SLE.L Regulatory News (SLE)

25 Feb 2009 07:05



Island Oil & Gas plc

("Island" or "the Company")

Moroccan Operational Update

Aeromag survey defined promising structures 

Imminent negotiations with ONHYM to upgrade Frontier licence into Exploration Licence

Highly positive regional moves: discoveries and international major farm ins

Island Oil & Gas, the Irish exploration and production company with an international portfolio is very pleased to note today's statement by San Leon, operator of the Joint Venture set up to explore the Zag basin, onshore Morocco. 

Aeromagnetic surveys have defined a number of promising structures. The results of the survey have greatly encouraged the joint venture (Island 20%) and negotiations are to commence on upgrading the Reconnaissance Licence to a full Exploration Licence.

In addition, Island notes the highly positive regional news of both new discoveries on the Algerian side of the basin and the entrance of international major RWE to the licence adjacent to Island's. 

Paul Griffiths, CEO of Island Oil & Gas commented:

"All of these moves are highly positive in both a regional and specific context. The entrance of such a major company as RWE to the adjacent licence validates our first mover activity.

The results from the aeromag, whilst very early, are very exciting. With excellent terms currently being offered in Morocco, we look forward to the future with confidence"

25 February 2009

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Notes to editors

Island Oil & Gas is an Irish based international oil and gas company, with recent history of proven exploration, development, production and asset trading successes. Its portfolio includes projects in Ireland, Netherlands, Albania and Morocco. With approved international operator status, Island has an access route into new projects denied to many of its peers. Island has been involved in Morocco since early 2007, has found operating conditions to be excellent and has found ONHYM, the Moroccan National Office of Hydrocarbons and Mining to be a highly valued partner. Island is targeting high impact joint venture exploration plays in two prospective projects:

The Tarfaya Exploration Licence is located onshore Southern Morocco and covers an area of 13,434 square kilometres adjacent to the Atlantic Coast. The Exploration Licence was awarded by ONHYM in November 2007 and is effective from 14 January 2008 for an eight year term divided into three work phases. Island is the operator and owns 30% of the Licence, with AiM listed San Leon Energy plc as 22.5% partner]. A recent competent person report compiled by Netherland Sewell & Associates for San Leon's AiM listing stated that 'Probable Prospective' oil in place for the Tarfaya exploration leads of 2,511.5 mmb and gross 'Probable Prospective Oil Resources' of 711.3 mmb. It quotes gross unrisked 'Possible Prospective Oil Resources' of 3,878.6 mmb.

The Zag Reconnaissance Licence is located in Southern Morocco and covers approximately 21,807 square kilometres. Island owns 20% of the Licence which is operated by San Leon Energy. The Zag Exploration Reconnaissance Licence lies within the Zag-Tindouf Basin of Southern Morocco and Western Algeria and is the westernmost of the prolific hydrocarbon-producing Palaeozoic Basins of North Africa. Petro Canada and RWE have taken acreage in adjacent blocks, and Repsol have made a major commercial discovery in the basin. Reconnaissance Licence upgradeable to a full Exploration Licence