Commencement of 2007 Drilling

Island Oil and Gas PLC
17 May 2007


17 May 2007


                              ISLAND OIL & GAS PLC
                    COMMENCEMENT OF 2007 DRILLING ACTIVITIES
                                        

Island Oil & Gas plc ('Island' or the 'Company') today announces that it has
spudded gas appraisal well 49/23-2 ('Well 49/23-2') on Exploration Licence 4/05
(the Old Head of Kinsale) in the Celtic Sea, offshore Ireland. Well 49/23-2,
which is the first of this year's drilling programme, is being drilled using the
Petrolia rig (the 'Rig'). Island is operator with a 65% interest.


Well 49/23-2 was spudded on 16 May 2007 in a water depth of approximately 290
feet. This is the Company's second well at the Old Head of Kinsale and follows
on from the gas discovery with its operated well 49/23-1 in 2006, representing
the first new gas discovery in the Celtic Sea for 16 years. Subject to a
successful result and commercial flow-test of Well 49/23-2, Island and its
partners plan to complete and tie-back both wells to the Kinsale A platform next
year with a view to producing first gas in the fourth quarter of 2008.


Following completion of drilling and testing, the Rig will move immediately to
the nearby Exploration Licence 5/05 (the Schull gas field) where it will drill
the Island-operated gas appraisal well 57/2-3, subject to approval of the Irish
Minister for Communications, Marine and Natural Resources.


Under the terms of an agreement between Island and Providence Resources plc
announced on 25 September 2006, Island has allocated one firm drilling slot to
Providence in 2007. Providence will take possession of the Rig as soon as Island
completes its two-well programme and for the remainder of the contract, allowing
Island to reduce its mobilisation and demobilisation costs.


Enquiries:


Paul Griffiths
Chief Executive
Island Oil & Gas plc

Tel: [phone]


Lisa J Newman MCIPR MIRS
Newman Consulting
Tel: [phone]


Notes to editors:


Island was founded in 2003 and listed on AIM in December 2004 (LSE:IOG).  The
Company has interests in eleven Irish offshore licences, as well as licences in
the Netherlands and Morocco.   Island is involved in an exploration and
appraisal programme which in 2006 saw successful Celtic Sea gas wells at the Old
Head of Kinsale and the Seven Heads Sub-Area.  The Company has again secured the
Petrolia rig for its 2007 Celtic Sea drilling programme. This commenced in the
second quarter of 2007 with an appraisal well at the Old Head of Kinsale gas
field, which is to be followed by an appraisal well at the Schull gas field.


Licence Interests, Old Head of Kinsale - Island operator with 65%*; EnCore 15%
(*with option to acquire an additional 5%); Valhalla Oil and Gas Limited 20%.


Licence Interests, Schull gas field - The current interests in the Schull gas
field are: Island 62.5%; EnCore Oil plc 12.5%*; Valhalla 25%. * EnCore is also
granted an option to acquire an additional 7.5% interest, subject to certain
conditions.


This drilling update has been reviewed and approved by Paul Griffiths, Chief
Executive of Island.  Paul Griffiths is a geology graduate of the Royal School
of Mines, Imperial College London, and is a member of the Petroleum Exploration
Society of Great Britain. He has 30 years experience in the oil and gas
exploration sector and is a qualified person as defined in the guidance note for
Mining Oil & Gas Companies, March 2006 of the London Stock Exchange.



Further information on Island can be found on the Company's website at http://
www.islandoilandgas.com.










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