Providence Resources - Preliminary Results
Embargo: 7:00am
21 April 2010
PROVIDENCE RESOURCES P.l.c.
("Providence" or the "Company")
PRELIMINARY RESULTS FOR THE
YEAR ENDED 31 DECEMBER 2009
PRODUCTION
* Annual production increases by 28% to 557,927 BOE (2008: 433,625 BOE)
* Singleton, Onshore UK: SNX-10 production well increases field production by
50%
APPRAISAL/DEVELOPMENT
* Spanish Point gas and Burren oil discoveries, Ireland: 3D seismic data
acquired for well planning
* Baxter's Copse, PEDL 233, onshore UK: First oil planned for 2011
* OML113, Offshore Nigeria: Commerciality of the AJE field declared
EXPLORATION
* Dunquin Prospect, Ireland: Drilling commitment made by Operator ExxonMobil
and ENI
* Kish Bank, Ireland: Dalkey Island oil prospect
EIRGAS Limited
* Option exercised to acquire up to 40% of the Kinsale Head assets from
PETRONAS
MOMENTUM 2010
* New SPV, EXOLA Limited, established to focus on unconventional oil projects
* Strategic seismic collaboration agreed with PGS Ventures
* EXOLA: Licensing authorisation over Baltimore heavy oil discovery
* EIRGAS: Identification of suitable structures for salt cavern gas storage in
Kish Bank Basin
FINANCIAL INFORMATION
* Revenue of €21.119 million (2008: €24.814 million) lower due to lower
average commodity prices and hurricane impacted production
* Results from Operating Activities loss of €1.092 million (2008: Loss of
€42.211 million) include a number of one-off hurricane related costs and
abandonment costs
* Net loss of €9.779 million (2008: Loss of €51.193 million) includes €12.399
million of non cash items (2008: €61.040 million)
* €0.0036 loss per share (2008: Loss €0.0206)
CORPORATE
* New $100 million banking facility with BNP Paribas
* €33.2 million in aggregate raised via equity raisings in June 2009 and
February 2010
* Appointment of First Energy as international capital markets advisor
Commenting on today's results, Tony O'Reilly, Chief Executive of Providence
Resources P.l.c. said:
"I am pleased to report that our Company has delivered a solid operational
performance in 2009. Â We have continued to expand and enhance our asset base,
whilst also managing to increase production levels  by 28% to 557,927 BOE
compared to 433,625 BOE in 2008.
"Over the past 5 years, Providence has built up a sizeable and extensive
portfolio of assets in the production, development and exploration arenas in
Ireland, the United Kingdom, the United States and West Africa. In doing so, we
have aligned ourselves with world class partners including ExxonMobil, Chevron,
ENI, Vitol, Star Energy and PETRONAS. Our focus is to ensure that this portfolio
has sufficient scale and diversity so as to allow for multiple avenues of value
creation for our shareholders. In this regard, we achieved a number of notable
successes during 2009.
"Within our production portfolio, the success of the Singleton SNX-10 well
confirmed our field re-development model and has subsequently led us to
accelerate various field activities to further boost production including the
potential 2011 third party tieback of the Baxter's Copse discovery. On the
development front, the acquisition of 3D seismic data last summer was an
essential step forward in advancing the Spanish Point gas project, as well as
beginning to un-mask the potentially large Burren oil project off the west coast
of Ireland. Within the exploration portfolio, ExxonMobil's confirmation of
drilling the Dunquin prospect follows years of extensive exploration work with
ENI capturing a 40% stake in this world class exploration target. Â In addition,
the ongoing development of our two new special purpose vehicles, EIRGAS Limited
and EXOLA Limited, allows Providence shareholders to participate in the exciting
arenas of gas storage and heavy oil, respectively.
"Looking ahead, 2010 is a key year for Providence with a number of projects now
advancing to the drilling stage. This, combined with a growing production base,
and the potential to realise the value being created in both our EIRGAS gas
storage and EXOLA heavy oil interests, gives us real confidence for the future.
We are also continuing to look at future opportunities that can deliver
appreciable value creation, both in Ireland and further afield."
Tony O'Reilly
Chief ExecutiveApril 21, 2010
Contacts:
Providence Resources Plc Tel: +353 (0)1 219 4074
Tony O'Reilly
Powerscourt Tel: +44 (0)207 250 1446
Rory Godson/Lisa Kavanagh
Murray Consultants Tel: +353 (0)1 498 0300
Pauline McAlester
Cenkos Securities Plc Tel: +44 (0)207 387 8900
Joe Nally/Nick Wells
J&E Davy Tel: + 353 (0)1 679 6363
Eugenee Mulhern/ Stephen Barry
FirstEnergy Capital Tel: + 44 (0)207 448 0201
Richard Hail/Derek Smith
The full Preliminary Report, Financial Statements and Company Outlook is set out
on the attached pages.
