Interim Results for the Six Months Ended 30 Jun...

Embargo: 7:00am 29 September 2010 PROVIDENCE RESOURCES P.l.c. ("Providence" or the "Company") INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2010 PRODUCTION * Production increased by 19% to 287,497 BOE (H1 2009: 241,424 BOE) * Reinstatement of production from Ship Shoal 253, Gulf of Mexico, in May 2010 * Commencement of two well drilling programme at Singleton Field, onshore UK APPRAISAL/DEVELOPMENT * Spanish Point gas condensate discovery, Porcupine Basin: 3D seismic evaluation completed * Burren oil discovery, Porcupine Basin: 3D seismic evaluation completed * AJE oil & gas discovery, OML113, offshore Nigeria: Commerciality of field declared EXOLA LIMITED SPV - NORTH CELTIC SEA BASIN, OFFSHORE IRELAND * Baltimore oil discovery: New licensing authorisation and farm out to Nautical Petroleum * Helvick oil discovery: Development to first oil options being investigated * Nemo (formerly Ardmore) oil discovery: Farm out to Nautical Petroleum EXPLORATION * Dunquin Prospect, Porcupine Basin: Successful conclusion of pre-drilling site survey * New Exploration Prospects, offshore Ireland: * Dalkey Island oil prospect, Kish Bank Basin * Marlin gas prospect, North Celtic Sea Basin * Wilde oil & gas prospect, Porcupine Basin * Strategic seismic collaboration agreed with PGS Ventures EIRGAS LIMITED - Kish Bank Basin, offshore Ireland * AMEC awarded ULYSSES gas storage conceptual study FINANCIAL INFORMATION * Revenue of €11.335 million up 8.3% (H1 2009: €10.464 million) * Profit from Operating Activities of €2.086 million up 23.7% (H1 2009: €1.685 million) * Profit before tax of €0.043 million (H1 2009: Loss of €5.580 million) * Loss for the period of €1.222 million (H1 2009: Loss €6.585 million) * 3.7 cent loss per share (H1 2009: Loss 26.26 cent) * Cash and cash equivalents at June 30th of €15.230 million (excludes restricted cash) Commenting on today's results, Tony O'Reilly, Chief Executive of Providence, said: "The first six months of 2010 has seen a huge amount of activity across our portfolio and a solid financial performance from the Company.  We have assembled a balanced portfolio of drillable prospects whilst also ensuring that we have the appropriate partners for the specific assets. We were pleased to welcome Nautical Petroleum - the North Sea heavy oil specialists - into two of our new heavy oil projects in the Celtic Sea this year. They join an ever expanding group of world-class partners with whom we work, including ExxonMobil, Petronas/Star Energy, ENI, Vitol and Chevron. Working with these partners, we firmly believe that our portfolio has sufficient scale and diversity to create numerous opportunities for value for our shareholders. "Within our production portfolio, the success of last year's Singleton SNX-10 well justified our field re-development model, and we subsequently embarked on a multi-well onshore UK drilling programme which commenced a few weeks ago. The objective of this programme is to increase production levels by some 40% in the short term, with production doubling to 1,500 BOEPD over the next 2 years. This will occur through a series of initiatives, including additional drilling, well stimulation, hydraulic fracturing and the installation of electrical generators to monetise flared gas. "On the development front, the completion of the 3D seismic interpretation over the Spanish Point complex was a vital step in advancing the Spanish Point gas condensate project towards drilling. It also unmasked the potential of the Burren oil discovery and confirmed the underlying Wilde exploration prospect. In addition to our heavy oil work with Nautical in the Celtic Sea, we have advanced discussions with potential contractors on fast track/low cost development plans for the Helvick oil field. "Within the exploration portfolio, the successful conclusion of the site survey over Dunquin was the last key step in the pre-drill activities, and we now await formal notification of a spud date from the operator, ExxonMobil. In 2010, we have had notable success in identifying and capturing large new exploration prospects offshore Ireland, including the Wilde prospect under Spanish Point, the Dalkey Island oil prospect offshore Dublin and, most recently, the Marlin gas prospect in the Celtic Sea, adjacent to the Kinsale Head gas field. "Much of our portfolio is now maturing into the ready to drill phase. Working with our partners, we are now planning a coordinated and comprehensive drilling programme to test the hydrocarbon potential of many of the major basins offshore Ireland, consisting of both high impact exploration and appraisal/ development wells, over the next two years or so. The precise details of this programme should be finalised towards year end. In outline, we expect that this would be the largest concerted drilling programme in Providence's history and would also be the largest co-ordinated multi-basin drilling programme carried out offshore Ireland." Tony O'Reilly Chief ExecutiveSeptember 29, 2010 Contacts: Providence Resources P.l.c. Tel: +353 (0)1 219 4074 Tony O'Reilly Powerscourt Tel: +44 (0) 207 250 1446 Rob Greening/Lisa Kavanagh Murray Consultants Tel: +353 (0)1 498 0300 Pauline McAlester Cenkos Securities Plc Tel: +44 (0)207 397 8900 Joe Nally/ Nick Wells J&E Davy Tel: + 353 (0)1 679 6363 Eugenée Mulhern/ Stephen Barry The full Financial Statements and Company Outlook are 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 ESM 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 at 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 North Porcupine Providence 56.0% Gas development Basin Burren North Porcupine Providence 56.0% Oil discovery Basin Wilde North Porcupine Providence 56.0% Oil and gas Basin exploration FEL 4/08 North Porcupine