Equator Exploration Completes Owanare-1 Well

Peak Petroleum Industries Nigeria Ltd. and Equator Exploration have discovered natural gas in the exploratory Owanare 1 well, located on OML 122, offshore Nigeria.

The OML 122 license area is located 25-60 km offshore and covers an area of 1,295 sq km on the Western Niger Delta. Owanare 1, the second well drilled on OML 122 by the Peak/Equator JV, is located in a water depth of 137 meters. The well has encountered high pressures and temperatures at a depth of 4100 meters making it necessary to suspend the well for later possible production. Gas was discovered in a 48 meter zone (157 feet) in the interval 1,683-1,732 meters brt and in a 13 meter zone (43 feet) in the interval 2,183-2,196 meters brt. The independent advisers to Equator, Horizon Energy Partners B.V., estimate the gas-in-place to be 185 bcf, an amount capable of commercial production as a satellite to a gas development of the B-DX1 discovery.

The aim of the Peak/Equator drilling campaign is to prove up significant volumes of gas for potential supply to the numerous gas-utilization projects currently underway or in planning stages in Nigeria within close proximity to OML 122. A secondary objective is to develop and produce the B-DX1 oil discovery.

After the suspension of the Owanare well, the rig will move 18 miles to the north to commence development drilling on the B-DX1 discovery. Evaluation of additional exploration and appraisal opportunities continues in and around the area of OML 122.

Elsewhere, Equator has paid signature bonuses and given guarantees to the authorities for its share of the work obligation, including a total of five wells, on deepwater OPL 321 and OPL 323, offshore Nigeria, and on deepwater Block 2 in the JDZ between Nigeria and Sao Tome & Principe. The 3D seismic surveys have already been acquired and the operators of the blocks, KNOC for OPL 321 and 323 and Sinopec for Block 2, are aggressively seeking deepwater rigs.

Commenting on the results of Owanare 1, Wade Cherwayko, Chief Executive Officer of Equator, said:

"The results from Owanare 1 are disappointing in terms of total volume discovered. Nevertheless, we do have a discovery which is yet another strong indication that OML 122 and its surrounding area have an active petroleum system and excellent reservoirs, providing many highly prospective exploration and appraisal opportunities. We look forward to commencing the drilling program on the oil development of B-DX1"

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