Netherlands Licence Award

Island Oil and Gas PLC
23 November 2006

                                   
23 November 2006


        ISLAND AWARDED Q13 PRODUCTION LICENCE, OFFSHORE NETHERLANDS


Island Oil & Gas plc (LSE:IOG) ('Island' or the 'Company') today announces that
formal transfer documents are currently being completed for the transfer of the
Q13 Production Licence, offshore the Netherlands, to the Company. Effective
17 November 2006, the Minister of Economic Affairs of the Netherlands awarded
the Q13 Production Licence, whilst in the same Decree approving the transfer of
this Licence to Island, as operator, and Nido Petroleum Limited ('Nido'). Island
will initially hold a 100% working interest in the Licence and, once the
agreement for 40% mandatory State Participation through Energie Beheer Nederland
B.V. ('EBN') has been completed, a 60% interest in the activities under the
Licence. Upon completion, EBN will pay its share of agreed historical costs plus
its share of future expenditure. Upon completion of the transfer of the Licence,
Island will pay Nido a cash consideration of AU$300,000.

The Q13 Production Licence covers an area of 30 sq. km. and contains the Amstel
Field, a Lower Cretaceous field with approximately 7-12 million barrels of gross
recoverable reserves (P90 to P10 range). The Amstel Field lies in water depths
averaging 60 feet approximately 10 kms. offshore the Dutch coast. It was
discovered in 1962 by NAM ('Shell/Esso'). The Field is located within the West
Netherlands Basin, a prolific oil and gas province in which, to date, over 1.3
billion barrels of oil-, and 3 tcf of gas-, in place have been encountered. The
Amstel Field is on trend with the Dutch offshore Rijn Field and the onshore
Wassenaar Field.

Three wells have been drilled in the Q13 Licence area: Q13-1 was the discovery
well, drilled by Shell/Esso in 1962. Wells Q13-8 and Q13-9 were appraisal wells,
drilled in the 1990s by PanCanadian. Well Q13-8 flowed at 3,500 barrels of oil
per day (bopd) with 1.12 mcf per day of associated gas. The other wells were not
flow-tested, but oil was proven from pressure testing and sampling. Despite the
good flow rates, the field was considered marginal in the early 1960s and deemed
non-commercial in the 1990s due primarily to low oil price and supply economics.

Island has been approved as an operator in the Netherlands on the back of the
Company's successful operatorship offshore Ireland during 2006. Island is
nearing completion of a new reservoir study over the Licence area which has
provided the Company with a greater insight into the distribution of better
quality sands which will assist in optimizing the location of future wells.
Island plans to develop the Amstel field by tying it back to existing facilities
and targeting first oil in late 2008/early 2009 contingent upon rig
availability.

Island will issue a further announcement as confirmation of the completion of
the Award.

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

'The award of this licence further underpins our strategy of focusing on
near-development oil and gas projects that are capable of generating early cash
flow due to proximity to existing infrastructure. We are delighted that this
award has resulted in two landmark milestones for the Company being attained:
our first international licence and acceptance as an approved operator of a
major field development project in a mature and strategic oil and gas province.
Island will continue to seek to evaluate potential opportunities in the
Netherlands and internationally, subject to these being consistent with the
Company's near-development investment strategy and new status as an approved
operator of a field development project.'


Enquiries:

Lisa J Newman MCIPR MIRS
Newman Consulting

Tel: [phone]


Notes to Editors:


About Island


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 also 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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