Island declines Celtic Sea option agreement

Island Oil & Gas has declined to exercise an option agreement with Lansdowne Celtic Sea to farm into 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.

Offshore staff

DUBLIN -- Island Oil & Gas has declined to exercise an option agreement with Lansdowne Celtic Sea to farm into 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 agreement allowed Island to secure rights to protect acreage in the event that any structures defined by seismic acquisition in Island's Old Head of Kinsale License extended into the option area.

Following the acquisition, processing and interpretation of a seismic survey over Standard Exploration License 4/05 (the Old Head of Kinsale), covering part blocks 49/17(p), 49/22(p) & 49/23(p), Island now believes that it has sufficient materiality within its existing license boundaries to progress its near-term strategy.

The company says that the Celtic Sea gas fields have been identified by major players as having potential for either an Irish or western European gas storage facility. The company is planning the development of satellite gas fields close to the Celtic Sea infrastructure.

01/27/2009

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