Dolphin semisubmersible rig. It will use some or all of these slots to drill appraisal and exploration wells on the highly prospective block OML 122, located offshore Nigeria. Any slots not required by Equator can be assigned to other operators at its election.

OML 122 is located 25-60 km offshore in water depths of 40-300 metres and covers an area of 1,295 sq. km on the Western Niger Delta, east of Shell's giant Bonga Field (estimated 1.4 billion barrels) on OML 118 and South west of Shell's EA Field on OML 79.

The Bulford Dolphin, currently located on the Mexican side of the Gulf of Mexico, is expected to be on location in Nigeria by November 2005. One of the first two wells will be an appraisal well on the Bilabri discovery located close to the Bilabri-1 well. This well, drilled in the 70's, was production tested at a rate of 5,175 barrels of oil per day on a 48/64 choke, with 40 API gravity oil and a GOR rate of 600 scf/bbl. The Bilabri-1 well also encountered several gas zones which 3D seismic indicates are of significant size. In addition to Bilabri, hydrocarbons were also discovered in the nearby Orobiri structure, drilled at the same time.

The exploration well will target the Owanare prospect, located in a water depth of 122 metres. Owanare is covered by the 3D seismic data acquired in 1999, which indicates significant hydrocarbon potential.

OML 122
Equator announced on 7 April 2005 that it had signed an agreement with Peak Petroleum Industries Nigeria Limited ("Peak") to share in the appraisal of existing discoveries, the exploration of prospects and the resulting potential developments on OML 122.

The licence was granted to Peak as Oil Prospecting Licence (OPL) 460 in 1993 under the Nigerian Government's Indigenous Programme, which was put in place to encourage the development of an indigenous Nigerian upstream industry. OPL 460 was converted to Oil Mining Licence (OML) 122 in May 2001 with an initial term of 20 years. Under the hydrocarbon laws of Nigeria, this conversion to an OML marked the recognition by the Nigerian Government that an exploitable hydrocarbon accumulation had been discovered. The term of OML 122 runs to 2021 and may be extended upon application to the Nigerian authorities.

OML 122 has additional "deepwater play type" exploration potential. It lies on the boundary between the conventional delta play type, encountered by the earlier wells, and the Deep Water stratigraphic channel play types, like the giant Shell Bonga and Bonga West Field (estimated 1.4 Billion bbls of oil). The Bonga field lies on trend with, and 55 km SW, of OML 122.

Wade Cherwayko, President and CEO of Equator, comments: "Equator is delighted to have secured a rig from Dolphin Drilling, one of the world's most experienced drilling contractors, enabling it and Peak to commence drilling operations to prove up the significant hydrocarbon potential of the OML 122 licence."
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