Providence 56.0% Oil and gas Basin 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 Dalkey Island Kish Bank Basin Providence 50.0% Oil exploration ULYSSES Kish Bank Basin Providence 100.0% Gas storage evaluation 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 and gas discovery Dunmore Celtic Sea EXOLA** 72.5% Oil discovery Helvick Celtic Sea EXOLA** 72.5% Oil and gas discovery Nemo* Celtic Sea EXOLA** 72.5% Oil and gas discovery Barryroe Celtic Sea Lansdowne 30.0% Oil discovery Baltimore Celtic Sea Providence 60.0% Oil discovery Marlin Celtic Sea Providence 60.0% Oil discovery *  previously called Ardmore ** 100% owned subsidiaries of Providence Resources P.l.c.; subject to licence transfer 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 for the Half Year ending June 30th 2010 Revenues for the first half of 2010 were up 8.3% to €11.335 million from €10.464 million due to increased volumes, product mix and the strength of the dollar relative to the euro. The average oil price per barrel achieved in H1 2010 was $78.42 compared to $87.60 in H1 2009, due largely to a larger hedge book in H1 2009. The average gas price realised was $5.65 per MMCF in H1 2010 compared to $6.32 in HI 2009. The overall BOE annual production was up 19%, with increased oil production up 16% and gas sales up 21%. Oil production was 115,606 barrels compared to 99,631 barrels (H1 2009) due to increased production from Singleton (up 9.3%) and reinstated oil production at Ship Shoal 253 in the Gulf of Mexico (up 83%). Gas production was up 21% to 1,031,343 MMCF from 850,759 MMCF (H12009) due largely to increased production from Vermillion 60 and Galveston A155. The Company generated a profit from operating activities of €2.086 million, up 23.7% from €1.685 million in H1 2009. Following finance expenses, the profit before tax was essentially breakeven at €0.043 million, a marked improvement over the loss of €5.580 million recorded in H1 2009. The reduction in finance expenditure relates to favourable FX movements relative to last year. After taxation of €1.265 million (H1 2009: €1.005 million), the Company incurred a loss of €1.222 million (H1 2009: loss €6.585 million). On a per share basis, this resulted in a 3.7 cent loss per share (H1 2009: loss 26.26 cent). In February 2010, the Company raised €16.3 million through the placing of 448.8 million new ordinary shares, with the proceeds being used to strengthen Providence's balance sheet by reducing net debt levels, as well as providing additional working capital for future investments in revenue enhancing projects. As of June 30th, cash and cash equivalents were €15.230 million (excluding restricted cash) whilst loans and borrowings amounted to €89.693 million. OPERATIONAL HIGHLIGHTS - PRODUCTION Singleton, Weald Basin, Onshore UK (99.125% interest) Oil production from the Providence operated Singleton field showed a 9.3% increase over the same period in 2009, with operating costs on budget. In mid September, the Company announced that it had started drilling operations as part of its 2010 drilling programme at Singleton. This drilling programme comprises the sidetracking of the X9 well to a new and more optimal  location together with the addition of two new lateral sections to the currently producing X8x well, potentially providing c. 350 BOEPD of additional cumulative production. In addition, the new X9 sidetrack well has been designed for future acid fracture stimulation, thereby providing further incremental production potential. Looking further ahead, the updated field development plan indicates that Providence can expect to achieve field production of 1,500 BOEPD over the next two years. This will occur through a phased programme of activities on the field including in-fill drilling, additional acid stimulation, hydraulic fracturing and gas monetisation through gas to wire power generation - (which is already underway). Gulf of Mexico, Offshore USA (range from 5.0% to 50.0% interests) Gas production in the Gulf of Mexico was up 21% compared to H1 2009, largely due to increased production from Vermillion 60 (50.0% interest) and better than expected production from Galveston A155 (10.8% interest). The reinstatement of oil production from Ship Shoal 253 (50.0% interest) in May led to an 83.0% increase in oil production relative to H1 2009. Whilst the Gulf of Mexico well disaster and subsequent remedial operations did not impact any attributable Providence daily production, the resulting ban on drilling in the Gulf of Mexico has delayed the drilling of any exploration targets within the portfolio. The establishment of the new US government administrative function has also resulted in inevitable delays in obtaining certain re-complete permits in the Gulf of Mexico. This has affected the timing of specific planned re-completes on Main Pass 19 (45.0% interest) and High Island A268 (5.0% interest), delaying them from H1 2010 to H2 2010 and in certain cases, to H1 2011. Looking ahead, subject to permissions, there are a number of additional well re-completions planned within the portfolio. In terms of exploration targets, potential drilling targets are on hold pending clarification on drilling consents and partner appetite. OPERATIONAL HIGHLIGHTS - DEVELOPMENT/APPRAISAL Spanish Point, Porcupine Basin, Offshore Ireland (56.0% interest) During the summer of 2009, Providence and its partners acquired a c. 300 sq km 3D seismic survey over the area. These seismic data provide excellent resolution at the reservoir level across the whole of the Spanish Point structure and confirm the potential for further reservoir development 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 future field development. The results of the 3D seismic interpretation are being used to determine the final resource