Equator Confirms Gas Discovery on OML 122 Offshore Nigeria

Peak Petroleum Industries Nigeria Ltd. and Equator Exploration Ltd. provide the following update on drilling activities on the "B-DX1" well located on the OML 122 license area, offshore Nigeria.

OML 122 is located 25-60 km offshore in water depths of 40-300 meters 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 southwest of Shell's EA Field on OML 79. B-DX1 is an exploratory-appraisal well on one of the discoveries made by Deminex Oil in OML 122 in the 1970's. Their original well tested an oil zone and encountered several gas zones, which recently reprocessed 3D seismic suggests are of significant size.

Drilling results to date on the B-DX1 well have confirmed the presence of hydrocarbon bearing formations in a structurally higher position than in the discovery well. The B-DX1 well has now reached the 9 5/8" casing point at a drilled depth of 2780 meters and has been logged. The logging has confirmed the predictions made with the reprocessed 3D seismic, with all the formations correlating between the two wells. A continuous hydrocarbon column, 455 gross feet in length, has been encountered at 2303 meters below sea level. Of this, a 200 foot gas interval lies within the main gas sand identified by the discovery well, confirming it as a major gas reservoir. This gas interval is augmented by another gas interval, 80 feet in length, in the deeper oil sand and lying above an expected oil column, 70 feet in length. Both sands have excellent reservoir qualities.

Operations continue with the evaluation of the hydrocarbon zones with a full suite of wireline logs, including a repeat formation testing tool, and with the running and cementing of the 9 5/8" casing. The well will then drill into the lower gas sand and into deeper potential gas bearing sands that were water-bearing in the discovery well due to its structurally low position. Testing operations will commence at the end of this month after the setting of the 7" liner, planned at 3,550 meters drilled depth. Equator is funding the cost of two wells in the field to earn a 40% working interest in the field area.

A second exploration well planned for mid-February 2006 will test a promising, large structure south of the B-DX1 well in a water depth of 135 meters. This structure, the Owanare prospect, is covered by 3D seismic data acquired in 1999 and recently re-processed and interpreted by Peak, Equator and their technical advisors.

The aim of the initial two wells being drilled by Peak/Equator is to prove-up significant volumes of gas as potential supply for the numerous gas-utilization projects currently underway or in planning stages in Nigeria within close proximity to OML 122. The secondary objective is to find commercial volumes of oil and condensate on the block.

Commenting on the B-DX1 well, Wade Cherwayko, Chief Executive Officer of Equator, said:

"Both Peak and Equator are pleased with the successful start to the drilling campaign which is confirming that we have the potential for a significant gas field, with good upside from condensate and crude oil".

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