Providence Resources plc : Preliminary Results ...

14 May 2012
Embargo 7am        

PROVIDENCE RESOURCES P.l.c.
("Providence" or the "Company")

Providence Resources P.l.c., the Irish oil and gas exploration and production company, whose shares are quoted in London (AIM) and Dublin (ESM), announces Preliminary Results for the year ended 31^st December 2011

OPERATIONAL HIGHLIGHTS

DRILLING ACTIVITIES

• Commencement of $500m, multi-well drilling programme (from 2011 through 2013) covering both appraisal and exploration projects in six geological basins offshore Ireland. This is the largest, multi-basin, offshore drilling programme in the history of Ireland. It represents an investment of up to $500 million by Providence and its partners 

• Drilling activities commenced in November 2011 with the successful drilling on the Barryroe oil discovery, which has delivered the first indicative commercial flow rate of oil, far above pre-drill expectations.  As part of the testing programme, a gas interval was also tested 

• Further new drilling activities are ongoing at Singleton, onshore UK 

A summary of the scheduled drilling programme offshore Ireland and onshore UK is as follows:

BASIN	ASSET   NAME	WELL DESIGNATION	PLANNED DATE*
Celtic Sea	Barryroe	Appraisal	Completed
Kish Bank	Dalkey Island	Exploration	Q4 2012
St George's Channel	Dragon	Appraisal	Q4 2012/ Q1 2013
South Porcupine	Dunquin	Exploration	Q2 2013
Main Porcupine	Spanish Point	Appraisal	Q2/Q3 2013
Rathlin	Rathlin	Exploration	Q4 2013
Weald	Singleton	Production	Ongoing

       
*Operator estimates based on relevant permit requirements and equipment availability/procurement.

APPRAISAL / DEVELOPMENT

CELTIC SEA BASIN
Barryroe Oil Discovery
-  Memorandum of Agreement with Shell to negotiate an oil off take sale and purchase agreement in relation to future potential oil production in the Celtic Sea Basin
 - 3D seismic survey successfully acquired and interpreted over the Barryroe oil discovery (240 sq km)  
- SEL 1/11 granted over an increased Barryroe area
- Commenced drilling of Barryroe appraisal well
- Increased equity in SEL 2/11 to 80% (from 50%)
- Post Year end - Flow testing results from Barryroe of 3,514 BOPD + 2.93 MMSCFGD (4,000 BOEPD) from main basal sandstone package. 7 MMSCFGD and 1,350 BOPD (c 2,516 BOEPD) was also flow tested (comingled test) in restricted conditions from an upper mainly gas bearing section
- Ongoing: Post well analysis and data assimilation, including seismic inversion, revised mapping and updating of in place resource figures and recoverable reserves

ST. GEORGE'S CHANNEL BASIN
Dragon Gas Discovery
- Announced upgraded resource potential to 300 BCF
- Launched farm out campaign
- Post Year end - Out of Round award by UK DECC of exploration licence over UK side of Dragon
- Ongoing: Plans being finalised for an appraisal well to be drilled in late 2012

MAIN PORCUPINE BASIN
Spanish Point Gas Condensate Discovery
- Well commitment made on FEL 2/04 by partners
- Chrysaor exercised option to increase its stake to 60.0% in FEL 2/04, with Providence and Sosina retaining 32.0% and 8.0%, respectively  
- 3D seismic survey successfully acquired over adjacent licence FEL 4/08
- CPR (Competent Persons Report) issued on resource potential of FEL 2/04 and FEL 4/08
- Ongoing: Plans being finalised for an appraisal well to be drilled in summer 2013

KEY EXPLORATION ACTIVITIES

KISH BANK BASIN
Dalkey Island Oil Prospect
- Partners made exploration well commitment to Irish Government
- Geochemical study indicated presence of highly mature oil prone source rock
- Awarded Standard Exploration Licence 2/11
- Post year end: Foreshore licence application underway for planned late 2012 exploration drilling

ULYSSES gas storage
- AMEC Study confirms ULYSSES gas storage concept is economically and technically feasible

SOUTH PORCUPINE BASIN
Dunquin Oil/Gas Prospect
- Farm-in by Repsol to licence (FEL 3/04) leading to revised equity percentages of ExxonMobil (27.5%), ENI (27.5%), Repsol (25.0%), Providence (16.0%) and Sosina (4.0%)
Post year end: Drilling preparations ongoing with exploration drilling scheduled for Q2 2013

RATHLIN BASIN
Rathlin Oil Prospects
- Awarded 6 offshore blocks in Rathlin Basin under UK Seaward 26^th Round
- Ongoing: Plans being finalised for an exploration well to be drilled in Q4 2013

IRISH ATLANTIC MARGIN ROUND
- Awarded 4 new offshore Licensing Options in Atlantic Margin area:

	- LO 11/11 - Newgrange (partners: Repsol (40.0%) and Sosina (20.0%))
	- LO 11/9 -  Drombeg - (partner: Sosina (20.0%))
	- LO 11/12 - Kylemore/Shannon (partner: First Oil Expro (33.3%))
	- LO 11/2 - Spanish Point South (partners: Chrysaor (58.0%) and Sosina (10.0%))

- Post year end: Repsol assumed Operatorship of Newgrange (LO11/11)
- Post year end: Identification of further gas potential in the Slyne Basin (LO 11/12)

PRODUCTION ACTIVITIES

WEALD BASIN
Singleton Oil Field, Onshore UK
- Produced levels increased to 196,661 BO (2010: 185,151 BO); production levels would have been higher but for interruptions due to the drilling of the two new wells  (X-11 and X-8v) in Q1 and the commencement of drilling operations on the X-12 well in Q4
- The latest view of the X-12 programme indicates the completion of drilling activities in late June 2012, with commissioning happening immediately thereafter. The X-12 well represents the longest well drilled at Singleton (circa 16,000 feet) and as a multi-lateral well, it should increase reservoir exposure at the field by some 50%
- Current production has been running at 750 BOEPD, with production levels being interrupted by the ongoing drilling operations on the X-12 well. Normalised production rates are 900 BOEPD
- Target for increased production to 1,500 BOEPD attainable within the next year through various initiatives, including planned production from the X-12 well, other well stimulations and the installation of generators to monetise flared gas
- Chris Beard appointed to head up PR Singleton Limited, which oversees the Company's UK operations

FINANCIAL HIGHLIGHTS

SHARE PLACINGS
- Successful Placing of 16.1 million new ordinary shares in March 2011 at £2.55 per share, raised gross proceeds of £41.0 million (c. US$ 65.7 million)
- Post year end: Successful Placing of 13.1 million new ordinary shares in April 2012 at £4.80 per share, at a 5% premium to the then existing share price, raised gross proceeds of £63.1 million (c. US$ 100.0 million)

SALE OF GULF OF MEXICO
- Receipt of US$ 15 million proceeds from sale of Gulf of Mexico portfolio with the proceeds being used to retire debt

SALE OF AJE
- Sold Nigerian subsidiary, which held its interest in OML 113, for a total consideration of US$ 16.0 million, with US$ 10 million received at the end of December 2011 and the balance of US$ 6 million received in April 2012. The proceeds were used to partially re-pay the €42 million Convertible Bond

