UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM
10-K/A



(Mark
One)

þAnnual
reportpursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934for
the fiscal year endedDecember 31, 2007.

oTransition
reportpursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934for
the transition period from
to .



Commission
file number:000-30377



PROVIDENCE
RESOURCES, INC.

(Exact
name ofregistrant
as specified in its charter)

|TEXAS(Stateor other jurisdiction of
incorporation or organization) | 06-1538201(I.R.S. Employer  Identification No.)
|------------------------------------------------------------------ | -----------------------------------------------



5300
 Bee Caves Rd, Bldg 1 Suite 240, Austin, Texas, 78746

(Address
 ofprincipal executive offices)
 (Zip Code)



(512)
 970-2888

(Issuers
 telephone number, including area code)



Securities
 registered under Section 12(b)
 of theExchangeAct:
 none.

Securities
 registered under Section 12(g)
 of theExchangeAct:
 common stock (title
 of class),$0.001 par value.

Indicate
 by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act
 of 1933:YesoNoþ.Indicate
 by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of theExchangeAct:
 YesoNoþ.

Indicate
 by check mark whether theregistrant:
 (1) filed all reports required to be filed by Section 13 or 15(d) of theExchangeAct
 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
 subject to such filing requirements for the past 90 days:Yesþ
 No o.

Indicate
 by check mark if disclosure of delinquent filers in response
 to Item 405 of Regulation S-K is not contained
 herein, and willnotbe
 contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III
 of this Form 10-K/A
 or any amendment to this Form 10-K/A
 o.

Indicate
 by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
 reporting company as defined by
 Rule 12b-2 of theExchangeAct:smaller
 reporting company þ.

Indicate
 by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of theExchangeAct):
 Yeso
 No þ.

The
 aggregate market value of the registrant's common stock, $0.0001
 par value, held by non-affiliates (49,653,214
 shares)
 was approximately$9,185,845
 based on the average closing bid and asked prices($0.185)
 for the common stock onOctober 15,
2008.



AtOctober
 17,2008,
 the number of shares outstanding of the registrant's common stock, $0.0001
 par value (the only class of voting stock),was
60,
261,118
.

1









TABLE OF CONTENTS



|          |                                                                                                                                    |  |  |      |  | 
|--------- | ---------------------------------------------------------------------------------------------------------------------------------- |  |  | ---- |  | 
|          |                                                                                                                                    |  |  | Page
|          |                                                                                                                                    |  |  |     
|PART I.   |                                                                                                                                    |  |  |     
|          | Item       1.        Business                                                                                                      |  |  | 3    | 
|          | Item       1A.      Risk Factors                                                                                                   |  |  | 8    | 
|          | Item       1B.      Unresolved Staff Comments                                                                                      |  |  | 13   | 
|          | Item       2.        Properties                                                                                                    |  |  | 13   | 
|          | Item       3.        Legal Proceedings                                                                                             |  |  | 14   | 
|          | Item       4.        Submission of Matters to a Vote of Security Holders                                                           |  |  | 14   | 
|PART II.  |                                                                                                                                    |  |  |     
|          | Item       5.        Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities |  |  | 15   | 
|          | Item       6.        Selected Financial Data                                                                                       |  |  | 17   | 
|          | Item       7.        Management's Discussion and Analysis of Financial Condition and Results of Operations                         |  |  | 17   | 
|          | Item       7A.     Quantitative and Qualitative Disclosures about Market Risk                                                      |  |  | 22   | 
|          | Item       8.        Financial Statements and Supplementary Data                                                                   |  |  | 22   | 
|          | Item       9.        Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                          |  |  | 23   | 
|          | Item       9A.     Controls and Procedures (Item 9A (T))                                                                           |  |  | 23   | 
|          | Item       9B.     Other Information                                                                                               |  |  | 23   | 
|PART III. |                                                                                                                                    |  |  |     
|          | Item     10.      Directors, Executive Officers and Corporate Governance                                                           |  |  | 24   | 
|          | Item     11.      Executive Compensation                                                                                           |  |  | 27   | 
|          | Item     12.      Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                   |  |  | 28   | 
|          | Item     13.      Certain Relationships and Related Transactions, and Director Independence                                        |  |  | 29   | 
|          | Item     14.      Principal Accountant Fees and Services                                                                           |  |  | 29   | 
|          | Item     15.      Exhibits and Financial Statement Schedules                                                                       |  |  | 30   | 
|          | Signatures                                                                                                                         |  |  | 31   | 
|          |                                                                                                                                    |  |  |     