estimates for the Spanish Point discovery. This, in turn, will allow the partners to optimally plan for the future appraisal well programme. Resource estimates will also be generated for the Burren oil discovery and underlying Wilde exploration prospect (see below). This information is expected to be made available in Q4 2010. Burren, Porcupine Basin, Offshore Ireland (56.0% interest) The 3D seismic survey also covered the adjacent 35/8-1 Burren oil discovery, which flowed c. 730 BOPD of high quality 34o API oil from one of two logged hydrocarbon bearing Lower Cretaceous sandstone intervals. A number of laterally extensive seismic anomalies of similar age to the Burren discovery have been identified within the 3D survey area. These anomalies suggest that Burren could from part of a much larger stacked Lower Cretaceous oil bearing reservoir system, providing significant future appraisal and exploration potential. A comprehensive update on Burren, which will include updated volumetrics and an outline of the forward plan towards drilling, will be provided during Q4 2010. AJE, OML113, Offshore Nigeria (6.7% interest) The AJE field is situated in the deepwater portion of OML 113 located offshore Nigeria, adjacent to the Benin border. Last year, the AJE field had been deemed a commercial discovery by the operating committee, and Chevron, as Technical Advisor, was authorised to prepare a development plan.  The OML 113 co-venturers are progressing the commercial aspects needed to align with the technical development of the AJE field. To date, the co-venturers have undertaken pre-Front-End Engineering and Design (pre-FEED) work. Dragon (Irish sector), St George's Channel, Offshore Ireland (100.0% interest) Mapping of the Dragon gas field has confirmed an in-place resource potential of c. 100 BSCF, of which c. 25% of the field is located in the Providence operated SEL 1/07. Providence is endeavouring to drill an appraisal well on the Dragon field and the deeper Orpheus Prospect. Baxter's Copse, PEDL 233, Onshore UK (50.0% interest) The Company holds a 50% interest in PEDL 223, which is adjacent to the Singleton field. A number of exploration and development opportunities have been identified within the block, principally the Baxter's Copse oil discovery and the Burton Down exploration prospect. RPS Energy's third party reserve audit of Baxter's Copse attributed 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). Earlier this year, certain activities were agreed to advance Baxter's Copse to first oil in 2011 via a third party tieback to the Providence operated Singleton oil field facilities. However, this programme has subsequently been deferred by at least a year due to competing planned activities at Singleton and delays in finalising the budget. OPERATIONAL HIGHLIGHTS - EXOLA In early 2010, Providence packaged its Celtic Sea assets into the EXOLA Portfolio to attract investment in unconventional oil developments and opportunities offshore Ireland and the UK. The assets currently covered by EXOLA include Helvick, Hook Head, Dunmore, Barryroe, Ardmore/Nemo and Baltimore, all located in the North Celtic Sea Basin. As detailed below, the Company has already entered into commercial deals with third party companies on possible development options for a number of these discoveries. Baltimore, North Celtic Sea Basin, Offshore Ireland (60.0% interest) In February, the Company was awarded a Licensing Option over the Baltimore heavy oil discovery off the south coast of Ireland. The Baltimore discovery is estimated to contain up to c. 300 MMBO in place and similar accumulations are currently being actively assessed for development in the UK North Sea. In April, the company announced that it had successfully farmed out a 40% interest in the project to Nautical Petroleum plc, an offshore heavy oil specialist in the North Sea. As part of the farm-in agreement, Nautical has agreed to carry out a development assessment study of the Baltimore discovery. Helvick, North Celtic Sea Basin, Offshore Ireland (72.5% interest) In May, the Company announced it had entered into an agreement to assess the development feasibility of using unmanned production buoys on the Helvick Field, offshore Ireland. This is one of a number of assessments being carried out on low cost development options for the Helvick field. A decision on whether to progress the project is expected within the next few months. The in-place resource potential of the Helvick field is c .10 MMBO, with three wells available for re-entry on the field. Nemo, North Celtic Sea Basin, Offshore Ireland (54.4% interest) Also in May, the Company announced that it had completed a resource assessment of the heavy oil potential, referred to as Nemo, underlying the Ardmore gas field (which contains an estimated 30 BCF). This work indicated an in-place resource potential of up to c. 230 MMBO of c. 16o API oil. Earlier this week, Providence announced a two step farm out with Nautical Petroleum, which will see Nautical fund and carry out a focused work programme on the development feasibility of the Nemo oil discovery 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 by the end of 2011 to drill an appraisal well on Nemo. Hook Head, North Celtic Sea Basin, Offshore Ireland (72.5% interest) Hook Head is located c. 60 km offshore Wexford in c. 240' water depth, and is situated in Standard Exploration Licence 2/07 in the North Celtic Sea Basin. The Hook Head structure is a large mid-basinal anticline where four wells have been drilled, and all have encountered hydrocarbon bearing sands. Two of these wells were drilled by Providence in 2007/08 and oil and gas were 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. Providence and its co-venture partners are currently seeking industry partners to co-venture on progressing this project. OPERATIONAL HIGHLIGHTS - EXPLORATION Dunquin Prospect, South Porcupine Basin (16.0% interest) The Dunquin exploration prospect is located in the South Porcupine Basin, offshore Ireland. 