CONVERTIBLE BOND
- 62.4% of bonds accepted early repayment offer resulting in a reduction of the bond amount by €18.5 million in addition to the saving on bond interest up to the date of redemption. The remaining balance of €11.1 million will be redeemed on July 29^th, 2012. This early tender resulted in interest savings of approximately €0.760 million

DEBT RE-STRUCTURING
- US$ 60 million pre-paid oil swap transaction agreed with Deutsche Bank AG in July 2011 with the proceeds being used to repay the BNP Paribas reserve based lending facility and to fund the ongoing development plan at Singleton

FINANCIAL INFORMATION - YEAR ENDED 31 DECEMBER 2011  
- Revenue from continuing operations of €13.752 million (2010: €11.080 million)
- Operating profit of €0.031 million (2010: €1.466 million) reflected large impairment charge of €6.635 million (2010: €1.263 million) relating to once off impairment charge of €4.9 million related to unfinished drilling at Singleton (X-8v well) and write downs in the Celtic Sea of €1.73 million  
- Loss before tax and discontinued operations of €5.213 million (2010: loss of €5.965 million)
- Loss for the period of €13.940 million (2010: loss €41.601 million)
- 20.78 cent loss per share for continuing operations (2010: loss 29.54 cent)
- Cash and cash equivalents at December 31^st of €36.054 million (of which €17.491 million was restricted cash)

PRO FORMA CONSOLIDATED STATEMENT OF FINANCIALPOSITION
- As a result of the post year end events (proceeds from the sale of AJE, the April 2012 share placing and the part prepayment of the bond), the Company has presented an additional unaudited pro forma Consolidated Statement of Financial Position reflecting these transactions.
- As a result, the Pro forma Cash and Debt would be €70.659 million and €46.516 million, respectively

Commenting on today's results, Tony O'Reilly, Chief Executive of Providence, said:

"2011 has undoubtedly been the most important year in our Group's history. It saw us commence our multi-basin, multi-year drilling campaign in Ireland - the biggest in the country's history - and we were particularly delighted that Barryroe, the first well of the campaign, came in far above all the pre-drill expectations in March 2012. This not only demonstrated the significant scale of the Barryroe oil field, but it has also opened up many other opportunities in the Celtic Sea and has helped to redefine the industry view on the Irish offshore and its potential. The successful flow of high quality light sweet crude at indicative commercial rates at Barryroe has enabled the Company to take a giant leap forward in advancing its plans to commercialise Ireland's first oil field.

"However, with its extensive portfolio, there has been more to the past year than just Barryroe. The Company made great strides across all of its operations, from the quality of its portfolio to the strength of its balance sheet. During the year, we streamlined our operations by divesting our assets in the Gulf of Mexico as well as in Nigeria. This allowed us to reduce debt levels by over $30 million. Furthermore, a proportion of the recent equity proceeds will be used to retire the remaining portion of the convertible bond, with a result that debt levels will have decreased by some $75 million in just 18 months.

"The Company has also remained focused on pushing recovery and production rates at the Singleton oil field, onshore UK. The year saw the successful completion of the X-11 well and the commencement of drilling of the X-12 well, where operations continue. And we were particularly pleased that Chris Beard joined us from Wytch Farm to head up our UK operations.

"We now have the leading acreage position offshore Ireland with 4 new licence authorisations being awarded off the west coast of Ireland, as well as new acreage being awarded by the UK government in the Rathlin Basin and the St. George's Channel Basin, which hosts the Dragon gas discovery. The Company also welcomed major new partners Repsol and First Oil Expro. They join our existing group of co-venturers offshore Ireland, including ExxonMobil, ENI, Petronas, Nautical, Sosina, Lansdowne and Atlantic Petroleum.

"The focus for 2012 and beyond is to continue to turn the drill bit on our extensive portfolio of production, appraisal and exploration assets in Ireland and the United Kingdom. The aim is to advance proven discoveries to project sanction whilst proving up new exploration opportunities - both in terms of individual assets and entire new basins. As our recent success at Barryroe demonstrates, advances in technology, infrastructure and commodity pricing have combined to present a truly unique opportunity to test the commercial potential of a number of these Irish assets. Simultaneously, the field re-development programme at Singleton, onshore UK, allows the Company to continue to access higher production rates and larger reserves.

"In summary, Providence has a very clear strategy, with the necessary financial resources, to play a significant and defining role in developing the Irish offshore".

Tony O'Reilly
Chief Executive               14 May 2012

Contacts:

Providence Resources Plc Tony O'Reilly, Chief Executive	Tel: [phone]
Powerscourt Lisa Kavanagh/Rob Greening	Tel: [phone]
Murray Consultants Pauline McAlester/Pauline Dooley	Tel: [phone]
Cenkos Securities Plc Adrian Hargrave/ Nick Wells	Tel: [phone]
J&E Davy Eugenee Mulhern/ Stephen Barry	Tel: + 353 1 679 6363
Liberum Simon Atkinson/Clayton Bush	Tel: [phone]

ABOUT PROVIDENCE
Providence Resources Plc is an Irish based oil and gas exploration company whose shares are traded on the London AIM market and on Dublin's ESM market. Providence's portfolio of production, appraisal and exploration assets includes licence interests in Ireland (offshore) and the United Kingdom (onshore & offshore). In 2011, Providence, along with its partners, commenced a circa $500 million multi-year drilling programme on a number of exploration and development wells in 6 different basins offshore Ireland. This programme represents the largest drilling campaign ever carried out offshore Ireland. www.providenceresources.com.

ANNOUNCEMENT
This announcement has been reviewed by John O'Sullivan, Technical Director, Providence Resources P.l.c. John holds a B.Sc. in Geology from University College Cork, Ireland, an M.Sc. in Applied Geophysics from the National University of Ireland, Galway and a M.Sc.in Technology Management from The Smurfit School of Business at University College Dublin. John is presently working part-time on a PhD dissertation at Trinity College, Dublin. John has worked in the offshore business for 20 years and is a fellow of the Geological Society of London and member of The Petroleum Exploration Society of Great Britain. Definitions in this press release are consistent with SPE guidelines.  
SPE/WPC/AAPG/SPEE Petroleum Resource Management System 2007 has been used in preparing this announcement

ALL FIGURES QUOTED ARE GROSS FIGURES, UNLESS OTHERWISE STATED
Glossary of terms used in this Announcement

BOPD	Barrels of Oil per Day
MMSCFGD	Million Standard Cubic Feet of Gas per Day
MMBO	Millions of Barrels of Oil
BOEPD	Barrels of Oil Equivalent per Day
BOE	Barrels of Oil Equivalent (1 BOE = 6,000 SCFG)
BSCF	Billion Standard Cubic Feet of Gas
SEL	Standard Exploration Licence (Ireland)
FEL	Frontier Exploration Licence (Ireland)
PL	Prospecting Licence (United Kingdom)
o API	Measurement Of Oil Gravity
SCF/STB	Standard Cubic Feet/Stock Tank Barrel
TVDSS	True Vertical Depth Subsea
PSIA	Pounds per Square inch Gauge

FINANCIAL HIGHLIGHTS

This announcement has been prepared on the basis of the results and financial position that the directors expect will be reflected in the audited statutory financial statements when these are completed.

