Bilabri Update

    RNS Number : 5060X
  Equator Exploration Limited
  25 June 2008
   

    FOR IMMEDIATE RELEASE - 25 June 2008 
    FOR: EQUATOR EXPLORATION LIMITED 
    ("Equator"or  the "Company")
    SUBJECT: Bilabri Update 

    London, 25 June 2008 - Equator  hereby makes the following announcement to provide an update, firstly, on the Company's progress on its
discussions with Peak Petroleum Industries Nigeria Limited ("Peak") concerning settlement under the Bilabri Settlement Agreement ("BSA")
between Peak and Equator Exploration (OML 122) Limited ("OML 122 Ltd") and, secondly, on the status of the Bilabri oil and gas
developments.

    Peak Settlement

    On 3 June 2008, the Company announced that Peak had made several representations to the Company that it would be able to and intended to
satisfy in full the terms of the BSA by the middle of June 2008. In addition, Equator announced that OML 122 Ltd was taking steps in the
Nigerian courts to register the LCIA arbitral award issued in its favour.

    On 19 June 2008, Peak made an announcement pertaining to its suit instituted before the Nigerian courts disputing the arbitration
proceedings on the basis of there being no arbitral dispute with OML 122 Ltd under the BSA. The announcement also included a statement that
the Nigerian court had dismissed "with substantial costs" an application made by Equator requesting the court to discharge an earlier court
order. Equator is fully aware of Peak's claims which are currently being addressed by the Nigerian court and the Company's legal advisors
are presently contesting Peak's position. The Company's legal advisors have also advised that the costs awarded so far in the court
proceedings are nominal costs only.

    During recent discussions, Peak has informed the Company that the claims and counter-claims being made by both Peak and the Company may
be hampering progress on the financing efforts being pursued by Peak.  Therefore, and without prejudice to the continuation of the legal
processes, the Company reiterates that Equator's strategy is still to work closely with Peak to ensure that the financing required for the
Bilabri oil development and to satisfy the terms of the BSA is secured within the shortest time possible. In this regard, Equator has been
in direct discussions with Peak's financial advisers, and has received independent assurances that funding will be granted by the end of
July 2008. Equator will therefore allow Peak until this time to conclude this financing initiative, before initiating conclusive steps in
Nigeria to enforce the arbitral award.    




    Bilabri Oil and Gas Development

    Over the past few weeks, progress has been made concerning the Bilabri oil and gas developments as several agreements have been entered
into by Peak, as licence holder and operator of OML 122. 

    These agreements, in respect of which certain information has been made public already, include:

    *     An FPSO contract with Nortechs FPSO Pte Limited;
    *     Agreements with various suppliers for time-critical equipment;
    *     Heads of agreement with Mitsubishi as the LNG offtaker for the gas development; and
    *     Heads of agreement with FlexLNG as the supplier of the offshore LNG process.
    *     A contract to secure the "Energy Searcher" drillship.

    The Company is working closely with Peak to put in place definitive documentation to secure its carried interest of 5 per cent in the
oil development of Bilabri and its 12.5 per cent paying interest in the gas development of Bilabri and Owanare.



    Enquiries:

 Equator                                                   [phone]
 Philip Rand
 Chief Executive Officer

 Beaumont Cornish Limited (Nominated Adviser to Equator)   [phone]
 Roland Cornish

 Fox-Davies Capital Limited (Nominated Broker to Equator)  [phone]
 Richard Hail

 Buchanan Communications                                   [phone]
 Bobby Morse/Ben Willey




    Information on Equator

    Equator Exploration Limited engages in the exploration and development of oil and gas projects in highly prospective West Africa.
Equator's objective is to build a diversified portfolio of exploration, appraisal and production assets in the region. The Company has
exploration interests in the territorial waters of Nigeria and of S Tome Prcipe as well as in the Joint Development Zone between the two
countries.


    Additional information regarding the Company can be obtained from the Company's website at www.equatorexploration.com.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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