IOG.L Regulatory News (IOG)

13 Dec 2006 15:41

Island Oil and Gas PLC13 December 2006 13 December 2006 Island Oil & Gas plc RMB Resources - Loan Facility and Warrants Island Oil & Gas plc (LSE:IOG) ("Island" or the "Company"), today announces thatit has secured a Stg£7.5 million short term loan facility ("facility") throughRMB Resources, the resources merchant banking business of RandMerchant Bank,part of the First Rand Group of South Africa . The facility is repayable, atIsland's option, at any time up to 31 December 2007. It is intended that thefacility be used primarily to further Island's appraisal and near termdevelopment activities during 2007, including its planned Celtic Sea wells. As part of the agreement, the Company has agreed to grant RMB Resources warrantsto purchase new ordinary shares in Island at a subscription price of Stg£0.7813per ordinary share, subject to certain conditions. The number of warrants to beissued is linked to the repayment date of the loan. An initial 1,439,908warrants were granted on signature of the Facility Agreement and a further1,919,877 and 2,399,846 warrants may be granted on 30 June 2007 and 31 December2007 respectively, if Island elects to maintain the facility as at these dates.All warrants expire on the third anniversary of their date of issue. RMB Resources is one of Africa's leading natural resource players, providinginnovative financial solutions to companies operating in the mining, oil, gasand energy sectors. With a presence in each of the major resource sector capitalraising centres, it has an international capability and the potential to providethe equity, quasi-equity and debt funding necessary for the future developmentof any or all of Island's oil and gas fields in Ireland and the Netherlands,where Island recently announced the award of Block Q13 containing the AmstelField development. Paul Griffiths, Chief Executive of Island, commented: "This facility allows Island to continue to progress our 2007 exploration andappraisal activities, against the backdrop of a highly successful 2006 drillingprogramme. RMB Resources is known for its international natural resourcesexpertise and their support further endorses our corporate strategy includingour near term development opportunities." Enquiries: Lisa J Newman MCIPR MIRSNewman Consulting Tel: +44 (0)1252 878682 Notes to Editors: Island was founded in 2003 and listed on AIM in December 2004. The Company hasinterests in eleven Irish offshore licences, (six as operator) and the Q13Production Licence offshore Netherlands. The Company is involved in an activeexploration and appraisal programme with two successful gas discoveries in2006. The Company has secured the Petrolia rig for its planned 2007 drillingprogramme. Further information on Island can be found on the Company's websiteat http://www.islandoilandgas.com. This information is provided by RNS The company news service from the London Stock Exchange