Financial Results Year End 2011
Revenues from continuing operations for the year were up 24% to €13.752 million due to increased production volumes and a higher oil price. The average oil price per barrel achieved (after swaps) was up 25.5% to US$ 100.45 compared to US$ 80.03 in the same period last year, and overall production was up  6.22% to 196,661 barrels of oil (2010: 185,151).

The Company gross profit margin was 70.5%, compared to 58.0% in 2010, due to better cost management, leading to a marginal operating profit of €0.031 million (2010: €1.466 million). The 2011 operating profit reflects the impact of a large impairment charge of €6.635 million (2010: €1.263 million) relating to once off impairment charge of €4.9 million related to unfinished drilling at Singleton (X-8v well) and write downs in the Celtic Sea of €1.73 million. Net finance expense was down to €5.244 million (2010: €7.431 million) due to lower net debt levels.  The loss before tax was €5.213 million (2010: loss of €5.965 million) with income tax expense of €4.503 million (2010: €3.841 million) leading to a loss from continuing operations of €9.716 million, a marginal improvement on the €9.806 million recorded in 2010. The loss from discontinued operations amounted to a further €4.224 million compared to a loss of €31.795 million in 2010, leading a total loss for the period of €13.940 million (2010: loss €41.601 million). On a per share basis, this resulted in a 20.78 cent loss per share (2010: loss 29.54 cent). At 31 December 2011, cash and cash equivalents was €36.054 million, of which €17.491 million was restricted cash.

Asset Sales
During 2011, the Company closed the sale of its portfolio in the Gulf of Mexico for an initial consideration of US$ 15 million, which was received in April 2011. In September 2011, the Company agreed the sale of its Nigerian subsidiary, which held its interest in OML 113, for a total consideration of US$ 16 million, US$ 10 million of which was received by year end and the balancing payment of US$ 6 million was received in April 2012. The proceeds from both of these assets sales were used to reduce the Company's level of debt.

Deutsche Bank Pre-Paid Swap Facility
In July 2011, the Company borrowed US$ 60 million via an oil pre-paid swap with Deutsche Bank AG based on a forward sale of a percentage of Singleton production at a fixed price and interest rate over six years. The proceeds of this transaction were used to repay the full amount owed under the reserve base lending facility with BNP Paribas. The Deutsche Bank facility is an amortising facility and at year end, the amount outstanding was €39.15 million.

Capital Raisings
In March 2011, the Company placed 16.1 million new ordinary shares at £2.55 per share, raising £41.0 million (€47.6 million) (US$ 65.7 million). The proceeds were used for the Company's multi-well drilling programme as well as providing capital for seismic studies to be undertaken on some of the Company's early stage assets in order to assess their suitability for drilling at a future date. This Placing was approved by shareholders at an EGM held in March 2011.

In April 2012, the Company placed 13.1 million new ordinary shares at £4.80, raising £63.1 million (US$ 100.0 million). The proceeds of the Placing, which was priced at a 5% premium to the then existing share price, will be used to repay the outstanding principal of the convertible bond, the increased costs of the Barryroe drilling programme (arising largely from the increase in equity from 50% to 80%) and to provide additional working capital for ongoing drilling activities across the Company's portfolio. The Placing was approved by shareholders at an EGM held in April 2011 and brings the total number of issued ordinary shares to 64.4 million shares.

Appointment of CFO
In April 2012, the Company appointed Simon Brett as Chief Financial Officer. Simon previously held the position of Group Financial Controller of Providence and has worked at the Company since 2008.  

Convertible Bond
In April 2012, an offer was made to the Company's bondholders to purchase the outstanding principal amount of the convertible bond that was issued on 29 July 2008. As announced on 4 May, 62.4% of bonds took up this offer. Prior to this early repayment, the net principal amount outstanding on the €42 million bond was €29.655 million. Following the buy-back of these bonds, the net principal amount outstanding on the convertible bond has reduced to €11.155 million, resulting in an interest saving of approximately €0.760 million. The remaining bonds will be redeemed in accordance with their terms on 29 July 2012.

OPERATIONAL HIGHLIGHTS - PRODUCTION

WEALD BASIN, ONSHORE UK

Singleton (100.0% interest)
The Singleton oil field is located in the Weald Basin, West Sussex, southern England. Since production commenced in 1986, the field has produced c. 4.3 MMBO from an oil in-place resource of up to c.107 MMBO. Having held a 20% stake since the field started operating in the early 1990's, the Company increased its equity to 99.125% in November 2007. During early 2012, the Company agreed to acquire the remaining 0.875% interest in Singleton from Noble, taking its beneficial ownership to 100.0%.

During 2011, daily oil production averaged 539 BOPD (versus 507 in 2010). Production rates in the first half were interrupted by the conclusion of drilling operations on site to bring the new X11 well on stream, which commenced production in April 2011 at an initial rate of c. 200 BOEPD (c. 150 BOPD & c. 300 MSCFGD), which was in-line with pre-drill expectations. The X-8v well encountered down-hole mechanical issues, which meant that it had to be shut, thereby in shutting in approximately 100 BOEPD. A remedial work-over of X8x is planned in the future. In Q4 2011, production was again impacted by drilling operations to allow the set up and commencement of drilling of the X-12 well, where drilling continues today. On a BOEPD basis, which includes associated gas production, average 2011 field production amounted to some 800 BOEPD. Current daily production rates are approximately 750 BOEPD against a normalised production rate of 900 BOEPD, with production rates down due to ongoing drilling activities at X-12.

Forward Programme
In late 2011, the Company commenced the next phase of its field development drilling programme with the drilling of the X-12 well. Completion of this well, which commenced drilling operations in December, has been delayed due to technical and operational issues. Completion of drilling activities is now expected in late June with commissioning taking place immediately thereafter. The X-12 well represents the longest well drilled at Singleton (circa 16,000 feet) and, as a multi-lateral well, should increase reservoir exposure at the field by some 50%. Production guidance for this new well is estimated at up to 500 BOEPD.

The investment programme also includes ongoing work on the GTW (Gas to Wire) programme, combined with regular well optimisation through acid stimulation and work-overs which are expected to commence in the second half of 2012. These activities are planned to deliver a combined incremental c.200 BOEPD by mid 2013.

Appointment at PR Singleton Limited
As part of its core strategy to expand its operations in the UK, in January 2012, the Company appointed Chris Beard (MEng BSc (Hons) CEng MIET) as Managing Director, PR Singleton Limited, which oversees the Company's UK operations.  Chris joined Providence from BP with whom he worked for almost 25 years in a variety of different roles in both the upstream and downstream businesses, most recently in the role of the Onshore Site Manager at Wytch Farm oilfield in Dorset, the largest onshore oilfield in Western Europe. Chris will also look at development options for Baxter's Copse as well as other onshore UK opportunities that may arise.

Baxter's Copse, PEDL 233, Onshore UK (50.0% interest)
The Company and Northern Petroleum Plc are partners in licence PEDL 223, which is adjacent to Singleton. A number of exploration and development opportunities have been identified within the block, principally the Baxter's Copse oil discovery. An RPS Energy third party reserve audit attributes 2P and 3P gross undeveloped reserves of 2.7 MMBO and 7.5 MMBO, respectively, net to Providence.

