Seven Heads West Test Results

29 Jun 2006 07:01

Island Oil and Gas PLC29 June 2006 29 June 2006 ISLAND OIL & GAS PLC ANNOUNCES SUCCESSFUL FIRST WELL OF ITS OFFSHORE IRELAND DRILLING PROGRAMME Island Oil & Gas plc ("Island" or the "Company") today announces a successfulgas testing from its first ever well as an independent Irish operator. Well 48/23-3 (the "Well") at the Seven Heads West Sub Area in the Celtic Seasuccessfully tested dry gas at a combined maximum rate of 13.2 mm cfpd through a48/64" choke from two separate Upper Wealden reservoir horizons in the LowerCretaceous and, in so doing, the Well has extended the limits of the Seven Headsgas field further west. Island has been sufficiently encouraged by the initial results of the well totake the decision to suspend the Well as a potential gas producer pendingfurther detailed technical and commercial evaluation of the Well data. It isexpected that the Well data evaluation will be completed later this year at which stage a further announcement will be made. In February 2006, Island concluded a Sub-Area Equity Interest AssignmentAgreement for Seven Heads West (the "Agreement") with Marathon. Upon completionof drilling and testing of the Well, Island has now fully satisfied the terms ofthis Agreement and will increase its equity interest in the Seven Heads WestSub-Area from 12.5% to 55.75%. Well 48/23-3 was spudded on 4 May 2006 in a waterdepth of 341 feet and was drilled to its planned total depth of 3,237 feet TVDss. Island has operated the well during the drilling and testing period but operatorship will now revert back to Marathon. Commenting on the well results, Paul Griffiths, Chief Executive of Islandstated: "The successful completion of the highly complex Seven Heads West drillingoperations marks an important milestone for the Company in establishing it as asuccessful independent Irish operator. This well marks an exciting and promisinginitial step in the Company's two-year drilling programme. The programme will bethe most diverse exploration programme undertaken by any company for severalyears as it involves evaluating the hydrocarbon potential of four differentsedimentary basins offshore Ireland. "Following the successful testing of well 48/23-3, the Petrolia drilling rigwill move shortly to the nearby Old Head of Kinsale gas prospect, southeast ofthe Kinsale gas field. Thereafter, the rig will move to the Inishbeg prospectin the Donegal Basin. Up to three wells are scheduled to be drilled by theCompany along the exciting Atlantic Margin fairway in 2007. Island has securedthe semi-submersible drilling unit, Petrolia (owned and operated by PetroliaDrilling Ltd) for both its 2006 and 2007 programmes; a major achievement intoday's rig markets. This drilling programme reflects the Company's confidenceand long term commitment to exploration offshore Ireland and our desiredobjective as an Irish operator of reducing Ireland's present high level ofdependency on imported energy through discovering and developing new hydrocarbonresources." Enquiries: Lisa J Newman MCIPR MIRSNewman Consulting Tel: +44 (0)1252 878682 Notes to Editors: This drilling update has been reviewed and approved by Paul Griffiths, ChiefExecutive of Island. Paul Griffiths is a geology graduate of the Royal School ofMines, Imperial College London, and is a member of the Petroleum ExplorationSociety of Great Britain. He has 30 years experience in the oil and gasexploration sector and is a qualified person as defined in the guidance note forMining Oil & Gas Companies, March 2006 of the London Stock Exchange. Further information on Island, and previous press releases, 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