Offshore staff

Island Oil and Gas has concluded an equity interest agreement with Marathon for the Seven Heads Petroleum lease offshore southern Ireland, via its subsidiary Ramco Celtic Sea. Subject to government approval, Island will drill a well in April to test a possible extension of the Seven Heads gas field, using the drilling rigPetrolia.

The well location will be just to the west of the 48/24-6 production well, which has encountered some of Seven Heads' most productive gas sands. Island will fund 100% of the well cost in return for increased equity in the unappraised part of the lease, west of a partition line close to 48/24-6. Once drilling is completed, operatorship will revert to Ramco.

2/10/2006