CELTIC SEA BASIN

BARRYROE (80.0% interest)
Barryroe is located in c. 100 metre water depth, c. 50 kilometres offshore Ireland in Standard Exploration Licence (SEL) 1/11 in the North Celtic Sea Basin. In December 2010, the Company completed an agreement with Lansdowne Oil & Gas which saw Providence increase its equity to 50.0% (from 30.0%) and assume operatorship of the Barryroe oil discovery. Barryroe has been successfully tested at flow rates of between 1,300 and 1,600 BOPD, from three exploration and appraisal wells that were drilled in the 1970s and 1990s. A further 2 wells drilled on the structure were logged as hydrocarbon bearing.  An audit carried out by RPS Energy for Lansdowne in 2010 indicated P50 and P10 STOIIP estimates for Barryroe of 373 MMBO and 893 MMBO, respectively. The corresponding 2C and 3C recoverable contingent resources were 59 MMBO and 144 MMBO, respectively.

Increase in Equity Ownership to 80.0%
In December 2011, the Company increased its equity ownership to 80% (from 50.0%) following a deal with San Leon Energy Plc. Under the terms of the agreement, Providence assumed San Leon's 30% working interest in the SEL 1/11, and in exchange, San Leon will be entitled to receive a 4.5% NPI ("Net Profit Interest") in the Licence.

Shell MOU
In January 2011, the Company signed a Memorandum of Understanding (MOU) with Shell International
Trading and Shipping Company Limited which relates to future potential oil production from its Barryroe and Hook Head oil discoveries. Under this MOU, the companies have committed to work together to execute an oil off-take sale and purchase agreement for the Barryroe and Hook Head oil discoveries. In addition, Shell will also carry out a market analysis on how best to market the oil from these fields. Samples of recently acquired Barryroe crude have been sent to Shell for analysis.

Seismic Acquisition
In June 2011, the Company carried out a 3D seismic acquisition project at Barryroe covering some 240 sq km. This seismic was subsequently sent for fast track processing with the final product being delivered in November 2011 prior to the commencement of appraisal drilling operations.

Barryroe Appraisal Well - 48/24-10z - Oil Test
The Company spudded the Barryroe appraisal well in November 2011 with operations carrying on through to March 2012. On March 15^th 2012, the partners announced that a 24' thick net pay interval in the oil bearing basal Wealden sandstone section had been successfully perforated as the first phase of the well testing programme. Stabilized flow rates of 3,514 BOPD & 2.93 MMSCFGD (4,000 BOEPD) were achieved through a 68/64" choke with a well head pressure of 517 PSIA without the use of artificial lift. The well was tested using vacuum insulated tubing over just the upper c. 2,600' of the total c. 7,400' test string length due to equipment availability constraints. As expected, laboratory reservoir fluid analysis confirmed that the oil is light with a gravity of 42^o API and a wax content of 20%. The oil is highly mobile, with a much better than expected in-situ reservoir viscosity of 0.68 centipoises and a gas-oil ratio of c. 800 SCF/STB.

Barryroe Appraisal Well - 48/24-10z - Upper Gas Bearing Interval Test
Following the successful testing of the lower basal 24' net oil bearing interval, an additional 17' thick net gas bearing section was perforated to test the potential of the upper part of the basal Wealden sandstone section. The surface test spread equipment was optimized for the lower oil zone test and was therefore equipment constrained on this gas zone test, which achieved highly productive comingled flow rates of  7 MMSCFGD & 1,300 BOPD (2,466 BOEPD) through a restricted 36/64" choke, with a flowing well head pressure of c. 1,700 psia. The productivity of the gas bearing interval far exceeded expectations and thereby constrained the ability to fully open the well up to its maximum potential flow rate. Preliminary modeling indicates that the gas zone has an absolute open flow (AOF) potential of 23 MMSCFGD (3,833 BOEPD). Following this test, well suspension operations were undertaken and the rig was subsequently demobilized to the UK.

Seismic Inversion
The acquired wire-line log data from the 48/24-10z well has now been used to evaluate the potential to directly map the hydrocarbon bearing basal reservoir sands at Barryroe. Geokinetics, a US based seismic processing company, has carried out an evaluation of the seismic response of the main basal hydrocarbon bearing reservoir interval and this modeling has confirmed that the basal reservoir sandstone package has a defined seismic response which can be detected clearly within the inverted 3D seismic volume. A preliminary review of the inverted 3D seismic volume indicates that the reservoir sequence is widely developed in the Barryroe area. Detailed interpretation of the inverted seismic data has now commenced and will be used to better define the static oil in place estimates for the Barryroe accumulation, which are expected to be published later this summer.

Barryroe - Next Steps
Having now completed data acquisition activities, the Barryroe programme has moved to data assimilation and integration. In addition to seismic inversion and geological mapping of the structure, the partners will update oil in place figures and will subsequently upgrade recoverable reserves. Fluid sample assay results will be responded to by our marketing partner and additional field development modelling will be carried out, including horizontal well planning. Information from this work will be provided to the market on a regular basis over the coming months. All of this data will then ultimately be incorporated in an updated field development plan, which will be the subject of a new Competent Person's Report that is expected to be published in Q4 2012.

HOOK HEAD (72.5% interest)
Hook Head is an appraisal project located offshore Wexford in SEL 2/07. The Hook Head structure is a large mid-basinal anticline where four wells have been drilled to date, all of which encountered hydrocarbon bearing sands. Two of these wells were drilled by Providence in 2007/08 and oil and gas was encountered in both, although operational constraints resulted in limited test data. Further evaluation of the field suggests that the majority of the resource (estimated c. 120 MMBO) lies in the central part of the structure, with the North and South flanks providing additional potential incremental resources for any future development in the area.

BALTIMORE (60.0% interest)
The Company has held Licensing Option 10/1 over the Baltimore heavy oil discovery located in block 48/19(p) since February 2010. The 48/19-2 discovery well is situated some c. 30 kilometres off the south coast of Ireland. Discovered in 1992, this c. 11^o API heavy oil accumulation is estimated to have an in-place resource potential of up to c. 300 MMBO.

NEMO (54.4% interest)
During 2010, the Company carried out a resource assessment of the heavy oil potential, referred to as Nemo, underlying the Ardmore gas field (which contains an estimated 30 BCF) which is also located in SEL 2/07. This work indicated an in-place resource potential of up to c. 230 MMBO of c. 16^o API oil. The Company agreed a two step farm out with Nautical Petroleum ("Nautical"), where Nautical carried out a focused work programme on the development feasibility of Nemo in return for 25% equity in the field. Nautical has an option to increase its stake in the field to 65%, and take-over operatorship, should it elect to drill an appraisal well on Nemo.

HELVICK (62.5% interest)
During 2010, the Company announced that it had entered into a conditional agreement to assess the development feasibility of using unmanned production buoys on the Helvick Field, which is located in SEL 2/07. This is one of a number of third party assessments being carried out on low cost development options. In December 2010, the Company assigned a 10% non-operated interest in Helvick to Lansdowne Oil and Gas plc. In February 2011, Lansdowne issued an independent reserve update on several of their assets. In this report, they stated that under the current conditions of high oil prices, commercial production at Helvick (3 MMBO Gross, 1.875 MMBO net 2C Contingent Resources) could be achieved and, as a result, first oil could potentially be achieved within two years of project sanction.