About Providence
Providence Resources Plc is an independent oil and gas exploration and
production company listed on the AIM market in London and on Dublin's IEX
market. Providence's active oil and gas portfolio includes interests in Ireland,
the United Kingdom, the United States (Gulf of Mexico) and West Africa
(Nigeria). Providence's portfolio is balanced between production, appraisal and
exploration assets, as well as being diversified geographically. Further
information on Providence and its oil and gas portfolio, including Annual
Reports are available from Providence's website atwww.providenceresources.com
<
http://www.providenceresources.com/>
Announcement
In accordance with the AIM Rules - Guidance for Mining and Oil & Gas Companies,
the information contained in this announcement has been reviewed and approved by
John O'Sullivan, Exploration Manager of Providence Resources P.l.c. John
O'Sullivan is a Geology graduate of University College Cork and holds a Masters
in Geophysics from The National University of Ireland, Galway. John also holds a
Masters in Technology Management from the Smurfit Graduate School of Business at
University College Dublin and is presently completing a dissertation leading to
a PhD in Geology at Trinity College, Dublin. John is a Fellow of the Geological
Society and a member of the Petroleum Exploration Society of Great Britain. He
has 20 years experience in the oil and gas exploration and production industry
and is a qualified person as defined in the guidance note for Mining Oil & Gas
Companies, March 2006 of the London Stock Exchange.
Glossary of terms used in this Announcement
ALL FIGURES QUOTED ARE GROSS FIGURES, UNLESS OTHERWISE STATED
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
SPE/WPC/AAPG/SPEE Petroleum Resource Management System 2007 has been used in
preparing this announcement
PROVIDENCE - ASSETS BY REGION
Asset Location Operator % Type
IRELAND
Spanish Point Porcupine Basin Providence 56.0% Gas development
Burren Porcupine Basin Providence 56.0% Oil discovery
FEL 4/08 Porcupine Basin Providence 56.0% Oil and gas
exploration
Dunquin Porcupine Basin ExxonMobil 16.0% Oil and gas
exploration
Drombeg Porcupine Basin ExxonMobil 16.0% Oil and gas
exploration
Cuchulain Porcupine Basin ENI 3.2% Oil and gas
exploration
Newgrange* Goban Spur Basin Providence 80.0% Oil and gas
exploration
Dalkey Island Kish Bank Basin Providence 50.0% Oil exploration
Kinsale Head** Celtic Sea Kinsale Energy 40.0% Gas production/gas
storage
Seven Heads** Celtic Sea Kinsale Energy 34.6% Gas production
Pegasus NE Celtic Sea EIRGAS*** 100.0% Oil and gas
exploration
Orpheus NE Celtic Sea EIRGAS*** 100.0% Oil and gas
exploration
Dionysus NE Celtic Sea EIRGAS*** 100.0% Oil and gas
exploration
Dragon (part) NE Celtic Sea EIRGAS*** c.25.0% Gas development
Hook Head Celtic Sea EXOLA*** 72.5% Oil & gas discovery
Dunmore Celtic Sea EXOLA*** 72.5% Oil discovery
Helvick Celtic Sea EXOLA*** 72.5% Oil & gas discovery
Ardmore Celtic Sea EXOLA*** 72.5% Gas discovery
Barryroe Celtic Sea Lansdowne 72.5% Oil discovery
Baltimore Celtic Sea Providence 100.0% Oil discovery
*Subject to new licensing application
** Subject to Closing
*** Subject to license transfer from Providence Resources P.l.c.
UNITED KINGDOM
Singleton Onshore Providence 99.1% Oil and gas
production
Baxter's Copse Onshore Providence 50.0% Oil discovery
Burton Down Onshore Providence 50.0% Oil and gas
exploration
UNITED STATES
High Island A-268 Gulf of Mexico Peregrine 5.0% Oil and gas
production
Galveston A-155 Gulf of Mexico Peregrine 10.8% Gas production
Ship Shoal 252* Gulf of Mexico SPN 50.0% Oil and gas
production
Ship Shoal 253* Gulf of Mexico SPN 50.0% Oil and gas
production
Ship Shoal 267* Gulf of Mexico SPN 50.0% Oil and gas
production
Main Pass 19 Gulf of Mexico Petsec 45.0% Oil and gas
production
East Cameron 257 Gulf of Mexico SPN 12.5% Gas production
West Cameron 333 Gulf of Mexico Mariner 32.5% Gas production
Vermillion 60 Gulf of Mexico SPN 50.0% Gas production
Ridge Onshore Louisiana Brammer 30.0% Gas production
* Earned interest through well bore participation
NIGERIA
AJE, OML 113 Offshore Nigeria YFP/Chevron 6.7% Oil and gas
development
FINANCIAL HIGHLIGHTS
Financial Results Year End 2009
Revenues for the 12 months were €21.119 million compared to €24.814 million in
2008 reflecting lower commodity prices, the adverse impact of hurricanes on
production and a change in the ratio of our oil/gas weighted sales. Total annual
production was 557,927 BOE compared to 433,625 BOE in 2008 largely as a result
of increased production from Singleton, the successful workover at VR60 and the
re-instatement of hurricane impacted production from the Gulf of Mexico. Despite
delays in commissioning Galveston A-155 (which commenced in September 2009) and
the ongoing delays in re-starting Ship Shoal 253 oil production (which is
expected to re-commence imminently), the base production rates were c. 2,000
BOEPD at year end. This production figure excludes any attributable production
from Kinsale where the Company has exercised an option (which has not yet
closed) to take up to a 40% equity stake. Including this share of production,
daily production at year end was equivalent to c. 4,000 BOEPD.
The average oil price per barrel achieved in 2009 was $88.23 compared to $111.07
in 2008. The average gas price realised was $5.55 per MMCF compared to $10.13 in
2008. Whilst the overall BOE annual production was up 28.67%, the mix changed to
36% oil and 64% gas in 2009 (from 46% oil and 54% gas in 2008). In 2010, with
increased production from Singleton and re-instated oil production at SS253, the
oil/gas mix should revert closer to levels seen in 2008.
