On 11 June 2007, Equator announced that it had entered into a conditional merger agreement (the “Merger Agreement”) with CAMAC Energy EP Limited (“CAMAC EP”) and CAMAC International Limited relating to a proposed merger of Equator and CAMAC Energy Holdings Limited (“CEHL”), a wholly owned subsidiary of CAMAC International Limited. The Merger Agreement was conditional upon, amongst other things, the posting of the AIM Admission Document, to Equator shareholders by no later than 31 August 2007. It has not been possible to produce an Admission Document that satisfies the requirements of the AIM Rules within the prescribed timeframe and as a result, the Merger Agreement has been terminated. The parties to the Merger Agreement concluded that it would not be possible to produce an Admission Document that meets the requirements in the immediately foreseeable future either and therefore it was agreed not to extend the period in which the condition could be satisfied.
The cessation of merger discussions will permit the Company to focus on optimizing the value of its assets on a stand alone basis. The Company is reviewing the most appropriate ways in which to do this, similar to the farm out of OPL 323 to BG Exploration and Production Nigeria Limited, announced on 17 August, 2007. The operating costs of the Company are expected to be adjusted commensurate with the results of the asset reviews.
In accordance with the announcement made on 20 August 2007, the Company is conducting a detailed review of its interest, commitments, prospects and financing of the Bilabri project under the terms of the Finance and Service Agreement with Peak Petroleum Industries Limited, the operator and sole license holder of Offshore Mining Lease (OML) 122, offshore Western Niger Delta, Nigeria.
The Company is finalising an agreement with an existing lender for a short term working capital facility. The terms are currently being negotiated and a further announcement will be made in due course.