Explanatory Note

This Form 10-K/A has been amended to: (a) clarify our Business section disclosure; (b)
            correct our Liquidity and Capital Resources subsection and Critical Accounting Pronouncements
            subsection; (c) insert a revised Report of Independent Registered Public Accounting
            Firm; (d) revise our financial statements and notes; (e) add
            to our Controls and Procedures; and (f) modify Exhibit
            31.

2





PART
 I



ITEM
 1.BUSINESS



As
 used herein the terms Company,
 we, us, and our, refer to Providence Resources, Inc., a Texas corporation, and our subsidiaries.
 All references herein to Providence Exploration refer to Providence Exploration, LLC, our wholly owned subsidiary, and
 its subsidiary PDX Drilling I, LLC.



Corporate
 History

The Company
 was incorporated under the laws of the State of Texas on February 17,
 1993, as GFB Alliance Services, Inc. We have since undergone several name changes and on May 13, 1999, pursuant to an
 amendment to our articles of incorporation, adopted the name Healthbridge, Inc. During early 2002 we acquired exclusive
 ownership and intellectual property rights for a
 medical
 wastedisposal
 technology.Prior
 to year end 2005 we decided to discontinue all operations due to our inability to successfully commercialize this technology.



The
 Company decided to enter into the oil and gas business in November
 of 2005. We executed a secured promissory note with Providence Exploration dated December 1, 2005, to loan up to $5,000,000 to fundits
 oil and gas exploration,development activities and lease
 purchases. On April 10, 2006, we executed a Securities Exchange Agreement with Providence Exploration and the membership unit holders
 of Providence Exploration and concurrently entered into a Note Exchange Agreement with the holders of certain of Providence
 Explorations promissory notes, which agreements resulted in the acquisition of Providence Exploration as a wholly owned
 subsidiary on September 29, 2006, at which time we changed our nameto
 Providence Resources, Inc.



The
 Companys principal place of business is located at 5300 Bee
 Caves Rd, Bldg 1 Suite 240, Austin, Texas, 78746, and our telephone
 number is (512) 970-2888.



The
 Companysregistered statutory office is located at 408 West
 17th Street, Ste. 101, Austin, Texas 78701.



The
 Company



The
 Company is involved in oil and gas exploration in Val Verde,Comanche, and Hamilton Counties,
 Texas.

Oil
 and Gas Exploration in Val Verde County  On March 30, 2006, the Company
 closed an Agreement for Purchase and Sale with Global Mineral Solutions, L.P., to purchase approximately 12,832 acres of oil and gas
 leases located in Val Verde County, Texas, in exchange for $3,849,600.



The
 Companysinterests in Val Verde County include
 multiple oil and gas target zones
 within a large structuredelineated
 bypriorseismic
 and drilling in the area.The leases lie
 along a trend that has produced from multiple large gas fields, including
 the Gomez field, which has produced 10.6 trillion cubic feet to date, the Brown Bassett, which has produced 1.6 trillion cubic feet
 to date,
 and the JM Field, which has produced 650 billion cubic feet to date.



