Resource Update

Island Oil and Gas PLC
20 November 2007


PRESS RELEASE                                                   20 November 2007



                              ISLAND OIL & GAS PLC
                                RESOURCE UPDATE


Island Oil & Gas plc (LSE: IOG) ('Island' or 'the Company'), announces that
Fugro Robertson Limited ('Fugro Robertson') has recently updated its independent
assessment of the Company's near-development oil and gas projects offshore
Ireland and the Netherlands. This takes account of the successful appraisal
wells in the Old Head and Schull gas fields earlier this year and significant
progress in outlining a potential development plan for the Connemara oil field.
It also reflects an increase in the Amstel oil field development costs related
to the highly competitive market conditions created by very strong growth in oil
and gas prices during 2007. This assessment constitutes a Competent Person's
Report (the 'CPR Report') under the AIM Rules.


Highlights of the CPR Report are:


•Contingent P50 Resources of 25.6 MMboe for Old Head of Kinsale and
Schull gas fields and the Amstel and Connemara oil fields, representing a 46%
increase in P50 Contingent Resources relative to the corresponding Fugro
Robertson Report announced in March 2007. This reflects the fact that Connemara
has now been included as a Contingent Resource by Fugro Robertson and includes
Islands revised lower equity share in the Licences (except Schull) following its
successful farmout programme


•Old Head of Kinsale gas field (Island interest 65%) - On a P50
basis, gross gas in place of 41.3 Bscf for the Field; gross gas recoverable of
28.9 Bscf for the Field; net contingent resources of 2.6 MMboe.


On a P10 basis, gross gas in place of 92 Bscf for the Field; gross gas
recoverable of 64.4 Bscf for the Field; net contingent resources of 5.8 MMboe.


Internal Rate of Returns of 25% and 39% respectively for the P50 and P10
resources using a Base Case Pricing Scenario.


•Schull gas field (Island interest 62.5%) - On a P50 basis, gross gas
in place of 42.6 Bscf; gross gas recoverable of 27.7 Bscf; net contingent
resources of 2.9 MMboe.


On a P10 basis, gross gas in place of 51.1 Bscf; gross gas recoverable of 33.2
Bscf; net contingent resources of 3.5 MMboe.


Internal Rate of Returns of 19% and 29% respectively for the P50 and P10
resources using a Base Case Pricing Scenario.


•Amstel oil field (Island interest 50%) - On a P50 basis, gross oil
recoverable of 10.9 MMbo for the field; net contingent resources of 5.5 MMboe.


On a P10 basis, gross oil recoverable of 16.4 MMbo; net contingent resources of
8.2 MMboe.


Internal Rate of Returns of 44% and 116% respectively for the P50 and P10
resources using a Base Case Pricing Scenario.


•Connemara oil field (Island interest 51.5%) - On a P50 basis, gross
oil and gas recoverable of 26.5 MMbo and 10.6 Bscf respectively; net contingent
resources of 14.6 MMboe.


On a P10 basis, gross oil and gas recoverable of 40 MMbo and 16 Bscf
respectively; net contingent resources of 22 MMboe.


Island drilled two successful appraisal wells in the Old Head of Kinsale and
Schull gas fields offshore Ireland during 2007 which realised the Company's
pre-drilling objective of establishing commercial flow rates from these fields.


The P50 Contingent Resources assigned by the Fugro Robertson Report to the
Schull and Old Head gas fields confirms the commercial viability of developing
the fields and those potentially attractive rates of return can be achieved from
these planned developments using a base case scenario for gas prices. On this
basis Island has entered into negotiations with lenders with regard to raising
project finance for the development of these fields. Island is also in active
discussions with a number of industry parties with respect to selling equity in
the fields to potentially fund any equity component of a project finance
package.


Island has commenced substantive preliminary discussions with Marathon, the
owners of the Kinsale and Seven Heads gas gathering facilities in the Celtic
Sea, regarding the engineering solutions required for the Old Head of Kinsale
and Schull fields to be tied back subsea to these facilities and is negotiating
commercial terms for these access rights. Both Island and Marathon are acutely
aware of the need to secure access to new indigenous gas resources to maximise
the use of the valuable infrastructure represented by the Kinsale and Seven
Heads facilities.


The P10 Contingent Resource estimates for the Old Head of Kinsale and Schull gas
fields demonstrate the significant potential upside in the fields based on
larger Contingent Resources and a higher future gas price that reflects the
current upward market trend in oil and gas prices.


The P50 Contingent Resources presented for the Amstel oil field in the
Netherlands underpin the value of this project to Island, particularly given
that the base case price scenario for oil used in the economic modelling by
Fugro Robertson is significantly less than present day oil prices. Island is in
substantive negotiations with a number of lenders with regard to raising project
finance for the development of the Amstel oil field. As in the case of the Old
Head and Schull Celtic Sea gas developments, The Company's high equity stake in
the Amstel oil field development has allowed Island to enter into substantive
discussions with several industry parties with respect to selling equity in the
field to potentially eliminate any requirement to raise equity finance as a
component of any project finance package and to facilitate potential access to
the nearby Rijn Platform as a potential evacuation route for Amstel oil.