MARLIN (60.0% interest)
As part of Nautical's study on Baltimore (detailed above), Licensing Option 10/1 and the surrounding area were mapped using available seismic data. This work revealed the previously unknown Marlin gas exploration prospect, which is located c. 10 km NW of the producing Kinsale Head gas field. This structure, which is the same age as the primary producing reservoirs at the Kinsale Head gas field, has been mapped to extend beyond the current Option area. Accordingly, the Baltimore partners increased the area covered by the Option to include the mapped extension of the Marlin prospect into open acreage. Geological modelling of the prospect suggests that it is likely to be gas charged with a total in place prospective resource potential of up to c. 74 BSCF.

MAIN PORCUPINE BASIN

SPANISH POINT (32.0% interest)
Providence first licensed Spanish Point area (FEL 2/04) in 2004 taking an 80.0% interest and operatorship along with partner, Sosina (20.0%). In 2008, Chrysaor farmed in for an initial 30.0% interest by agreeing to carry out various works, including 3 D seismic acquisition. In 2009, a c. 300 sq km 3D seismic survey was acquired over FEL 2/04, which contains the Spanish Point gas discovery and the adjacent Burren oil discovery. The partners subsequently licenced adjacent blocks under FEL 4/08 in 2008.

The Spanish Point gas condensate accumulation was discovered in 1981 by Phillips Petroleum and a consortium which included Atlantic Resources Plc, (a Providence predecessor company). The discovery well (35/8-2) flowed c. 1,000 BOPD and c. 5 MMSCFGPD (cumulatively 1,800 BOEPD) from one of four Upper Jurassic reservoir intervals within an overall c. 1,400 ft thick gross hydrocarbon bearing section. Due to a combination of low commodity prices, high cost of development and lack of an indigenous gas market and infrastructure in the early 1980's, the project was not declared commercial at that time.
The Burren oil discovery well was drilled in 1978 by a group led by Phillips Petroleum. The discovery well (35/8-1) flowed c. 730 BOPD of high quality 34^o API from one of two Lower Cretaceous sands within a gross c. 400" hydrocarbon bearing interval. The original Jurassic target for the well was never penetrated due to increased down-hole pressures and drilling was terminated at the top of the Jurassic.

Independent CPR over FEL 2/04 and FEL 4/08
In April 2011, the partners released a Competent Persons Report (CPR) on the resource potential of FEL 2/04 and FEL 4/08. This study independently assessed gross un-risked recoverable prospective resources of up to c. 750 MMBOE in FEL 2/04 and FEL 4/08. This resource potential covers a number of prospects in addition to Spanish Point (up to 200 MMBOE REC) and Burren (up to c. 66 MMBO REC). Prospect targets identified in FEL 4/08 and FEL 2/04 include Wilde, Beehan, Costello, Shaw, Rusheen, Synge, and Cama.

Chrysaor Exercises Option
In March 2011, Chrysaor exercised its option to drill up to two appraisal wells on the Spanish Point discovery. In return for committing to this work, Chrysaor doubles its equity participation in FELs 2/04 and 4/08 from 30% to 60% and will assume the drilling management role for the Spanish Point programme. As a result, Providence's equity moves from 56.0% to 32.0%. As part of the option, there is a financial cap on Providence's financial exposure to the drilling costs. The partnership have identified the appraisal well location at Spanish Point and planning has commenced for drilling, including the sourcing of a suitable rig for the planned Q2/Q3 2013 drilling.

Galleon Survey
In July 2011, the Company, on behalf of its partners Chrysaor and Sosina, acquired a c. 220 km2 survey over acreage adjacent to the Spanish Point licence. Processing of this seismic data is ongoing and will be completed later this summer.

KISH BANK BASIN

DALKEY ISLAND (50.0% interest)
In 2010, the Company identified the Lower Triassic Dalkey Island prospect, offshore Dublin, as a significant undrilled oil exploration prospect with an in-place prospective resource potential of c. 870 MMBO. Providence operates the prospect on behalf of its partner, Petronas. Similarly aged oil productive reservoirs have been discovered in the Liverpool Bay area of the East Irish Sea Basin, offshore UK. Oil source rock has been identified in the basin and the Company has started planning operations, including a requisite foreshore licence application, for the drilling of a well later this year.

ULYSSES Project
The ULYSSES Project, which commenced in 2008, was a study to assess the natural gas storage and carbon
sequestration potential of the Kish Bank Basin, offshore Dublin. The initial phase of this study, carried out by AMEC plc, which included planning, capacity modelling, infrastructural integration and gas sourcing, was completed in 2011 and has confirmed that the construction of an offshore natural gas salt cavern storage facility at the ULYSSES location is both economically and technically feasible. A number of scenarios have been developed which have an associated range in capacity, off-take export rates and capital expenditure. Detailed technical data relating to the subsurface geology, which will be acquired through the drilling of the Dalkey Island exploration prospect, will also assist with the advancement of this project.

ST GEORGE'S CHANNEL

DRAGON (100.0% interest)
The Dragon gas discovery is situated in c. 100 m water depth in the St George's Channel Basin, in between Ireland and Wales. The 103/1-1 discovery well was drilled in 1994 by Marathon Oil and flowed c. 22 MMSCFGD & 120 BOPD from sands of Upper Jurassic age. Dragon is partially located in Standard Exploration Licence (SEL) 1/07 on the Irish side of the St George's Channel Basin and in block 103/1 on the UK side. Providence licenced 100.0% of SEL 1/07 in 2007 and in January 2012, it was offered Block 103/1 by the UK Government's Department of Energy & Climate Change (DECC) following an out of round application by PR Singleton Limited (Operator, 50%) and Star Energy Oil & Gas Ltd (50%)

Previous work on Dragon had suggested in place resources of up to c. 100 BSCF with a c. 25:75 split between Ireland and the UK. A new study was carried out by IKON Geoscience, and this involved the modeling of historical well and seismic data using the latest available technology. This study determined that the presence of the Dragon gas bearing reservoir sands may be directly detectable from the 3D seismic data. Revised mapping, using these inverted seismic data, indicates that the Dragon gas field may extend further into Irish territorial waters than had been previously been mapped, with a larger potential resource base of up to c. 300 BSCF and a c. 75:25 resource split between Ireland and the UK. Additional reprocessing of the 3D seismic data has now commenced as part of the planning of an appraisal well to be drilled in late 2012. A formal farm out campaign is currently being undertaken on the St George's Channel area.

PEGASUS (100.0% interest)
The Pegasus gas exploration prospect is located north-west of the Dragon gas field in the St George's Channel, with estimated prospective resource potential of c. 300 BSCF.

ORPHEUS (100.0% interest)
The Orpheus gas exploration prospect lies beneath the Dragon gas field, which straddles the Irish/UK Median Line. It is planned that the deeper Orpheus prospect, which has an estimated prospective resource potential of c. 290 BSCF, would be drilled as part of any appraisal programme of the Dragon Field.

