IOG.L Regulatory News (IOG)

9 Sep 2008 07:00



Island Oil & Gas plc

Positive Moldova Update

Island Oil & Gas plc ("Island" or the "Company") is pleased to announce that its wholly owned subsidiary Island Moldova BV has today executed a mandate letter with the European Bank for Reconstruction and Development ("EBRD") to begin the process of carrying out technical and commercial due diligence and environmental studies that are required by the EBRD prior to seeking final approval from the EBRD's Board of Directors for financing the Moldovan projects.

In November 2007, Island announced the execution of a Memorandum Of Understanding with Valiexchimp S.R.L. ("Valiexchimp"), thereby giving the Company the right to acquire certain upstream and downstream oil and gas assets in Moldova. This move with the EBRD represents a considerable step forward in processing the transaction with Valiexchimp. Island will report further progress on the completion of the transaction in due course.

The Moldovan projects are anticipated to generate a positive operating cash flow in 2009 and to potentially lead to additional oil field rehabilitation opportunities in other FSU countries. 

Commenting on the mandate letter with the EBRD, Paul Griffiths, Chief Executive of Island, stated:

"This marks a significant step towards delivering the diversification of our portfolio through a strategic entry into Eastern Europe and the Former Soviet Union. We look forward to working closely with our colleagues in the EBRD to progress the studies necessary to deliver the funding required to further develop the Moldovan assets." 

 9 September 2008

Enquiries:

Island Oil & Gas plc Tel: +353 1 6313755Paul GriffithsKarl Prenderville

www.islandoilandgas.com

Davy (NOMAD and broker) Tel: +353 1 679 6363

Anthony Farrell 

Landsbanki (UK broker) Tel: +44 (0)207 426 9000

Simon Robinson

College Hill (Financial PR) Tel: +44 (0)20 7457 2020

Paddy Blewer

Nick Elwes

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