IOG.L Regulatory News (IOG)

17 Dec 2007 07:01

Island Oil and Gas PLC17 December 2007 17 December 2007 ISLAND OIL & GAS PLC ACQUIRES AN ADDITIONAL EQUITY INTEREST IN THE DURRESI BLOCK OFFSHORE ALBANIA AND AGREES FARMOUT TERMS WITH BEACH PETROLEUM LIMITED Island Oil & Gas plc, (LSE:IOG) ("Island" or the "Company"), today announcesthat its wholly owned subsidiary Island International Exploration BV ("IIEBV")has acquired the remaining 50% equity interest in the Durresi Block offshoreAlbania from Lundin Albania BV and that this transfer of interest has now beenformally approved by the National Agency of Natural Resources in the Republic ofAlbania ("AKBN"). IIEBV has, in addition, agreed farm out terms with Australiancompany Beach Petroleum Limited ("Beach") The farm out terms with Beach involve Beach (or a Beach nominated subsidiarycompany) acquiring a 25% equity interest in the Durresi Block for back costs.Island has granted Beach an option to increase its equity to 45% by contributing55% of the dry hole cost of one well at a location to be mutually agreed betweenthe Operator (IIEBV) and Beach. The completion of the farm in transaction issubject to Beach Board approval and the formal written consent of the AKBN. Onreceipt of both of the above approvals, a Petroleum Complementary Agreement willbe negotiated with the AKBN to formally confirm IIE and Beach as parties to theDurresi Block Licence. The Petroleum Complementary Agreement will then besubject to the formal written consent of the AKBN on behalf of the AlbanianCouncil of Ministers. The Durresi Block covers an area of 4,200 square kilometres along the Adriaticcoast of Albania. It contains the unappraised A4-1X gas/condensate discoverydrilled by Chevron and Agip in 1993 at a time of lower oil and gas prices.Several undrilled oil and gas prospects and leads exist in the Durresi Blockalong the northern edge of the Apulia Platform. This trend is currently thefocus of renewed exploration and licence activity in the adjacent Italianoffshore. Paul Griffiths, Chief Executive of Island commented: "Island has strengthened its position offshore Albania in an area that isattracting renewed industry interest. We are particularly pleased to have agreedfarmout terms with Beach Petroleum Limited who we believe will be an idealpartner for Island to accelerate exploration activity in this region" Hector Gordon, Chief Operating Officer of Beach, added: "We are delighted to be joining Island in the Durresi Block in an exciting oiland gas province. We consider that subsequent exploration at the Block, whichwill target deeper water prospects, will have the potential to yield reserves inexcess of 100 million barrels of oil equivalent, net to Beach, on the basis ofthe current 25% interest." Enquiries: Paul GriffithsChief ExecutiveIsland Oil & Gas PLCTel: +353 1 6313755 Karl PrendervilleCommercial DirectorIsland Oil & Gas PLCTel: +353 1 6313755 Lisa J N Pope MCIPR MIRSNewman ConsultingTel: +44 (0)1252 878682 This information is provided by RNS The company news service from the London Stock Exchange