EXTENSION OF LOAN FACILITY

Island Oil and Gas PLC
31 March 2008



ISLAND OIL & GAS PLC

ISLAND OIL & GAS PLC ANNOUNCES EXTENSION OF LOAN FACILITY



Island Oil & Gas plc (LSE:IOG) ('Island' or the 'Company'), is pleased to
announce that  agreement has been reached with RMB Resources ('RMB') to extend
the existing GBP£12 million loan facility ('the Loan Facility'), which was
repayable at any time up to 31 March 2008, for a period of 60 days.

The principal purpose of the extension is to allow the Company sufficient time
to conclude negotiations that are likely, subject to contract, to lead to the
financing of several of Island's development projects that are capable of
producing early cash flow. RMB have also agreed to consider a further extension
of the facility repayment date.

Commenting on the extension of the loan facility, Paul Griffiths, Chief
Executive of Island, stated:

'Island is working closely with RMB with the aim of crystallising the value of
the Company's diverse portfolio of near development assets and accelerating the
timing of cash flow from the projects that are in the most advanced stage of
planning and execution. This involves accessing development finance by means of
rationalizing our current high levels of equity in our near term development
projects through partial disposals. These arrangements will allow Island to
consolidate resources and focus on key areas of its business growth strategy
that are designed to generate near term cash flow.'


                                                                   31 March 2008


Further information:

Island Oil & Gas plc
Karl Prenderville , Commercial Director                 Tel: [phone]
www.islandoilandgas.com

Davy (NOMAD and broker)
Anthony Farrell                                         Tel: [phone]

Landsbanki (UK broker)
Simon Robinson                                          Tel: [phone]

College Hill (Financial PR)
Paddy Blewer                                            Tel: [phone]
Nick Elwes


Notes to Editors:

Island was founded in 2003 and listed on AIM in December 2004 (LSE:IOG).  The
Company has interests in eleven Irish offshore licences in both the Celtic Sea
and Atlantic Margin. In addition, it is developing a wider portfolio, with
potentially valuable licences in the Netherlands, Albania and Morocco. Island is
involved in an exploration and appraisal programme which in 2006 and 2007 saw
successful Celtic Sea gas wells at the Old Head of Kinsale, Schull and Seven
Heads Sub-Area.




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