The seizure of Mecungo and Vamisse islands comes a month after the terrorists occupied the strategic port town of Mocimboa da Praia, which was used for cargo deliveries for the development of the gas project.
Witnesses said the militants arrived in small fishing boats at night Wednesday and removed people from their houses before torching them.
They ordered residents to leave the islands mostly inhabited by internally-displaced people who fled their villages on the mainland where attacks have escalated.
“They got us together and told us to run away if we want to live. I think everyone left the island,” one witness told Agence France-Presse (AFP).
Government forces are still battling to retake the Mocimboa da Praia port since it was occupied on August 12.
France's energy company Total, which is investing $23 billion in the gas exploration project, stated that it no longer relies on the occupied port.
The Takfiri terrorists have carried out attacks in the region since 2017, displacing more than 250,000 people and killing at least 1,500.