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req.,one day soon hopefully!

Phoenix,JANUARY 11, 2008
Wasting money in Providence Resources
JUST BEFORE Christmas Tony O’Reilly Junior put out an end of year trading statement for Providence Resources highlighting the company’s achievements in 2007 and, in particular, what he calls its “significant oil discovery at Hook Head, offshore Ireland”. To some extent this update is reassuring but it is very hard to overcome the serious disappointment with the ultimate outcome of the HookHead drilling which, in the end, failed to flow test any oil at all.

If Providence was valued as a small fish this might not be significant but, since thecompany issued an additional400 million new shares at 7 cent last April, it now has just on 2.5billion shares outstanding and, at the current share price of 9cent, the company is currently capitalised at a huge €225m.
This is a valuation that is over four times that of its much more successful neighbour,
Irish Oil and Gas (IOG), and yet Providence has nothing in the pipeline for the whole of the coming year that will bring any real excitement and interest for investors.

DISASTER
After many drilling disappointments, there was huge expectation riding on this year’s Hook Head drilling, using the Petrolia drilling rig which IOG was able to sub-
contract out to it. Without this leg-up Providence could not have drilled this year for there are no rigs available on short notice and in the current market. After drilling two well son the Old Head of Kinsale and Schull prospects, which IOG successfully flow tested at 17million and 21 million cubic feet of gas a day respectively, it passed the rig on to Providence which spudded in to its Hook Head prospect on August 20and reached a target depth of4,880 feet three weeks later on September 10, when Providence announced “that ithad successfully logged a total of 75 feet of net hydrocarbon bearing reservoir in the50/11/3 Hook Head appraisal well with average porosities of20% within the main hydrocarbon bearing interval”
and that “the plan is now to seta string of casing prior to flow testing the well”.
This latter looked promising and investors anticipated a high rate of barrels flowing per day on test. IOG had successfully flow tested its Schull prospect within seven days with the same rig. Strangely, Providence spent a full calendar month (30 days)
flow testing this Hook Head drill and in the end failed completely to flow test anything. In the circumstances,
this was a disaster but Providence announced it as a success, advising that it could now confirm a “significant oil accumulation at Hook Head”.
Given that the rig was costing $450,000 a day plus al lthe other ancillary costs, this meant that in three week drilling at a cost of $12mProvidence had got virtually as much knowledge as it was going to out of this well hole. But then it spent a further $15m incompletely failing to flow test this well over the following month to learn virtually nothing more.
Often in the trade a dud well is announced as a technical success but, in this case,
Providence spent 30 days having a technical failure.
According to Providence itself“ down hole mechanical conditions which were primarily related to the integrity of the casing string cement bond,
delayed the implementation of a full flow test programme”.
Given that IOG had used the same Petrolia rig to successfully flow test both the prospects it drilled in time and within budget, Providence appears to have wasted an awful lot of money and it is certainly unacceptable to simply confirm that “further work on the down hole mechanical conditions were precluded by the time limitations relating to the rig contract. Accordingly the partners have now moved to suspend the well for future re-enter.”
The really disappointing part of this prolonged flow test failure is that this was not a wildcat drill but rather essentiallyan appraisal well to follow uptwo holes which had previouslybeen drilled. Mar
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. . .

up to 70million barrels-oil at $100.hardly a waste of time.Who rattled their cage.

winner,don't know. Have emailed co. to see if they are responding to this unfair article.

Technically the article is correct. As I said ages ago, ADTI = cowboys. Let's hope PVR don't use their services again.

who did iog use?

Email reply from Co.Secretary on Phoenix Article!

We too are dismayed at this article and its deliberate negative tone which is entirely based on pessimistic speculative assumptions. We note that there is no mention of the new Macquarie facility or the applications under the recent Porcupine round. It is hard to see how the author could make such comments on Dunquin when no information has been released. Facts should be checked.

First up in 2008 is the drilling of AJE 4 and the entry of Chevron to this consortium is welcomed.



Regards



Michael Graham

I would expect a pull back from current levels until aje 4 drill commences, unless management issue a statement updating the market on drilling plans.
There is some negativity after the phoneix magazine article which however valid will have an effect on confidence.imoho

winner,proof will be in the pudding!

HERMANA a very light and sweet pudding would go down rather well.

winner,Hook Head reentry should provide min. 70m barrels of light and sweet crude. Just need a rig and results of Site Survey at nearby prospect first.

Thats the key'RIGS IN SHORT SUPPLY'a pull back to5.5p would be a good buying op before aje-4.imoho

pull back starting,i imagine 5-5p trading range and some support there.

winner,PVR silence is spooking market. Very good value for those who believe management would ideally like to sink 9 wells in 2008.

slow and steady walkdown by the mms,we never seem to be able to hold ground.very frustrating.

winner,a good find at Aje will put us back on track. Be assured that PVR is working hard to get rigs for 8 other hoped for wells.

Any reason why we are not increasing production at singleton,lets get some more
out of the field now!!!

winner,Singleton is on the list for at least one drill in 2008.

should not be to difficult for pvr to drill singleton,would be very worrying if they could not manage that.

winner,a Singleton drill in 2008 is a banker,imho.