Island Oil & Gas plc, the Irish exploration and production company, says that a 2D seismic acquisition programme has commenced over Standard Exploration Licences 4/05 and 5/05 in the Celtic Sea, offshore Ireland.

The Irish Marine Institute (the “Contractor”), the national agency responsible for Marine Research, Technology, Development and Innovation, has been contracted, using the Celtic Explorer, to carry out several seismic surveys over the Old Head and Schull gas fields and a number of adjacent targets for exploration and appraisal drilling. The Contractor acquired high resolution seismic surveys for Island over the Old Head area in 2006 and 2007 following which, successful gas exploration and appraisal wells were drilled by Island.

The seismic surveys will target a potential extension of the Old Head field to the southeast of the existing accumulation proven by the 49/23-1, 49/23-2 and 49/23-2z wells and low risk exploration prospects adjacent to the Schull and Old Head gas fields.

This new seismic will help to confirm the potential for the Old Head and Schull Licences to contain a number of additional gas targets adjacent to existing infrastructure at Kinsale and Seven Heads. Any successful drilling would make a significant contribution to extending the life of Ireland’s only current offshore gas gathering infrastructure. This comes at a time when uncertainty over security of supply and sharply rising oil and gas commodity prices are key strategic issues that could have a major impact on predictions for future economic growth.

Island’s partners in the Old Head and Schull Licences are Valhalla Oil and Gas Limited and EnCore Oil plc.

Commenting on the seismic survey, Chief Executive Paul Griffiths said, “Wholesale gas prices have increased by nearly 50% during the past 12 months and are projected to increase by up to 50% again over the next 18 months. This greatly increases the value of our Old Head and Schull gas developments. These new seismic surveys are designed to further investigate the potential of the Old Head and Schull areas to hold additional gas prospects adjacent to our existing fields.We anticipate being able to make a Declaration of Commerciality for a joint development of Schull and Old Head later this year, which will add further value to our portfolio. Significant cash flow would be generated from these fields upon commencement of production, which is currently targeted for 2010.”