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 they have elected to enter the second phase of the licence, which carries a firm well commitment within the Dunquin licence area. In July 2010, a pre-drill site survey was successfully concluded over the Dunquin Prospect. The Dunquin partners now await formal notification of a spud date from the operator, ExxonMobil. Drombeg and Cuchulain, South Porcupine Basin (16.0% and 3.2% interest, respectively) 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 and Cuchulain. These prospects are at differing stages of exploration maturity, but all have had 2D seismic surveying carried out over them. Providence is currently in discussions with third parties in relation to a large deep exploration target at Drombeg. Dalkey Island Prospect, Ireland (50.0% interest) In April, the Company identified the Lower Triassic Dalkey Island structure, offshore Dublin, as a significant undrilled oil exploration prospect with a prospective resource potential of c. 870 MMBO. Similar aged oil productive reservoirs have been discovered in the Liverpool Bay area of the East Irish Sea Basin, offshore UK. The Company has begun discussions with rig operators to source a suitable unit for a drilling campaign in 2011/12. Marlin Prospect, Celtic Sea Basin, Offshore Ireland (60.0% interest) As part of the Nautical study on the Baltimore heavy oil discovery, the Option and surrounding area were mapped using available seismic data and this work has revealed the new Marlin 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 in the Kinsale Head gas field, has been mapped to extend beyond the current Option area. Accordingly, the Baltimore partners applied to the Minister for Communications, Energy and Natural Resources for an increase in the area covered by the Option to include the mapped extension of the Marlin prospect into open acreage.  Geological modelling of the Marlin prospect suggests that it is likely to be gas charged with a total prospective resource potential of up to c. 74 BSCF. Pegasus Prospect, St George's Channel, Offshore Ireland  (100.0% interest) The Pegasus exploration prospect is located north-west of the Dragon Field in the St George's Channel with estimated prospective resource potential of c. 300 BSCF. Orpheus Prospect, St George's Channel, Offshore Ireland (100.0% interest) The Orpheus exploration prospect lies beneath the Dragon gas field, which straddles the Irish/UK Median Line. As part of any appraisal well on the Dragon Project, the deeper Orpheus prospect, which has an estimated prospective resource potential of c. 290 BSCF, would also be drilled. Wilde Prospect, Porcupine Basin, Offshore Ireland (56.0% interest) Previous 2D seismic interpretation over the Spanish Point area indicated the presence of a potentially large structural closure known as the Wilde exploration prospect underlying the Spanish Point discovery. Interpretation and mapping of the new 3D data has confirmed the presence of the Wilde prospect with an associated c. 45 sq km of areal closure. The Upper Jurassic interval of the Wilde exploration target is of significant interest as it is considered to be of equivalent age to Callovian-Oxfordian zones, which flowed at a cumulative rate of c. 5,000 BOPD in the nearby 26/28-1 well (situated c. 30 km to the north). This well also encountered good reservoir development within the Bajocian-Bathonian section suggesting further hydrocarbon potential within the underlying Middle Jurassic section. OPERATIONAL HIGHLIGHTS - EIRGAS EIRGAS is a 100% subsidiary focused on the development of gas storage and carbon capture sequestration (CCS) opportunities in Ireland. Whilst the Company withdrew from its Option to acquire up to 40% of the Kinsale Head assets from Petronas in May 2010, EIRGAS continues to work on other storage opportunities. ULYSSES Project, Kish Bank Basin, Offshore Dublin (100.0% interest) Earlier this year, the Company completed its ULYSSES Study, which was an assessment of the gas storage and CCS potential of the Kish Bank Basin. This study identified a suitable site for gas storage, and further geotechnical studies confirmed that the basin could host an effective carbon storage capacity of c. 270 million tonnes. Earlier this month, the Company announced that it has selected international engineering and project management company, AMEC, to begin a conceptual development study for the ULYSSES salt cavern gas storage project in the Kish Bank Basin. 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. OUTLOOK The Company is now entering a stage of more focused operations on specific assets - namely the drilling at Singleton and a comprehensive multi-year, multi-well drilling programme, offshore Ireland. With over 12 drillable prospects, the short term focus is to align all partner interests and finalise the scheduling of drilling activities for the next 24 months or so. As an Ireland based company, it is particularly exciting to know that the majority of these opportunities are offshore Ireland, one of Europe's last great undrilled frontiers. Providence's unrivalled ability to test these great unexplored basins in a multi-faceted programme gives us further confidence in the continued success of this Company for our shareholders. Tony O'Reilly Chief Executive September 29, 2010 PROVIDENCE RESOURCES P.l.c. Condensed consolidated income statement For the 6 months ended 30 June 2010 +-----------------------+----------------------+----------------+--------------+ |  |         |   |   | | |6 months ended 30 June| 6 months ended |Year ended 31 | | | 