Island Oil & Gas has finalised an agreement with its chairman Brian Benitz whereby he will lend £300,000 to the company to provide it with working capital. The arrangement is designed to allow the firm to dispose of assets in the Celtic Sea in what it yesterday called "a manner and time frame that is most advantageous to shareholders".

One-third of the loan comes directly from Mr Benitz, while the remainder is being provided by a trust connected to him.

Island has also agreed terms with Longreach Oil and Gas Ventures (in which Mr Benitz has an interest) and Celtex Exploration Services for the provision of funds to cover bank guarantees given to the Kingdom of Morocco to secure the firm's position in assets in that country.

The firm has meanwhile raised £762,417 before expenses through a share placing designed to raise working capital.