SOUTH PORCUPINE BASIN

DUNQUIN (16.0% interest)
The Dunquin exploration prospect is located in the South Porcupine Basin. The prospect is operated by ExxonMobil Exploration and Production (Offshore) Ireland Limited and has associated P50 & P10 prospective recoverable resources of c. 1.7 BBOE & c. 3.7 BBOE, respectively. In August 2009, the Company confirmed that ExxonMobil, on behalf of the Dunquin partners, had notified the Irish Department of Communications, Energy and Natural Resources that it had elected to enter the second phase of the licence, which carries a firm well commitment within the Dunquin licence area. In 2010, a pre-drill site survey was successfully concluded and in September 2011, the multi-national Spanish headquartered oil company Respol farmed in to 25.0% of the prospect. The resultant equity holdings are ExxonMobil (operator, 27.5%), ENI (27.5%), Repsol (25.0%), Providence (16.0%) and Sosina (4.0%). As announced in February 2012, the co-venturers have commenced well activities for the planned drilling in Q2 2013.  Additional basin exploration targets include LO 11/9, Drombeg (80.0% Interest) and FEL 1/99, Cuchulain (3.2% Interest).

RATHLIN BASIN

RATHLIN (100.0% Interest)
In October 2010, the Company was awarded a petroleum exploration licence over Rathlin Island, Northern Ireland for an initial licence term of five years with a decision on a well commitment required within three years. In January 2011, under the second tranche of awards under the UK's 26th seaward oil and gas licensing round, the Company was awarded 6 offshore blocks. The initial licence phase is for six years with a well required to be drilled within this term in order to move to the next phase. Providence has committed to carry out a number of technical studies on the hydrocarbon exploration potential within the licence area. Providence operates the licence with a 100% equity interest and has planned for an exploration well to be drilled in late 2013.

SLYNE BASIN

LICENSING OPTION 11/12 (66.6% Interest)
In October 2011, under the Irish Atlantic Margin Licensing Round, the Company was awarded Licensing Option 11/12 in the Slyne Basin, located in c. 300 metre water depth c. 70 km off the west coast of Ireland. The initial technical evaluation of LO 11/12 has revealed the presence of the "Kylemore" and "Shannon" prospects which are similar in age to the nearby Corrib gas field ("Corrib"). Providence (66.66%) operates LO 11/12 on behalf of its partner First Oil Expro Limited (33.33%).

KYLEMORE (66.6% Interest)
The Kylemore prospect lies c. 20 km south-west of Corrib and is interpreted as a mid-basinal inverted four way dip-closed anticline based on a combination of 2D and 3D seismic data. The most recent mapping of the Kylemore prospect indicates that structurally it is directly analogous to the Corrib. Volumetric analysis, based on available Kylemore prospect maps, indicates a potential gas in place of up to c. 228 BSCF.

SHANNON (66.6% Interest)
The Shannon structure, which is fully covered by 3D seismic data, is situated c. 10 km south-west of Corrib. Enterprise Oil (now part of Shell) drilled the 18/25-2 exploration well on the Shannon prospect in 1999, however the Corrib reservoir was not encountered.  Enterprise subsequently interpreted the reservoir to be faulted out at the well location. As Enterprise's pre-drill map demonstrate a significant structural closure covering c. 23 sq km (the 1 TSCF Corrib Field covers c. 15 sq km), the LO 11/12 partners believe that Shannon warrants a complete re-evaluation in the context of any remaining resource potential.

GOBAN SPUR BASIN

LICENSING OPTION 11/11 (40.0% Interest)
In October 2011, under the Irish Atlantic Margin Licensing Round, the Company was awarded Licensing Option 11/11 in the Goban Spur Basin located in c. 1,000 metre water depth, located c. 250 km off the south-west coast of Ireland in c. 1,000 metre water depth. Partners include Repsol (40%) and Sosina (20%)

NEWGRANGE (40.0% Interest)
The Newgrange prospect is located in Licensing Option 11/11. The prospect comprises a large four way dip closed anticline which extends over a c. 1,000 sq kilometer area. Nearby well control suggests the potential for excellent carbonate reservoir development with the most recent volumetric analysis indicating a mean gas in place prospective resource potential of 14 TSCF. In March 2012, Repsol assumed the role of Operator for LO 11/11. This change of operatorship is in recognition of Repsol's extensive deepwater drilling expertise together with its recent significant successes in carbonate exploration elsewhere in the Atlantic Basins.

OLYMPIC SAILING SPONSORSHIP
In May 2012, the Company and the Irish Sailing Association announced that Providence had become a sponsor of the Irish Olympic Sailing Team. This sponsorship will enable the team to undertake world class preparations in advance of London 2012 and beyond. The Irish Olympic Sailing Team are considered 'Genuine Prospects' for a medal in the London 2012 Games. Through their drilling programme, Providence has also identified 'Genuine Prospects' offshore Ireland.

ENERGY AND THE ENVIRONMENT
The Company is totally committed to supplying energy in an environmentally responsible manner. Its ongoing exploration, development and production operations are carried out in compliance with all
environmental rules and regulations.

PROVIDENCE RESOURCES Plc
Consolidated income statement
For the year ended 31 December 2011

	2011 €'000	2010 €'000
Continuing operations
Revenue	13,752	11,080
Cost of sales	(4,055)	(4,660)
Gross profit	9,697	6,420
Administration expenses	(2,533)	(3,578)
Pre-licence expenditure	(117)	(113)
Impairment of exploration,evaluation and production assets	(6,635)	(1,263)
Loss on disposal of assets	(381)	-
Operating profit	31	1,466
Finance income	134	228
Finance expense	(5,378)	(7,659)
Loss before income tax	(5,213)	(5,965)
Income tax expense	(4,503)	(3,841)
Loss for the year from continuing operations	(9,716)	(9,806)
Discontinued operations
Loss from discontinued operations (net of income tax)	(4,224)	(31,795)
Loss for the financial year	(13,940)	(41,601)
Loss per share (cent) - continuing operations
Basic loss per share	(20.78)	(29.54)
Diluted loss per share	(20.78)	(29.54)
Loss per share (cent) - discontinued operations
Basic loss per share	(9.03)	(96.00)
Diluted loss per share	(9.03)	(96.00)

The total loss for the year is entirely attributable to equity holders of the Company.

PROVIDENCE RESOURCES Plc
Consolidated statement of comprehensive income
For the year ended 31 December 2011

		2011 €'000	2010 €'000
Loss for the financial year		(13,940)	(41,601)
Foreign exchange translation differences		(1,533)	(216)
Net change in fair value of cash flow hedges transferred to income statement		1,342	(1,539)
Cashflow hedges	- net fair value (loss)	(2,449)	(2,046)
	-  related deferred tax	2,057	918
Total income and expenses recognised in other comprehensive income		(583)	(2,883)
Total comprehensive expense for the year		(14,523)	(44,484)

The total comprehensive expense for the year is entirely attributable to equity holders of the Company.

