Drilling Report

Island Oil and Gas PLC
02 July 2007


2 July 2007


                       ISLAND OIL & GAS PLC FLOWS GAS FROM

                     THE OLD HEAD OF KINSALE APPRAISAL WELL


Island Oil & Gas plc ('Island' or the 'Company') (LSE:IOG) today announces that
the 49/23-2z sidetrack well (the 'Well') on Exploration Licence 4/05 (the 'Old
Head of Kinsale') in the Celtic Sea offshore Ireland has successfully tested dry
gas at a rate in excess of 18 million standard cubic feet per day ('mmscfpd')
through a 56/64' restricted choke size, with absolute open flow potential of 47
mmscfpd. The gas was produced from the same Upper Wealden reservoir horizons in
the Lower Cretaceous, at a measured depth of 4,450 feet below the rotary table
('brt'), that were encountered approximately 2.5 kms to the NE of the original
49/23-1 discovery well drilled in 2006.

The well, which was drilled to 5,140 feet measured depth (drillers total depth
4,386 feet as true vertical depth brt), is being suspended as a potential gas
producer alongside well 49/23-1. Following a detailed technical and commercial
study of the well data, Island and its partners will make a further announcement
in due course regarding the next stage in the evaluation and potential
development of the Old Head of Kinsale gas field.

The Petrolia Rig will shortly move to the nearby Exploration Licence 5/05 (the
Schull gas field) where it will drill the Island-operated gas appraisal well 57/
2-3.

Island has a 65% interest in the Old Head of Kinsale gas field, where it is
partnered by Valhalla Oil and Gas Limited and EnCore Oil plc.


Enquiries:

Lisa J Newman MCIPR MIRS
Newman Consulting

Tel: [phone]


Paul Griffiths
Chief Executive
Island Oil & Gas plc

Tel: [phone]


Notes to Editors:


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.

This drilling update has been reviewed and approved by Paul Griffiths, Chief
Executive of Island.  Paul Griffiths is a geology graduate of the Royal School
of Mines, Imperial College London, and is a member of the Petroleum Exploration
Society of Great Britain. He has 30 years experience in the oil and gas
exploration sector and is a qualified person as defined in the guidance note for
Mining Oil & Gas Companies, March 2006 of the London Stock Exchange.


Further information on Island can be found on the Company's website at http://
www.islandoilandgas.com.




                      This information is provided by RNS
            The company news service from the London Stock Exchange