Equity Oil reports results of testing of exploratory well in Eastern Siberia.

SALT LAKE CITY--(BUSINESS WIRE)--Aug. 12, 1996--Equity Oil Co. (NASDAQ-EQTY) reported that the cased-hole drill stem tests of the four zones selected for testing by Symskaya Exploration Inc., its 50% owned subsidiary, in the Lemok No. 1 well, flowed salt water with no oil or gas.

The tested zones, ranging in depth from 6,890 to 8,283 feet are in fractured dolomites of probable Cambrian age. These Cambrian zones were a secondary target in the well, drilled by Symskaya Exploration Inc., on its 1.1 million acre license area in the Krasnoyarsk Krai in Eastern Siberia. Drilling was terminated at a depth of 14,102 feet due to mechanical problems prior to reaching the primary target in the Vendian formation at an estimated depth of 14,500 feet. Total direct drilling costs for the Lemok No. 1 incurred by Symskaya through June 30, 1996 were approximately $9.0 million.

"The test results are disappointing to us," said Paul M. Dougan, president of Equity, "since oil shows, cores, logs, and other data accumulated during the course of drilling evidenced the presence of hydrocarbons in the intervals that were tested." He further stated, "the lack of producible oil in the tested intervals does not preclude the possibility that the well was drilled below the oil/water contact for these formations, and that a well drilled at a structurally higher location may contain productive hydrocarbons in these same intervals. In addition, the lack of a positive test in the Cambrian zones, which were secondary targets in the drilling of the Lemock No. 1, does not alter the possibility of accumulations of recoverable hydrocarbons in the Vendian or Riphean formations that were not reached in this well." Detailed analysis of the pressure, flow data and fluid recovered in the tests is being conducted. Based upon all of the data accumulated from the Lemok No. 1, Dougan reported that the drilling of a second well is under active consideration, as well as various alternatives for obtaining outside financing for such a well. If Symskaya abandons the Lemok No. 1, Equity will be required to record a non-cash charge to earnings equal to its 50% share of the direct drilling costs incurred in this well.

If drilled, a second well would be located approximately five miles east of the Lemok No. 1, and would target the Vendian formation at a depth of approximately 11,000 feet, which would be 3,000 feet structurally higher on the Ishtyskaya anticline. Correspondingly, the four intervals tested in the Lemok No. 1 should be encountered at depths ranging from approximately 3,900 to 5,300 feet in a second well, and it is possible that producible hydrocarbons could be encountered in those zones at the higher structural position.

Equity Oil Co., headquartered in Salt Lake City, is an independent oil and gas exploration and production company with operation in ten states and Canada. In 1991, it formed Symskaya Exploration Inc., now 50% owned by Equity and 50% by Leucadia National Corp. (NYSE:LUK), to explore for and develop oil and gas in the Krasnoyarsk region of Eastern Siberia in the Russian Federation.

CONTACT: Equity Oil Co., Salt Lake City

Paul M. Dougan or Clay Newton

801/521-3515

or

DGI/Donenfeld Group Inc., New York 

Ken Donenfeld or Cathy Gannon

212/425-5700