Loan Facility & Warrants

Island Oil and Gas PLC
13 December 2006


13 December 2006


                              Island Oil & Gas plc

                   RMB Resources - Loan Facility and Warrants


Island Oil & Gas plc (LSE:IOG) ('Island' or the 'Company'), today announces that
it has secured a Stg£7.5 million short term loan facility ('facility') through
RMB Resources, the resources merchant banking business of RandMerchant Bank,
part of the First Rand Group of South Africa . The facility is repayable, at
Island's option, at any time up to 31 December 2007. It is intended that the
facility be used primarily to further Island's appraisal and near term
development activities during 2007, including its planned Celtic Sea wells.

As part of the agreement, the Company has agreed to grant RMB Resources warrants
to purchase new ordinary shares in Island at a subscription price of Stg£0.7813
per ordinary share, subject to certain conditions. The number of warrants to be
issued is linked to the repayment date of the loan. An initial 1,439,908
warrants were granted on signature of the Facility Agreement and a further
1,919,877 and 2,399,846 warrants may be granted on 30 June 2007 and 31 December
2007 respectively, if Island elects to maintain the facility as at these dates.
All warrants expire on the third anniversary of their date of issue.

RMB Resources is one of Africa's leading natural resource players, providing
innovative financial solutions to companies operating in the mining, oil, gas
and energy sectors. With a presence in each of the major resource sector capital
raising centres, it has an international capability and the potential to provide
the equity, quasi-equity and debt funding necessary for the future development
of any or all of Island's oil and gas fields in Ireland and the Netherlands,
where Island recently announced the award of Block Q13 containing the Amstel
Field development.

Paul Griffiths, Chief Executive of Island, commented:

'This facility allows Island to continue to progress our 2007 exploration and
appraisal activities, against the backdrop of a highly successful 2006 drilling
programme. RMB Resources is known for its international natural resources
expertise and their support further endorses our corporate strategy including
our near term development opportunities.'


Enquiries:

Lisa J Newman MCIPR MIRS
Newman Consulting

Tel: [phone]


Notes to Editors:

Island was founded in 2003 and listed on AIM in December 2004.  The Company has
interests in eleven Irish offshore licences, (six as operator) and the Q13
Production Licence offshore Netherlands.   The Company is involved in an active
exploration and appraisal programme with two successful gas discoveries in
2006.  The Company has secured the Petrolia rig for its planned 2007 drilling
programme. Further information on Island can be found on the Company's website
at http://www.islandoilandgas.com.



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