IOG.L Regulatory News (IOG)

17 May 2007 07:02

Island Oil and Gas PLC17 May 2007 17 May 2007 ISLAND OIL & GAS PLC COMMENCEMENT OF 2007 DRILLING ACTIVITIES Island Oil & Gas plc ("Island" or the "Company") today announces that it hasspudded gas appraisal well 49/23-2 ("Well 49/23-2") on Exploration Licence 4/05(the Old Head of Kinsale) in the Celtic Sea, offshore Ireland. Well 49/23-2,which is the first of this year's drilling programme, is being drilled using thePetrolia rig (the "Rig"). Island is operator with a 65% interest. Well 49/23-2 was spudded on 16 May 2007 in a water depth of approximately 290feet. This is the Company's second well at the Old Head of Kinsale and followson from the gas discovery with its operated well 49/23-1 in 2006, representingthe first new gas discovery in the Celtic Sea for 16 years. Subject to asuccessful result and commercial flow-test of Well 49/23-2, Island and itspartners plan to complete and tie-back both wells to the Kinsale A platform nextyear with a view to producing first gas in the fourth quarter of 2008. Following completion of drilling and testing, the Rig will move immediately tothe nearby Exploration Licence 5/05 (the Schull gas field) where it will drillthe Island-operated gas appraisal well 57/2-3, subject to approval of the IrishMinister for Communications, Marine and Natural Resources. Under the terms of an agreement between Island and Providence Resources plcannounced on 25 September 2006, Island has allocated one firm drilling slot toProvidence in 2007. Providence will take possession of the Rig as soon as Islandcompletes its two-well programme and for the remainder of the contract, allowingIsland to reduce its mobilisation and demobilisation costs. Enquiries: Paul GriffithsChief ExecutiveIsland Oil & Gas plc Tel: +353 1 631 3755 Lisa J Newman MCIPR MIRSNewman ConsultingTel: +44 (0)1252 878682 Notes to editors: Island was founded in 2003 and listed on AIM in December 2004 (LSE:IOG). TheCompany has interests in eleven Irish offshore licences, as well as licences inthe Netherlands and Morocco. Island is involved in an exploration andappraisal programme which in 2006 saw successful Celtic Sea gas wells at the OldHead of Kinsale and the Seven Heads Sub-Area. The Company has again secured thePetrolia rig for its 2007 Celtic Sea drilling programme. This commenced in thesecond quarter of 2007 with an appraisal well at the Old Head of Kinsale gasfield, which is to be followed by an appraisal well at the Schull gas field. Licence Interests, Old Head of Kinsale - Island operator with 65%*; EnCore 15%(*with option to acquire an additional 5%); Valhalla Oil and Gas Limited 20%. Licence Interests, Schull gas field - The current interests in the Schull gasfield are: Island 62.5%; EnCore Oil plc 12.5%*; Valhalla 25%. * EnCore is alsogranted an option to acquire an additional 7.5% interest, subject to certainconditions. This drilling update has been reviewed and approved by Paul Griffiths, ChiefExecutive of Island. Paul Griffiths is a geology graduate of the Royal Schoolof Mines, Imperial College London, and is a member of the Petroleum ExplorationSociety of Great Britain. He has 30 years experience in the oil and gasexploration sector and is a qualified person as defined in the guidance note forMining Oil & Gas Companies, March 2006 of the London Stock Exchange. Further information on Island can be found on the Company's website at http://www.islandoilandgas.com. This information is provided by RNS The company news service from the London Stock Exchange