Licence Award

Island Oil and Gas PLC
11 August 2005



PRESS RELEASE

11 August 2005



             ISLAND OIL AND GAS AWARDED FRONTIER EXPLORATION LICENCE

              05/3 IN THE NORTHEAST ROCKALL BASIN OFFSHORE IRELAND





Island Oil and Gas plc, ('Island'), today announces that it has been granted a
100% interest in Frontier Exploration Licence 05/3 covering blocks 18/10, 19/1
and 19/6 in the Northeast Rockall Basin. The Licence, newly named as the '
Killala Licence', was awarded in the Northeast Rockall Licensing Round. Island
intends holding the Licence in its subsidiary Island Rockall JV Limited, which
will be the operator.



The Killala Licence, which covers an area of approximately 715 square
kilometers, is located in deep water on the Atlantic margin approximately 70
kilometers off the west coast of Ireland and approximately 35 kilometers north
of the Corrib gas field.



The licence contains one very significant exploration prospect covering an area
of up to 80 square kilometers together with a number of other prospects and
leads.



Frontier Exploration Licence 05/3 is effective from 01 July 2005 and is valid
until 30 June 2021 unless surrendered or revoked. The first phase of the licence
expires on 30 June 2009 unless a well is committed to on or before 01 April
2009. The work programme committed to during this first phase of the licence
includes regional desktop studies, seismic and reservoir modeling work and new
seismic acquisition.



Commenting on the award of the new Frontier Exploration Licence Paul Griffiths,
Chief Executive of Island, stated:



 'The Irish sector of the Rockall Basin has been tested by only two wells to
date, the second of which, 12/2-1, confirmed the presence of hydrocarbons in
this vast and as yet under-explored area. The basin however contains several
very large structures and therefore the potential for future large hydrocarbon
finds is high. The addition of this licence to Island's portfolio of licences
off the west coast of Ireland ensures that Island is strategically
well-positioned with regard to exposure to future potential exploration success
in the most prospective but sparsely explored sedimentary basins off the west
coast of Ireland '.



Enquires :



Lisa J Newman MCIPR MIRS             Tel: [phone]

Newman Consulting                    Email:[e-mail]






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