Island Gas & Oil reports pre-tax loss

Island Gas & Oil, the Irish exploration group which has a stake in the Seven Heads gas field off the Cork coast, has reported a small pre-tax loss of Stg£33,000 for the half year to January 31, 2006.

The £33,000 loss compared to loss £545,000 the same time the previous year.

“We intend to start our 2006 three-well programme with two wells in the Celtic Sea on a sub-area of the Seven Heads petroleum lease and at the Old Head of Kinsale, followed by a well on the Inishbeg prospect in the Donegal basin,” the company told The Evening Echo.

“We have also successfully secured the Petrolia rig for our proposed 2007 drilling programme. This gives us an opportunity to evaluate our existing and future prospects along the Atlantic margin, follow-up any 2006 exploration success and potentially develop an international spread of projects," said the company.

Island became a gas producer with effect from October 1, 2004 as a result of the acquisition of a 12.5% interest in Seven Heads.

At the time of the company’s annual general meeting held in March 2006, it was reported that they had received in total some Stg£1.2m in gas sales from Seven Heads up to the end of February 2006. Gas sales revenues through to the end of March 2006 now total Stg£1.5m.

Last December, the company raised £8.31m by way of a private placing. Another £4.15m will be received in April if all of the warrants associated with the placing are exercised.

The company described the six month period as an “extremely busy” time for it as it gears up for a three-well drilling programme.

“With an active drilling programme about to commence and further exploration drilling contemplated in 2007, we believe that Island is creating a significant opportunity for enhancing shareholder value.”

The Government has also granted an extension of Island’s licence to search for gas in the Seven Heads area until December 31, 2006.

The company is also hoping to strike oil in the Seven Heads structure.

Another extension to explore for gas has been given in the Rosscarberry licensing option — immediately to the north of Seven Heads.