Joint Venture Moldova

Island Oil and Gas PLC
05 December 2007


5 December 2007


 ISLAND AGREES TERMS FOR ESTABLISHMENT OF JOINT VENTURE WITH VALIEXCHIMP S.L.R.
        OVER PRODUCING OIL AND GAS FIELDS AND INFRASTRUCTURE IN MOLDOVA


Island Oil & Gas plc ('Island' or the 'Company') today announces that it has
agreed terms and administrative procedures with Valiexchimp S.L.R.
('Valiexchimp') for the setting up of a Joint Venture Company ('JVC'), 50% owned
by Island and 50% owned by Valiexchimp, to acquire specific upstream and
downstream oil and gas assets, currently owned and operated by Valiexchimp, in
the Republic of Moldova. Valiexchimp's assets are presently being re-structured
to facilitate the completion of this transaction in a timely manner.


In addition Island is also evaluating additional opportunities arising from its
Memorandum of Understanding with Valiexchimp in relation to exploration and
exploitation of gas and oil resources on other ex-Soviet republics. Island will
report further progress on the completion of this transaction in due course.


Enquiries:

Paul Griffiths
Chief Executive
Island Oil & Gas plc
T: [phone]

Karl Prenderville
Commercial Director
Island Oil & Gas plc
T: [phone]

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