IOG.L Regulatory News (IOG)

19 Apr 2006 07:02

Island Oil and Gas PLC19 April 2006 19 April 2006 ISLAND OIL & GAS PLC RIG MOBILIZED FOR THREE-WELL DRILLING PROGRAMME Island Oil & Gas plc ("Island" or the "Company"), the technology-led explorationand production company, is pleased to announce the mobilization of thesemi-submersible drilling unit, Petrolia, owned and operated by PetroliaDrilling (UK) Limited under contract to Island. The rig is under tow from theCromarty Firth in the north of Scotland en-route to the Sub-Area of the SevenHeads Petroleum Lease in the Celtic Sea. Thereafter, the rig will move to theOld Head of Kinsale in the Celtic Sea and then the Inishbeg prospect in theDonegal Basin Frontier Exploration Licence. The commencement of drilling on allthree prospects is subject to the usual regulatory consents and approvals Island has a 12.5% participating interest in the producing Seven Heads PetroleumLease. Following the conclusion in February 2006 of a Sub-Area Equity InterestAssignment Agreement for the Seven Heads Petroleum Lease with MarathonInternational Petroleum Hibernia Limited, through its wholly-owned subsidiaryMarathon Seven Heads Limited (formerly Ramco Celtic Sea Ltd), the first well ofthe 2006 drilling programme will be drilled to test a possible extension of theSeven Heads gas field, in the Sub-Area. The well will be located in an areaimmediately to the west of the 48/24-6 production well, which has to dateencountered some of the best producing sands in the Seven Heads gas field.Island will fund 100% of the cost of the well, including testing, in return forincreasing its equity interest in all of the un-appraised parts of theSub-Area. As a result of drilling this well, Island's equity interest in theSub-Area will increase from 12.5% to 55.75%. Island will operate the wellduring the drilling period but operatorship will revert back to Marathon oncethe drilling programme has been completed. It is intended that the second and third wells will target the Old Head ofKinsale Prospect in the Celtic Sea, where Island will be operator, and theInishbeg Prospect in the Donegal Basin with Lundin as operator. Paul Griffiths, Chief Executive of Island, commented: "This represents a major step forward towards the assessment and development ofa significant part of the Company's project portfolio. We would expect, subjectto weather and other factors, the Petrolia to arrive on location inapproximately 15 days time." Enquiries: Lisa J Newman MCIPR MIRSNewman Consulting Tel: +44(0)1252 878682 This information is provided by RNS The company news service from the London Stock Exchange