Providence Resources plc: Providence Resources P.l.c. - Interim Results for half year ended 30th June 2013 30 September 2013 Embargo: 7am PROVIDENCE RESOURCES P.l.c. ("Providence" or the "Company") Interim Results for the half year ended 30^th June 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 interim results for the half year ended 30^th June 2013. OPERATIONAL HIGHLIGHTS * Barryroe Oil Field, Celtic Sea * Publication of NSAI Competent Person's Report * 2C Recoverable Resources of 346 MMBOE * 311 MMBO & 207 BCF gas in solution (or 34.5 MMBOE) * 2C Financials (after tax) attributable to Providence * Net contingent cash-flow of $10.6 billion * NPV 10% of $2.6 billion * Farm out process ongoing * Rothschild managing the process, with significant industry interest * Underlying Upper Jurassic potential confirmed in adjacent operated acreage * Dunquin, South Porcupine Basin * Completion of drilling of Dunquin North well * 144' residual oil column interpreted in high porosity over-pressured massive carbonate reservoir system * Water confirmed as mobile fluid phase * New petroleum play system confirmed * Application made to extend second phase of Dunquin Frontier Exploration Licence by 12 months to November 2014 * Spanish Point, Main Porcupine Basin * Farm in by Cairn Energy Plc who assume an operated 38% equity interest * Rig confirmed for 2014 appraisal drilling * Blackford Dolphin semi-submersible drilling rig expected April 2014 * Application made to convert Licencing Option 11/2 into an exploration licence with 3D seismic surveying offered as the forward work programme * Southern Porcupine Basin * Application made to convert Drombeg Licence Option 11/9 into an exploration licence with 3D seismic surveying offered as the forward work programme * Application made to convert Repsol operated Newgrange Licence Option 11/11 into an exploration licence with 2D seismic surveying offered as the forward work programme FINANCIAL HIGHLIGHTS * Sale of Onshore UK assets for $66 million * Repayment of all corporate debt * Profit of €1.328 million for the half year * Includes one-time gain of €6.095 million from sale of UK assets Commenting on activity during the first half of 2013 and ongoing operations, Tony O'Reilly, Chief Executive of Providence Resources P.l.c., said: "Following the truly transformational year of 2012, the first half of 2013 continued with a high level of activity. The main focus of our activities remained the ongoing post well work at Barryroe, the independent audit of resources and the launch of our industry wide Barryroe farm out campaign. "The publication of the two Netherland Sewell & Associates, Inc. (NSAI) independent audits earlier this year further substantiated the scale of Barryroe and also helped to redefine the industry view of the Irish offshore and its potential. As planned, we are now actively engaged in a farm out process, which involves bringing in a suitably qualified partner to advance the project from development to first oil. The Company is very pleased with the level of international industry interest in Barryroe received to date. "Aside from Barryroe, we continue with the necessary preparatory work on the remaining four wells being planned as part of our multi-basin drilling programme. The next well to be drilled is the Cairn operated Spanish Point appraisal well, which is currently scheduled take place early in the second quarter of 2014. "Whilst in the short-term, the absence of mobile hydrocarbons in the Dunquin North well was received negatively by the stock market, we believe that the evidence for oil generation and entrapment in the southern Porcupine Basin may well provide much greater sustainable value for our shareholders in the longer term. It is also important to remember that this well, being the first in the basin, was always a high risk exploratory venture. The fact that we were able to confirm the presence of a new working petroleum system is very encouraging and which has, without doubt, caught the attention of the international E&P sector. "In addition, the recently announced oil discoveries in the Flemish Pass Basin offshore Canada, which were once geologically on-trend with the southern Porcupine Basin, have only served to further highlight the oil potential of this area. As the largest acreage holder in the southern Porcupine Basin, we are very well positioned to capitalise on this growing industry interest in one end of what has been termed the 'North Atlantic source rock superhighway'. "Much has been said of late about the renaissance of the Irish offshore, and the arrival of new entrants such as Cairn Energy, Woodside and Kosmos only serves to augment this very positive environment. However, more drilling needs to be carried out as there are still too few wells being drilled offshore Ireland - averaging only one a year. Providence takes pride that, as an Irish independent, through its multi-basin drilling programme, we are leading the charge: the only new exploration and appraisal wells drilled offshore Ireland in 2012 and 2013, and being planned for 