Providence Resources Reports Results for First Quarter 2013

Providence Resources P.l.c., the Irish oil and gas exploration and appraisal company, whose shares are quoted in London (AIM) and Dublin (ESM), announces its preliminary results for the year ended 31st December 2012.

DRILLING PROGRAMME

The year 2012 was a landmark year for Providence as operations on the first well in the Company’s multi-well, multi-year drilling programme offshore Ireland were successfully completed at Barryroe. This $500 million, six well programme is the largest and most comprehensive drilling programme undertaken offshore Ireland, involving Providence and its partners in a number of exploration and development / appraisal wells across six different basins offshore Ireland.

This first of six wells, which was successfully tested in March 2012, was an appraisal well on the Barryroe oil field in the North Celtic Sea Basin – the results of which have far exceeded expectations. Drilling of the second well, the Dunquin exploration well in the Porcupine Basin, off the west coast of Ireland commenced in April 2013 and plans are now in place for a further appraisal well to be drilled on the Spanish Point gas condensate field in Q2 2014, following the just announced farm in deal by Cairn Energy Plc. Two additional exploration wells are planned to be drilled in the Rathlin and Kish Bank Basins, whilst a further appraisal well is being planned to be drilled in the St. George’s Channel.

Commenting on activity during 2012 and the future drilling plans offshore Ireland for 2013 and beyond, Tony O’Reilly, Chief Executive of Providence Resources P.l.c., said:

“2012 was a truly transformational year for Providence, with the most notable event being the successful drilling and well testing on the Barryroe oil field in the Celtic Sea Basin, the first well in our multi-basin drilling campaign offshore Ireland. The Barryroe test results in March came in far above all pre-drill expectations and the subsequent post-well analysis has confirmed the true potential of Barryroe.

“In April 2013, the independent Netherland Sewell & Associates, Inc. (NSAI) resource audit further substantiated the scale of Barryroe and this has enabled the Company to take a big step forward in advancing its plans to commercialise Ireland’s first oil field. Barryroe has not only exceeded expectations, but has also opened other opportunities in the Celtic Sea, and it has helped to redefine the industry view on the Irish offshore and its’ potential. We are now proceeding with the farm-out discussions to attract a suitably qualified partner to advance the project and take it to first oil.

“All in all, the success of Barryroe has helped to redefine the industry view on the Irish offshore. It has also had an extremely positive impact on both the asset portfolio and the financial well-being of the Company. The improvement in the financial footing of the Company can be best confirmed by the complete restructuring of the balance sheet over the past 18 months, with assets sales and capital raisings facilitating debt levels to be reduced by approximately €75 million, leaving the Company completely debt free.

“Aside from Barryroe, we and our partners are continuing with all the necessary preparations on the balance of our multi-basin drilling programme where a further five wells are planned in the programme. In April 2013, we announced the commencement of drilling operations at the ExxonMobil-operated Dunquin oil/gas prospect in the southern Porcupine Basin. This exploration well, which is one of the deepest wells ever drilled offshore Ireland, is testing a new play concept in the southern Porcupine Basin and will be keenly watched by the industry. Based on the forward plans, results from this well are expected later this summer.

“Looking further ahead, we plan to drill two further appraisal projects – Spanish Point in the northern Porcupine Basin and Dragon in St George’s Channel Basin. Both fields are similar to Barryroe in that they have previously flowed hydrocarbons and they are now being re-examined availing of today’s new technology and pricing environment. Importantly, both fields have had extensive 3D seismic acquired over them and this will be very important for their upcoming appraisal drilling. Notably, leading international independent, Cairn Energy, has just farmed in to the Spanish Point licences in advance of the upcoming drilling.

“We also have a further two exploration prospects to be drilled in the Rathlin Basin (Polaris) and the Kish Bank Basin, offshore Dublin. Earlier this year, due to a technical licensing matter, we voluntarily surrendered our foreshore licence over the Kish Bank Basin to allow for new legislation to be put in place by the Irish government. As soon as the new legislation is put in place, we plan to re-apply for a foreshore licence.

“We also continue to look at new exploration and appraisal opportunities for future drilling in other basins, such as Drombeg, in the Southern Porcupine Basin, which has already generated significant industry interest, and Newgrange, in the Goban Spur Basin, which is operated by Repsol. Importantly, all of the wells in our multi-basin drilling programme are what we term “pathfinder wells”: in other words, by testing any one petroleum play, we have the potential to prove up many adjacent prospects in each of the respective basins.

“Partnership has always been a key part of Providence’s strategy, and we carry out our drilling programmes with an array of notable co-venture companies, including ExxonMobil, ENI, PETRONAS, Repsol, Chrysaor, First Oil Expro, Sosina, Lansdowne and Atlantic Petroleum and we are very pleased to welcome Cairn Energy Plc into our Spanish Point consortium, where they are taking a 38% equity stake and becoming Operator. All of these partners bring both technical capabilities and financial support, which allow us to move forward with our extensive programme of exploration and drilling activities offshore Ireland.

“Providence has always believed in the material hydrocarbon prospectivity of offshore Ireland. As the only Irish independent E&P company actually drilling offshore Ireland, we were very pleased with the success at Barryroe, which has firmly validated this view. Furthermore, in addition to the operational success of the past year, Providence has also completely restructured its balance sheet over the last 18 months and is now entirely debt free. We therefore feel extremely well placed to capitalise on the positive momentum that we have built up in 2012, and to firmly embrace the advances in technology, infrastructure, the fiscal regime and higher oil prices in order to unlock the hydrocarbon potential offshore Ireland”.

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Press Release, May 08, 2013