Drilling Report

Island Oil and Gas PLC
30 August 2006

30 August 2006

                              ISLAND OIL & GAS PLC

                         Drilling Update - Well 13/12-1

Island Oil & Gas plc ('Island' or the 'Company') today announces that well 13/
12-1 (the 'well') on the Inishbeg Prospect in Frontier Exploration Licence 1/05
('FEL 1/05'), operated by Lundin Petroleum AB ('Lundin'), has been plugged and
abandoned.

FEL 1/05 is in the Donegal Basin on the Atlantic Margin offshore Ireland. The
well, which was spudded on 22 August 2006 in a water depth of 319 feet, was
drilled using the Petrolia rig. It was the third well of Island's 2006 drilling
programme, under which the Company has produced two successful gas discoveries
with its two operated Celtic Sea wells at Seven Heads West and the Old Head of
Kinsale.

Enquiries:

Lisa J Newman MCIPR MIRS
Newman Consulting

Tel: [phone]


Notes to editors:

Island was founded in 2003 and listed on AIM in December 2004.  The Company has
interests in eleven Irish offshore licences, (six as operator). The Company has
operated two Celtic Sea wells in 2006, both of which produced successful gas
discoveries. The Company has also secured the Petrolia rig for its planned 2007
drilling programme.

The partners in FEL 1/05 are Island (31%); Lundin (operator. 30%); Lansdowne Oil
& Gas (19.25%), Petroceltic International (16.25%) and Sunningdale Donegal Basin
Ltd (3.50%).

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




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