Equator Exploration - Sao Tome oil play

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Drilling Update

RNS Number:3026W
Equator Exploration Limited
30 December 2005


Immediate Release 30 December 2005

EQUATOR EXPLORATION LIMITED

UPDATES DRILLING OPERATIONS ON EXPLORATORY - APPRAISAL WELL ON OML122, NIGERIA


LONDON, United Kingdom & LAGOS, Nigeria - 30 December 2005 - Peak Petroleum
Industries Nigeria Ltd. ("Peak") and Equator Exploration Ltd. (AIM: EEL.L)
("Equator") are pleased to provide this update on drilling activities on the
"B-1 DX" well located on the OML 122 licence area, offshore Nigeria.

OML 122 is located 25-60 km offshore in water depths of 40-300 metres and covers
an area of 1,295 sq. km on the Western Niger Delta, east of Shell's giant Bonga
Field (estimated 1.4 billion barrels) on OML 118 and southwest of Shell's EA
Field on OML 79. OML 122 has two suspended oil and gas discoveries that were
drilled in the 1970's. The B-1 DX well, is an exploratory-appraisal well on the
field discovered by the "B-1" well drilled by Deminex Oil. The B-1 well tested
an oil zone and encountered several gas zones, which recently reprocessed 3D
seismic suggests are of significant size.

The well is currently drilling ahead at a depth of 1583 metres below sea level,
utilising real time logging while drilling. It has already encountered gas zones
in the upper section which can be correlated with the original B-1 well. Logging
data on the B-1 DX well indicates that the well is in a structurally "up-dip"
higher position than the B-1 well. Within the next seven to ten days, it is
anticipated that the B-1 DX well will be penetrating an upper gas sand, the main
gas sand, the oil sand and the lower gas sand, all of which were encountered by
the B-1 well, The well will then drill into deeper potential gas bearing sands
that were water-bearing in the original B-1 well due to its structurally low
position. Testing operations will commence as soon as the well has reached total
depth, planned at 3,550 metres below sea level. It is anticipated that tests
will be conducted on three of the gas sands and the oil sand. Equator is funding
the cost of two wells in the field to earn a 40% working interest in the field
area.

A second exploration well planned for early February 2006 will test a promising,
large structure south of the B-1 DX well in a water depth of 135 metres. This
structure, the Owanare prospect, is covered by 3D seismic data acquired in 1999
and recently re-processed and interpreted by Peak, Equator and their technical
advisors. The Owanare prospect has estimated potential hydrocarbon volumes of
1.5 TCF of gas.

The aim of the initial two wells being drilled by Peak/Equator is to prove-up
significant volumes of gas as potential supply for the numerous gas-utilisation
projects currently underway or in planning stages in Nigeria within close
proximity to OML 122. The secondary objective is to find commercial volumes of
oil and condensate on the block.

Commenting on the B-1 DX well, Wade Cherwayko, Chief Executive of Equator, said:

"Both Peak and Equator are pleased with the progress made on the B-1 DX well. We
are also encouraged by the logging data we have received to date which indicates
that the B-1 DX well is structurally higher then the original B-1 well."

For further information, contact:

Wade Cherwayko, Chief Executive Officer +44 (0)20 7235 2555
Philip Dimmock, Chief Operating Officer +44 (0)20 7235 2555
Bobby Morse /Ben Willey, Buchanan Communications +44 (0)20 7466 5000

Background information:

Equator

Equator (www.equatorexploration.com) was founded in December 2000 and listed on
the Alternative Investment Market of the London Stock Exchange in December 2004.

Equator's objective is to build a diversified portfolio of exploration,
appraisal and production assets in the Gulf of Guinea. The Company has
exploration interests in the territorial waters of Sao Tome & Principe and
Nigeria as well as the Nigeria-Sao Tome and Principe Joint Development Zone.
Equator is also currently evaluating other exploration opportunities in West
Africa.