Exploration company, Island Oil & Gas, which started drilling its first appraisal at the Old Head of Kinsale in the Celtic Sea last month, has raised £13.7m, before expenses, through the issue of new shares.

The group said it has completed a placing through the issue of 35,253,365 new ordinary shares of €0.01 each, at a price of £0.39 per share.

The funds will be used by the company to continue drilling off the Celtic Sea at the Old Head of Kinsale gas field.

Application has been made to the London Stock Exchange for the 35,253,365 new Ordinary Shares to be admitted to trading on AIM, Island said in a statement. 

Dealing is expected to commence in these shares on 25 May 2007.