EER, which is traded on London's AIM, also annnounced that it is also purchasing equity in another Nigerian offshore block, OML 122.
EER's Wade Cherwayko, a former ERHC Energy executive, said EER and its Indian partner, ONGC Videsh, have received approval from the Nigeria-Sao Tome and Principe Joint Development Authority and still need final partner approval and an okay from the JDZ's Joint Ministerial Council.
EER has been a subject of envy since it listed on AIM last year and flew from a low of about 77 pence to a close yesterday at 339.25.
Here is the EER press release:
Drilling Update on CML 122 and Increased Interest in Block 2 JDZ
April 28, 2006
Peak and Equator continue drilling on OML 122
Equator acquires an additional 3% interest in Block 2 JDZ
Equator now has a total 9% interest in Block 2 JDZ
LONDON, United Kingdom & LAGOS, Nigeria - 28 April 2006 - Peak Petroleum Industries Nigeria Limited ('Peak') and Equator Exploration Ltd. (AIM: EEL.L) ('Equator') continue their drilling operations on the Owanare X1 well on OML 122 located offshore Nigeria. After some slight operational delays in the drilling program, Peak and Equator anticipate announcing the initial well results within approximately seven to ten days.
Equator is pleased to announce that it has increased its net participating interest in Block 2 of the Nigeria/Sao Tome and Principe Joint Development Zone ('JDZ') from 6% per cent to 9%. This follows the acquisition by Equator and its partner ONGC Videsh Limited of a 7.5% interest held by A. & Hatman Limited ('Hatman'), a Nigerian E&P company. The assignment of Hatman's interest to Equator has been approved by the Nigeria/Sao Tome and Principe Joint Development Authority ('JDA'); the transfer is subject to final partner and Joint Development Approval.
JDZ Block 2 is adjacent to Nigerian Block OML 130 which hosts the 700 million barrel and 2.5 TCF of gas Akpo field and another series of discoveries totalling an additional 500 million barrels and several TCF of gas as well as several additional developing discoveries with reserves in excess of 500 MMBO and several TCF. Akpo is anticipated to begin production in 2008 with maximum rates currently forecasted to reach 175,000 BOPD.
The JDZ is located approximately 200 kilometres offshore Nigeria and was established in 2001 following the ratification of a bilateral treaty between Nigeria and the island nation of Sao Tome and Principe. The JDZ is administered by the JDA.
Commenting on the increased interest in Block 2 of the JDZ, Wade Cherwayko, Chief Executive Officer of Equator, said:
'We are delighted to have increased our net stake to 9% in the very prospective Block 2 JDZ, located in the highest potential exploration region in the Gulf of Guinea.'
For further information, contact:
Wade Cherwayko, Chief Executive Officer
+44 (0)20 7235 2555
Philip Dimmock, Chief Operating Officer
+44 (0)20 7235 2555