2010 | 30 June 2009 |December 2009 | | |       Unaudited | Unaudited | Audited | | |       €'000 | €'000 | €'000 | +-----------------------+----------------------+----------------+--------------+ | Continuing operations |  |  |  | |  | | | | +-----------------------+----------------------+----------------+--------------+ |Revenue | 11,335| 10,464| 21,119| +-----------------------+----------------------+----------------+--------------+ |Cost of sales | (7,281)|     (7,183)| (16,410)| +-----------------------+----------------------+----------------+--------------+ |  |  |  |  | +-----------------------+----------------------+----------------+--------------+ |Gross Profit | 4,054| 3,281| 4,709| +-----------------------+----------------------+----------------+--------------+ |  |  |  |  | +-----------------------+----------------------+----------------+--------------+ |Administration expenses| (1,819)| (1,420)| (5,637)| +-----------------------+----------------------+----------------+--------------+ |Foreign exchange | 16| (11)| 725| +-----------------------+----------------------+----------------+--------------+ |Pre-licence expenditure| (165)| (165)| (734)| +-----------------------+----------------------+----------------+--------------+ |Impairment of | -| -| (155)| |exploration and | | | | |evaluation assets | | | | +-----------------------+----------------------+----------------+--------------+ |Operating profit / | 2,086| 1,685| (1,092)| |(loss) | | | | +-----------------------+----------------------+----------------+--------------+ |  |  |  |  | +-----------------------+----------------------+----------------+--------------+ |Finance income | 31| 25| 201| +-----------------------+----------------------+----------------+--------------+ |Finance expense | (4,913)| (5,029)| (10,057)| +-----------------------+----------------------+----------------+--------------+ |Foreign exchange | 2,839| (2,261)|  | +-----------------------+----------------------+----------------+--------------+ |  |  |  |  | +-----------------------+----------------------+----------------+--------------+ |Profit/(loss) before | 43| (5,580)| (10,948)| |income tax | | | | +-----------------------+----------------------+----------------+--------------+ |Income tax | (1,265)| (1,005)| 1,169| |(expense)/credit | | | | +-----------------------+----------------------+----------------+--------------+ |  |  |  |  | +-----------------------+----------------------+----------------+--------------+ |Loss from continuing | (1,222)| (6,585)| (9,779)| |operations | | | | +-----------------------+----------------------+----------------+--------------+ |  |  |  |  | +-----------------------+----------------------+----------------+--------------+ |  |  |  |  | +-----------------------+----------------------+----------------+--------------+ |Loss per share (cent) |  |  |  | +-----------------------+----------------------+----------------+--------------+ |Basic loss per share | (3.741)| (26.263)| (36.000)| +-----------------------+----------------------+----------------+--------------+ |Diluted loss per share | (3.741)| (26.263)| (36.000)| +-----------------------+----------------------+----------------+--------------+ |  |  |  |  | +-----------------------+----------------------+----------------+--------------+ PROVIDENCE RESOURCES P.l.c. Consolidated statement of comprehensive income For the 6 months ended 30 June 2010 +-------------------------------+---------------+---------------+--------------+ |  |6 months ended |6 months ended |Year ended 31 | | | 30 June 2010 | 30 June 2009 |December 2009 | | | Unaudited | Unaudited | Audited | | | €'000 | €'000 | €'000 | +-------------------------------+---------------+---------------+--------------+ |Loss for the financial year | (1,222)| (6,585)| (9,779)| +-------------------------------+---------------+---------------+--------------+ |  |  |  |  | +-------------------------------+---------------+---------------+--------------+ |Foreign exchange translation | (3,217)| 2,371| 2,754| |differences | | | | +-------------------------------+---------------+---------------+--------------+ |Net change in fair value of | -| 40| -| |available for sale equity | | | | |instruments | | | | +-------------------------------+---------------+---------------+--------------+ |Net change in fair value of | (1,191)| (4,002)| (6,515)| |cash flow hedges | | | | |transferred to income statement| | | | +-------------------------------+---------------+---------------+--------------+ |Cashflow hedges - net fair | 1,083| (4,411)| (4,432)| | value (loss) / | | | | | gain | | | | +-------------------------------+---------------+---------------+--------------+ |    - related | 661| 2,417| 3,312| | deferred tax | | | | +-------------------------------+---------------+---------------+--------------+ |  |  |  |  | +-------------------------------+---------------+---------------+--------------+ |Total income and expenses | (2,664)| (3,585)| (4,881)| |recognised in other | | | | |comprehensive income | | | | +-------------------------------+---------------+---------------+--------------+ |  |  |  |  | +-------------------------------+---------------+---------------+--------------+ |Total comprehensive expense | (3,886)| (10,170)| (14,660)| +-------------------------------+---------------+---------------+--------------+ 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 As at 30 June 2010 +-----------------------------------+------------+------------+----------------+ |  |30 June 2010|30 June 2009|31 December 2009| | | Unaudited | Unaudited | Audited | | | €'000 | €'000 | €'000 | +-----------------------------------+------------+------------+----------------+ |Assets |  |  |  | +-----------------------------------+------------+------------+----------------+ |Exploration and evaluation assets | 9,966| 9,676| 9,232| +-----------------------------------+------------+------------+----------------+ |Development and production assets | 99,411| 84,410| 92,126| +-----------------------------------+------------+------------+----------------+ |Property, plant and equipment | 140| 172| 168| +-----------------------------------+------------+------------+----------------+ |Available for sale assets | -| 259| -| +-----------------------------------+------------+------------+----------------+ |Derivative instruments | 160| 2,177| 567| +-----------------------------------+------------+------------+----------------+ |Deferred tax | 5,735| 3,962| 6,510| +-----------------------------------+------------+------------+----------------+ |Total non-current assets | 115,412| 100,656| 108,603| +-----------------------------------+------------+------------+----------------+ |  | _______| _______| _______| +-----------------------------------+------------+------------+----------------+ |Trade and other receivables | 4,400| 4,111| 5,471| +-----------------------------------+------------+------------+----------------+ |Derivative instruments | 2,146| 138| 1,812| +-----------------------------------+------------+------------+----------------+ |Restricted cash | 2,520| 2,520| 2,520| +-----------------------------------+------------+------------+----------------+ |Cash and cash equivalents | 15,230| 17,327| 1,012| +-----------------------------------+------------+------------+----------------+ |  | 24,296| 24,096| 10,815| +-----------------------------------+------------+------------+----------------+ |Assets classified as held for sale | -| 9,716| -| +-----------------------------------+------------+------------+----------------+ |  | _______| _______| _______| +-----------------------------------+------------+------------+----------------+ |Total currents assets | 24,296| 33,812| 10,815| +-----------------------------------+------------+------------+----------------+ |Total assets | 139,708| 134,468| 119,418| +-----------------------------------+------------+------------+----------------+ |  |  |  |  | +-----------------------------------+------------+------------+----------------+ |Equity |  |  |  | +-----------------------------------+------------+------------+----------------+ |Share capital | 15,058| 14,609| 14,609| +-----------------------------------+------------+------------+----------------+ |Capital conversion reserve fund | 623| 623| 623| +-----------------------------------+------------+------------+----------------+ |Share premium | 86,918| 71,836| 71,836| +-----------------------------------+------------+------------+----------------+ |Singleton revaluation reserve | 2,969| 3,114| 3,066| +-----------------------------------+------------+------------+----------------+ |Convertible bond - equity portion | 2,944| 2,944| 2,944| +-----------------------------------+------------+------------+----------------+ |Foreign currency translation | (5,123)| (2,289)| (1,906)| |reserve | | | | +-----------------------------------+------------+------------+----------------+ |Share based payment reserve | 3,083| 1,801| 2,519| +-----------------------------------+------------+------------+----------------+ |Warrant reserve | 5,641| 5,641| 5,641| +-----------------------------------+------------+------------+----------------+ |Cashflow hedge reserve | (35)| 1,051| (588)| +-----------------------------------+------------+------------+----------------+ |Available for sale reserve | -| 40| -| +-----------------------------------+------------+------------+----------------+ |Retained deficit | (95,672)| (91,401)| (94,547)| +-----------------------------------+------------+------------+----------------+ |  |  |  |  | +-----------------------------------+------------+------------+----------------+ |Total equity attributable to equity| 16,406| 7,969| 4,197| |holders | | | | |of the Company | | | | +-----------------------------------+------------+------------+----------------+ |  |  |  |  | +-----------------------------------+------------+------------+----------------+ |Liabilities |  |  |  | +-----------------------------------+------------+------------+----------------+ |Loans and borrowings | 89,693| 83,398| 80,786| +-----------------------------------+------------+------------+----------------+ |Decommission provision | 5,633| 5,565| 4,792| +-----------------------------------+------------+------------+----------------+ |Deferred tax | 17,894| 16,447| 15,120| +-----------------------------------+------------+------------+----------------+ |Derivative instruments | 1,730| -| 2,456| +-----------------------------------+------------+------------+----------------+ |  |  |  |  | +-----------------------------------+------------+------------+----------------+ |Total non-current liabilities | 114,950| 105,410| 103,154| +-----------------------------------+------------+------------+----------------+ |  |  |  |  | +-----------------------------------+------------+------------+----------------+ |Trade and other payables | 7,794| 16,596| 11,298| +-----------------------------------+------------+------------+----------------+ |Loans and borrowings | -| 4,493| -| +-----------------------------------+------------+------------+----------------+ |Derivative instruments | 558| -| 769| +-----------------------------------+------------+------------+----------------+ |  |  |  |  | +-----------------------------------+------------+------------+----------------+ |Total current liabilities | 8,352| 21,089| 12,067| +-----------------------------------+------------+------------+----------------+ |  |  |  |  | +-----------------------------------+------------+------------+----------------+ |Total liabilities | 123,302| 126,499| 