IOG.L Regulatory News (IOG)

17 Jul 2007 08:30

Island Oil and Gas PLC17 July 2007 17 July 2007 ISLAND ANNOUNCES SHARE PURCHASE AND CONNEMARA OPTION AGREEMENT WITH BLUEWATER GROUP Island Oil & Gas plc ("Island" or the "Company") today announces that it hasconcluded a Heads of Agreement (the "Agreement") with Supernova Energy B.V.,which is a member of the Bluewater Group ("Bluewater") of the Netherlands, amember of the Bluewater group of companies, over Frontier Exploration Licence 1/04 (the "Licence") located in the Porcupine Basin in the Atlantic Margin off the west coast of Ireland. The Licence includes the Connemara Field and severalsignificant exploration prospects. Island is operator with a 61.5% interest. TheAgreement is subject to approval of the Irish Minister for Communications,Marine and Natural Resources and joint venture partners. Highlights: • Bluewater will purchase 3,750,000 ordinary shares in Island for Stg£0.60 per share in a private placing (total value Stg£2.25m), giving Bluewater an exclusive option to farm in for 10% equity in the Licence, at no additional cost, exercisable up to 31 December 2007; • Island will grant Bluewater a second option to farm in for an additional 10% equity in return for a cash consideration of a further Stg£2.25m, exercisable up to 31 December 2007; • Island and Bluewater will also form a joint venture partnership to apply for blocks in the upcoming South Porcupine Licensing round. Island will operate and hold no less than a 51% participation interest in the joint venture. Island and Bluewater will work closely on progressing development options forthe Connemara Field and in accelerating farmout activity in respect of the jointventure's Atlantic Margin portfolio of exploration prospects. Commenting on the Agreement with Bluewater, Paul Griffiths, Chief Executive ofIsland, said: "Island has again continued its successful track-record of forming industryalliances with major players in their own field. As a specialist in theoperation of Floating Production Systems, Bluewater are an ideal partner in thePorcupine Basin. We have also demonstrated our stated intention of movingforward key Atlantic Margin projects. We look forward to a successfulpartnership with Bluewater." Enquiries: Paul GriffithsChief ExecutiveIsland Oil & Gas plcTel: +353 1 631 3755 Lisa J Newman MCIPR MIRSNewman ConsultingTel: +44 (0)1252 878682 Anthony FarrellDavyTel: + 353 1 679 6363 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 a successful gas appraisal well at the Old Head ofKinsale gas field. Bluewater has built a technological lead specialising in lease and operation oftanker-based Production and Storage (FPSO/FSO) systems, and has become a leadingprovider of advanced Single Point Mooring (SPM) systems. Bluewater operatesworldwide with offices in The Netherlands, United Kingdom, United States,Nigeria, Angola, South Africa, Malaysia and China This information is provided by RNS The company news service from the London Stock Exchange