2014, are on Providence originated projects. "As the most active company offshore Ireland, partnership has always been a key part of Providence's strategy, and having successfully completed various farm outs, today we work with an array of notable co-venture companies, including ExxonMobil, ENI, PETRONAS, Repsol, Chrysaor, First Oil Expro, Sosina, Lansdowne and Atlantic Petroleum. This year, we were very pleased to welcome Cairn Energy Plc into our Spanish Point consortium after it acquired a 38% equity stake and assumed the role of Operator. All of our partners bring both technical capabilities and financial support which allow us to move forward with our extensive programme of exploration and appraisal drilling activities. "Providence has always believed in the material hydrocarbon prospectivity offshore Ireland and the results from Barryroe and Dunquin North, together with the recent results in the conjugate Flemish Pass Basin, continue to endorse this view. We remain committed to our programme of drilling, whilst also leveraging relevant industry farm in partners to take our asset portfolio through the development phase to production. The decision by us and our partners to elect to move from licensing options to exploration licences also further validates the emergence of the Irish Atlantic Margin as a highly prospective, world class oil and gas province." Tony O'Reilly Chief Executive 30^th September 2013 Contacts: Providence Resources P.l.c. Tel: +353 1 219 4074 Tony O'Reilly, Chief Executive John O'Sullivan, Technical Director Powerscourt Tel: +44 207 250 1446 Lisa Kavanagh/Rob Greening Murray Consultants Tel: +353 1 498 0300 Pauline McAlester Cenkos Securities Plc Tel: +44 207 397 8900 Nick Wells/Max Hartley J&E Davy Tel: + 353 1 679 6363 Eugenee Mulhern Liberum Tel: +44 203 100 2000 Clayton Bush TERMS USED IN THIS ANNOUNCEMENT: CPR - Competent Person's Report MMBO - Million Barrels of Oil MMBOE - Million Barrels of Oil Equivalent BCF - Billion Cubic Feet of Gas REC - Recoverable STOIIP - Stock Tank Original Oil in Place NPI - Net Profit Interest TD - Target Depth MDBRT - Measured Depth Below Rotary Table DCF - Discounted Cashflow ABOUT PROVIDENCE Providence Resources P.l.c. is an Irish based oil & gas exploration and appraisal company with a portfolio of appraisal and exploration assets offshore Ireland and the U.K. The Company is currently leading a circa $500 million multi-year drilling programme on a number of exploration/development wells over 6 different basins offshore Ireland, representing the largest drilling campaign ever carried out offshore Ireland www.providenceresources.com ANNOUNCEMENT This announcement has been reviewed by John O'Sullivan, Technical Director, Providence Resources P.l.c. John holds a B.Sc. in Geology from University College Cork, Ireland, an M.Sc. in Applied Geophysics from the National University of Ireland, Galway and a M.Sc.in Technology Management from The Smurfit School of Business at University College Dublin. John is presently working part-time on a PhD dissertation at Trinity College, Dublin. John has worked in the offshore business for 20 years and is a fellow of the Geological Society of London and member of The Petroleum Exploration Society of Great Britain. Definitions in this press release are consistent with SPE guidelines. SPE/WPC/AAPG/SPEE Petroleum Resource Management System 2007 has been used in preparing this announcement OVERVIEW OF OPERATIONS BARRYROE OIL FIELD (PVR 80% interest) During 2013, the Company's main focus continued to be the extensive post well studies from the 48/24-10z well, which included: further seismic reprocessing; evaluation of additional regional geological data; the completion of the Phase 2 field development studies; ongoing permitting and environmental studies; the publication of NSAI CPR audits; and gearing up for the planned farm out campaign, which commenced in late Q2 2013. * Publication of Competent Person's Report (CPR) data In April 2013, a CPR on the Basal Wealden Sands was issued by leading international audit firm Netherland, Sewell & Associates Inc (NSAI). This audit validated the significant volumetric and recoverable resources of the Basal Wealden sands at Barryroe. As a result, the updated total on block audited resource figures for Barryroe now stand at: * 2C STOIIP of 1.048 billion barrels * 2C Recoverable Resources of 346 MMBOE * 311 MMBO & 207 BCF gas in solution (or 34.5 MMBOE) * The audited resource figures exclude an additional 778 MMBO STOIIP (P50) identified by Providence in logged hydrocarbon bearing intervals, within stacked Lower Wealden and Purbeckian sands In July 2013, the Company released summary details of the financial CPR for the Basal Wealden sands only, as prepared by NSAI. These show the net contingent cash-flows attributable to Providence's 80% interest, after providing for tax and the 4.5% NPI payable to San Leon Energy. Prepared on range of cases, and on an undiscounted and discounted basis, the results were as follows: NET CONTINGENT PVR CASHFLOWS 80% DCF (US $ Millions) TOTAL @ 10% 