Providence Confirms Hook Head Oil Discovery

Well testing operations on Providence's 50/11-3 Hook Head appraisal well, Offshore Ireland, has been completed at a drilling depth of 4,880 ft TVDSS, using the Petolia semi-submersible drilling rig, which was contracted for a 50-day period.

The 50/11-3 Hook Head appraisal well in located in c. 240 ft water depth and is c. 60km offshore Southern Ireland, situated in Standard Exploration License 2/07 in the North Celtic Sea Basin. The license interest is jointly held by six companies and is operated by Providence Resources, which has an interest of approximately 43.5%.

The well was drilled on the crest of the structure and was on geological prognosis confirming the pre-drill interpretation. Hydrocarbons were encountered over a 484 ft. gross interval in the main target zone with 75 ft. of net hydrocarbon bearing section. Three further prospective zones, which were identified pre-drill as exploration targets for the well, were all logged as being hydrocarbon-bearing. These good quality reservoir zones, which are above the main target zone, had good oil/gas shows whilst drilling and logged a cumulative of c. 20 ft. of additional net pay.

The hydrocarbon type recovered is now confirmed as a good quality (c. 30o API) crude oil, with associated gas. The reservoir is normally pressured to c. 1,170 psi at c. 2,550 ft. TVDSS. The reservoir porosities within the hydrocarbon bearing zones are up to 27%.

Whilst key reservoir and fluid data were acquired during the initial well flowing period, 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 program. Further work on the down-hole mechanical conditions was precluded by the time limitations relating to the rig contract.

Accordingly, the partners have now moved to suspend the well for future re-entry and potential use as a production well, having gathered all data that can be reasonably acquired at this time. The rig is currently being demobilized.

The Hook Head partners have committed to an immediate and detailed evaluation of the well results in the context of operations as well as reservoir data with a view to further appraisal/development drilling at Hook Head early in the 2008 drilling season. Discussions have already commenced regarding the securing of an appropriate rig.

Commenting on the announcement, Mr. Tony O'Reilly, Chief Executive said:

"We are very pleased to have confirmed Hook Head as a significant oil accumulation with hydrocarbon bearing reservoirs over a large area. This drilling program has been a major step forward for Providence and its partners as it has met or exceeded our pre-drill objectives, in terms of hydrocarbon type, areal extent and indicative productivity. We also were able to obtain important well data and fluid samples, which will be vital for our future planning. We will now move quickly to evaluate all of these data in the context of our further drilling plans and potential development scenarios for Hook Head."

A lack of good casing cement bond resulted in poor casing integrity, which resulted in water ingress from zones above and below the main hydrocarbon-bearing intervals. Several sequential remedial cement jobs were carried out which hampered the ability to carry out a full testing program within the timeframe available. However, this remedial work has secured the well for potential future re-use.

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