Interim Results

Island Oil and Gas PLC
20 April 2005


20 April 2005

                             ISLAND OIL AND GAS PLC
                          ('Island' or 'the Company')
            INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 JANUARY 2005

                              CHAIRMAN'S STATEMENT

The six months to 31 January 2005 has been a period of intense activity on a
number of important fronts in the development of Island. The Company has, in
that time:

  * Executed an option agreement with Marathon Oil Ireland Ltd in August 2004
    through which Island has an exclusive option to earn 50% of Marathon's
    equity in all oil and gas-bearing reservoirs below 4,000 feet subsea within
    an area defined by the extent of the overlying Kinsale gas accumulation;

  * Acquired in October 2004, through the acquisition of Island Expro Ltd, an
    interest in two additional Celtic Sea licences, Licensing Options 03/4 and
    04/2, which are both prospective for gas and are located to the southeast 
    of Ireland, adjacent to the Kinsale and Seven Heads gas infrastructure.

  * Acquired as a result of the Island Expro acquisition the benefit of a
    farm-out agreement entered into by Island Expro in August 2004 with
    Petroceltic International plc ('Petroceltic'), whereby Petroceltic acquired
    a 15% interest in Licensing Option 03/4, which lies to the southeast of the
    Kinsale gas field and contains two prospective gas structures. The
    consideration was paid by the issue of shares in Petroceltic which were
    subsequently sold for £104,000. A further amount of £296,000 is payable by
    Petroceltic in cash or shares on the execution of a rig contract to drill
    this prospect. Island, as operator, retains a 50% interest in this Licence,
    which will revert to 65% if Petroceltic chooses not to enter into the rig
    contract.

  * Raised in November 2004 £8.24 million, gross of expenses, in a private
    placing to institutional and private investors, prior to successfully
    listing on AIM in London in December 2004.

  * Executed a Sale and Purchase Agreement with Lundin Petroleum AB (the 
    'Lundin Transaction') in December 2004 to acquire a portfolio of offshore 
    Irish oil and gas assets, including a 12.5% interest in the producing 
    Seven Heads gas field and a 12.5% interest in the undeveloped oil-bearing 
    reservoirs below the gas, for a consideration of four million shares of 
    Island. The completion of this complex transaction is now in its final 
    stages.

  * Executed a farm-in agreement in January 2005 with Ramco Donegal Limited
    and Sunningdale Donegal Basin Limited to earn a 26% interest in Frontier
    Exploration Licence 1/05 in the Donegal Basin, which contains two large gas
    prospects, subject to drilling an exploration well in 2006. Island has an
    option to acquire an additional 5% groundfloor interest in this licence 
    upon completion of the Lundin Transaction.

Strong demand for oil and uncertain supply has driven oil prices to record highs
in the six months to 31 January 2005. The future outlook for a prolonged period
of higher oil prices should provide a stable commercial environment for Island
to evaluate, appraise and potentially develop its equity interests in the
undeveloped Connemara oil field off the west coast of Ireland, and its exclusive
options to appraise the deeper Seven Heads and Kinsale oil-bearing reservoirs.

The long-term outlook for gas prices is equally positive and Island anticipates,
in conjunction with its present and prospective future partners, developing a
multi-well Celtic Sea drilling programme for 2006 to appraise its gas prospects,
and existing gas discoveries, around the Kinsale and Seven Heads gas fields.

Financial Results:

The Group recorded an operating loss of £623,000 for the period, which includes
the full cost of the AIM listing process; the costs incurred in raising the
£8.24 million in new equity finance, as well as the costs associated with the
Island Expro acquisition. Despite these considerable costs, Island retained
£8.472 million cash balances as at 31 January 2005. We have chosen to report
these results in Sterling, since that is the main currency in which most of our
business is transacted, and in which our cash balances are held.

Future Prospects:

Island proposes to continue with its synergy-based approach to appraisal and
exploration drilling, complemented by strategic acquisitions designed to add
real value to our portfolio.

In the Celtic Sea, completion of the Lundin Transaction will place Island in a
strong position to implement its strategy of utilising, wherever possible,
existing infrastructure and conducting an aggressive, reduced risk, drilling
programme with suitable partners. It is currently anticipated that up to three
Celtic Sea wells will be drilled during 2006, two of which are likely to
appraise specific and confirmed oil and gas discoveries. Island has commenced
building an operating team in preparation for this programme.

West of Ireland, Island will accelerate its evaluation of the Connemara oil
field and surrounding exploration prospects, and will have a significant
interest in the consortium established to drill a large gas prospect in its
Donegal licence in 2006.

Looking internationally, Island is continuing to progress its exploration 
permit application in France, and is also exploring specific potential 
opportunities in Libya.

Island expects oil and gas prices to remain strong, based on increased demand
from the developing Indian and Chinese economies. The industry demand for
quality exploration prospects is increasing and the ability to secure such
prospects on attractive commercial terms is becoming more difficult. In the
current exploration market, a successful 2006 drilling campaign should create 
an opportunity to realise value for Island shareholders through a trade sale of
some of its equity interest in any new oil or gas discovery, at a time when the
ratio of the value of reserves in the ground to investment is maximised, 
usually prior to development drilling.

The remaining months of 2005 will be a busy period for Island, and an important
phase in the further development of the Company as it consolidates its 
confirmed oil and gas discoveries and prospects and prepares to begin a 
multi-well drilling programme in 2006.