The Loss from Operating Activities was €1.092 million compared to a loss of
€42.211 million in 2008. The results include a number of one-off hurricane
related costs as well as increased abandonment costs for MO 861. A net loss of
€9.779 million (2008: Loss €51.193 million) was recorded in 2009, which
comprises €12.399 million of non cash items (2008: €61.04 million) and increased
finance expenses of €10.057 million (2008: €8.294 million). This yielded a fully
diluted post tax EPS of a loss of 0.36 cents compared to a loss of 2.06 cents in
2008.
BNP Paribas Facility
In September, the Company announced that it had arranged a new US$100 million
senior secured reducing borrowing base facility with BNP Paribas of which US$65
million was immediately available for drawdown. This facility was used to repay
the drawn portion of the Macquarie Facility (US$56 million), which was then
cancelled, and to provide future funding for Providence's general E&P business.
Capital Raising - June 2009 & February 2010
In June 2009, the Company announced a placing of 431.9 million new ordinary
shares to raise €16.9 million. In February 2010, the Company announced a further
placing of 448.8 million new ordinary shares, raising €16.3 million. The
proceeds were used to further strengthen Providence's balance sheet by reducing
net debt levels, as well as providing additional working capital for future
investments in revenue enhancing projects, including part of the EIRGAS
investment in the Kinsale Head assets.
OPERATIONAL HIGHLIGHTS - PRODUCTION
Singleton Production, Onshore UK - Plan to exceed 1,000 BOEPD
Following the drilling of the successful SNX-10 development well, which came on
production in Q2 2009, oil production at the field increased by 250 BOPD (or
50%). Additional production enhancement activities have taken current field
production levels to 800 BOEPD, of which 85% is oil. The updated field
development plan indicates that Providence can expect to exceed its stated
objective of increasing field production to over 1,000 BOEPD over the next year
through a phased programme of activities on the field including in-fill
drilling, additional acid stimulation, gas monetisation (through gas to wire
power generation) and hydraulic fracturing. Details on these activities,
including the planned drilling campaign, are expected to be released during Q2
2010.
Baxter's Copse, PEDL 233, Onshore UK - New Reserve Update
The Company and Northern Petroleum Plc are 50/50 partners in PEDL 223, which is
adjacent to the Singleton field. The companies have identified a number of
exploration and development opportunities within the block, principally the
Baxter's Copse oil discovery. RPS Energy recently completed a third party
reserve audit, attributing 2P and 3P gross undeveloped reserves of c. 5.4 MMBO
and 15 MMBO respectively (2.7 MMBO and 7.5 MMBO respectively net to Providence).
A forward plan of activities has been agreed by the partners to advance the
Baxter's Copse discovery to first oil in 2011 via a third party tieback to the
Providence operated Singleton oil field facilities.
Gulf of Mexico, Offshore USA - Increased Production
Throughout 2009, the Company continued to build production rates through new
project start-ups, various re-complete activities and by re-instating production
impacted by hurricanes in 2008. Notably, the delayed Galveston A-155 project, in
which the Company has a 10.8% interest, was finally brought into production in
Q3 2009. The project underwent a fast-track development with first gas achieved
within 17 months of discovery. Hurricanes Gustav and Ike seriously impacted
production in the area, including Providence's production from its Ship Shoal
253 and High Island A-268 fields, in addition to delaying the start-up of the
new Galveston A-155 gas field by around six months. The cumulative impact from
this lost/deferred production is estimated at approximately 350 BOEPD net to
Providence through most of 2009. Operations at Main Pass 89 and Mobile 861
ceased during the year. The SS 253 oil field is still offline but
re-commencement of production is expected imminently.
In 2009, various re-completion activities were carried out in the region, with a
notable success being VR 60 where production rates increased far in excess of
plans. Cumulatively, the assets in the Gulf of Mexico are now producing c.
1,200 BOEPD, of which approximately 70% is gas. Looking ahead, the Company plans
a series of well re-completions from the Main Pass 19 platform, whilst a number
of potential future drilling targets, including the large "Snake River"
exploration target, will be dependent on partner appetite and the success of
drilling campaigns on adjacent blocks.
OPERATIONAL HIGHLIGHTS - DEVELOPMENT/APPRAISAL
Spanish Point & Burren, Main Porcupine Basin, Ireland - 3D Seismic Programme
During the summer of 2009, Providence and its partners acquired a c. 300 sq km
3D seismic survey over the Spanish Point licence, which contains the Spanish
Point gas discovery and the adjacent Burren oil discovery. Whilst the evaluation
continues, initial findings from this survey were very positive.
At Spanish Point, the initial processed seismic data indicated excellent
resolution at the reservoir level across the whole of the Spanish Point
structure and confirm the potential for further reservoir above that tested by
the 35/8-2 discovery well within the existing hydrocarbon bearing block. In
addition, the results suggest that fault density within the Spanish Point
structure is relatively low, which is positive in terms of reservoir continuity
and any ultimate future field development.
The 3D survey area also covered the adjacent 35/8-1 Burren oil discovery, which
originally flowed high quality 34o API oil from one of a number of thin Lower
Cretaceous sands within a c. 400ft gross hydrocarbon bearing interval.
