EEL Equator Exp.

RNS Number:5698N
Equator Exploration Limited
08 February 2008


FOR IMMEDIATE RELEASE - 8 February 2008
FOR: EQUATOR EXPLORATION LIMITED
("Equator" or "the Company")
SUBJECT: Update on Loan repayment deferral and issue of equity to raise
$1,172,160


On 17 December 2007, the Company announced that the repayment of an unsecured,
short term working capital loan agreement for US$5 million had been deferred for
a short period from the due date of 15 December 2007. In order to provide
flexibility and additional working capital for the Company to meet its
operational needs (including licence commitments due), Equator has now agreed
with the lenders that the repayment date be deferred to 15 June 2008 and in a
separate transaction, warrants attached to a US$5 million loan dated 6 September
2007 have been exercised under amended conditions.


Under the terms of the US$5 million loan dated 6 September 2007 from certain
private investors, the Company issued warrants over 8,375,000 shares at a price
of �0.30 per share, exercisable for 2 years. As the condition for the lenders
allowing the six-month deferral of repayment, the exercise price of the warrants
has been reduced from �0.30 per share to �0.10 per share. All other terms remain
unchanged.


Further, the terms of a separate US$5 million loan from Mr Robert Gipson dated 5
June 2007 have been amended. In consideration for the lender agreeing to
exercise immediately the 7,326,000 warrants granted by the Company and which
could have been exercised over 2 years, the Company has agreed to a reduction in
the exercise price from �0.35 per share to US$0.16 per share (equivalent to
�0.081 at current exchange rates). Consequently, the Board has received and
accepted a request from Mr Gipson to exercise the warrants, and accordingly will
issue and allot 7,326,000 ordinary shares in the Company (the "Shares") for a
purchase price of US$1,172,160. Application will be made for the Shares, which
will rank pari passu with existing ordinary shares, to be admitted to trading on
AIM. The effect is therefore to raise money by the issue of Shares at the
current share price, thus eliminating the warrants.


Related Party - AIM Rule 13


Mr Robert Gipson is a Senior Managing Director of Ingalls & Snyder LLC which
currently holds 15.94 per cent of the issued common shares in the Company (15.3
per cent after this transaction). This shareholding comprises shares held on
behalf of other parties including 7,743,000 on behalf of Mr Gipson. Following
the exercise of the warrants, Mr Gipson will have beneficial ownership of
15,069,000 shares in the Company, or 8.25 per cent of the enlarged issued share
capital. Accordingly, the transaction to accept the exercise of the warrants at
the reduced price is being treated as a Related Party Transaction under the AIM
Rules. The Board of Directors of the Company, all of whom are independent of Mr
Gipson and Ingalls & Snyder, considers, having consulted with the Company's
Nominated Adviser, that the terms of this transaction are fair and reasonable
insofar as the shareholders are concerned. In respect of the deferral of the
loan from the private investors, the Company has received assurances from
Ingalls & Snyder that such parties are not related to or affiliated with that
firm.


In addition, and further to the announcement dated 17 December 2007, the
discussions with a commercial bank for further working capital are continuing
but have not yet been concluded.



Enquiries:

Equator                                                    +44 (0)207 235 2555
Philip Rand
Chief Executive Officer

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 Sao Tome & Principe 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. 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

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