1C (Low Case) 2,732.0 709.7 2 C (Best Case) 10,660.4 2,627.8 3 C (High Case) 28,214.4 6,990.3 * Evaluation of Jurassic potential During the period, studies were carried out on the deeper Upper Jurassic potential, which the Company had previously postulated to exist below the Barryroe oil field and which was thought to have material upside resource potential. During 2013, an evaluation of the previous Esso operated 48/22-1a well, which lies c. 20 km west and down-flank of the Barryroe Field in the adjacent Licensing Option 12/04 (Providence 80%, Operator), was undertaken. This new analysis has highlighted a c. 300' gross interval of Upper Jurassic Tithonian aged hydrocarbon bearing sands with c. 70' of net pay, averaging 12% porosity. These sands, which were not tested at the time, may exist beneath the target depth (TD) of the current Barryroe wells, thereby adding even further resource potential to the known Barryroe Purbeckian and Wealden hydrocarbon bearing intervals. In addition, it is notable that the 48/22-1a well had to be prematurely abandoned having encountered a significant 14 pounds per gallon (ppg) pressure kick, with hydrocarbons circulated to surface from a glauconitic bearing Jurassic sandstone at TD, which was not logged due to operational constraints and safety issues. These data suggest that there could also be the potential for a further deeper Jurassic shallow water marine hydrocarbon bearing system below the Tithonian. * Farm out process Having issued the NSAI Resource CPR, the Company commenced an industry wide farm out campaign on Barryroe. Following an advisor selection process, Rothschild was appointed to advise the Company on this farm out process. Whilst confidentiality provisions and commercial considerations prohibit the identification of the companies involved in this process, interest levels have been high, with approximately a dozen companies having reviewed the data - with these companies representing a good cross section of leading, international E&P companies. Discussions are ongoing, with the Company working to conclude discussions over the coming months. MULTI-BASIN DRILLING CAMPAIGN The first half of the year saw a continuation of the Company's multi-well drilling programme offshore Ireland - the only new drilling activities taking place offshore Ireland. Following the successful appraisal drilling of the Barryroe oil field in 2012, the Company continued with drilling operations at the ExxonMobil operated Dunquin North exploration prospect in the southern Porcupine Basin, the second well in the Company's $500 million, six well drilling programme. * Dunquin North (PVR 16% Interest) Drilling operations on the Dunquin North exploration well, situated on the northern flank of the c. 700 sq km intra-basinal ridge system in the southern Porcupine Basin, were completed on 15^th July 2013, having reached a final total depth of c. 16,400 feet MDBRT. The primary Lower Cretaceous Dunquin target was encountered within the pre-drill depth prognosis and comprised a thick over-pressured carbonate reservoir system. The well was terminated having drilled a total thickness of c. 800 feet of massive porous carbonate reservoir. Preliminary well analysis indicated the reservoir to be water bearing - however, petrophysical log interpretation, elevated gas levels, together with oil shows in sidewall cores over the upper 144 feet section of the reservoir, is interpreted to represent the presence of a residual oil column. As the first well to be drilled in this large deepwater basin, the results from the Dunquin North are a qualified technical success as they have demonstrated that all of the key components of a working petroleum system exist in the southern Porcupine Basin. As the largest acreage holder in the southern Porcupine Basin, with interests in Dunquin South (16%), Drombeg (80%) and Newgrange (40%) and Cuchulain (3.2%), the confirmation of an oil prone petroleum system, compared to the pre-drill gas prognosis, is very encouraging and further work is being carried out on in order to characterise this newly emerging petroleum system. Based on the extensive post well analysis being carried out, an application has been made to extend the second phase of this frontier exploration licence by 12 months to November 2014. This post well evaluation will shed important new insights on the adjacent Dunquin South prospect (c. 900 MMBOE REC P50), as well as the nearby Drombeg, Newgrange and Cuchulain prospects. * Spanish Point (PVR 32% Interest) The third well in the planned programme is the Spanish Point appraisal well (100 MMBOE REC 2C), located in the northern Porcupine Basin. This well, which is currently scheduled to be drilled in early Q2 2014 using the Blackford Dolphin semi-submersible drilling rig, will be operated by Cairn Energy Plc. Cairn which, when it farmed into the Spanish Point licence acreage (FEL 2/04, FEL 4/08 & LO 11/2) in April 2013, assumed operatorship of the entire Spanish Point licence area. This appraisal well, which follows on from the original discovery well in the 