Previously, it had been difficult to map the architecture of these reservoir
sands - however, the 3D survey has already provided a significant improvement in
the imaging of the Burren reservoir sands which will allow the partnership to
more fully assess its commercial potential.
A comprehensive update on both Spanish Point and Burren, which will include
updated volumetrics and an outline of the forward plan towards drilling, will be
provided once the 3D seismic interpretation has been completed during Q2 2010.
AJE Field, Offshore Nigeria - Moving towards Final Investment Decision
In February 2009, the AJE Field was deemed a commercial discovery by the
partnership comprising Chevron, Vitol, EER, YFP and Providence. The partnership
subsequently authorised Chevron, as Technical Advisor to the Operator, to
prepare a Development Plan for the AJE Field with the objective of getting to
FID (Final Investment Decision) in 2010 which is presently ongoing. In addition,
the partners continue to evaluate a number of exploration targets contained
within other parts of OML 113 and shot a 2D survey in this regard during 2009.
OPERATIONAL HIGHLIGHTS - EXPLORATION
Dunquin Prospect, South Porcupine Basin - ENI farms in for 40% & ExxonMobil
makes drilling commitment
In August, 2009, the Company announced that ENI had farmed into the Dunquin
prospect. Under the terms of the agreement, ENI assumed a 40% interest in the
Dunquin licence with ExxonMobil holding a 40% operated stake, whilst Providence
and Sosina retained 16% and 4% equity positions, respectively. Also 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 they have elected to enter the second phase of the licence, which
carries a firm well commitment within the Dunquin licence area.
Balance of Porcupine Basin - Portfolio Management
Over the past four years, the Company has assembled a large portfolio of
exploration acreage in the Porcupine area off the West coast of Ireland. This
portfolio is adjacent to the Dunquin prospect and covers other targets such as
Drombeg, Newgrange and latterly, through the ENI farm in deal, Cuchulain. These
prospects are at differing stages of exploration maturity having all had 2D
seismic surveying carried out over them. Currently, Providence is in discussions
with third parties in relation to a large deep exploration target at Drombeg,
whilst the Newgrange area is currently the subject of a new licensing
application.
Dalkey Island Prospect , Kish Bank Basin, Irish Sea.
Modern analysis of vintage 2D seismic data of the Kish Bank Basin has revealed
the presence of a large undrilled structure at Lower Triassic level situated c.
10 km offshore Dublin. This feature, known as the Dalkey Island exploration
prospect, may be prospective for oil as there are similar aged oil productive
reservoirs in the eastern Irish Sea offshore Liverpool. Mid-case volumetric
estimate of the in-place prospective resources for the Dalkey Island prospect is
c. 870 MMBO.
OPERATIONAL HIGHLIGHTS - EXOLA LIMITED
Establishment of EXOLA Limited
Following the Company's 2008 drilling programme in the Celtic Sea, the Company
considered how best to move forward in the region. With gas prospects now
largely linked to any future development plans at Kinsale Head (through EIRGAS),
the focus shifted to how best to exploit the significant oil potential in the
basin. Subsequently, Providence established EXOLA Limited as a special purpose
vehicle (SPV) to invest in unconventional oil developments and opportunities
offshore Ireland and the UK. The assets covered by EXOLA include Helvick, Hook
Head, Dunmore, Barryroe, Ardmore and Baltimore. A number of studies have already
been completed, and the Company is in discussions with various industry players
on possible development options for a number of fields. We hope to provide
further updates over the coming months.
Baltimore Licensing Option
In February, the Company announced that it has been awarded Licensing Option
10/1 over the Baltimore heavy oil discovery located in block 48/19(p) in the
North Celtic Sea Basin, offshore Ireland. The 48/19-2 discovery well is situated
some c. 30 kilometers off the south coast of Ireland in c.100 metre water depth.
Discovered in 1992, this c. 11o API heavy oil accumulation is estimated to have
an in place resource potential of up to c. 300 MMBO.
OPERATIONAL HIGHLIGHTS - EIRGAS LIMITED
Kinsale Head & Seven Heads Gas Fields, Celtic Sea - Option to acquire exercised
In September, the Company announced that its' wholly owned gas storage
subsidiary, EIRGAS Limited, exercised an option with PETRONAS to acquire up to a
40% interest in the 100% operated Kinsale Head Area comprising the Kinsale Head,
South West Kinsale and Ballycotton gas fields. As part of the same transaction,
EIRGAS also exercised an option to acquire up to a 40% interest in the 86.5%
adjacent Seven Heads gas field. Â Under the terms of the Option Agreement, EIRGAS
has the right to purchase  its' stake in the Kinsale Head Area assets on the
same pro-rata terms by which PETRONAS acquired its original 100% stake from
Marathon in April 2009. That transaction had a total value of US$180 million,
effective from January 2008. The transaction is subject to Irish regulatory
approval and an announcement concerning the closing process is expected in the
near future.
As Ireland's only operating gas storage facility, Kinsale Head has great
strategic and commercial importance. Through its affiliation with PETRONAS, and
by working with the experienced management team at Kinsale Energy, Providence
now has an opportunity to play an important role in leading the development of
further gas production, gas storage and potential CO2 sequestration
opportunities in Ireland.
