Issue of Equity

Island Oil and Gas PLC
08 December 2005



8 December 2005





            ISLAND OIL AND GAS COMPLETES STG£8.3 MILLION FUNDRAISING


Island Oil and Gas plc ('Island' or 'The Company'), the technology-led
independent exploration and production company, today announces that it has
successfully completed a placing to raise approximately Stg£8.3 million,
inclusive of expenses, through the issue of 11,874,000 new Ordinary Shares of
€0.01 each at a price of Stg£0.70 per share.  The placing, which was arranged by
Davy, was supported by a number of existing and new institutional and private
investors.



In addition to the placing shares, 5,937,000 warrants have been issued to the
new shareholders, on the basis of one warrant for every two new shares
subscribed for, at an exercise price of Stg£0.70 per share.  These warrants may
be exercised up to the later of either 21 April 2006 or 10 days after the
spudding of the first well in Island's 2006 drilling programme.  If all the
warrants are exercised, a further £4.15 million approximately will be raised for
the Company.



The funds raised will support Island's planned three well drilling programme
offshore Ireland in 2006 for which the semi-submersible rig 'Petrolia' has
already been contracted, as previously announced.



Further details of the drilling programme will be announced in due course.



Application will be made to the London Stock Exchange for up to 11,874,000
Ordinary Shares to be admitted to trading on AIM.  Dealing is expected to
commence in these shares on 13 December 2005.  These new shares have been
allotted and will rank pari passu in all respects with the 47.33 million
existing issued Ordinary Shares.





Enquiries:



Lisa J Newman MCIPR MIRS             Tel: [phone]
Newman Consulting                    Email: [e-mail]


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