Providence Resources P l c : Half Year 2016 Results - LEADING OFFSHORE IRELAND

Tony O'Reilly, Chief Executive Officer commented:

"Providence enters the second half of the year with renewed optimism. A solid balance sheet and significantly enhanced financial strength, combined with the planned near term drilling activity at our Druid prospect have the potential to create significant shareholder value.

During the first half of 2016, the market volatility that characterized the E&P sector in 2015 continued and presented the industry with significant commercial and financial challenges. A dearth of M&A activity in the sector, compounded by some very specific pressures relating to the scheduled Melody debt repayment, coupled with the adverse Court of Appeal ruling, had material implications for Providence. However, thanks to the support of our existing shareholders and new investors, we successfully raised new funds in July 2016 to allow us to completely restructure our balance sheet and provide the financial resources and flexibility to advance our very extensive portfolio of assets. Importantly, we were able to repay all of our corporate debt, settle the outstanding litigation with Transocean and provide the appropriate resources to finance the drilling of the high impact Druid exploration well in 2017.

The success of this financing clearly demonstrates shareholder support for our strategy to develop our unique portfolio of appraisal and exploration assets offshore Ireland. In that context, the Irish offshore has become a very attractive location for industry majors as evidenced by the record number of new licensing authorisations awarded in the 2015 Atlantic Margin Licensing Round.

The securing of funds to be able to drill the Druid prospect is a rare opportunity for us to avail of the cost dynamics that currently exist in the industry. With estimated Pmean in place oil resources of over 3 BBO, we believe that Druid represents one of the few world class deep-water exploration prospects being planned for drilling in 2017. Having secured the necessary finance and now with an even lower cost estimate than previously forecast, we are moving forward with our drilling programme targeting a spud date in June 2017.

Key to the Providence portfolio is Barryroe, where the financial restructuring combined with the industry's falling cost profile, now provides increased flexibility in terms of our commercial farm out negotiations. We look forward to updating the market further as we continue to develop and consolidate our leading position offshore Ireland."

• Barryroe Oil Project, North Celtic Sea Basin (SEL 1/11)

  • Upper C-Sand GIIP within SEL 1/11 & OPL1 Option area now estimated at c. 400 BSCF

  • Latest well cost estimates for single vertical well c. US$25 million

• Spanish Point Gas Condensate Project, Northern Porcupine Basin (FEL 2/04 & 4/08)

  • Adjacent third party Licensing Options awarded in 2015 Atlantic Margin Licensing Round

• Helvick / Dunmore Oil Discoveries North Celtic Sea Basin

  • Award of Lease Undertakings

  • 50% staged farm in by Marginal Field Development Company Limited

    EXPLORATION PROSPECTS

• Druid / Drombeg Oil Prospects, Southern Porcupine Basin (FEL 2/14)

  • Multi-domain analysis confirms that the 3D seismic responses from the Druid and Drombeg prospects are consistent with the presence of 2 large vertically stacked stratigraphically trapped oil accumulations

  • Total cumulative in place un-risked prospective resources of c. 5.095 BBO (Pmean)

    • Druid - c. 3.180 BBO (Pmean)

    • Drombeg - c. 1.915 BBO (Pmean)

  • Both Druid and Drombeg prospects could be evaluated with a single vertical exploration well

  • Adjacent third party Licensing Options awarded in 2015 Atlantic Margin Licensing Round

• Newgrange Prospect, Goban Spur Basin (FEL 6/14)

  • Seismic supports top seal and reservoir presence for Cretaceous target

  • Pre-Cretaceous structural closure far larger than previously mapped

  • Adjacent third party Licensing Options awarded in 2015 Atlantic Margin Licensing Round

• Avalon Oil Prospect, Northern Porcupine Basin (LO 16/27)

  • Award of new Licensing Option in 2015 Atlantic Margin Licensing Round

  • Large AVO stratigraphic Paleocene oil play analogous to Druid

• Dunquin Oil Prospect, Southern Porcupine Basin (FEL 3/04)

  • Dunquin North post-well technical studies continuing

  • Evidence of more significant residual oil in the Dunquin North well

  • Adjacent third party Licensing Options awarded in 2015 Atlantic Margin Licensing Round

• Kish Oil Prospect, Kish Bank Basin (SEL 2/11)

  • Company's working interest increased to 100%

    PORTFOLIO MANAGEMENT

• Relinquishments made to Licence Authorisations over:

  • Cuchulain, Southern Porcupine Basin (FEL 1/99)

  • Polaris, Rathlin Basin (P 1885)

  • Dragon (UK), St George's Channel Basin (P 1930)

    H1 2016 FINANCIAL HIGHLIGHTS
• Further reduction in administration costs and legal expenses
• Operating loss for the period of €2.216 million (€3.787 million in H1 2015)
• Loss of €4.440 million (€8.425 million in H1 2015)
• Loss per share of 3.17 cents (7.94 cents in H1 2015)
• At June 30, 2016, total cash and cash equivalents were €0.522 million (€11.289 million at June 30, 2015)