Fugro Robertson used the guidelines of Chapter 19 of the Listing Rules of the
London Stock Exchange as a guide for the reporting standard. The Fugro Robertson
Report does not currently address Island's exploration portfolio of prospects
around the Schull gas field; on the highly prospective Atlantic Margin, where
Island has already executed agreements that have allowed OMV and Bluewater to
participate in a potential 2009 drilling programme, subject to securing
additional partners; and in Southern Morocco; nor does it address the Company's
inherited gas/condensate discovery in Albania or the potential value of the
Company's potential acquisition of producing and revenue generating assets in
Moldova.


Fugro Robertson has commenced work on a second Report to include the above
portfolio and Island will make a further announcement once this Report is
completed.


Paul Griffiths, Chief Executive of Island Oil & Gas plc, commented:


'The Fugro Robertson Report supports Island's view of the potential commercial
viability of our most advanced near-term oil and gas development projects in
Ireland and the Netherlands and is a key contributor to our ongoing commercial
discussions with banks and potential industry partners to secure the finance
required to develop the oil and gas fields in a timely manner so as to take
maximum advantage of the recent increase in oil and gas prices. Notwithstanding
this the Company is committed to accelerating activity in our portfolio of
exploration prospects on the Atlantic Margin off the west coast of Ireland where
the value of our extensive licence holding may potentially increase, should
there be success in any of the four wells being drilled by other operators next
year in the area. Recent transactions with OMV and the Bluewater Group
demonstrate the attractiveness of the portfolio and substantiate Island's
strategy of promoting activity on our licences in this potentially significant
hydrocarbon province'.


Enquiries:


Paul Griffiths

Island Oil & Gas PLC

Chief Executive

[phone]


Karl Prenderville

Commercial Director

Island Oil & Gas PLC

[phone]


Lisa J N Pope MCIPR MIRS

Newman Consulting

[phone]


Notes to Editors:


Turlough Cooling, Reservoir Engineering Manager, M.Sc. Petroleum Engineering of
Fugro Robertson Limited is the qualified person who managed the evaluation of
the technical and commercial information relating to Island Oil & Gas plc and
the documentation of the Competent Persons Report from Fugro Robertson Limited.
Turlough Cooling has reviewed and approved the technical information included in
this announcement.

Glossary of technical terms:


Bscf - Billions of standard cubic feet of gas


MMbo - Million barrels of oil


MMboe - Million barrels of oil equivalent, which assumes that 6 Mscf of gas has
the same calorific equivalent of 1 barrel of oil


Mscf - Thousands of standard cubic feet of gas


MMscf - Millions of standard cubic feet of gas


P10 - Proven, Probable and Possible reserves


P50 - Proven and Probable Reserves


Proven Reserves - Those quantities of petroleum which, by analysis of geological
and engineering data, can be estimated with reasonable certainty to be
commercially recoverable, from a given date forward, from known reservoirs and
under current economic conditions, operating methods, and government
regulations. Proved reserves can be categorized as developed or undeveloped. If
deterministic methods are used, the term reasonable certainty is intended to
express a high degree of confidence that the quantities will be recovered. If
probabilistic methods are used, there should be at least a 90% probability that
the quantities actually recovered will equal or exceed the estimate.


Unproven Reserves - Based on geologic and/or engineering data similar to that
used in estimates of proved reserves; but technical, contractual, economic, or
regulatory uncertainties preclude such reserves being classified as proved.
Unproved reserves may be further classified as probable reserves and possible
reserves.


Probable Reserves - Those unproved reserves which analysis of geological and
engineering data suggests are more likely than not to be recoverable. In this
context, when probabilistic methods are used, there should be at least a 50%
probability that the quantities actually recovered will equal or exceed the sum
of estimated Proved plus Probable reserves.


Possible Reserves - Those unproved reserves which analysis of geological and
engineering data suggests are less likely to be recoverable than probable
reserves. In this context, when probabilistic methods are used, there should be
at least a 10% probability that the quantities actually recovered will equal or
exceed the sum of estimated Proved plus Probable plus Possible reserves.


Reserve and Resource Categories

After discovery, reserves may be assigned to one of the following two categories
based upon their commercial status at any point in time.


Reserves - Those quantities of petroleum that have been discovered that are
estimated to achieve a commercial return on investment and have been approved
for development by Government and the Board of Directors of the owners.


Contingent Resources - Contingent Resources are those quantities of petroleum,
which are estimated, on a given date, to be potentially recoverable from known
(discovered) accumulations, but which are not currently considered being
commercially recoverable.


Prospective Resources - Prospective Resources are those quantities of petroleum
that are estimated, on a given date, to be potentially recoverable from
undiscovered accumulations.







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