1980s, is being drilled on 3D seismic (acquired in 2008) and is designed to establish flow rates and volumetric upside (estimated additional c. 100 MMBOE REC). The partners have also elected to convert the adjacent LO 11/2 (Spanish Point South) area into a Frontier Exploration Licence and are planning to acquire a c. 500 sq km 3D survey over the area. *2014 / 2015 Drilling In addition to the planned drilling at Spanish Point, works continue for the preparation of drilling activities on the remaining three wells in the current programme: *Dragon gas discovery (200 BCF REC 2C), St. George's Channel (PVR 100% interest) - appraisal/development drilling in the summer of 2014; *Polaris oil prospect (P50 STOIIP of 520 MMBO), Rathlin Basin (PVR 100% interest) -exploration drilling later in 2014/early 2015 *Kish Bank oil prospect (250 MMBO REC P50). Irish Sea (PVR 50% interest) - exploration drilling later in 2014/early 2015 Further appraisal/pre-development drilling may also be undertaken at the Barryroe oil project in the Celtic Sea Basin (PVR 80% interest), at the discretion of incoming farminees. As always, the timing of all planned drilling, site and seismic activities is based on relevant permit requirements and appropriate equipment availability/procurement. OTHER FUTURE DRILLING OPPORTUNITIES Looking further ahead, the Company continues to advance other prospects towards future drilling. These include Drombeg in the Porcupine Basin, Newgrange in the Goban Spur Basin and Pegasus in the St George's Channel Basin. * Drombeg (PVR 80% interest) Currently held under Licensing Option 11/9, the 872 MMBO REC (P50) Drombeg oil prospect is the subject of farm in discussions with a number of international companies. The results of the offset Dunquin North well are extremely encouraging for the Drombeg prospect given the evidence of oil generation and entrapment in a similar aged section. In addition, the over-pressured reservoir conditions indicate that the shared Lower Cretaceous top seal, which is significantly thicker at Drombeg, is currently integral. Given these new data, together with the scale of this very large oil exploration opportunity, the Company and its partner, Sosina (20%), have elected to convert this Licensing Option into a Standard Exploration Licence and are planning to acquire a new 3D seismic survey over the prospect, prior to drilling. * Newgrange (PVR 40% interest) The Newgrange prospect, which is held under Licensing Option 11/11, is operated by Repsol (40%) with Providence (40%) and Sosina (20%). Similar to the Drombeg prospect, a decision has been taken to convert this Licensing Option into a Standard Exploration Licence with plans for further 2D seismic acquisition in advance of any exploratory drilling. The recent results from the Dunquin well have led to a re-appraisal of hydrocarbon type (from gas to oil) with volumetric quantification currently under review. * Pegasus (PVR 100% interest) The Pegasus prospect, in which Providence currently holds a 100% equity stake, is being prepared for exploration drilling in 2015. This large gas prospect (250 BCF GIIP) would benefit from any infrastructure established for the planned development of the adjacent Dragon gas field. The Company is undertaking a farm out process for all of its assets in the St George's Channel. * Other Celtic Sea Assets (PVR c. 72.5% interest) The Company is in various stages of discussions on the potential to farm out its other Celtic Sea assets, including Hook Head (PVR 72.5% interest), Dunmore (PVR 72.5% interest) and Helvick (PVR 62.5% interest). The success of any of these farm outs are contingent on commercial terms being satisfactorily agreed and the approval of partners and regulatory authorities. * Atlantic Margin Finally, as part of its ongoing analysis of the conjugate Atlantic Margin plays, especially following on from the technical results from the Dunquin North well, a number of new opportunities are being evaluated on the Atlantic Margin, both in Ireland and further afield. OVERVIEW OF FINANCIALS SALE OF ONSHORE UK ASSETS TO IGAS ENERGY PLC On September 28^th 2012, the Company announced that it had entered into an agreement with IGas Energy Plc to divest its UK onshore production and development assets (Singleton, Baxter's Copse and Burton Down) for a total gross consideration of US$ 66 million. This transaction, which closed in February 2013, allowed for the repayment of all outstanding indebtedness to Deutsche Bank of $44 million, leaving the balance of the gross sale proceeds of US$ 22 million available for general working capital purposes. The transaction resulted in the Company being debt free. FINANCIAL RESULTS - HALF YEAR ENDED JUNE 30^th, 2013 *With the divestment of the UK onshore operations, the financial results for the half year ended June 30^th 2013 now show only continuing operations. As such, the divested UK onshore activities are now shown as "discontinued operations" and, accordingly, the comparative 2012 results are shown as re-presented. *From an income statement perspective, the Company showed