Kish Bank Basin - ULYSSES project
The ULYSSES Study, which commenced in August 2008, covered the northern and
western sectors of the shallow water Kish Bank Basin, and was focused on
assessing the gas storage and carbon sequestration potential of the basin. These
studies have confirmed a site which may be suitable for offshore natural gas
salt cavern development similar to those recently proposed for development in
the Lough Larne area of Northern Ireland. In addition, further geotechnical
studies support recently published material which suggests that the basin could
host a potential of 270 million tonnes of CO2.
SEL 1/07 Licence area expanded
In March 2009, the Company was granted an increase in the areal extent of its
100% operated Standard Exploration Licence (SEL) 1/07 in the St George's Channel
Basin, offshore south-east Ireland. This revised licence authorisation contains
the mapped extension into Irish waters of the proven UK Dragon gas field, which
was discovered in 1994. The expansion of the licence area has been designed to
capture this additional "Orpheus" exploration prospect, which may be targeted as
part of any future appraisal/ development well programme on the overlying Dragon
Field. The Dragon Field lies c. 60 kilometers from Milford Haven in South Wales
where two LNG facilities are located.
CORPORATE MATTERS
In addition to its ongoing relationship with existing partners, the Company
continues to establish new working relationships with world class companies. On
the corporate front, the Company welcomed the arrival of ENI as its partner at
Dunquin whilst in the geo-science arena, the Company entered into a strategic
relationship with PGS Ventures. As part of its objective to broaden its
shareholder base internationally, the Company appointed FirstEnergy Capital as
an international capital markets adviser.
With the increase in its institutional shareholders base, as well as the number
of shares in issue, the Company carried out an analysis of its shareholder base
with its advisors and this lead to a proposed share re-organisation, by way of a
1 for 100 share consolidation. The details of this re-organisation, to be tabled
at an Extraordinary General Meeting to be held at the time of the Company's
Annual General Meeting in May, is contained in a circular to be sent to
shareholders.
After 13 years of diligent service as a non-executive director, Mr. Peter
Kidney, has advised that due to other business commitments, he will be retiring
by rotation at the upcoming Annual General Meeting and he will not be seeking
re-election. Peter has been a director of the Company since its inception in
1997. On behalf of everyone at Providence, the board wish to express its sincere
appreciation for his wise counsel and contribution to the growth of the business
and wish him every continued success in his other endeavours.
ENERGY AND THE ENVIRONMENT
The Company is committed to supplying energy in an environmentally responsible
manner with its ongoing exploration, development and production operations being
carried out in compliance with all environmental rules and regulations.
2010 OUTLOOK
The Company is expecting a period of high activity in 2010, consistent with
prior years. Whilst maintaining its diversified portfolio strategy, the Company
is now entering a stage of more focussed operations on specific assets. Within
the exploration portfolio, the site survey and preparation for upcoming drilling
at Dunquin will be the primary activity. On the development side, the key focus
area is Spanish Point and Burren where the results of the 3D seismic programme
will soon be announced. From a production perspective, the key area of focus
will be Singleton and the ongoing production enhancement programme, including
the planned drilling programme for later this year and the future plans for
Baxter's Copse.
With our two special purpose vehicles, the main focus at EIRGAS will be closing
the transaction with PETRONAS and advancing the gas storage expansion plans. At
EXOLA, the objective will be to continue discussions with third party companies
who are interested in working with the Company on the individual assets or with
the whole portfolio. Finally, the Company will continue to look at opportunities
to further strengthen its balance sheet and reduce debt levels.
Providence has an extensive array of production, development and exploration
assets, and continues to be partnered by a number of world class operators. We
have recently added to our range of established activities by entering the gas
storage and trading market via EIRGAS, and heavy oil through EXOLA. The Company
sees these areas as incremental value creating opportunities for shareholders
and will no doubt, bring us into contact with other world class operators.
Commodity prices have now rebounded from their lows at the beginning of 2009,
and worldwide demand for energy is resuming its growth after the 2008/09
financial crisis. These factors combined give us great confidence in the
performance of our business and we believe that our shareholders have a truly
unique investment platform and can look to the future with optimism.
Tony O'Reilly
Chief Executive April 21, 2010
PROVIDENCE RESOURCES P.l.c.
Consolidated income statement
For the year ended 31 December 2009
+-------------------------------------------------+----------+----------+
| Â | Â | Â |
| | Â | Â |
| | Â | Â |
| | 2009 | 2008 |
| | €'000 | €'000 |
+-------------------------------------------------+----------+----------+
| Continuing operations | Â | Â |
| Â | | |
+-------------------------------------------------+----------+----------+
| Revenue | 21,119 | 24,814 |
+-------------------------------------------------+----------+----------+
| Cost of sales | (16,410) | (13,571) |
+-------------------------------------------------+----------+----------+
| Â | Â | Â |
+-------------------------------------------------+----------+----------+
| Gross Profit | 4,709 | 11,243 |
+-------------------------------------------------+----------+----------+
| Â | Â | Â |
+-------------------------------------------------+----------+----------+
| Administration expenses | (4,912) | (2,784) |
+-------------------------------------------------+----------+----------+
| Pre-licence expenditure | (734) | (927) |
+-------------------------------------------------+----------+----------+
| Impairment of exploration and evaluation assets | (155) | (49,743) |
+-------------------------------------------------+----------+----------+
| Operating loss | (1,092) | (42,211) |
+-------------------------------------------------+----------+----------+
| Â | Â | Â |
+-------------------------------------------------+----------+----------+
| Finance income | 201 | 487 |
+-------------------------------------------------+----------+----------+
| Finance expense | (10,057) | (8,294) |
+-------------------------------------------------+----------+----------+
| Â | Â | Â |
+-------------------------------------------------+----------+----------+
| Loss before income tax | (10,948) | (50,018) |
+-------------------------------------------------+----------+----------+
| Income tax credit/(expense) | 1,169 | (1,175) |
+-------------------------------------------------+----------+----------+
| Â | Â | Â |
+-------------------------------------------------+----------+----------+
| Loss for the year from continuing operations | (9,779) | (51,193) |
+-------------------------------------------------+----------+----------+
| Â | Â | Â |
+-------------------------------------------------+----------+----------+
| Â | Â | Â |
+-------------------------------------------------+----------+----------+
| Loss per share (cent) | Â | Â |
+-------------------------------------------------+----------+----------+
| Basic loss per share | (0.36) | (2.06) |
+-------------------------------------------------+----------+----------+
| Diluted loss per share | (0.36) | (2.06) |
+-------------------------------------------------+----------+----------+
| Â | Â | Â |
+-------------------------------------------------+----------+----------+
PROVIDENCE RESOURCES P.l.c.
