Owanare 1 Exploration Well Discovers Gas

Peak Petroleum Industries Nigeria Ltd. and Equator Exploration report that their second well in the OML 122 lease, offshore Nigeria, has discovered gas.

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).

Owanare 1, the second well drilled on OML 122 by Peak/Equator, is located in a water depth of 137 meters, 18 kilometers to the southeast of the Peak/Equator "B-DX1" discovery well. The Owanare 1 well is being logged while drilling and has encountered gas in a 48 meter zone (157 feet) in the interval 1683-1732 meters brt and in a 13 meter zone (43 feet) in the interval 2183-2196 meters brt. Several water bearing zones have also been encountered below these zones to the current depth. The 9-5/8" casing has been successfully installed with the shoe at 3063 meters brt. The well is drilling ahead at 3346 meters brt towards deeper targets starting at 3550 meters brt. Depending on the extent of the increase in pressures experienced at these depths, a 7" liner may be required before the deeper objectives can be reached. Equator is funding the cost of the Owanare 1 exploration well to earn a 40% economic interest in any gas development scheme.

The aim of the Peak/Equator drilling program is to prove-up significant volumes of gas as potential supply for the numerous gas-utilisation 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 on the block.

Commenting on the results to date from the Owanare 1, Wade Cherwayko, Chief Executive of Equator, said:

"Peak and Equator are delighted to announce another gas discovery in their joint venture on OML 122 and look forward to penetrating and evaluating the deeper objectives. With the large number of gas utilization projects being developed onshore Nigeria, Peak and Equator hope to monetize the gas discoveries to date on OML 122 in the near future."

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