Licence Application

Island Oil and Gas PLC
23 March 2006

23 March, 2006



ISLAND OIL & GAS PLC APPLIES FOR NEW LICENCES OFF THE WEST COAST OF IRELAND IN
THE SLYNE-ERRIS-DONEGAL BID ROUND


Island Oil & Gas PLC ('Island' or the 'Company') announces that an application
was made to the Petroleum Affairs Division of the Department of
Communications,Marine and Natural Resources for six blocks in the recent
Slyne-Erris-Donegal Bid Round which closed on the 15 March 2006.

The areas applied for are in the Southern Slyne Basin, where a large structural
lead prospective for Triassic gas was identified, and in the Donegal Basin,
where a series of potential Triassic structures were mapped on trend with the
Inishbeg Prospect, which will be drilled by Island and its partners later this
year. These structures are potentially prospective for both oil and gas.

It is intended that Island will operate any licence awarded as a result of this
application.

Commenting on the Application Paul Griffiths, Chief Executive of Island, stated:


'We are pleased to once again participate, as we did in the previous Porcupine
and Northeast Rockall Licensing Rounds,in a new Irish Offshore Licensing Round.
We seek to increase our acreage position on the prospective Atlantic Margin and
to strengthen our growing portfolio of prospects in what is strategically a key
area for the future discovery of the large quantities of indigenous gas
necessary to reduce Ireland's long term dependence on gas imported from the
United Kingdom. Island, through its planned 2006 multi-well drilling programme,
has demonstrated its commitment to deliver a fast-track approach to exploration
drilling where this can be technically and commercially justified. We will
continue to apply this same strategy to our portfolio of oil and gas prospects
off the West Coast of Ireland in 2007 and beyond'



Enquiries:
Victoria Baird
Island Oil & Gas PLC
Tel: + 353 1 6313755




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