Consolidated statement of comprehensive income
For the year ended 31 December 2009
+------------------------------------------------------------+--------+--------+
|Â | Â | Â |
| | Â | Â |
| | Â | Â |
| | 2009| 2008|
| | €'000| €'000|
+------------------------------------------------------------+--------+--------+
|Loss for the financial year | (9,779)|(51,193)|
+------------------------------------------------------------+--------+--------+
|Â | Â | Â |
+------------------------------------------------------------+--------+--------+
|Foreign exchange translation differences | 2,754| (4,443)|
+------------------------------------------------------------+--------+--------+
|Â | Â | Â |
+------------------------------------------------------------+--------+--------+
|Net change in fair value of cash flow hedges transferred to | (6,515)| (2,200)|
|income statement | | |
+------------------------------------------------------------+--------+--------+
|Cashflow hedges - net fair value (loss) / gain | (4,432)| 12,267|
+------------------------------------------------------------+--------+--------+
|Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â - related deferred tax | 3,312| (3,020)|
+------------------------------------------------------------+--------+--------+
|Â | Â | Â |
+------------------------------------------------------------+--------+--------+
|Total income and expenses recognised in other comprehensive | (4,881)| 2,604|
|income | | |
+------------------------------------------------------------+--------+--------+
|Â | Â | Â |
+------------------------------------------------------------+--------+--------+
|Total comprehensive income for the year |(14,660)|(48,589)|
+------------------------------------------------------------+--------+--------+
The total recognised income and expense for the year is entirely attributable to
equity holders of the Company.
PROVIDENCE RESOURCES P.l.c.
Consolidated statement of financial position
At 31 December 2009
+----------------------------------------------------------+--------+--------+
|Â | 2009| 2008|
| | €'000| €'000|
+----------------------------------------------------------+--------+--------+
|Assets | Â | Â |
+----------------------------------------------------------+--------+--------+
|Exploration and evaluation assets | 9,232| 9,505|
+----------------------------------------------------------+--------+--------+
|Development and production assets | 92,126| 78,172|
+----------------------------------------------------------+--------+--------+
|Property, plant and equipment | 168| 193|
+----------------------------------------------------------+--------+--------+
|Available for sale assets | -| 219|
+----------------------------------------------------------+--------+--------+
|Derivative instruments | 567| 9,604|
+----------------------------------------------------------+--------+--------+
|Deferred tax | 6,510| 3,962|
+----------------------------------------------------------+--------+--------+
|Total non-current assets | 108,603| 101,655|
+----------------------------------------------------------+--------+--------+
|Â | _______| _______|
+----------------------------------------------------------+--------+--------+
|Trade and other receivables | 5,471| 5,412|
+----------------------------------------------------------+--------+--------+
|Derivative instruments | 1,812| 463|
+----------------------------------------------------------+--------+--------+
|Restricted cash | 2,520| 13,027|
+----------------------------------------------------------+--------+--------+
|Cash and cash equivalents | 1,012| 9,664|
+----------------------------------------------------------+--------+--------+
|Â | 10,815| 28,566|
+----------------------------------------------------------+--------+--------+
|Assets classified as held for sale | -| 9,491|
+----------------------------------------------------------+--------+--------+
|Â | _______| _______|
+----------------------------------------------------------+--------+--------+
|Total currents assets | 10,815| 38,057|
+----------------------------------------------------------+--------+--------+
|Total assets | 119,418| 139,712|
+----------------------------------------------------------+--------+--------+
|Â | Â | Â |
+----------------------------------------------------------+--------+--------+
|Equity | Â | Â |
+----------------------------------------------------------+--------+--------+
|Share capital | 14,609| 14,172|
+----------------------------------------------------------+--------+--------+
|Capital conversion reserve fund | 623| 623|
+----------------------------------------------------------+--------+--------+
|Share premium | 71,836| 56,309|
+----------------------------------------------------------+--------+--------+
|Singleton revaluation reserve | 3,066| 3,206|
+----------------------------------------------------------+--------+--------+
|Convertible bond - equity portion | 2,944| 2,944|
+----------------------------------------------------------+--------+--------+
|Foreign currency translation reserve | (1,906)| (4,660)|
+----------------------------------------------------------+--------+--------+
|Share based payment reserve | 2,519| 1,597|
+----------------------------------------------------------+--------+--------+
|Warrant reserve | 5,641| 5,641|
+----------------------------------------------------------+--------+--------+
|Cashflow hedge reserve | (588)| 7,047|
+----------------------------------------------------------+--------+--------+
|Retained deficit |(94,547)|(84,908)|
+----------------------------------------------------------+--------+--------+
|Â | Â | Â |
+----------------------------------------------------------+--------+--------+
|Total equity attributable to equity holders of the Company| 4,197| 1,971|
+----------------------------------------------------------+--------+--------+