Completion of the Lundin Transaction will result in Island gaining a 12.5% 
share of the gas revenues, net of expenses, which have arisen from the Seven 
Heads gas production. These revenues will accrue from 1 October 2004, being the
commencement date of the current gas contract. No income or expenditure from
this source has been reflected in the accounts to 31 January 2005, as the
Transaction has not been completed.

Island is keen to participate in any viable investment programme designed to
increase future revenues from Seven Heads in 2005 and beyond. It is expected
that a further announcement regarding completion of the Lundin Transaction will
be made shortly.

It remains to me to extend my thanks and appreciation to my fellow Directors 
for their hard work during the period under review.

Bryan Benitz
Chairman

Enquiries:

Newman Consulting
Lisa J Newman MCIPR MIRS

T: [phone]
M: [phone]
[e-mail]


ISLAND OIL AND GAS PLC
FINANCIAL INFORMATION
(Unaudited)

                                                    6 months          9 months
                                                    ended             ended
                                                    31 January        31 July
                                                    2005              2004
PROFIT AND LOSS ACCOUNT                             Stg£000's         Stg£000's

Profit on sale of interest in licence and financial     104                0
asset

Exploration and Licence Expenses                       (194)             (20)

Administration expenses(1)                             (533)             (48)
_______________________________________________________________________________
Operating (Loss)                                       (623)             (68)

Interest receivable                                     78                 3
_______________________________________________________________________________
(Loss) before tax                                      (545)             (65)

Tax                                                     (12)              (1)
_______________________________________________________________________________
(Loss) after tax attributable to shareholders          (557)             (66)

Profit and Loss account at beginning of period          (66)              (1)
Foreign Exchange movement on reserves                    (2)               1
_______________________________________________________________________________

Profit and Loss account at end of period               (625)             (66)
_______________________________________________________________________________
Loss per share - in pence                              (2.18)

(1)Included in Administration Expenses are Stg£340,000 for Professional Fees in
connection with the recent AIM listing. In addition, share issue expenses of 
Stg£534,000 were written off against the Share Premium in the period.



ISLAND OIL AND GAS PLC
FINANCIAL INFORMATION
(Unaudited)

                                                        31 January     31 July
                                                        2005           2004
BALANCE SHEET                                           Stg£000's      Stg£000's

Intangible Assets                                         2,836         50
_______________________________________________________________________________

Current Assets
Bank and Cash                                             8,472        974
Debtors                                                      62          7
_______________________________________________________________________________
                                                          8,534        981

Creditors: amounts falling due within one year             (303)      (111)
_______________________________________________________________________________

Net Current Assets                                        8,231        870
_______________________________________________________________________________

Net Assets                                               11,067        920
_______________________________________________________________________________

Represented by;

Share Capital                                               298         75
Share Premium                                            11,394        911
Profit and loss account                                    (625)       (66)
_______________________________________________________________________________

Shareholders' Funds                                      11,067        920
_______________________________________________________________________________



ISLAND OIL AND GAS PLC
FINANCIAL INFORMATION
(Unaudited)

                                                        6 months     9 months
                                                        31 January   31 July
                                                        2005         2004
CASH FLOW STATEMENT                                     Stg£000's    Stg£000's

Net Cash (outflow)/inflow from Operating Activities         (557)         36
_______________________________________________________________________________

Returns on Investments
Interest received                                             41           3
_______________________________________________________________________________

Net Cash inflow from returns on Investments                   41           3
_______________________________________________________________________________

Capital Expenditure and Financial Investment
Expenditure on intangible assets                          (2,786)        (50)
Sale of Investments                                          104           0
_______________________________________________________________________________
                                                          (2,682)        (50)
_______________________________________________________________________________

Taxation                                                     (10)          0
_______________________________________________________________________________

Net Cash (outflow) before Financing activities            (3,208)        (11)
_______________________________________________________________________________

Financing Activities
Issue of Shares, net of expenses                          10,706         985
_______________________________________________________________________________

Increase in Cash                                           7,498         974
_______________________________________________________________________________

Reconciliation of Net Cash Flow to movement in Net Cash
Increase in Cash during the period                         7,498         974
Net Cash at start of period                                  974           0
_______________________________________________________________________________

Net Cash at end of period                                  8,472         974
_______________________________________________________________________________

The accounting policies applied in the preparation of the unaudited interim
results are consistent with those used in the preparation of the statutory
financial statements for the year ended 31 July 2004 with the following
additions:

Basis of consolidation

The consolidated financial statements comprise the financial statements of the
parent undertaking and its subsidiary undertakings. The results of companies
acquired are dealt with in the profit and loss account from the date control
passes.

Foreign currencies

The results and cashflows of non-sterling group undertakings are translated 
into sterling using the average exchange rate and related balance sheets have 
been translated at the rates of exchange ruling at the balance sheet date. 
Exchange rate differences arising on the translation of results of non-sterling 
group undertakings and on the restatement of opening net assets are dealt with 
through retained profit net of differences on related foreign currency 
borrowings.

Transactions denominated in foreign currencies are translated into sterling and
recorded at the rate of exchange ruling at the date of the transaction.Monetary
assets and liabilities arising in foreign currencies are translated into euro 
at the rate of exchange ruling at the balance sheet date.

Profits and losses arising from exchange differences have been included in the
profit and loss account.

Intangible fixed assets

Oil and gas interests

The cost of acquiring oil and gas interests are included as intangible assets
and are amortised over the expected useful lives of the related oil and gas
interests once the commercial viability of the interests has been established.
Prior to establishing the commercial viability of the interests they are 
carried at cost.

The oil and gas interests are reviewed at least annually for impairment and are
written down if impairment has occurred.

Ends.



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