Providence Resources plc : Operational Update S...

June 29^th 2012
Embargo 7am

OPERATIONAL UPDATE
SINGLETON FIELD

NEW X12 DEVELOPMENT WELL OPERATIONS TEMPORARILY SUSPENDED

• HYDROCARBON BEARING RESERVOIR INTERVAL ENCOUNTERED WITHIN PRE-DRILL DEPTH PROGNOSIS 

• EQUIPMENT & DOWNHOLE MECHANICAL ISSUES IMPEDE WELL OPERATIONS 

• PLANNING PERMITS AND RIG CONTRACT TIME LIMITATIONS RESULT IN SUSPENSION OF CURRENT OPERATIONS 

WELL RE-ENTRY & ADDITIONAL WELL WORKOVERS PLANNED FOR Q4 2012/Q1 2013

 CURRENT FIELD PRODUCTION OF c. 750 BOEPD UNAFFECTED

Providence Resources P.l.c., ("Providence") the Irish oil and gas exploration and production company, whose shares are quoted in London (AIM) and Dublin (ESM), provides an operational update on its Singleton oilfield, Weald Basin onshore UK. Providence (100%) operates the Singleton field through its wholly owned subsidiary PR Singleton Limited.

The Singleton X12 development well is currently being suspended above the primary target after incurring technical downtime due to a variety of equipment failures and down-hole mechanical issues, which impeded planned operations within rig contract limitations. These issues led to an inability to successfully run casing through the overburden above the field at the original X12 south west flank well which was landed in the top of the main reservoir interval within the pre-drill depth prognosis. After a number of further attempts to run casing, the well was ultimately drilled to an alternate location in an attempt to alleviate these unresolved problems. The main Singleton Jurassic carbonate reservoir interval was again encountered on prognosis, with mud-logs confirming it to be hydrocarbon bearing. Overburden mechanical issues and equipment failure continued to impact these subsequent operations. Given the now significantly prolonged programme period, a decision was taken to temporarily suspend the well, given the time restriction conditions outlined in the approved planning consents, together with the rigs contractual availability period. Accordingly, the KCA Deutag T49 rig will demobilize to its next operator, once suspension operations conclude.

Providence has already commenced an in-depth evaluation of the rig drilling and subsurface data in order to better fully understand why such issues occurred with this specific well and identify what methods can be adopted in the future. In addition, an updated planning application to complete the well will be prepared and submitted in order to establish production from the well in the near term. Further operations on the field, including other well re-entries and stimulations, are also being planned in tandem with this operation for late 2012/early 2013. A further update on the revised forward programme will be provided in the coming period.
     
Speaking today, John O'Sullivan, Technical Director of Providence said,

"The X12 development well is the most ambitious and challenging well to have been designed and drilled on the Singleton Field. Notwithstanding the operational problems experienced by the drilling team, the X12 well has geologically confirmed our reservoir depth model for the south-west flank of the Singleton field. Whilst our team worked hard to address the X12 operational and equipment challenges, progress was not sufficient over the past few weeks making it increasingly difficult to complete well operations within our approved planning and rig availability timelines. Unfortunately, this meant that we had no alternative but to suspend current well operations. We plan to meet with our well services contractors over the coming period to investigate a number of the operational issues that plagued the X12 programme.

Obviously, this temporary suspension will have the effect of delaying planned production increases from Singleton in 2012, and so the team is now revising the forward well work programme so as to endeavour to meet overall production growth targets for Singleton.  This outcome, while frustrating, does not impact current production rates, which are running at approximately 750 BOEPD. The Company continues to comfortably meet its performance obligations to the Deutsche Bank pre-paid swap facility, where the Company sells a portion of its current daily production at pre-agreed terms."

Contacts:

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

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

ABOUT SINGLETON
The Singleton oil field is located 7km north of Chichester in onshore licence PL 240 in the Weald Basin, South of England.The field consists of two east west trending elongate horst blocks divided by a narrow graben. The wells produce from the Jurassic-aged Great Oolite formation, consisting predominantly of oolitic grainstones deposited during transgressive/regressive episodes. Studies suggest an original oil in-place resource of up to c.107 MMBO. Since production commenced in 1989, the field has produced c. 4.0 MMBO, which represents a recovery factor to date of c.3.5%. Published data from similar fields in the area suggest an ultimate recovery factor of up to c.10% should be achievable. Normalised field production is c. 900 BOEPD with the produced oil (37^o API gravity crude). The last (March 2011) published audited 2P (Proven + Possible) showed reserves of 7.7 MMBO, with further Possible reserves of 3.3 MMBO.

GLOSSARY
BOEPD - Barrels of Oil Equivalent per Day
MMBO - Million Barrels of Oil
API - Gravity

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

SPE/WPC/AAPG/SPEE Petroleum Resource Management System 2007 has been used in preparing this announcement

---

This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.

The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.

Source: Providence Resources plc via Thomson Reuters ONE

HUG#1622903