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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Equator Exp. | LSE:EEL | London | Ordinary Share | VGG3084F1282 | COM SHS NPV |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 20.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number : 8780V Equator Exploration Limited 03 June 2008 FOR IMMEDIATE RELEASE - 3 June 2008 FOR: EQUATOR EXPLORATION LIMITED ("Equator"or the "Company") SUBJECT: Corporate Update London, 3 June 2008 - Equator, the exploration and development oil and gas company with projects in the highly prospective offshore basins of The Gulf of Guinea, offshore West Africa, hereby makes the following announcement to provide an update on the Company's progress on a number of initiatives. Farm-out Strategy and Progress The Company's stated ongoing strategy is to optimise the value of and secure funding for its interests offshore West Africa in the best interests of all stakeholders. This strategy is progressing satisfactorily as summarized below. Progress on OPL 323 The farm-out of 20 per cent of the Company's interest in OPL 323 held by Equator Exploration Nigeria 323 Limited ("323 Ltd") to BG Exploration and Production (Nigeria) Limited ("BG") is progressing and is now in the final stages. 323 Ltd is now at the point of seeking the signatures of its partners on the transfer deed and the documents to amend the joint venture agreements prior to submission to the Nigerian authorities for final approval. Progress on OPL 321 The Company has received offers from a number of entities to farm-in to its interest held in OPL 321 by Equator Exploration Nigeria 321 Limited. The Company is currently evaluating these offers and is confident that agreement will shortly be reached with at least one of these entities. Further information will be released in due course. Progress on Other Farm-ins The Company continues to seek ways to monetize all or part of its interests held by Equator Exploration JDZ Block 2 Limited in JDZ Block 2 and also in the Company's two option blocks in the Exclusive Economic Zone of S Tome Prcipe ("EEZ"). Net Profits Interests Further to the announcements dated 11 January 2007 and 17 August 2007, the Company is pleased to announce that it has reached a settlement with its bidding partners regarding the remaining net profits interests in both OPL 321 and OPL 323. Equator confirms that it now has the full 30% economic interest in both blocks out of which the farm-out of 20% of OPL 323 is in its final stages and the farm-out of OPL 321 has yet to be agreed. In settlement, a relatively small cash payment will be made from the proceeds of the farm-out of OPL 323 to the partners who bid with us for the blocks in 2005. The bidding partners have also been granted a total of 5.6 million warrants, priced at 8 pence, over common shares in the Company. Arbitration Process Further to the announcement made on 11 February 2008, the arbitration process held in London between Equator Exploration (OML 122) Limited ("OML 122 Ltd") and Peak Petroleum Industries Nigeria Limited ("Peak"), which was undertaken in accordance with the terms of the Bilabri Settlement Agreement ("BSA"), details of which were announced on 28 September 2007, is now concluded. A final award, which is enforceable in Nigeria under Nigerian Law, was issued on 27 May 2008 by the Arbitrator in favour of OML 122 Ltd in the total sum of US$123 million plus interest ("Final Award"). Prior to the grant of the Final Award, Peak had made several representations to the Company that it will be able to and intends to satisfy in full, the terms of the BSA at the latest by the middle of June 2008. With this in mind and in order not to frustrate Peak's current financing initiative, the Directors of Equator have taken the view that it would be prudent and in the interests of the Company's stakeholders to achieve settlement under the BSA before enforcing the Final Award. Although OML 122 Ltd is presently taking steps to register the Final Award in the Nigerian courts, it will however not seek to enforce its claim in the Nigerian courts until after the middle of June 2008, at which time the Company will reassess its position if settlement under the BSA is not realised. The Company will make such further announcement as would be appropriate at the time. Contingent Liabilities We remain in contact with Dolphin Drilling Limited, BW Offshore Limited ("BW") and other suppliers from the suspension of the Bilabri development as the farm-outs noted above and the potential settlements under the Final Award or the BSA move closer to completion. Determination of the contingent liability to BW of up to US$ 58 million, noted in the Company's Interim Accounts for 2007, of which US$20 million has already been paid, which may result from the termination of the charter agreement for the Floating Production, Storage and Offtake Unit by BW, is the subject of legal proceedings in the British Virgin Islands. However, in order to ensure that the interests of all of the Company's stakeholders are safeguarded, the Company is currently in discussions with BW. Working Capital and Funding Leaving aside any potential recovery under the Final Award or the BSA, the Directors believe that completion of the farm-outs noted above will provide the Company with significant additional working capital of approximately US$80 million. In addition it will eliminate the future cash requirements of approximately US$27 million under the committed exploration work programmes for the residual interests that will be held by the Company in both OPL 321 and OPL 323. The Directors believe that following the proposed farm-outs and the resolution of the net profits interests, the Company will have residual interests in each of OPL 321 and OPL 323 of at least 10 per cent. These, together with the interest in JDZ Block 2 and the two option on blocks in the EEZ, provide an exploration portfolio with significant upside potential. The Directors currently expect exploration drilling to commence on OPL 321 and OPL 323 late in 2009 and on JDZ Block 2 in 2010. The Directors also believe that delineation of the blocks in the EEZ is unlikely to be completed prior to first quarter 2009. Enquiries: Equator +44 (0)207 235 2555 Philip Rand, CEO/CFO Philip Dimmock, COO Beaumont Cornish Limited (Nominated Adviser to Equator) +44 (0)207 628 3396 Roland Cornish Fox-Davies Capital Limited (Nominated Broker to Equator) +44 (0)207 936 5234 Richard Hail Buchanan Communications +44 (0)207 466 5000 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 END MSCZXLFBVQBXBBV
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