a profit of €1.328 million versus a prior year loss of €33.295 million (with most of the gain due to the sale of Singleton of €6.095 million). *Cash (& cash equivalents) at June 30th was €23.817 million with the closing reconciliation of the sale of the UK onshore assets to IGas generating an additional €1.2 million cash payment (received in July 2013). *The loss per share from continuing activities was 5.65 cents compared to 11.45 cents in 2012. *The reported profit per share was 2.06 cents compared to a loss of 60.40 cents in 2012. *Over the past 2 years, the Company has reduced debt levels by c €75 million and the Company is now debt free. LIST OF ASSETS Asset Basin Operator % Type IRELAND Barryroe Celtic Sea Providence 80.0% Oil development Hook Head Celtic Sea Providence 72.5% Oil and gas discovery Dunmore Celtic Sea Providence 72.5% Oil discovery Helvick Celtic Sea Providence 62.5% Oil and gas discovery Kish Bank Kish Bank Providence 50.0% Oil and gas exploration ULYSSES Kish Bank EIRGAS 50.0% Gas storage evaluation Kylemore Slyne Basin Providence 66.6% Gas exploration Shannon Slyne Basin Providence 66.6% Gas exploration Spanish Point Main Porcupine Cairn 32.0% Oil and gas development Burren Main Porcupine Cairn 32.0% Oil discovery Wilde/Beehan Main Porcupine Cairn 32.0% Oil and gas exploration Cama (North and South) Main Porcupine Cairn 32.0% Oil and gas exploration Rusheen (North and South) Main Porcupine Cairn 32.0% Oil and gas exploration Costelloe (Main, North Main Porcupine Cairn 32.0% Oil and gas and South) exploration Shaw Main Porcupine Cairn 32.0% Oil and gas exploration Synge Main Porcupine Cairn 32.0% Oil and gas exploration Spanish Point South Main Porcupine Cairn 32.0% Oil and gas exploration Dunquin North South Porcupine ExxonMobil 16.0% Oil exploration Dunquin South South Porcupine ExxonMobil 16.0% Oil exploration Drombeg South Porcupine Providence 80.0% Oil exploration Cuchulain South Porcupine ENI 3.2% Oil and gas exploration Newgrange Goban Spur Repsol 40.0% Oil and gas exploration Pegasus St George's Providence 100.0% Oil and gas Channel exploration Orpheus St George's Providence 100.0% Oil and gas Channel exploration Dionysus St George's Providence 100.0% Oil and gas Channel exploration Dragon St George's Providence 100.0% Gas development Channel Note: EIRGAS is a wholly owned subsidiary of Providence UNITED KINGDOM Polaris Rathlin, N. Ireland Providence 100.0% Oil and gas exploration Dragon St Georges Channel Providence 100.0% Gas development Note: Dragon sits c. 75% in Irish territorial waters/c. 25% in UK territorial waters PROVIDENCE RESOURCES P.l.c. Condensed consolidated income statement For the 6 months ended 30 June 2013 Notes 6 months ended 6 months ended Year ended 31 30 June 2013 30 June 2012 December 2012 Unaudited Unaudited Audited €'000 €'000 €'000 Continuing operations Administration expenses (3,327) (3,493) (3,937) Pre-licence expenditure (8) - - Impairment of exploration, - - (1,495) evaluation and production assets Operating loss 1 (3,335) (3,493) (5,432) Finance income 61 178 494 Finance expense 3 (260) (2,999) (3,295) Loss before income tax (3,534) (6,314) (8,233) Income tax expense (109) - - Loss from continuing (3,643) (6,314) (8,233) operations Profit / (loss) from 2 4,971 (26,981) (15,950) discontinued operations (net of income tax) Profit / (loss) for the 1,328 (33,295) (24,183) period Loss per share (cent) - continuing operations Basic loss per share 8 (5.65) (11.45) (13.51) Diluted loss per share 8 (5.65) (11.45) (13.51) Profit / (loss) per share (cent) - discontinued operations Basic profit/ (loss) per 7.71 (48.95) (26.17) share Diluted profit / (loss) per 7.71 (48.95) (26.17) share Profit / (loss) per share (cent) - total Basic profit/ (loss) per 2.06 (60.40) (39.68) share Diluted profit / (loss) per 2.06 (60.40) (39.68) share PROVIDENCE RESOURCES P.l.c. Consolidated statement of comprehensive income For the 6 months ended 30 June 2013 6 months ended 30 6 months ended Year ended 31 June 2013 30 June 2012 December 2012 Unaudited Unaudited Audited €'000 €'000 €'000 Profit / (loss) for the 1,328 (33,295) (24,183) financial period Foreign exchange translation 4,783 (1,770) (97) differences Net change in fair value of - - 2,305 cash flow hedges transferred to income statement Cashflow hedges - net fair - - - value loss - - - 3,407 related deferred tax Total income and expense 4,783 (1,770) 5,615 recognised in other comprehensive income Total comprehensive income 6,111 (35,065) (18,568) /(expense) for the period The total recognised expense for the period is entirely attributable to equity holders of the Company. PROVIDENCE RESOURCES P.l.c. Consolidated statement of financial position As at 30 June 2013 Notes 30 June 2013 30 June 2012 31 December Unaudited Unaudited 2012 €'000 €'000 Audited €'000 Assets Exploration and evaluation assets 4 74,244 53,621 67,076 Development and production assets 5 - 39,615 - Property, plant and equipment 43 27 42 Derivative instruments - 5,795 - Deferred tax - 4,749 - Total non-current assets 74,287 103,807 67,118 Trade and