|Â | Â | Â |
+----------------------------------------------------------+--------+--------+
|Liabilities | Â | Â |
+----------------------------------------------------------+--------+--------+
|Loans and borrowings | 80,786| 77,843|
+----------------------------------------------------------+--------+--------+
|Decommission provision | 4,792| 4,762|
+----------------------------------------------------------+--------+--------+
|Deferred tax | 15,120| 16,001|
+----------------------------------------------------------+--------+--------+
|Derivative instruments | 2,456| -|
+----------------------------------------------------------+--------+--------+
|Â | Â | Â |
+----------------------------------------------------------+--------+--------+
|Total non-current liabilites | 103,154| 98,606|
+----------------------------------------------------------+--------+--------+
|Â | Â | Â |
+----------------------------------------------------------+--------+--------+
|Trade and other payables | 11,298| 27,638|
+----------------------------------------------------------+--------+--------+
|Loans and borrowings | -| 11,497|
+----------------------------------------------------------+--------+--------+
|Derivative instruments | 769| -|
+----------------------------------------------------------+--------+--------+
|Â | Â | Â |
+----------------------------------------------------------+--------+--------+
|Total current liabilities | 12,067| 39,135|
+----------------------------------------------------------+--------+--------+
|Â | Â | Â |
+----------------------------------------------------------+--------+--------+
|Total liabilities | 115,221| 137,741|
+----------------------------------------------------------+--------+--------+
|Total equity and liabilities | 119,418| 139,712|
+----------------------------------------------------------+--------+--------+
PROVIDENCE RESOURCES P.l.c.
Consolidated statement of changes in Equity
For the year ended 31 December 2009
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Â | | | | | | | |Conver-| | | |
| | | Capital | | | | | | tible | | | |
| | |Conversion| | | Foreign | Share | |Bond - | | | |
| | Share | Reserve | Share | Singleton | Currency | Based | |equity |Cashflow|Retained| |
| |Capital| Fund |Premium|Revaluation|Translation|Payment|Warrants|portion| Â Hedge |Deficit | Total |
| | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 |
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|At 1 January| | | | | | | | | | | |
|2008 | 14,162| 623| 55,239| 3,357| (217)| 968| 3,666| -| -|(33,866)| 43,932|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Loss for | | | | | | | | | | |(51,193)|
|financial | | | | | | | | | | | |
|year | -| -| -| -| -| -| -| -| -|(51,193)| |
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Currency | | | | | | | | | | | |
|translation | -| -| -| -| (4,443)| -| -| -| -| -| (4,443)|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Macquarie | | | | | | | | | | | |
|warrants | -| -| -| -| -| -| 1,975| -| -| -| 1,975|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Share based | | | | | | | | | | | |
|payment | -| -| -| -| -| 629| -| -| -| -| 629|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Transfer | | | | | | | | | | | |
|from | | | | | | | | | | | |
|Singleton | | | | | | | | | | | |
|revaluation | | | | | | | | | | | |
|reserve | -| -| -| (151)| -| -| -| -| -| 151| -|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Cashflow | | | | | | | | | | | |
|hedge | -| -| -| -| -| -| -| -| 7,047| -| 7,047|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Equity | | | | | | | | | | | |
|component of| | | | | | | | | | | |
|convertible | | | | | | | | | | | |
|bonds issued| | | | | | | | | | | |
|in year | -| -| -| -| -| -| -| 2,944| -| -| 2,944|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Transactions| | | | | | | | | | | |
|with owners,| | | | | | | | | | | |
|recorded | | | | | | | | | | | |
|directly in | | | | | | | | | | | |
|equity | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Shares | | | | | | | | | | | |
|issued in | | | | | | | | | | | |
|year | 10| -| 1,070| -| -| -| -| -| -| -| 1,080|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|At 31 | | | | | | | | | | | |
|December | | | | | | | | | | | |
|2008 | 14,172| 623| 56,309| 3,206| (4,660)| 1,597| 5,641| 2,944| 7,047|(84,908)| 1,971|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Loss for | | | | | | | | | | | |
|financial | | | | | | | | | | | |
|year | -| -| -| -| -| -| -| -| -| (9,779)| (9,779)|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Currency | | | | | | | | | | | |
|translation | -| -| -| -| 2,754| -| -| -| -| -| 2,754|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Share based | | | | | | | | | | | |
|payments | -| -| -| -| -| 922| -| -| -| -| 922|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Transfer | | | | | | | | | | | |
|from | | | | | | | | | | | |
|Singleton | | | | | | | | | | | |
|revaluation | | | | | | | | | | | |
|reserve | -| -| -| (140)| -| -| -| -| -| 140| -|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Cashflow | | | | | | | | | | | |
|Hedge | -| -| -| -| -| -| -| -| (7,635)| -| (7,635)|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Transactions| | | | | | | | | | | |
|with owners,| | | | | | | | | | | |
|recorded | | | | | | | | | | | |
|directly in | | | | | | | | | | | |
|equity | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|Shares | | | | | | | | | | | |
|issued in | | | | | | | | | | | |
|year | 437| -| 15,527| -| -| -| -| -| -| -| 15,964|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
|At 31 | | | | | | | | | | | |
|December | | | | | | | | | | | |
|2009 | 14,609| 623| 71,836| 3,066| (1,906)| 2,519| 5,641| 2,944| (588)|(94,547)| 4,197|
+------------+-------+----------+-------+-----------+-----------+-------+--------+-------+--------+--------+--------+
PROVIDENCE RESOURCES P.l.c.
