Equator Exploration Acquires Stake in Deepwater Blocks Offshore Nigeria

Following a signing of Production Sharing Contracts on March 9, 2006, Equator has been awarded a 30% interest in blocks OPL 323 and OPL 321, offshore Nigeria. The Korean National Oil Corporation ("KNOC") was awarded a 60% interest in the blocks. The balance of 10% was awarded to local Nigerian companies.

Details on OPL 323

In water depths of between 1,300 m and 2,000 m, six large structures have been identified by interpretation of a regional 3D seismic survey covering the block, acquired by Petroleum Geo-Services ("PGS"). Estimated risked recoverable reserves are in excess of 2 billion barrels across six large prospects as estimated by Equators technical advisors, Horizon Energy Partners ("Horizon"). Five of the six prospects are supported by amplitude anomalies and the block is located in an area with access to source rocks and abundant reservoir sands. OPL 323, which is 80 kms offshore the Southwest Coast of Nigeria, is adjacent to the large Abo field in OML 125 to the east, operated by Agip. ExxonMobil's Bosi and Ehra discoveries in OPL 209 are located to the immediate south of the block with seismic interpretations suggestive that several prospects extend onto this adjacent block from OPL 323. Erha, scheduled to go on line in 2006, has liquid reserves reported to be in excess of 500mmbo recoverable (Exxon, 2006). Peak production at Erha is forecasted to be 150,000 BOPD, with another 40,000 bopd forecasted with Erha North. Bosi, the second field development on OPL 209, is forecasted to have an initial production capacity of 120,000 BOPD.

Details on OPL 321

OPL 321 is contiguous with and to the west of OPL 323. The block lies on trend with block OPL 322 to the south, where Shell's recent discovery well Bobo-1 encountered a significant column of hydrocarbons. Initial assessment of the prospectivity of the block, indicates the presence of one very large prospect, which could contain in excess of 2.0 billion barrels as estimated by Horizon.

Commenting on the prospectivity of Blocks OPL 323 and 321, Mr. Wade Cherwayko, Chief Executive Office of Equator, said:

"Our recent geologic and geophysical work and the industry's well results in the adjacent blocks indicate that the oil footprint of the region continues expanding westward. The position of OPL 323 and 321, their proximity to the Shell Bobo discovery, Esso's "strategic Hub" in the adjacent fields on OPL 209 Erha-Bosi with peak flow rates anticipated by Exxon in excess of 300,000 BOPD, and the continued growth of ENI's Abo Complex to the north, suggests that multiple, active hydrocarbon systems are present near, and potentially on these exploration blocks. These two blocks are in the most prospective and exciting deepwater exploration play in West Africa today"

Sir Sam Jonah, Chairman of Equator, added:
"OPL 323 and OPL 321 are widely regarded as the two most highly sought after blocks in Nigerian deepwater today. It is unprecedented for a company of our size to be involved in such prospective deepwater exploration acreage and we look forward to working closely with KNOC and our other partners in exploring and hopefully developing these exciting oil and gas exploration projects."

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