Offshore staff

LONDON -- The exploration well 49/23-1 at Old Head of Kinsale in the Celtic Sea encountered gas over a gross interval of 150 ft, reports Island Oil & Gas Plc.

Island plans to re-enter the well in 2007 to conduct an extended test. Current data indicates gas extends over an area of 22 sq km with potential gas in place of 90 to 120 bcf.

"Following the successful testing of the Seven Heads West well 48/23-3, the company has now made the first new gas find in the Celtic Sea since 1990," said Paul Griffiths, Island's chief executive.

In the interim, Island will continue technical and commercial feasibility studies of a potential subsea tieback to Marathon Oil's Kinsale Alpha production platform 25 km away.

The well is operated by Island (with 100% equity interest) and was drilled by the semisubmersiblePetrolia. The rig will move to the Donegal basin where it will drill the Lundin-operated well 13/12-1 on the Inishbeg Prospect in which Island has a 31% equity interest.

8/3/06