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Sinopec aggressively seeking deepwater rig for JDZ Block 2.

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Equator Exploration Announces Completion of Owanare 1 as Gas
Thursday, May 25, 2006
Latest Oilvoice Headlines

- Equator announces gas discovery
- Well indicates gas-in-place of 185 bcf

Peak Petroleum Industries Nigeria Ltd. and Equator Exploration Ltd. have announced the discovery of gas in the exploratory 'Owanare 1' well, located on OML 122, offshore Nigeria.

The OML 122 licence 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 metres. The well has encountered high pressures and temperatures at a depth of 4100 metres making it necessary to suspend the well for later possible production. Gas was discovered in a 48 metre zone (157 feet) in the interval 1,683-1,732 metres brt and in a 13 metre zone (43 feet) in the interval 2,183-2,196 metres brt. The independent advisers to Equator, Horizon Energy Partners B.V. ('Horizon'), 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-utilisation 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 programme on the oil development of B-DX1'