Equator Says Nigerian Reserves Report Completed

Equator updates its hydrocarbon assets located in Nigeria and Sao Tome & Principe.

OML 122 Oil Development

Peak Petroleum Industries Nigeria Ltd. and Equator report that development drilling will soon commence on OML 122. In addition, the Companies are currently finalizing an agreement to lease an FPSO with the aim of commencing oil production in Q3 2007.

A report on OML 122 from independent consultants, Horizon Energy Partners BV, provides a Best Estimate for the recoverable hydrocarbon volumes as 45 million barrels of oil and 730 BCF of gas.

As previously reported, the second well drilled on OML 122 by Peak and Equator, Owanare 1, discovered gas in two zones with a total thickness of 61 meters (200ft). Horizon estimates the gas-in-place to be 185 bcf, an amount capable of commercial production as a satellite to a gas development on the Bilabri field.

Negotiations are underway for financing the OML 122 oil development project with production anticipated to start Q3 2007.

Deepwater Exploration

Horizon has also completed a report which estimates the significant prospective resources in OPL's 323 and 321. These two deep water blocks were awarded to Equator, Korean National Oil Company, NJ Exploration Limited and Tulip Energy Resources Nigeria Limited in the Nigeria 2005 licensing round.

Equator has paid in full its share of the signature bonuses for blocks OPL 323 and OPL 321 and has set aside US$83 million to cover the work program obligations. Equator has also funded its share of the signature bonus and work program obligation for Block 2 in the Joint Development Zone (JDZ) between Sao Tome & Principe and Nigeria which is adjacent to the recently announced Chevron and Exxon discovery in Block 1 JDZ .

Commenting today, Wade Cherwayko, CEO of Equator, said:

"The Company is pleased with the significant progress which has been achieved in the targeting of first oil production by Q3 2007 from OML 122. In addition, Equator and its partners, the Korea National Oil Company, ONGC Videsh and Sinopec are aggressively negotiating to secure drilling rigs to commence exploration activities on OPL 323, OPL 321 and Block 2 JDZ."