Lansdowne Awards 'Old Head' Gas Trend Farm-in Option to Island

Lansdowne has executed an Option Agreement with Island to farm out an area of Standard Exploration License 4/07, covering part blocks 49/11(p), 49/12(p), 49/13(p), 49/17(p) and 49/18(p) in the Celtic Sea offshore Ireland. The Option, if exercised, would be subject to the approval of the Minister for Communications, Energy and Natural Resources.

Under the terms of the Option Island will acquire a seismic survey of approximately 100 km of 2D data over the Area and will have the right to carry out the drilling and testing of a farm-in well in the Area. The Option extends to December 31, 2008 and, if exercised, the Well is expected to commence before July 31, 2010, depending on rig availability.

The Well, subject to the exercise of the Option, is expected to be drilled and will test potentially the same reservoirs that are gas-bearing in the 49/23-1, 49/23-2 and 49/23-2z wells drilled by Island in the Old Head gas field immediately to the south of the Area.

Upon exercise of the Option Island will acquire a 58.34% equity interest in the Option Area and become the operator and Lansdowne will retain a 41.66% equity interest.

Following comprehensive seismic, geological and reservoir engineering studies in the area of the Old Head gas field, Island now believes that there is additional potential for low risk gas prospects along the "Old Head Trend" in an area of the Celtic Sea that was formerly under-explored until the Old Head gas discovery was made by Island in 2006.

"We are pleased to conclude this agreement with Island which will allow the evaluation of the Old Head Trend to proceed in a co-operative and timely manner, commencing with the acquisition of new seismic data, currently underway," said Lansdowne CEO Steve Boldy. "We look forward to working with Island with a view to early development of the gas potential in the Old Head Trend."