3





Seismic
 Exploration  Val Verde County Leases

On
 March 27, 2007 the Company engaged TRNCO Petroleum Corporation (TRNCO)
 of Midland, Texas todesign
 andimplementa high-tech,high-quality
 3D seismicsurvey of
 the ValVerde County leases. The data collected is
 intended to illuminate deep gas targets at depths ranging from 14,000 to 16,000 feet in the
 Ellenberger carbonate, Strawn carbonate and Pennsylvanian-Wolfcamp sandstone reservoirs which
 underlie ourleasehold interests over 57 squaremiles.
 TRNCOwas responsible for supervising the acquisition,
 processing, licensing and interpretation of the seismic
 data while Dawson Geophysical Company(Dawson)was
 engaged to obtain the actual 3D seismic data.



Dawson
 went to work on the property obtaining seismic data at a rate of 1 square mile a day delivering data on a weekly basis. Demux
 and geometry workwas performed on accumulated data as it was
 received
 Actual
 data acquisitionwascompleted
 by the end of November.The
 Companyengaged Fairfield Industries Incorporated(FairField)to
 process and interpret the Val Verde seismic data. Fairfield
 is well known worldwide for developing and operatingsophisticated
 software and hardware configurations to process data thatcreates
 accurate images of the Earths subsurface for geologic
 interpretation. High-performance networkingthat utilizes
 workstation cluster technology empowers Fairfield with supercomputing
 capabilities that generate superior algorithms withthe best
 available noise reduction, multiple removal, pre-stack time,depth
 imaging, and multi-component seismic processing. Superior hardware and software capabilities, coupled
 with international experience in marine streamer, shallow water,
 transition zone,
 and high land seismic
 data analysis and processing enable Fairfield
 to providegeophysical services in a timely and cost-effective
 manner.



The
 Companyalsoengaged
 Mr. Sam Tingas
 a consultanttoprovide
 additional processing experience to the work ofFairfieldand
 TRNCO to ensure high quality results.
 Mr. Ting is a
 dedicated
 geophysicist with over25 yearsexperience
 that includesexploration
 seismic projects in the Delaware,Midland,
 and Val Verde Basins in Texas. Since early 2005, Mr. Ting has
 provided geophysical services as a private consultant. Between
 April 2000 and February 2005, Mr. Ting wasthe
 founder
 and president of Geo-Experts, Inc.,
 a geo-science
 consulting company of more than 40 consultants that provided expertise associated with
 exploration and production projects worldwide. Prior to founding
 Geo-Experts, Mr. Ting was with Mobil Research and Development for 20 years with his last 9 years of service assenior
 geophysical advisorresponsible
 forproviding technical
 evaluations and assistance for Mobil's worldwide geophysical
 applications.



Meanwhile,the
 Companysmanagement and consultants are
 reviewing
 general geological
 and reservoir attributes in order tooptimize seismic processing
 for mapping fractured reservoirs. The ultimate seismic challengefacingthe
 Companyis to map the most
 productive pays from Ellenberger to Strawn represented by
 compartmentalized and hydro-thermally fractured dolomitic reservoirs.



The
 anticipated final processing of seismic data by our team of
 dedicated professionals is expected by the middleof
 April 2008.
 Interpretative work toidentify and prioritize initial drilling
 locationswill
 be determined shortly thereafter.Initial drilling on the leases is anticipated within the
 third quarter of 2008. In the event that we do not begin
 drilling by early 2009 theVal Verde Countyleases will
 begin to expire.



4





Drilling
  Val Verde Leases



On
 June 29, 2007, the Company entered into an exploration and development agreement(Agreement)
 with Miller Energy, LLC and certain of its affiliates (Miller) providing for the further
 exploration and development of the Companys oil and gas leasehold interests in Val Verde County, Texas.
 Miller, and its affiliates, is a group of privately owned oil and gas
 companies, based in Lafayette, Louisiana. Millers business operations include oil and gas interests within the Barnett Shale,
 in the vicinity of Fort Worth, Texas.

