Providence Resources to Fast-Track Gulf of Mexico Discovery

Providence Resources has made a successful oil and gas discovery in High Island Block A-268 in the Gulf of Mexico. It is planned that this new field, which is located 125 kilometers off the coast of Texas and in which Providence holds a 5% working interest, will undergo a fast-track development to existing infrastructure. First production from the field is planned for later this year.

Speaking today, Tony O'Reilly Jr, Chief Executive of Providence, said:

'We are delighted to be a part of this successful drilling program in the Gulf of Mexico. This High Island project is part of Providence's objective to increase its daily production rates and we are delighted that the consortium is planning to move ahead with a fast track development program for the second half of 2007.'

'While final production rates are still to be determined, it is anticipated that initial field rates will be in the region of 14 MMSCFGPD and 280 BOPD (c.100 BOEPD net to Providence) when production starts later this year, significantly increasing our present daily production. Drilling and development costs will be met from existing Providence financing resources.'

'Furthermore, the encouraging results from this well, give the Company greater confidence as to the potential for further step out locations and associated incremental production from this block in the future. In addition, Providence, as part of a US-based industry consortium, continues to examine other such opportunities in the Gulf of Mexico as we look to continually increase our daily production rates in a timely and cost-effective manner.'

Partners in the High Island A-268 block include Challenger Minerals Inc. (Operator, part of the GlobalSantaFe Corporation), Peregrine, RP Joint Venture (which comprises Reeder, HRB Oil & Gas), Pruet Offshore, Warren American Offshore, HDO Gulf Energy, Cottesloe Oil & Gas.

The High Island A-268 OCS-G 22268 #1 discovery well The OCS-G 22268 #1 well was drilled in 165 feet of water on High Island block A-268 using the TODCO 207 jackup. The well was drilled to a deviated total depth of 8,172 ft TVDSS. The well was drilled on a Tertiary-aged gas-condensate target with pre-drill most likely recoverable resource estimate of 10 BSCFE. A number of additional similar geological targets have also been identified within the High Island A-268 block totaling a further 28 BSCFE of potential resources and these are now being assessed as locations for possible future drilling.

Significant hydrocarbon shows were recorded across the target reservoir sands during drilling operations and subsequent logging together with modular dynamic testing (MDT) have revealed the presence of a number of gas and condensate bearing intervals. Two primary reservoir zones have been identified with a total logged pay thickness of c. 100 feet. Average porosities derived from well log analysis and core data range 25-30% suggesting excellent reservoir quality. A production liner is being set across these reservoir intervals in preparation for completing as a producing well.

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