PROVIDENCE RESOURCES Plc
Consolidated statement of financial position
At 31 December 2011

	2011 €'000	2010 €'000
Assets
Exploration and evaluation assets	36,214	10,140
Development and production assets	46,159	57,407
Property, plant and equipment	32	123
Derivative instruments	5,111	75
Deferred tax	5,887	3,408
Total non-current assets	93,403	71,153
	_______	_______
Trade and other receivables	6,626	3,568
Derivative instruments	513	736
Restricted cash	17,491	2,520
Cash and cash equivalents	18,563	9,171
	43,193	15,995
Assets classified as held for sale	-	13,574
	_______	_______
Total currents assets	43,193	29,569
Total assets	136,596	100,722
Equity
Share capital	16,668	15,058
Capital conversion reserve fund	623	623
Share premium	130,548	86,918
Singleton revaluation reserve	2,650	2,919
Convertible bond - equity portion	2,333	2,944
Foreign currency translation reserve	(3,655)	(2,122)
Share based payment reserve	4,368	3,537
Loan warrant reserve	5,641	5,641
Cashflow hedge reserve	(2,305)	(3,255)
Retained deficit	(148,994)	(136,001)
Total equity attributable to equity holders of the Company	7,877	(23,738)
Liabilities
Loans and borrowings	30,033	83,109
Decommissioning provision	5,165	3,551
Deferred tax	24,091	18,912
Derivative instruments	-	3,001
Total non-current liabilities	59,289	108,573
Trade and other payables	27,651	8,911
Loans and borrowings	41,779	2,678
Derivative instruments	-	1,978
	69,430	13,567
Liabilities classified as held for sale	-	2,320
Total current liabilities	69,430	15,887
Total liabilities	128,719	124,460
Total equity and liabilities	136,596	100,722

PROVIDENCE RESOURCES Plc
Consolidated statement of changes in Equity
For the year ended 31 December 2011

	Share Capital	Capital Conver- sion Reserve fund	Share premium	Singleton Reval- uation	Foreign currency translation	Share Based Payment	Loan warrants	Conver- tible bond - equity portion	Cash- flow hedge	Retained deficit	Total
	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
At 1 January 2010	14,609	623	71,836	3,066	(1,906)	2,519	5,641	2,944	(588)	(94,547)	4,197
Loss for financial year	-	-	-	-	-	-	-	-	-	(41,601)	(41,601)
Currency translation	-	-	-	-	(216)	-	-	-	-	-	(216)
Cashflow hedge	-	-	-	-	-	-	-	-	(2,677)	-	(2,667)
Total comprehensive income	14,609	623	71,836	3,066	(2,122)	2,519	5,641	2,944	(3,255)	(136,148)	(40,287)
Transactions with owners, recorded directly in equity
Shares issued in year	449	-	15,082	-	-	-	-	-	-	-	15,531
Share based payment	-	-	-	-	-	1,018	-	-	-	-	1,018
Transfer from Singleton revaluation reserve	-	-	-	(147)	-	-	-	-	-	147	-
At 31 December 2010	15,058	623	86,918	2,919	(2,122)	3,537	5,641	2,944	(3,255)	(136,001)	(23,738)
Loss for financial year	-	-	-	-	-	-	-	-	-	(13,940)	(13,940)
Currency translation	-	-	-	-	(1,533)	-	-	-	-	-	(1,533)
Cashflow hedge	-	-	-	-	-	-	-	-	950	-	950
Total comprehensive income	15,058	623	86,918	2,919	(3,655)	3,537	5,641	2,944	(2,305)	(149,941)	(38,261)
Transactions with owners, recorded directly in equity
Shares issued in year	1,610	-	43,630	-	-	-	-	-	-	-	45,240
Share based payments	-	-	-	-	-	898	-	-	-	-	898
Share options forfeited in year	-	-	-	-	-	(67)	-	-	-	67	-
Transfer from Singleton revaluation reserve	-	-	-	(269)	-	-	-	-	-	269	-
Bond redemption	-	-	-	-	-	-	-	(611)	-	611	-
At 31 December 2011	16,668	623	130,548	2,650	(3,655)	4,368	5,641	2,333	(2,305)	(148,994)	7,877

PROVIDENCE RESOURCES Plc
Consolidated statement of cash flows  
For the year ended 31 December 2011

	2011 €'000	2010 €'000
Cash flows from operating activities
Loss before income tax for the year	(9,437)	(33,522)
Adjustments for:
Depletion,depreciation and amortisation	2,634	8,099
Loss on disposal	381	-
Impairment of exploration and evaluation assets	1,731	1,263
Impairment of development and production assets	4,904	26,806
Finance income	(134)	(228)
Finance expense	5,378	7,659
Equity settled share payment charge	898	1,018
Foreign exchange	2,307	703
Change in trade and other receivables	1,579	1,903
Change in restricted cash	(14,971)	-
Change in trade and other payables	18,811	(2,387)
Interest paid	(6,798)	(8,229)
Tax paid	-	(48)
Hedge repayment	(7,714)	-
Net cash (outflow)/inflow from operating activities	(431)	3,037
Cash flows from investing activities
Interest received	134	228
Acquisition of exploration and evaluation assets	(27,576)	(1,714)
Acquisition of development and production assets	(8,889)	(8,998)
Acquisition of property, plant and equipment	(38)	-
Disposal of development and production assets - Nigeria	7,759	-
Disposal of development and production assets - USA	10,475	-
Net cash used in investing activities	(18,135)	(10,484)
Cash flows from financing activities
Proceeds from issue of share capital	47,662	16,522
Share capital issue costs	(2,422)	(991)
Payment of loan transaction costs	-	406
Repayment of loans and borrowings	(56,540)	(406)
Proceeds from drawdown of loans and borrowings	39,033	-
Net cash from financing activities	27,733	15,531
Net increase in cash and cash equivalents	9,167	8,084
Cash and cash equivalents at 1 January	9,171	1,012
Effect of exchange rate fluctuations on cash and cash equivalents	225	75
Cash and cash equivalents at 31 December	18,563	9,171

PROVIDENCE RESOURCES Plc
Notes

Note 1 - Operating Segments
For the year ended 31 December 2011

Operating segment information is presented in the consolidated financial statements in respect of the Group's geographical segments which represent the financial basis by which the Group manages its business. Information regarding the results of each reportable segment is included below. Performance is measured based on segment result and total asset value as included in the internal management reports that are reviewed by the Group's board of directors, which management believe is the most relevant information when evaluating the results of certain segments relative to other entities that operate within that industry. There are no significant inter segment transactions.

        The Group's revenues and profits for the year arise from oil and gas production in the UK.

Segment Revenue
Revenue by source/destination	2011	2010
	€'000	€'000
UK	13,752	11,080
Segment net loss for the year	2011	2010
	€'000	€'000
UK - producing assets	2,977	5,742
UK - exploration assets	-	(225)
Republic of Ireland - exploration assets	(1,815)	(1,131)
Africa - development and production assets	(422)	(366)
Corporate expenses	(709)	(2,554)
Operating profit for the year	31	1,466
The Group disposed of its US oil and gas portfolio of assets in March 2011 and these operations are classified as discontinued in 2010 and 2011. Revenues derived from these operations amount to €nil (2010: €10,872,000) with the net loss for the year amounting to €4,224,000 (2010: loss of €31,795,000)
Segment assets	2011	2010
	€'000	€'000
UK - producing assets	61,943	48,382
Republic of Ireland - exploration assets	67,306	10,140
Africa - development and production assets	4,637	12,480
US - producing assets (discontinued operations)	-	15,984
US - assets	91	-
Group assets, principally derivative assets, deferred tax , restricted cash and cash and cash equivalents	2,619	13,736
Total assets	136,596	100,722
Segment liabilities
UK - producing	(67,201)	(27,646)
Republic of Ireland - exploration assets	(23,747)	(5,308)
US - producing assets (discontinued operations)	-	(4,205)
US - liabilities	(1,343)	-
Group liabilities , principally deferred tax and loans and borrowings	(36,428)	(87,301)
Total liabilities	(128,719)	(124,460)
Capital expenditure	2011	2010
	€'000	€'000
UK - producing assets	7,927	8,086
- exploration assets	-	225
	7,927	8,311
Republic of Ireland - exploration assets	27,805	1,489
Africa - development and production assets	245	911
Total capital expenditure	35,977	10,711
Depletion and decommissioning charge
UK - producing assets	2,505	2,789
Impairment charge
Republic of Ireland - exploration assets	1,731	1,038
UK - exploration assets	-	225
UK - development and production assets	4,904	-
	6,635	1,263

The Group sells its entire oil production to one customer, and therefore significant credit concentration exists.