The
 Agreement includes the following provisions:



| | · | Miller will undertake all activities necessary to test and develop the Companys oil and gas leasehold interests in Val Verde County;
| | - | -------------------------------------------------------------------------------------------------------------------------------------

| | · | Miller will fund up to $10,000,000 of drilling costs in Val Verde County through a series of convertible debentures; and
| | - | ------------------------------------------------------------------------------------------------------------------------

| | · | Miller will acquire a 10% working interest in the Companys Val Verde County oil and gas leasehold interests.
| | - | -------------------------------------------------------------------------------------------------------------



The
 Company is now actively working with Miller in anticipation ofthe final interpretation and
 processing ofseismic datathat
 is expected to indicate prospective drill targets.



Oil
 and Gas Exploration in Comanche and Hamilton Counties

On
 October 1, 2005, Providence Exploration purchased interests in approximately 6,272 acres of oil and gas leases located in Comanche
 and Hamilton Counties, Texas from Harding Company.
 Seismic work was completed on the leases and initial drill targets identified. An oil and gas pipeline infrastructure was also
 completed in Southeast Comanche County by Comanche County Pipeline, LLC, a partnership owned 90% by the Company and 10% by Harding
 Company and others. Harding Company drilled four wells, Marrs #1, Steward #1H, Nowell #1 and Patton #2H onthe
 CompanysComanche County leases. None of the wells indicated commercial quantities of gas
 that could be produced on an economic basis and were abandoned.
 We now retain approximately 3,000 acres of the original acreage leased
 in Comanche and Hamilton County asseveral of the leases haveexpired
 due to non-production. No additional wells are anticipated for these leases until such time as
 further evaluation of existing work is completed.



Competition



The
 oil and gas business in Texas is highly competitive. We compete with over 1,000 independent companies, many with greater financial
 resources and larger staff than we have available. Texas hosts approximately 40 significant independent operators including Marathon
 Oil, Houston Exploration Company and Newfield Exploration Company in addition to over 950 smaller operations with no single producer
 dominating the area. Major operators such as Exxon, Shell Oil, ConocoPhillips, Mobil and others that are considered major players in
 the oil and gas industry retain significant interests in Texas. We believe that we can successfully compete against the independent
 companies by focusing our efforts on the efficient development of our leases.



Marketability



The
 products to be sold by us, oil and natural gas, are commodities purchased by many distribution and retail companies. Crude oil can be
 sold whenever it is produced subject to transportation cost. Natural gas requires transportation from point of production to the
 purchaser by pipeline. The Companydoes
 not produce oil or gas products for market at this time.

5





Patents,
 Trademarks, Licenses,Franchises, Concessions, Royalty Agreements and Labor
 Contracts



We
 currently have no patents, trademarks, licenses, franchises, concessions, or labor
 contract, except the leaseswe
 haveacquired for oil, gas and mineralinterests
 do provide for the payment of royalties in the eventproduction
 is realized.



Governmental
 and Environmental
 Regulation

The
 Companys oil and gas exploration, including future production and related operations are
 subject to extensive rules and regulations promulgated by federal and state agencies. Failure to comply with such rules and
 regulations can result in substantial penalties. The regulatory burden on the oil and gas industry adds to our cost of doing business
 and affects our profitability. Because such rules and regulations are frequently amended or interpreted differently by regulatory
 agencies, we are unable to accurately predict the future cost or impact of complying with such laws.



The
 Companysoil and gas exploration and future production operations are and will be
 affected by state and federal regulation of gas production, federal regulation of gas sold in interstate and intrastate commerce,
 state and federal regulations governing environmental quality and pollution control, state limits on allowable rates of production by
 a well or pro-ration unit and the amount of gas available for sale, state and federal regulations governing the availability of
 adequate pipeline and other transportation and processing facilities, and state and federal regulation governing the marketing of
 competitive fuels. For example, a productive gas well may be shut-in because of an over-supply of gas or lack of an
 available gas pipeline in the areas in which we may conduct operations. State and federal regulations generally are intended to
 prevent waste of oil and gas, protect rights to produce oil and gas between owners in a common reservoir, control the amount of oil
 and gas produced by assigning allowable rates of production and control contamination of the environment. Pipelines are subject to
 the jurisdiction of various federal, state and local agencies.



