IOG.L Regulatory News (IOG)

4 May 2006 09:44

Island Oil and Gas PLC04 May 2006 4 May 2006 ISLAND OIL & GAS PLC ANNOUNCES COMMENCEMENT OF 2006 DRILLING OPERATIONS Island Oil & Gas plc ("Island" or the "Company") today announces that it hasspudded well 48/23-3 at Seven Heads West in the Celtic Sea offshore Ireland. Thewell is the first in its planned 2006 and 2007 drilling programmes. Well 48/23-3 is designed to appraise a possible extension of the Upper Wealdengas sands that are producing gas in the 48/24-6 production well immediately tothe east. The well, which is in a water depth of 329 feet, will be drilled to aplanned total depth of 3,200 feet TVD ss. Island concluded a Sub-Area Equity Interest Assignment Agreement for the SevenHeads West area with Marathon International Petroleum Hibernia Limited, throughits wholly-owned subsidiary Marathon Seven Heads Limited (formerly Ramco CelticSea Ltd) in February 2006. Under the Agreement, Island will fund 100% of thecost of the current well, including testing, in return for increasing its equityinterest in the Seven Heads West, Sub-Area, from 12.5% to 55.75%. Island willoperate the well during the drilling period but operatorship will revert back toMarathon once the drilling of the well has been completed. Well 48/23-3 is being drilled using the semi-submersible drilling unit,Petrolia, owned and operated by Petrolia Drilling Limited, under contract toIsland. Subject to regulatory consents and approvals, Island intends to move therig after the completion of the 48/23-3 well to the nearby Old Head of Kinsaleprospect, to drill 49/23-1, the second well of its 2006 three-well programme.The rig then moves on to the Donegal Basin for its planned third well, whichwill be operated by Lundin. Commenting on the commencement of the 2006 drilling programme, Paul Griffiths,Island's Chief Executive, said: "The commencement of drilling operations at Seven Heads West marks a significantmilestone in the development of Island Oil & Gas plc as it seeks to establishits credentials as a competent operator capable of managing and delivering anambitious drilling programme over the next two years in Irish waters and,potentially overseas. Our decision to enter into long-term drilling contractsfor 2006 and 2007 is paying dividends as rigs are currently becomingincreasingly difficult to source. We anticipate that our ability to operatetogether with the availability of a rig in 2007 will open up a number of new andpotentially exciting opportunities for the Company in the near future." Enquiries: Lisa J Newman MCIPR MIRSNewman ConsultingTel: +44 (0)1252 878682 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