Index Ups Stake in Taffy Program

Index Oil and Gas, Inc.

Index Oil and Gas, Inc. said Tuesday that it plans a three-well, back-to-back exploration drilling program in Matagorda County, Texas. The three wells target relatively low risk, shallow Miocene gas reservoirs between 5,000 and 7,000 feet total drilling depth. The first of the three wells should spud in fourth calendar quarter of 2006.

The three wells are Taffy 1, Taffy 2, and Taffy 3. Taffy 3 is a new addition to Index's drilling portfolio. The Taffy 3 exploration agreement was recently signed and entitles Index to participate in the well with a 30% working interest.

At the same time Index increased its working interest in the Taffy 1 from 7.5% to 12.5% along with its working interest in Taffy 2 from 20% to 30%.

The three-well drilling program is expected to be finished in the first calendar quarter of 2007.

The Taffy prospects, if commercially successful, are expected to add incrementally to the Company's reserves and cashflow in line with the Company's strategy to rapidly build a balanced portfolio of producing assets, without exposing investors to single critical events.

Index is a gas biased oil and gas exploration and production company, with activities in Kansas, Texas, Louisiana, Mississippi and Alabama. It has offices in Houston, Texas and Bath, England.