Many
 state authorities require permits for drilling operations, drilling bonds and reports concerning operations and impose other
 requirements relating to the exploration and production of oil and gas. Such states also have ordinances, statutes or regulations
 addressing conservation matters, including provisions for the unitization or pooling of properties, the regulation of spacing,
 plugging and abandonment of wells, and limitations establishing maximum rates of production
 from wells.Texas regulationsdo provide certainlimitations
 with respect to our operations.



Environmental
 Regulation



The
 recent trend in environmental legislation and regulation has been generally toward stricter standards, and this trend will likely
 continue.The Companydoes not presently anticipate that
 we will be required to expend amounts relating to future oil and gas production operations that are material in relation to our total
 capital expenditure program by reason of environmental laws and regulations, but because such laws and regulations are subject to
 interpretation by enforcement agencies and are frequently changed by legislative bodies, we are unable to accurately predict the
 ultimate cost of such compliance for 2008.



The
 Companyis subject to numerous laws and regulations governing the discharge of materials into
 the environment or otherwise relating to environmental protection. These laws and regulations may require the acquisition of a permit
 before drilling commences, restrict the types, quantities and concentration of various substances that can be released into the
 environment in connection with drilling and production activities, limit or prohibit drilling activities on certain lands lying
 within wilderness, wetlands, and areas containing threatened and endangered plant and wildlife species, and impose substantial
 liabilities for unauthorized pollution resulting from our operations.


6




The following environmental laws and regulatory programs
 appear to be the most significant to our operations in 2008:



Clean
 Water and Oil Pollution Regulatory Programs  The Federal
 Clean Water Act (CWA) regulates discharges of pollutants to surface waters. The discharge of crude oil and petroleum
 products to surface waters also is precluded by the Oil Pollution Act (OPA). Our operations are inherently subject to
 accidental spills and releases of crude oil and drilling fluids that may give rise to liability to governmental entities or private
 parties under federal, state or local environmental laws, as well as under common law. Minor spills may occur from time to time
 during the normal course of our future production operations. We will maintain spill prevention control and countermeasure plans (SPCC
 plans) for facilities that store large quantities of crude oil or petroleum products to prevent the accidental discharge of
 these potential pollutants to surface waters.



Clean
 Air Regulatory Programs  Our operations are subject to the federal Clean Air Act (CAA),
 and state implementing regulations. Among other things, the CAA requires all major sources of hazardous air pollutants, as well as
 major sources of certain other criteria pollutants, to obtain operating permits, and in some cases, construction permits. The permits
 must contain applicable Federal and state emission limitations and standards as well as satisfy other statutory and regulatory
 requirements. The 1990 Amendments to the CAA also established new monitoring, reporting, and recordkeeping requirements to provide a
 reasonable assurance of compliance with emission limitations and standards.Providence
 Exploration currently obtains construction and operating permits for our compressor engines; we
 are not presently aware of any potential adverse claims in this regard.



Waste
 Disposal Regulatory Programs  Our operations will generate and result in the
 transportation and disposal of large quantities of produced water and other wastes classified by EPA as non-hazardous solid
 wastes. The EPA is currently considering the adoption of stricter disposal and clean-up standards for non-hazardous solid
 wastes under the Resource Conservation and Recovery Act (RCRA). In some instances, EPA has already required the clean up
 of certain non-hazardous solid waste reclamation and disposal sites under standards similar to those typically found only for
 hazardous waste disposal sites. It also is possible that wastes that are currently classified as non-hazardous by EPA,
 including some wastes generated during our drilling and production operations, may in the future be reclassified as hazardous
 wastes. Because hazardous wastes require much more rigorous and costly treatment, storage, transportation and disposal
 requirements, such changes in the interpretation and enforcement of the current waste disposal regulations would result in
 significant increases in waste disposal expenditures.



