Update on OPL 321 and OPL 323
January 26 2009 - 9:51AM
UK Regulatory
TIDMEEL
RNS Number : 2518M
Equator Exploration Limited
26 January 2009
FOR IMMEDIATE RELEASE - 26 January 2009
FOR: EQUATOR EXPLORATION LIMITED
SUBJECT: Update on Status of OPL 321 and OPL 323
London, 26 January 2009 - Equator Exploration Limited ("Equator" or the
"Company") would like to update shareholders on recent events regarding the
status of OPL 321 and OPL 323.
BACKGROUND
In the Nigerian 2005 bid round held in August 2005, a bidding group comprising
ONGC Videsh Ltd ("ONGC"), Equator and OWEL E&P Ltd ("OWEL"), submitted the
winning bids for the Oil Prospecting Licences ("OPLs") for blocks 321 and 323.
The bids included signature bonuses totaling US$485 million. However, the Korean
National Oil Corporation ("KNOC") exercised a right of first refusal granted to
it in recognition of a commitment by KNOC to implement a downstream project.
After discussion among all parties, KNOC was awarded a 60% interest in the
blocks and appointed as operator. A 30% interest was awarded to the ONGC group
while the remaining 10% was awarded to Local Content Vehicles ("LCVs") - Tulip
Energy Resources Nigeria Limited for OPL 321 and NJ Exploration Limited for OPL
323. ONGC declined its part of the award, allowing Equator to take the allocated
share. The Government of Nigeria and KNOC consented to this and Equator made
payment to the Nigerian Government of a full one-third share of the signature
bonuses totaling US$161.7 million. On 10 March 2006, Equator signed the two
Production Sharing Contracts with the Nigerian National Petroleum Corporation
and the other parties as a full independent party with a 30 per cent interest.
The Company also signed the Joint Operating Agreements with the other
participants on 7 June 2007. Since March 2006, Equator has participated fully
with the other parties in all of the technical and commercial decisions related
to the detailed evaluation of the hydrocarbon prospects and in the preparations
for drilling.
UPDATE
The Company has recently been informed by the Ministry of Energy of a decision
made by the President of Nigeria to void the allocation of the blocks to KNOC
and to restore the status of the ONGC Consortium as the winning bidder, subject
to their payment in full of the US$485 million signature bonus within 60 days of
6 January 2009.KNOC and ONGC have confirmed to the Company that they have
received letters from the Ministry of Energy to this effect. We understand that
the basis of the decision is the non-payment by KNOC of the signature bonus
offered by the winning bidder in full and that the portion of the signature
bonus paid by KNOC will be refunded forthwith.
As stated above, Equator did pay its portion of the signature bonuses in full.
Equator has received verbal assurances from the Ministry that its participating
interest in the two PSCs is unaffected by the decision to void KNOC's allocation
but to date has received no direct written communication. The directors continue
to believe that the Company's interest in the OPLs remains intact and that
Equator will have the right either to participate with the ONGC Consortium in a
new PSC or to have its signature bonus refunded.
In order to protect its investment to date of US$16 million in petroleum
operations, Equator is working with KNOC, ONGC and all LCV partners to ensure
that the preparation for drilling operations continues with the minimum of
disruption. The Company will continue to keep shareholders and the markets
informed of events.
Enquiries:
+------------------------------------+------------------------------------+
| Equator | +44 (0)207 235 2555 |
+------------------------------------+------------------------------------+
| Philip Rand | |
+------------------------------------+------------------------------------+
| CEO/CFO | |
+------------------------------------+------------------------------------+
| | |
+------------------------------------+------------------------------------+
| Beaumont Cornish | +44 (0)207 628 3396 |
| Limited (Nominated Adviser to | |
| Equator) | |
+------------------------------------+------------------------------------+
| Roland Cornish | |
+------------------------------------+------------------------------------+
| | |
+------------------------------------+------------------------------------+
| Fox-Davies Capital Limited (Broker | +44 (0)207 936 5224 |
| to Equator) | |
+------------------------------------+------------------------------------+
| Daniel Fox-Davies | |
+------------------------------------+------------------------------------+
| | |
+------------------------------------+------------------------------------+
| Buchanan Communications | +44 (0)207 466 5000 |
+------------------------------------+------------------------------------+
| Bobby Morse/Ben Willey | |
+------------------------------------+------------------------------------+
| | |
+------------------------------------+------------------------------------+
Additional information regarding the Company can be obtained from the Company's
website. The Company's website can be accessed at www.equatorexploration.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
DRLPUURCGUPBGCQ
Equator Exploration (LSE:EEL)
Historical Stock Chart
From Apr 2024 to May 2024
Equator Exploration (LSE:EEL)
Historical Stock Chart
From May 2023 to May 2024