115,221| +-----------------------------------+------------+------------+----------------+ |Total equity and liabilities | 139,708| 134,468| 119,418| +-----------------------------------+------------+------------+----------------+ PROVIDENCE RESOURCES P.l.c. Consolidated statement of changes in Equity For the 6 months ended 30 June 2010 +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |  | |Capital| | | | | |Conver-| | | | | | | | Con- | | |Foreign | | | tible | | | | | | | |version| |Singleton|Currency| Share | |Bond - | |Avail-| | | | | Share |Reserve| Share | Re- | Trans- | Based | |Equity |Cashflow| able |Retained| | | |Capital| Fund |Premium|valuation| lation |Payment|Warrants|portion| Hedge | for |Deficit | Total | | | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | sale | €'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 | -| -| -| -| -| -| -| -| -| -| (1,222)|(1,222)| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Currency | | | | | | | | | | | | | |translation | -| -| -| -| (3,217)| -| -| -| -| -| -|(3,217)| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Share based | | | | | | | | | | | | | |payment | -| -| -| -| -| 564| -| -| -| -| -| 629| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Transfer | | | | | | | | | | | | | |From | | | | | | | | | | | | | |Singleton | | | | | | | | | | | | | |Revaluation | | | | | | | | | | | | | |reserve | -| -| -| (97)| -| -| -| -| -|  | 97| -| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Cashflow | | | | | | | | | | | | | |hedge | -| -| -| -| -| -| -| -| 553| -| -| 553| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Transactions| | | | | | | | | | | | | |with owners,| | | | | | | | | | | | | |recorded | | | | | | | | | | | | | |directly in | | | | | | | | | | | | | |equity |  |  |  |  |  |  |  |  |  |  |  |  | +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Shares | | | | | | | | | | | | | |issued | | | | | | | | | | | | | |in year | 449| -| 15,082| -| -| -| -| -| -| -| -| 15,531| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |At 30 June | | | | | | | | | | | | | |2010 | 15,058| 623| 86,918| 2,969| (5,123)| 3,083| 5,641| 2,944| (35)| -|(95,672)| 16,406| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |  |  |  |  |  |  |  |  |  |  |  |  |  | +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |At 1 | | | | | | | | | | | | | |January | | | | | | | | | | | | | |2009 | 14,172|  | 56,309| 3,206| (4,660)| 1,597| 5,641| 2,944| 7,047| -|(84,908)| 1,971| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Loss for | | | | | | | | | | | | | |financial | | | | | | | | | | | | | |year | -| -| -| -| -| -| -| -| -| -| (6,585)|(6,585)| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Currency | | | | | | | | | | | | | |translation | -| -| -| -| 2,371| -| -| -| -| -| -| 2,371| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Share based | | | | | | | | | | | | | |payments | -| -| -| -| -| 204| -| -| -| -| -| 204| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Transfer | | | | | | | | | | | | | |from | | | | | | | | | | | | | |singleton | | | | | | | | | | | | | |revaluation | | | | | | | | | | | | | |reserve | -| -| -| (92)| -| -| -| -| -| -| 92| -| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Gain on | | | | | | | | | | | | | |available | | | | | | | | | | | | | |for | | | | | | | | | | | | | |sale assets | -| -| -| -| -| -| -| -| -| 40| -| 40| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Cashflow | | | | | | | | | | | | | |Hedge | -| -| -| -| -| -| -| -| (5,996)| -| -|(5,996)| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Transactions| | | | | | | | | | | | | |with owners,| | | | | | | | | | | | | |recorded | | | | | | | | | | | | | |directly | | | | | | | | | | | | | |in equity |  |  |  |  |  |  |  |  |  |  |  |  | +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Shares | | | | | | | | | | | | | |issued | | | | | | | | | | | | | |in year | 437| -| 15,527| -| -| -| -| -| -| -| -| 15,964| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |At 31 | | | | | | | | | | | | | |December | | | | | | | | | | | | | |2009 | 14,609| 623| 71,836| 3,114| (2,289)| 1,801| 5,641| 2,944| 1,051| 40|(91,401)| 7,969| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |  |  |  |  |  |  |  |  |  |  |  |  |  | +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |At 1 | | | | | | | | | | | | | |January | | | | | | | | | | | | | |2009 | 14,172|  | 56,309| 3,206| (4,660)| 1,597| 5,641| 2,944| 7,047| -|(84,908)| 1,971| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Loss for | | | | | | | | | | | | | |financial | | | | | | | | | | | | | |year | -| -| -| -| -| -| -| -| -| -| (9,779)|(6,585)| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Currency | | | | | | | | | | | | | |translation | -| -| -| -| 2,754| -| -| -| -| -| -| 2,371| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Share based | | | | | | | | | | | | | |payments | -| -| -| -| -| 922| -| -| -| -| -| 204| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Transfer | | | | | | | | | | | | | |from | | | | | | | | | | | | | |singleton | | | | | | | | | | | | | |revaluation | | | | | | | | | | | | | |reserve | -| -| -| (140)| -| -| -| -| -| -| 140| -| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Cashflow | | | | | | | | | | | | | |Hedge | -| -| -| -| -| -| -| -| (7,635)| -| -|(5,996)| +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |Transactions| | | | | | | | | | | | | |with owners,| | | | | | | | | | | | | |recorded | | | | | | | | | | | | | |directly | | | | | | | | | | | | | |in equity |  |  |  |  |  |  |  |  |  |  |  |  | +------------+-------+-------+-------+---------+--------+-------+--------+-------+--------+------+--------+-------+ |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 6 months ended 30 June 2010 +----------------------------------------------------+-------+--------+--------+ |  | 2009| 2008| 2009| | | €'000| €'000| €'000| +----------------------------------------------------+-------+--------+--------+ | Cash flows from operating activities |  |  |  | +----------------------------------------------------+-------+--------+--------+ |Loss before income tax for the year | 43| (5,580)|(10,948)| +----------------------------------------------------+-------+--------+--------+ |Adjustments for: |  |  |  | +----------------------------------------------------+-------+--------+--------+ |Depletion and depreciation | 4,072| 3,607| 7,381| +----------------------------------------------------+-------+--------+--------+ |Loss on abandonment of development and production | 10| 673| 1,606| |assets | | | | +----------------------------------------------------+-------+--------+--------+ |Impairment of assets | 165| 165| 155| +----------------------------------------------------+-------+--------+--------+ |Finance income | (31)| (25)| (201)| +----------------------------------------------------+-------+--------+--------+ |Finance expense | 4,913| 5,029| 10,057| +----------------------------------------------------+-------+--------+--------+ |Equity settled share payment charge | 564| 205| 922| +----------------------------------------------------+-------+--------+--------+ |Change in trade and other receivables | 1,071| 1,301| (59)| +----------------------------------------------------+-------+--------+--------+ |Change in restricted cash | -| 10,507| 10,507| +----------------------------------------------------+-------+--------+--------+ |Change in trade and other payables |(3,504)|(11,042)|(16,340)| +----------------------------------------------------+-------+--------+--------+ |Foreign exchange |(1,418)| 2,261| 1,406| +----------------------------------------------------+-------+--------+--------+ |Interest paid |(4,100)| (4,224)| (8,078)| +----------------------------------------------------+-------+--------+--------+ |Tax paid | (60)| (4)| (576)| +----------------------------------------------------+-------+--------+--------+ |  |  |  |  | +----------------------------------------------------+-------+--------+--------+ |Net cash (outflows) / inflows from operating | 1,725| 2,877| (4,168)| |activities | | | | +----------------------------------------------------+-------+--------+--------+ |  |  |  |  | +----------------------------------------------------+-------+--------+--------+ |Cash flows from investing activities |  |  |  | +----------------------------------------------------+-------+--------+--------+ |Interest received | 31| 25| 201| +----------------------------------------------------+-------+--------+--------+ |Acquisition of exploration and evaluation assets | (519)| (171| (251)| +----------------------------------------------------+-------+--------+--------+ |Acquisition of development and production assets |(2,684)| (9,999)|(11,710)| +----------------------------------------------------+-------+--------+--------+ |Acquisition of property, plant and equipment | (32)| (44)| (76)| +----------------------------------------------------+-------+--------+--------+ |Acquisition of available for sale assets | -| (225)| -| +----------------------------------------------------+-------+--------+--------+ |Sale of available for sale assets | -| -| 159| +----------------------------------------------------+-------+--------+--------+ |  |  |  |  | +----------------------------------------------------+-------+--------+--------+ |Net cash used in investing activities | (3,204|(10,414)|(11,677)| +----------------------------------------------------+-------+--------+--------+ |  |  |  |  | +----------------------------------------------------+-------+--------+--------+ |Cash flows from financing activities |  |  |  | +----------------------------------------------------+-------+--------+--------+ |Proceeds from issue of share capital | 16,523| 16,968| 16,980| +----------------------------------------------------+-------+--------+--------+ |Share capital issue costs | (991)| (1,004)| (1,016)| +----------------------------------------------------+-------+--------+--------+ |Payment of loan transaction costs | -| -| (2,535)| +----------------------------------------------------+-------+--------+--------+ |Repayment of loans and borrowings | -| (7,245)|(56,318)| +----------------------------------------------------+-------+--------+--------+ |Proceeds from drawdown of loans and borrowings | -| 5,868| 49,778| +----------------------------------------------------+-------+--------+--------+ |  |  |  |  | +----------------------------------------------------+-------+--------+--------+ |Net cash from financing activities | 15,532| 14,587| 6,889| +----------------------------------------------------+-------+--------+--------+ |  |  |  |  | +----------------------------------------------------+-------+--------+--------+ |Net decrease in cash and cash equivalents | 14,053| 7,050| (8,956)| +----------------------------------------------------+-------+--------+--------+ |  |  |  |  | +----------------------------------------------------+-------+--------+--------+ |Cash and cash equivalents at 1 January | 1,012| 9,664| 9,664| +----------------------------------------------------+-------+--------+--------+ |Effect of exchange rate fluctuations on cash and | 165| 613| 304| |cash equivalents | | | | +----------------------------------------------------+-------+--------+--------+ |  |  |  |  | +----------------------------------------------------+-------+--------+--------+ |Cash and cash equivalents at 30 June | 15,230| 17,327| 1,012| +----------------------------------------------------+-------+--------+--------+ [HUG#1447503] This 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