other receivables 4,880 22,267 4,005 Derivative instruments - 1,433 - Restricted cash - 3,473 - Cash and cash equivalents 23,817 41,145 16,831 Total 28,697 68,318 20,836 Assets classified as held for sale - - 43,852 Total currents assets 28,697 68,318 64,688 Total assets 102,984 172,125 131,806 Equity Share capital 6 18,137 18,123 18,136 Capital conversion reserve fund 623 623 623 Share premium 6 210,049 209,589 209,975 Singleton revaluation reserve - 2,559 2,471 Convertible bond - equity portion - 673 - Foreign currency translation 1,031 (5,425) (3,752) reserve Share based payment reserve 6,083 4,512 4,942 Cashflow hedge reserve - (1,124) - Retained deficit (162,969) (174,897) (164,297) Total equity attributable to 72,954 54,633 68,098 equity holders of the Company Liabilities Loans and borrowings 7 - 24,520 - Decommissioning provision 4,975 5,525 4,738 Deferred tax - 28,319 - Derivative instruments - - - Total non-current liabilities 4,975 58,364 4,738 Trade and other payables 25,055 39,610 23,445 Loans and borrowings 7 - 11,017 - Derivative instruments - 8,501 - Total 25,055 59,128 23,445 Liabilities classified as held for - - 35,525 sale Total current liabilities 25,055 59,128 58,970 Total liabilities 30,030 117,492 63,708 Total equity and liabilities 102,984 172,125 131,806 PROVIDENCE RESOURCES P.l.c. Consolidated statement of changes in Equity For the 6 months ended 30 June 2013 Capital Conver- Con- Singleton Foreign tible version Share Re- Currency Share Bond - Share Reserve Prem- valuation Trans- Based Warrants equity Cashflow Retained Capital Fund ium lation Payment portion Hedge Deficit Total €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 At 1 January 2013 18,136 623 209,975 2,471 (3,752) 4,942 - - - (164,297) 68,098 Profit for financial period - - - - - - - - - 1,328 1,328 Currency translation - - - - 4,783 - - - - - 4,783 Cashflow hedge - - - - - - - - - - - Total comprehen-sive income - - - - 1,031 - - - - (162,969) 74,209 Transactions with owners, recorded directly in equity Share based payment - - - - - 1,141 - - - - 1,141 Transfer to P&L - Singleton sale - - - (2,471) - - - - - - (2,471) Shares issued in year 1 - 74 - - - - - - - 75 At 30 June 2013 18,137 623 210,049 - 1,031 6,083 - - - (162,969) 72,954 At 1 January 2012 16,668 623 130,548 2,650 (3,655) 4,368 5,641 2,333 (2,305) (148,994) 7,877 Loss for financial period - - - - - - - - - (33,295) (33,295) Currency translation - - - - (1,770) - - - - - (1,770) Cashflow hedge - - - - - - - - 1,181 - 1,181 Total comprehend sive income - - - - (5,425) - - - (1,124) (182,289) (26,007) Transactions with owners, recorded directly in equity Shares issued in period 1,315 - 72,281 - - - - - - - 73,596 Share based payments - - - - - 144 - - - - 144 Transfer from Singleton revaluation reserve - - - (91) - - - - - 91 - Warrants redemption 140 - 6,760 - - - (5,641) - - 5,641 6,900 Bond redemption - - - - - - - (1,660) - 1,660 - At 30 June 2012 18,123 623 209,589 2,559 (5,425) 4,512 - 673 (1,124) (174,897) 54,633 At 1 January 2012 16,668 623 130,548 2,650 (3,655) 4,368 5,641 2,333 (2,305) (148,994) 7,877 Loss for financial year - - - - - - - - - (24,183) (24,183) Currency translation - - - - (97) - - - - - (97) Cashflow hedge - - - - - - - - 2,305 - 2,305 Total comprehensive income - - - - (3,752) - - - - (173,177) (14,098) Transactions with owners, recorded directly in equity Shares issued in year 1,314 - 72,415 - - - - - - - 73,729 Share based payments - - - - - 1,301 - - - - 1,301 Share options exercised in year 14 - 252 - - (238) - - - 238 266 Share options forfeited in year - - - - - (489) - - - 489 - Transfer from Singleton revaluation reserve - - - (179) - - - - - 179 - Warrants redemption 140 - 6,760 - - - (5,641) - - 5,641 6,900 Bond redemption - - - - - - - (2,333) - 2,333 - At 31 December 2012 18,136 623 209,975 2,471 (3,752) 4,942 - - - (164,297) 68,098 PROVIDENCE RESOURCES P.l.c. Consolidated statement of cash flows For the 6 months ended 30 June 2013 6 months ended 6 months ended Year ended 31 30 June 2013 30 June 2012 December 2012 Unaudited Unaudited Audited €'000 €'000 €'000 Cash flows from operating activities Loss before income tax for the (3,534) (7,642) (8,233) year - continuing operations Profit/(loss) before income tax 4,971 (22,088) (36,524) for the year - discontinuing operations Profit/ (loss) before income tax 1,437 (29,730) (44,757) for the period Adjustments for: Depletion and depreciation 309 1,794 2,755 Gain on sale of discontinued (6,095) - - operation Abandonment provision - 365 34 Impairment of exploration and 8 - 1,495 evaluation assets Impairment of production and - 28,298 32,357 development assets Finance income (61) (178) (494) Finance expense 260 2,044 16,369 Equity settled share based 1,141 144 1,247 payment charge Foreign exchange 2,795 (3,425) (507) Change in trade and other (875) (15,641) (3,782) receivables Change in restricted cash - 14,018 16,581 Change in trade and other payables 1,610 11,959 (2,696) Interest paid (363) (4,537) (6,712) Hedge repayments (37) (581) (297) Net cash inflows from operating 