Irish & International Farmout

Island Oil and Gas PLC
24 April 2007


24 April 2007


  ISLAND OIL & GAS CONCLUDES IRISH AND INTERNATIONAL FARM OUT AGREEMENTS WITH
                                   ENCORE OIL


Island Oil & Gas plc ('Island') (LSE:IOG) today announces that, in line with its
current strategy of bringing forward the value of its project portfolio, it has
concluded farmout and option agreements with EnCore Oil plc ('EnCore') covering
both Irish and international assets. These include farm out agreements on the
Old Head of Kinsale and the Schull gas fields in the Celtic Sea, both of which
are the subject of the 2007 drilling programme, and the Amstel Field, offshore
the Netherlands, and arise as a result of the Cooperation Agreement entered into
between EnCore and Island in October 2006.


The farm out agreements for the Old Head of Kinsale and Schull gas fields are
subject to approval from the Irish Minister for Communications, Marine and
Natural Resources. The Amstel farm out is subject to the approval of the Dutch
Minister for Economic Affairs.


•Exploration Licence 4/05 ('Old Head of Kinsale' gas field) - Island
has concluded a farm out agreement with EnCore over the Island-operated Old Head
of Kinsale gas field, whereby EnCore will acquire a 15% interest, in return for
a cash consideration for past costs, reducing Island's interest to 65%. Island
has also granted EnCore an option to acquire a further 5% interest, subject to
certain conditions. Drilling of appraisal well 49/23-2 is expected to commence
during May this year using the Petrolia rig.


•Exploration Licence 5/05 ('Schull' gas field) - Island has concluded
a farm out agreement with EnCore over the Island-operated Schull gas field,
whereby EnCore will acquire a 12.5% interest, reducing Island's interest to
42.5%. EnCore is also granted an option to acquire an additional 7.5%, subject
to certain conditions. Island is currently negotiating the acquisition of an
additional 20% interest in Schull from the minority partners, in order to
advance drilling activity. It is expected that post-conclusion of this
transaction Island will have a shareholding of 62.5% in Schull, prior to any
decision by EnCore to exercise its option to acquire a further 7.5%. An
appraisal well will be drilled at the Schull gas field this year following
drilling and testing of the Old Head of Kinsale appraisal well.


•Netherlands Q13 Production Licence ('Amstel' field) - Island has
concluded a farm out agreement with EnCore over the Amstel field, whereby EnCore
will acquire a 10% interest for a cash consideration, reducing Island's interest
to 50%. EnCore is also granted an option to acquire a further 5% interest,
subject to certain conditions.


•Overriding Royalty Agreements - Island and EnCore have entered into
Overriding Royalty Agreements in connection with the above farm out agreements
whereby, EnCore agrees to pay Island a royalty defined as a percentage of the
revenue from the sale of hydrocarbons from the farm out interests in the
Licences above (7.5% Old Head of Kinsale, 10% Schull and Amstel), subject to
certain conditions including field performance.


•Option Agreement, Southern North Sea - EnCore holds a 100% interest
in a UK Promote Licence in the Southern North Sea, containing the Bennett
Prospect, adjacent to the Cavendish gas field. EnCore has granted Island an
option to acquire a 15% interest in the licence, subject to certain conditions.


•Option Agreement, Nimes, France - EnCore holds a 100% interest in an
application for a licence for a block in the Nimes area in France, and has
granted Island an option to acquire a 30% interest in the total equity awarded,
subject to certain conditions.


Island will only exercise the options in the Southern North Sea and France if
there is an opportunity to farm out for a fully carried interest in any future
work programmes. EnCore will immediately participate pro-rata in the upcoming
appraisal wells 49/23-2, at the Old Head of Kinsale gas field, and 57/2-3, at
the Schull gas field.


Further to these farm out agreements, Island will now proceed with a placing to
institutional investors to secure additional equity to support its drilling and
contingent testing programme.


Paul Griffiths, Chief Executive of Island, commented:


'Island has successfully delivered upon its stated strategy of seeking to farm
out its substantial equity interests in its extensive portfolio of exploration
and near-development assets in order to accelerate drilling activity and the
development of our portfolio to early production, whilst limiting financial
exposure and bringing forward value.'

Enquiries:


Lisa J Newman MCIPR MIRS
Newman Consulting 

Tel: [phone] 

Paul Griffiths
Chief Executive 
Island Oil & Gas plc

Tel: [phone]


Anthony Farrell 
Davy 

+ 353 1 679 6363

Andrew Matharu
Bridgewell Limited

Tel: [phone]


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 is due to commence
in the second quarter of 2007 with an appraisal well at the Old Head of Kinsale
gas field, 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.


Partners and Interests in Farm Out Agreements in This Announcement:


Old Head of Kinsale gas field

Island operator with 65%*; EnCore 15% (*with option to acquire an additional
5%); Valhalla Oil and Gas Limited 20%.


Schull gas field

Island operator with 42.5%*; EnCore 12.5% (*with option to acquire an additional
7.5%); Carob Limited 15%; Celtex Exploration 15%; Bexley Investments 15%.


Amstel Field

Island operator with 50%*; EnCore 10% (with the option to acquire an additional
5%); EBN 40%








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