Note 2 - Related party transactions

Tony O'Reilly, Chief Executive, entered into a new service contract effective from September 2011 after his previous contract expired with the Company in respect of service outside of the Republic of Ireland through a company beneficially owned by him, Kildare Consulting Limited. The above mentioned contract is of two years duration and is subject to one year's notice period. The amount paid under the previous and current contracts amounted to €451,950 for 2011.

Providence Resources Plc
Proforma Consolidated statement of financial position
At 31 December 2011

The unaudited proforma statement of financial position below demonstrates the impact on the statement of financial position at 31 December 2011 as though the following three significant transactions occurring in 2012 had occurred on 31 December 2011:

a)	In April 2012, the Group received the final $6m payment from the sale of Nigeria. The proceeds of €4.6m were used to discharge borrowing secured on the asset.
b)	In April 2012, the Company placed 13.138 million shares at a price of £4.80 per share, raising €70.595 m after costs.
c)	On the 4th May 2012, the company redeemed €18.499m of the outstanding bond.

This unaudited proforma statement of financial position is for shareholder information purposes only and will not form part of the audited statutory financial statements when they are completed.

	At 31 December 2011	Final Payment for Nigerian asset	Share issue	Part Redemption of Bond	Proforma At 31 December 2011
	€'000	€'000	€'000	€'000	€'000
Assets
Total non-current assets	93,403	-	-	-	93,403
Other current assets	24,630	(4,610)	-	-	20,020
Cash	18,563	-	70,595	(18,499)	70,659
Total current assets	43,193	(4,610)	70,595	(18,499)	90,679
Total assets	136,596	(4,610)	70,595	(18,499)	184,082
Liabilities
Other non-current liabilities	59,289	-	-	-	59,289
Total non-current liabilities	59,289	-	-	-	59,289
Other current liabilities	69,430	(4,610)	-	(18,499)	46,321
Total current liabilities	69,430	(4,610)	-	(18,499)	46,321
Total liabilities	128,719	(4,610)	-	(18,499)	105,610
Total assets less total  liabilities	7,877	-	70,595	-	78,472
Equity
Total equity attributable to equity holders of the company	7,877	-	70,595	-	78,472

LIST OF ASSETS

Licence	Asset	Basin	Operator	Partners	%	Type
IRELAND
SEL 1/11	Barryroe	Celtic Sea	Providence	Lansdowne; San Leon	80.00%	Oil discovery
SEL 2/07	Hook Head	Celtic Sea	Providence	Atlantic; Sosina	72.50%	Oil and gas discovery
SEL 2/07	Dunmore	Celtic Sea	Providence	Atlantic; Sosina	72.50%	Oil discovery
SEL 2/07	Helvick	Celtic Sea	Providence	Atlantic; Sosina; Lansdowne	62.50%	Oil and gas discovery
SEL 2/07	Nemo	Celtic Sea	Providence	Atlantic; Sosina; Nautical	54.40%1	Oil and gas discovery
LO 10/1	Baltimore	Celtic Sea	Providence	Nautical	60.00%	Oil discovery
LO 10/1	Marlin	Celtic Sea	Providence	Nautical	30.00%2	Oil and gas exploration
SEL 2/11	Dalkey Island	Kish Bank	Providence	Petronas	50.00%	Oil and gas exploration
SEL 2/11	ULYSSES	Kish Bank	EIRGAS 3		100.00%	Gas storage evaluation
LO 11/12	Kylemore	Slyne	Providence	First Oil Expro	66.66%	Gas exploration
LO 11/12	Shannon	Slyne	Providence	First Oil Expro	66.66%	Gas exploration
FEL 2/04	Spanish Point	Main Porcupine	Providence	Chrysaor; Sosina	32.00%	Oil and gas discovery
FEL 2/04	Burren	Main Porcupine	Providence	Chrysaor; Sosina	32.00%	Oil discovery
FEL 2/04	Wilde / Beehan	Main Porcupine	Providence	Chrysaor; Sosina	32.00%	Oil discovery
FEL 4/08	Cama (North & South)	Main Porcupine	Providence	Chrysaor; Sosina	32.00%	Oil and gas exploration
FEL 4/08	Rusheen (North & South)	Main Porcupine	Providence	Chrysaor; Sosina	32.00%	Oil and gas exploration
FEL 4/08	Costelloe (Main, North & South)	Main Porcupine	Providence	Chrysaor; Sosina	32.00%	Oil and gas exploration
FEL 4/08	Shaw	Main Porcupine	Providence	Chrysaor; Sosina	32.00%	Oil and gas exploration
FEL 4/08	Synge	Main Porcupine	Providence	Chrysaor; Sosina	32.00%	Oil and gas exploration
LO 11/2	Spanish Point South	Main Porcupine	Providence	Chrysaor; Sosina	32.00%	Oil and gas exploration
FEL 3/04	Dunquin	South Porcupine	ExxonMobil	Eni; Repsol; Sosina	16.00%4	Oil and gas exploration
FEL 1/99	Cuchulain	South Porcupine	ENI	ExxonMobil; Sosina	3.20%	Oil and gas exploration
LO 11/9	Drombeg	South Porcupine	Providence	Sosina	80.00%	Oil and gas exploration
LO 11/11	Newgrange	Goban Spur	Providence	Repsol; Sosina	40.00%	Oil and gas exploration
SEL 1/07	Pegasus	St George's Channel	Providence		100.00%	Oil and gas exploration
SEL 1/07	Orpheus	St George's Channel	Providence		100.00%	Oil and gas exploration
SEL 1/07	Dionysus	St George's Channel	Providence		100.00%	Oil and gas exploration
SEL 1/07	Dragon	St George's Channel	Providence		100.00%	Gas discovery
Block 103/1	Dragon	St George's Channel	Providence	Star Energy	50.00%	Gas discovery
1 Subject to terms of farm out with Nautical 2 Providence holds 60% of licence; Equity shown is net for Marlin Prospect 3 EIRGAS Limited is a 100% owned SPV established by Providence to invest in gas storage/ CCS opportunities offshore Ireland/UK 4 Subject to terms of farm out with ExxonMobil

UNITED KINGDOM
PL 240	Singleton	Onshore, Weald	Providence	Noble	99.13%	Oil and gas production
PELD 233	Baxter's Copse	Onshore, Weald	Providence	Northern	50.00%	Oil Discovery
PELD 233	Burton Down	Onshore, Weald	Providence	Northern	50.00%	Oil and gas exploration
PL 5/10	Rathlin Island	Rathlin, N. Ireland	Providence		100.00%	Oil and gas exploration
Block 125 -	Rathlin	Rathlin, N. Ireland	Providence		100.00%	Oil and gas exploration
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