129 4,530 11,593 activities Cash flows from investing activities Interest received 61 178 494 Acquisition of exploration and (7,176) (17,407) (31,755) evaluation assets Acquisition of development and - (22,177) (27,202) production assets Acquisition of property, plant and - - (38) equipment Disposal of development and - 4,610 4,610 production assets - AJE Disposal of discontinued operation 15,894 - - Net cash from investing activities 8,779 (34,796) (53,891) Cash flows from financing activities Proceeds from issue of share 76 84,407 84,797 capital Share capital issue costs - (3,911) (3,902) Repayment of loans and borrowings (1,564) (28,027) (44,273) Proceeds from drawdown of loans - - 4,077 and borrowings Net cash from financing activities (1,488) 52,469 40,699 Net increase/(decrease) in cash 7,420 22,203 (1,599) and cash equivalents Cash and cash equivalents at 1 16,831 18,563 18,563 January Effect of exchange rate (434) 379 (133) fluctuations on cash and cash equivalents Cash and cash equivalents at 30 23,817 41,145 16,831 June PROVIDENCE RESOURCES P.l.c. Note 1 Segment Reporting 6 months ended 30 6 months ended Year ended 31 June 2013 30 June 2012 December 2012 Unaudited Unaudited Audited €'000 €'000 €'000 Segment net (loss) for the period UK - exploration assets 782 - - Republic of Ireland - (268) (275) (1,495) exploration assets US - assets 29 (862) - Corporate expenses (3,878) (2,356) (3,937) Operating loss for the period (3,335) (3,493) (5,432) Segment assets UK - producing assets - - 46,098 43,852 classified as held for sale UK - exploration assets 1,160 - 933 Republic of Ireland - 77,770 70,067 69,129 exploration assets US 138 260 155 Group assets 23,916 55,700 17,737 Total assets 102,984 172,125 131,806 Segment Liabilities UK - producing - classified as - (31,280) (35,525) held for sale UK - exploration (382) - - Republic of Ireland - (28,220) (27,288) (27,183) exploration US (116) (772) (252) Group liabilities (1,312) (58,152) (748) Total Liabilities (30,030) (117,492) (63,708) Capital Expenditure UK - producing assets - - 22,177 27,202 classified as held for sale UK - exploration assets 293 - 774 Republic of Ireland - 6,883 17,407 30,981 exploration assets Republic of Ireland - property, - - 38 plant and equipment Total Capital Expenditure 7,176 39,584 58,995 Depletion and decommissioning charge UK - producing assets - 1,633 2,727 (discontinued operations) Republic of Ireland - - - 34 exploration assets - 1,633 2,761 Impairment charge Republic of Ireland - 8 - 1,495 exploration assets UK - development and production - 28,298 32,357 assets 8 28,298 33,852 PROVIDENCE RESOURCES P.l.c. Note 2 Discontinued Operations 6 months ended 6 months ended Year ended 31 30 June 2013 30 June 2012 December 2012 Unaudited Unaudited Audited €'000 €'000 €'000 Results of discontinued operations Revenue 2,411 7,746 15,642 Cost of sales (615) (3,316) (5,454) Gross profit 1,796 4,430 10,188 Administration expenses (179) (503) (1,281) Impairment of assets - (28,298) (32,357) Results from operating activities 1,617 (24,371) (23,450) Finance expense (2,741) 955 (13,074) Results from operating activities (1,124) (23,416) (36,524) before tax Income tax (charge)/credit - (3,565) 20,574 Results from operating activities (1,124) (26,981) (15,950) after tax Profit on sale of discontinued 6,095 - - operations Profit / (loss) for the period 4,971 (26,981) (15,950) Basic profit/(loss) per share 7.71 (48.95) (26.17) Diluted profit / (loss) per share 7.71 (48.95) (26.17) Cashflow from discontinued operations Net cash from operating activities 1,496 7,268 9,726 Net cash from investing activities 51,420 (22,177) (27,202) Net cash from financing activities (37,090) (4,918) (5,931) Net cash flows for the period 15,826 (19,827) (23,407) Held for sale assets and liabilities Assets Development and production assets - - 38,986 Derivative instruments - - 2,163 Trade and other receivables - - 1,793 Cash and cash equivalents - - 910 - - 43,852 Liabilities Loans and borrowings - - 31,725 Decommissioning provision - - 869 Deferred tax - - 1,421 Trade and other payables - - 1,510 - - 35,525 PROVIDENCE RESOURCES P.l.c. Note 3 Finance Expense 6 months ended 6 months ended Year ended 31 30 June 2013 30 June 2012 December 2012 Unaudited Unaudited Audited €'000 €'000 €'000 Interest expense - 2,724 3,021 Unwinding of discount on 260 275 274 decommissioning provision Total finance expense 260 2,999 3,295 Recognised directly in equity Foreign currency differences on 4,783 (1,770) (97) foreign operations Net change in fair value of - - 2,305 cashflow hedge transferred to income statement Finance income / (expense) 4,783 (1,770) 2,208 recognised directly in equity PROVIDENCE RESOURCES P.l.c. Note 4 Exploration and evaluation assets Republic of Ireland UK Total €'000 €'000 €'000 Cost and book value At 1 January 2012 36,214 - 36,214 Additions 18,847 - 18,847 Cash calls received in period (2,054) - (2,054) Administration expenses capitalised 614 - 614 At 30 June 2012 53,621 - 53,621 At 1 January 2012 36,214 - 36,214 Additions 35,344 551 35,895 Administration