Completion of Placing

Island Oil and Gas PLC
21 May 2007


21 May 2007


                              ISLAND OIL & GAS PLC

                          COMPLETION OF EQUITY PLACING

Further to the announcement made by Island Oil & Gas plc ('Island' or the
'Company') on 17 May 2007 regarding an equity placing, Island today announces
that it has completed a placing to raise approximately Stg£13.7 million, before
expenses, through the issue of 35,253,365 new ordinary shares of €0.01 each at a
price of Stg£0.39 per share ('the Placing'). The Placing which was arranged by
Davy and Bridgewell, was supported by a number of existing and new institutional
and private investors, including RMB Resources with whom the company has entered
into discussions for the purpose of restructuring its current Stg£7.5 million
short term debt facility into a larger secured medium term debt facility.

In addition to the Placing, 8,813,340 warrants have been issued to the new
shareholders, on the basis of 1 warrant for every 4 Placing Shares, at an
exercise price of £0.45 per Ordinary Share ('New Warrants'). These New Warrants
will expire on 16 July 2007.

The funds will be used by Island to support its drilling and contingent testing
programme. This commenced on 16 May 2007 with the spudding of gas appraisal well
49/23-2 at the Old Head of Kinsale gas field, in the Celtic Sea offshore
Ireland, which will be followed immediately afterwards by gas appraisal well 57/
2-3 at the nearby Schull gas field, subject to approval of the Irish Minister
for Communications, Marine and Natural Resources.

Application has been made to the London Stock Exchange for the 35,253,365 new 
Ordinary Shares to be admitted to trading on AIM.  Dealing is expected to 
commence in these shares on 25 May 2007.  These new shares will rank pari passu
in all respects with the existing issued share capital. Following admission of 
the Placing Shares, there will be 110,394,365 Ordinary Shares in issue.


Enquiries:

Lisa J Newman
Newman Consulting

Tel: [phone]


Paul Griffiths
Chief Executive
Island Oil & Gas plc

Tel: [phone]


Anthony Farrell
Davy

Tel: + 353 1 679 6363


Andrew Matharu
Bridgewell Limited

Tel: + 44 (0) 207 003 3105


Notes to Editors:

About Island

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.

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






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