Sir Don makes an interesting point which I believe warrants elaboration:
We have coastline to the west, coastline to the east, and a rather large inhospitable looking mountain range to the south. We appear to be on a young world, possibly cold as well. To find good land anywhere nearby I think we're going to have to go to the North-east, east or possibly south.
The Babs aren't to the North, one can assume, given where their warrior appeared. They can't be to the south or the south west, or our warrior would have seen them on the way up, or we would have seen their borders by now. It is remotely possible they could be near the forested plain in the south-east, but the most likely option seems to be that they're east, and a little bit south.
These two assumptions aren't a great deal on their own, but together they lead to some worrying conclusions.
We are going to have to expand to the east if we want good cities. We can build cities in the hills for the horses, and probably iron, a port to the North, but to really expand quickly we're going to have to go east IMHO. Guess what's to the east! The babylonians!
So, to expand with any sort of speed and size, we're going to have to at least limit the Babylonian presense, if not eliminate it. This is worrying given their very early UU, probably trigering a GA.
This merely raises the problem. I am not sure what we should do to solve it.
On option to combat this is to cluster our cities around the capital, get IW, and then launch a speedy attack into their heartland. We could then expand more freely hopefully.
Another is to try and 'outflank' the Babylonians by expanding around them. We could hope for some culture flips to gain more productive territory, but since they are religious this could be tough - in my experience they Babs usually come pretty high in the culture stakes.
As far as exploration goes, I think we really need to find out where they are, and find out where the good land is. From there we can make our decision.