expenses capitalised 1,144 223 1,367 Cash call received in year (5,507) - (5,507) Impairment charge (1,495) - (1,495) Increase in abandonment provision 602 - 602 At 31 December 2012 66,302 774 67,076 At 31 December 2012 66,302 774 67,076 Additions 6,188 175 6,363 Administration expenses capitalised 695 118 813 Impairment charge (8) - (8) At 30 June 2013 73,177 1,067 74,244 PROVIDENCE RESOURCES P.l.c. Note 5 Development and production assets UK €'000 Cost At 1 January 2012 61,833 Additions 21,972 Administration expenses 205 Exchange rate adjustment 1,764 At 30 June 2012 85,774 At 1 January 2012 61,833 Additions 27,144 Transfer to held for sale (90,282) Administration expenses 58 Exchange rate adjustment 1,247 At 31 December 2012 - At 1 January 2013 - Additions - Administration expenses - Exchange rate adjustment - At 30 June 2013 - Depletion At 1 January 2012 15,674 Charge for the year 1,633 Impairment of assets 28,298 Exchange rate adjustment 554 At 30 June 2012 46,159 At 1 January 2012 15,674 Charge for the year 2,727 Impairment of assets 32,357 Transfer to held for sale assets (51,296) Exchange rate adjustment 538 At 31 December 2012 - At 1 January 2013 - Charge for the period - Impairment of assets - Exchange rate adjustment - At 30 June 2013 - Net book value At 30 June 2013 - At 31 December 2012 - At 30 June 2012 39,615 PROVIDENCE RESOURCES P.l.c. Note 6 Share Capital and Share Premium Number Authorised: '000 €'000 At 1 January and 30 June 2011 Deferred shares of €0.011 each 1,062,442 11,687 Ordinary shares of €0.10 each 123,131 12,313 Number Share Capital Share Premium Issued: '000 €'000 €'000 Deferred shares of €0.011 each 10,624 12,750 5,691 Ordinary share of €0.10 each 49,809 4,981 124,857 At 1 January 2012 49,809 16,668 130,548 Shares issued 13,149 1,315 76,183 Share issue costs - - (3,902) Warrants exercised in period 1,400 140 6,760 At 30 June 2012 64,358 18,123 209,589 Share options exercised in period 140 14 386 At 31 December 2012 64,498 18,136 209,975 Share options exercised in period 15 1 74 At 30 June 2013 64,513 18,137 210,049 PROVIDENCE RESOURCES P.l.c. Note 7 Loans and Borrowings Deutsche Deutsche Convertible Total bank loan bank loan Bond facility fees €'000 €'000 €'000 €'000 At 1 January 2012 39,151 (786) 33,447 71,812 Written off to income (1,393) 68 679 (646) statement Repaid during year (4,918) - (23,109) (28,027) Foreign exchange 921 (22) - 899 At 30 June 2012 33,761 (740) 11,017 44,038 At 1 January 2012 39,151 (786) 33,447 71,812 Drawn down in year 4,077 - - 4,077 Repaid during year (10,008) - (34,265) (44,273) Written off to income - 135 818 953 statement Foreign exchange (825) (19) - (844) Transfer to held for sale (32,395) 670 - (31,725) liabilities At 31 December 2012 - - - - Repaid during period - - - - Foreign exchange - - - - At 30 June 2013 - - - - Analysed as follows: 30 June 2013 31 December 2012 30 June 2012 Non-Current €'000 €'000 €'000 Credit facility (prepaid - - 24,520 swap) Revolving credit facility - - - Convertible bond - - - Total - - 24,520 Current Credit facility (prepaid - - 8,501 swap) Convertible bond - - 11,017 Total - - 19,518 At end of period - - 44,038 PROVIDENCE RESOURCES P.l.c. Note 8 Earnings per share 30 June 2013 30 June 2012 31 December 2012 Unaudited Unaudited Audited €'000 €'000 €'000 Loss attributable to equity holders (3,643) (6,314) (8,233) of the company from continuing operations The basic weighted average number of Ordinary share in issue In issue at beginning of year 64,498 49,809 49,809 Adjustment for shares issued in - 5,310 11,144 period Weighted average number of ordinary 64,498 55,119 60,953 shares Basic loss per share (cent) (5.65) (11.45) (13.51) The weighted average number of ordinary shares for diluted earnings per share calculated as follows: Weighted average number of ordinary 64,498 55,119 60,953 shares Diluted loss per share (cent) (5.65) (11.45) (13.51) There is no difference between the loss per ordinary share and the diluted loss per share for the current period as all potentially dilutive ordinary shares outstanding are anti-dilutive. PROVIDENCE RESOURCES P.l.c. Note 9 Related party transactions (a) Mr. Tony O'Reilly Jnr, has through Kildare Consulting Limited, a company beneficially owned by him, renewed a contract for the provision of service to the company outside the Republic of Ireland effective 1 September 2013. The amount paid under the contract from 1 January to 30 June 2013 is €222,525. (b) The contract referred to in Note 9 (a) above is of two years duration and is subject to one year's notice period. PROVIDENCE RESOURCES P.l.c. Note 10 Commitments The Group has capital commitments of approximately €9.3m to contribute to its share of costs of exploration, evaluation and production activities for the next 6 months. ------------------------------------------------------------------------------ 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#1732174
Providence Resources plc: Providence Resources P.l.c. - Interim Results for half year ended 30th June 2013
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