   At June 30, 2016 debt was €19.546 million (€15.610m at June 30, 2015)

• June 21, 2016 - Capital fundraising announced (and approved at the EGM on July 14, 2016)with proceeds proposed to be used to:

  • Retire corporate debt

  • Make payment to Transocean

  • Provide working capital

  • Finance the Company's share of funding the drilling of the Druid exploration well

    LITIGATION AGAINST TRANSOC EA N DRI LLI NG UK LI MI T ED (" T RA NSO CE AN" )
• April 2016 Court of Appeal Ruling

  • In April 2016, the Court of Appeal of England and Wales overturned one aspect of the judgment handed down by the Commercial Court in London in December 2014 in relation to the Transocean litigation. Accordingly, the Company was ordered to pay Transocean the gross amount of c.US$6.77 million in respect of certain costs claimed by Transocean in the original legal proceedings issued against the Company by Transocean in May 2012

  • Pursuant to the Court of Appeal Order, on April 27, 2016, the Company paid £225,000, being part of Transocean's legal costs for appeal, and a balance of £183,000 was paid on July 18, 2016

  • Lansdowne, the Company's joint venture partner in Barryroe, is liable for 20% share of all costs associated with the litigation

  • In addition, the Court of Appeal Order stated that other matters in dispute between the Company and Transocean will be the subject of a further hearing in the Commercial Court in London unless otherwise resolved between the parties

• Appeal to the Supreme Court

  • The Company has sought leave to appeal the Court of Appeal Order Judgment to the Supreme Court in the UK. A decision on the grant of such leave to appeal is expected to take between nine months to one year and further announcements will be made in this regard in due course

    POST JUNE 30 EVENTS
• Barryroe Oil Project, North Celtic Sea Basin (SEL 1/11)

  • Farm out discussions continue

• Druid/ Drombeg Oil Prospects, Southern Porcupine Basin (FEL 2/14)

  • Election made to enter Phase 2 of Licence (includes the commitment of one exploration well)

  • Druid 2017 Drilling Programme

    • Appointment of Well Management Company

    • Invitation To Tender ("ITT") issued for the provision of a deep-water drilling unit

    • Druid well design to allow for optional penetration of underlying Drombeg prospect

    • Planned spud date for Druid well is June 2017, subject to regulatory consents

    • Revised Druid well cost estimates is c. $35 million (compared to previous estimate of $46 million)

    • Additional cost for deepening of well to penetrate the Drombeg prospect amounts to c. $15 million

    • Farm out discussions continue

• Newgrange Prospect, Goban Spur Basin (FEL 6/14)

  • Prospective Resource Potential of c. 13.6 TSCF GIIP or c. 9.2 BBO STOIIP

  • Top Seal capacity analysis indicates potential for a hydrocarbon column of up to 350 metres

  • Latest internal well gross cost estimate of c. $22.5 million

  • Farm out discussions continue

• Spanish Point Gas Condensate Project, Northern Porcupine Basin (FEL 2/04)

  • Farm out campaign continues

• Dunquin Oil Prospect, Southern Porcupine Basin (FEL 3/04)

  • ENI assumes operatorship following withdrawal of ExxonMobil

  • Providence's equity increased to 26.846%*

    * Includes equity acquired from Atlantic Petroleum in July 2015, which is subject to approval of the Minister for Communications, Climate Action and Environment.

    PLACING OFFER AND OPEN OFFER
• July 14, 2016 - EGM held

  • All resolutions passed with at c. 99% acceptances

• Details of Placing

  • Raised gross proceeds of £53.712 million through issuance of 447.607 million shares £0.12 pence per share

  • Significantly increased the depth of institutional shareholder base

• Details of Open Offer

  • Raised proceeds of €1.516 million through the issuance of 9.975 million shares**

    • Directors subscribed for 1.956 million shares** at a cost of €0.297 million

      **Includes 200,000 direct share subscription by Lex Gamble

• Following Admission of Placing and Open Offer shares, the Company's total issued and voting share capital now comprises 597,658,958 ordinary shares of €0.10 each POST FINANCING EVENTS
• Melody Debt Retired

  • Post the EGM, all amounts outstanding under the loan facility with Melody were paid in full by the payment of cash equal to US$20 million (together with accrued interest) and the allotment of 9,938,033 ordinary shares of

    €0.10 cents each (at the Placing price of £0.12 per share)

  • Post repayment, the floating charge over the Company's assets held by Melody was released

  • Providence is now debt free

• Court of Appeal - Transocean Litigation

• The Company discharged the balance of the uncontested sums owing to Transocean in respect of the Court of Appeal order made on April 13, 2016

• The hearing of Transocean's claim in respect of Part 36 of the English Civil Procedure Rules has now been listed to be heard by Mr Justice Popplewell on Friday, October 14, 2016

• In the event that Transocean is successful in the Commercial Court in relation to the Part 36 claim, the Company estimates that it would be required to make additional net payment of c.US$3.1 million to Transocean

• In the event of an adverse adjudication, it is open to the Company to appeal such a decision