AGM Statement

1 Mar 2006 11:30

Island Oil and Gas PLC01 March 2006 1 March 2006 ISLAND OIL & GAS PLC AGM STATEMENT Island Oil & Gas plc ("Island"), the technology-led independent exploration andproduction company, held its first AGM at 11.30 am today in the Conrad Hotel inDublin. At today's meeting, in his opening remarks Bryan Benitz, non-executive Chairmanof Island, commented: "The past year has seen your Company continue to successfully acquire anddevelop what we believe is an outstanding portfolio of Irish oil and gasinterests, including nine previous oil and gas discoveries and an interest in aproducing field. We are now, subject to the normal regulatory consents andapprovals, preparing to embark upon our three-well drilling programme, startingearly in the second quarter of this year, and plan to drill wells at Seven Headsand the Old Head of Kinsale in the Celtic Sea, as well as the Inishbeg prospectin our Donegal Basin Frontier Exploration Licence. "Having moved to a position as a gas production company through our acquisitionof a 12.5% interest in the Seven Heads Petroleum Lease last year, we are pleasedto report that we have now received some Stg£1.2 million in gas sales receiptsfrom Seven Heads. The gas sales revenue of more than Stg£700,000 received forthe 7 month period from the 1 August 2005 to 28 February 2006 is significantlyahead of the Stg£480,000 reported in Island's full year results which reflectedgas sales covering the 10 month period 1 October 2004 to 31 July 2005. Theknowledge acquired as a result of our access to the production data over thisperiod has greatly enhanced our understanding of the Seven Heads field. "Following our conclusion of a Sub-Area Equity Interest Assignment Agreement forthe Seven Heads Petroleum Lease with Marathon International Petroleum HiberniaLimited ("Marathon") last month, we will shortly commence the drilling of a wellto test a possible extension of the gas field in that Sub- Area, to the west ofthe 48/24-6 producing well. In return for funding 100% of the drilling cost ofthe well, Island's equity interest in the Sub-Area will increase from 12.5% to55.75% as a result of earning half of the interest held by Marathon through itswholly owned subsidiary Ramco Celtic Sea Limited. "During 2004 and 2005, Island was one of only two operators to apply forlicenses in the Porcupine and Rockall Licensing Rounds off the west coast ofIreland. Island was successful in obtaining the acreage that it had identifiedas holding significant exploration potential, and as a result we now hold astrategic acreage position stretching some 400 kilometers from the DonegalBasin, through the Rockall Basin, to the Porcupine Basin. The recentannouncement by ExxonMobil in respect of their entry into the Porcupine Basinoffshore Ireland supports Island's decision to create a second core area off thewest coast of Ireland. Our acreage position in this area is currently attractingindustry interest during 2006, particularly as we will be drilling in theDonegal Basin this year. "With an active drilling programme about to commence, alongside decisions onfurther exploration activity planned for next year, we believe that Island iscurrently in an excellent position to enhance returns to our shareholders duringthe year." 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