Consolidated statement of cash flows
For the year ended 31 December 2009
+------------------------------------------------------------+--------+--------+
|Â | 2009| 2008|
| | €'000| €'000|
+------------------------------------------------------------+--------+--------+
|Cash flows from operating activities | Â | Â |
+------------------------------------------------------------+--------+--------+
|Loss before income tax for the year |(10,948)|(50,018)|
+------------------------------------------------------------+--------+--------+
|Adjustments for: | Â | Â |
+------------------------------------------------------------+--------+--------+
|Depletion and depreciation | 7,381| 7,398|
+------------------------------------------------------------+--------+--------+
|Loss on abandonment of development and production assets | 1,606| -|
+------------------------------------------------------------+--------+--------+
|Impairment of assets | 155| 50,670|
+------------------------------------------------------------+--------+--------+
|Finance income | (201)| (487)|
+------------------------------------------------------------+--------+--------+
|Finance expense | 10,057| 8,294|
+------------------------------------------------------------+--------+--------+
|Equity settled share payment charge | 922| 629|
+------------------------------------------------------------+--------+--------+
|Change in trade and other receivables | (59)| (832)|
+------------------------------------------------------------+--------+--------+
|Change in restricted cash | 10,507|(13,073)|
+------------------------------------------------------------+--------+--------+
|Change in trade and other payables |(16,340)| 12,877|
+------------------------------------------------------------+--------+--------+
|Foreign exchange | 1,406| -|
+------------------------------------------------------------+--------+--------+
|Interest paid | (8,078)| (3,212)|
+------------------------------------------------------------+--------+--------+
|Tax paid | (576)| (4)|
+------------------------------------------------------------+--------+--------+
|Â | Â | Â |
+------------------------------------------------------------+--------+--------+
|Net cash (outflows) / inflows from operating activities | (4,168)| 12,242|
+------------------------------------------------------------+--------+--------+
|Â | Â | Â |
+------------------------------------------------------------+--------+--------+
|Cash flows from investing activities | Â | Â |
+------------------------------------------------------------+--------+--------+
|Interest received | 201| 487|
+------------------------------------------------------------+--------+--------+
|Acquisition of exploration and evaluation assets | (251)|(35,992)|
+------------------------------------------------------------+--------+--------+
|Acquisition of development and production assets |(11,710)| (8,906)|
+------------------------------------------------------------+--------+--------+
|Acquisition of property, plant and equipment | (76)| (131)|
+------------------------------------------------------------+--------+--------+
|Acquisition of available for sale assets | -| (3,250)|
+------------------------------------------------------------+--------+--------+
|Acquisition of subsidiary undertaking | -|(43,278)|
+------------------------------------------------------------+--------+--------+
|Sale of available for sale assets | 159| -|
+------------------------------------------------------------+--------+--------+
|Â | Â | Â |
+------------------------------------------------------------+--------+--------+
|Net cash used in investing activities |(11,677)|(91,070)|
+------------------------------------------------------------+--------+--------+
|Â | Â | Â |
+------------------------------------------------------------+--------+--------+
|Cash flows from financing activities | Â | Â |
+------------------------------------------------------------+--------+--------+
|Proceeds from issue of share capital | 16,980| 1,080|
+------------------------------------------------------------+--------+--------+
|Share capital issue costs | (1,016)| -|
+------------------------------------------------------------+--------+--------+
|Payment of loan transaction costs | (2,535)| -|
+------------------------------------------------------------+--------+--------+
|Repayment of loans and borrowings |(56,318)|(12,034)|
+------------------------------------------------------------+--------+--------+
|Proceeds from drawdown of loans and borrowings | 49,778| 88,963|
+------------------------------------------------------------+--------+--------+
|Â | Â | Â |
+------------------------------------------------------------+--------+--------+
|Net cash from financing activities | 6,889| 78,009|
+------------------------------------------------------------+--------+--------+
|Â | Â | Â |
+------------------------------------------------------------+--------+--------+
|Net decrease in cash and cash equivalents | (8,956)| (819)|
+------------------------------------------------------------+--------+--------+
|Â | Â | Â |
+------------------------------------------------------------+--------+--------+
|Cash and cash equivalents at 1 January | 9,664| 11,396|
+------------------------------------------------------------+--------+--------+
|Effect of exchange rate fluctuations on cash and cash | 304| (913)|
|equivalents | | |
+------------------------------------------------------------+--------+--------+
|Â | Â | Â |
+------------------------------------------------------------+--------+--------+
|Cash and cash equivalents at 31 December | 1,012| 9,664|
+------------------------------------------------------------+--------+--------+
[HUG#1406052]