Island Announces Updated Resource Estimates

Island Oil & Gas plc said that Fugro Robertson Limited recently completed an independent assessment of the company's most advanced near-development oil and gas projects.

The projects include: the Amstel Oil Field, offshore the Netherlands; the Old Head of Kinsale and the Schull gas fields in the Celtic Sea. In addition, Fugro Robertson has also assessed the producing Seven Heads gas field taking into account the results of the West Seven Heads 48/23-3 appraisal well drilled by Island in 2006. This assessment constitutes a Competent Person's Report (the "Report") under the AIM Rules. Island's 2007 drilling program will commence in the second quarter of this year and will include appraisal wells at both the Old Head of Kinsale and Schull gas fields.

Highlights of the CPR Report are:

--Contingent P50 resources of 15.9 MMboe for Old Head of Kinsale, Amstel and Seven Heads West;
--Old Head of Kinsale, Celtic Sea (Island interest 100%) - On a P50 basis, Field gross gas in place of 78 Bscf; Field Gross Gas Recoverable of 55 Bscf; net contingent resources of 9.2 MMboe.
--Amstel Oil Field, Netherlands (Block Q13) (Island interest 60% after exercise of State back-in rights) - On a P50 basis, Field gross oil recoverable of 10.9 MMbbl; total net contingent resources 6.5 MMboe.
--Schull License, Celtic Sea (Island interest 55%) - Fugro Robertson evaluated the Schull 57/2-2 discovery well ("Schull Field") and two adjacent gas prospects. On a P50 basis, Schull Field gas in place of 28 Bscf; and gross gas recoverable reserves of 18.2 Bscf; net contingent resources of 1.7MMboe. For the two adjacent gas prospects, the unrisked total prospective resources are 74.1 Bscf (net risked prospective resources 1.7 MMboe).
--Seven Heads West, Celtic Sea (Island 55.75%) - At the Seven Heads West Sub-Area, P50 Field gross gas recoverable of 1.7 Bscf, making net contingent resources of 0.2 MMboe, with potential P10 upside of net contingent resources of 0.3 MMboe based on P10 gross gas recoverable of 3.1 Bscf.

Island drilled a successful gas well on the Old Head of Kinsale field in the Celtic Sea, offshore Ireland as part of its 2006 drilling program; the first new gas discovery in the Celtic Sea for 16 years. The Company plans to drill a further appraisal well at the Old Head of Kinsale in the second quarter of 2007, using the Petrolia Rig. Subject to the results from this well, a Plan of Development will be submitted based on completing and tying back the two wells drilled by Island to the Kinsale facilities subject to commercial agreement with Marathon and the consent of Irish regulatory authorities.

Following the Old Head of Kinsale well, the Petrolia rig will move to the nearby Schull License, where Island will drill an appraisal well to evaluate the 57/2-2 discovery made in 1987 by Total. The appraisal well will assess the continuity of and potential for establishing commercial gas flow rates from sands encountered in the 57/2-2 well but not put on test at the time. The Schull well is planned with a view to developing the gas potential of the area, where Island has identified two additional structures, through the Seven Heads/Kinsale infrastructure. There is significant potential upside in gas reserves in this area subject to the results of the well to be drilled this year. A potential satellite tie-back development at Old Head will significantly improve project economics for Schull through a potential reduction in operating costs by sharing the Kinsale Platform facilities.

Island acquired its interest in the Amstel Field, offshore the Netherlands, its first international acreage, in November 2006. Island is operator and the Company is currently evaluating development options for this oil field and revising a Plan of Development previously submitted to the Dutch authorities. Island is currently seeking availability of a Jack-up rig for drilling in the field in 2008.

The CPR reserves have been calculated in accordance with the standards of the Society of Petroleum Engineers. The CPR does not currently quantify any resource volumes for Island's highly prospective Atlantic Margin licenses, including its potential multi-tcf gas prospects in the Slyne and Rockall Basins and also its near-development oil projects off the west coast of Ireland (Connemara oil field) and the Celtic Sea (Seven Heads oil field). Island will continue to progress these projects and is currently in discussion with potential industry partners to further pre-development appraisal activity.

Paul Griffiths, Chief Executive of Island Oil & Gas plc, commented:

"The Fugro Robertson report focuses on our most advanced projects from our extensive project portfolio. We are now beginning the process of bringing forward the value of our project portfolio through the prioritized development of near-term production projects, farm-outs and industry alliances. We will continue to prove-up the value of the remainder of our portfolio over the coming 12 to 24 months, and will be commencing our 2007 Celtic Sea drilling program in the second quarter with an appraisal well firstly at the Old Head of Kinsale and then at the Schull gas fields."

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