The
 Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)
  CERCLA, also known as the Superfund law, imposes liability, without regard to
 fault or the legality of the original conduct, on certain classes of persons who are considered to have caused or contributed to the
 release or threatened release of a hazardous substance into the environment. These persons include the current or past
 owner or operator of the disposal site or sites where the release occurred and companies that transported disposed or arranged for
 the disposal of the hazardous substances under CERCLA. These persons may be subject to joint and several liabilities for the costs of
 cleaning up the hazardous substances that have been released into the environment and for damages to natural resources.The
 Company is not presently aware of any potential adverse claims in this regard.



7





Texas
 Railroad Commission  The State of Texas has promulgated certain legislative rules
 pertaining to exploration, development and production of oil and gas that are administered by the Texas Railroad Commission. The
 rules govern permitting for new drilling, inspection of wells, fiscal responsibility of operators, bonding wells, the disposal of
 solid waste, water discharge, spill prevention, liquid injection, waste disposal wells, schedules that determine the procedures for
 plugging and abandonment of wells, reclamation, annual reports and compliance with state and federal environmental protection laws.
 We believe that we will function in compliance with these rules.



We
 believe that all of our operations are in substantial compliance with current applicable federal, state and local environmental laws
 and regulations and that continued compliance with existing requirements will not have a material adverse effect our financial
 position, cash flows or results of operations. There can be no assurance, however, that current regulatory requirements will not
 change, currently unforeseen environmental incidents will not occur or past non-compliance with environmental laws or regulations
 will not be discovered.

Employees



The
 Companycurrently has2
 employees.
 We also use an independent operator and contractors to assist us in managing ourinterests
 in oil and gas properties.Management
 also uses consultants, attorneys, and accountants as necessary to
 assist in the development of our business.



Reports
 to Security Holders



The
 Companys annual report contains audited financial statements. We are not required to deliver an annual report to security
 holders and will not automatically deliver a copy of the annual report to our security holders unless a request is made for such
 delivery. We file all of our required reports and other information with theSecurities
 and Exchange Commission (the Commission). The public
 may read and copy any materials that are filed by the Company with theCommissionat
 the Commissions Public Reference Room at100 F
 Street, N.E.,
 Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at
 1-800-SEC-0330. The statements and forms filed by us with the Commission have also been filed electronically and are available for
 viewing or copy on the Commission maintained Internet site that contains reports, proxy and information statements, and other
 information regarding issuers that file electronically with the Commission. The Internet address for this site can be found athttp://www.sec.gov.



ITEM
 1A.     RISK FACTORS



Our
 future operating results are highly uncertain. Before deciding to invest in us or to maintain or increase your investment, you should
 carefully consider the risks described below, in addition to the other information contained in this annual report. If any of these
 risks actually occur, our business, financial condition or results of operations could be seriously harmed. In that event, the market
 price for our common stock could decline and you may lose all or part of your investment.



Risks
 Related to the Companys Business



The
 Company has a history of operating losses and such losses may continue in the future.

Since
 the Companys inception in 1993, our operations have resulted in a continuation of losses and an accumulated deficit of $38,118,959
 at December 31, 2007. We
 will continue to incur operating losses until such time as we begin producing oil and gas revenue, which may or may not eventuate.
 Should the Company fail to produce oil and gas revenue we may continue to operate at a loss and may never be profitable.

8





The
 Company has a limited operating history as an oil and gas exploration company.

The
 Company acquired Providence Exploration on September 29, 2006, which company first began oil and gas exploration operations during
 the fourth quarter of 2005. As such, our limited operating history in the oil and gas
 exploration sector provides an inadequate track record from which to base future projections
 of success.

The
 Company has a history of uncertainty about continuing as a going concern.

The
 Companys audits for the periods ended December 31, 2007 and December 31, 2006
 expressed substantial doubt as to our ability to continue as a going concern as a result of recurring
 losses, an accumulated deficit of $38,118,959
 as of December 31, 2007,
 and revenue generating activities that were insufficient to sustain operations. Unless we are able to cure this pattern of
 reoccurring losses and insufficient revenue, our ability to continue as a going concern will be in jeopardy.

The
 Company cannot represent that it will be successful in continuing operations.

The
 Company has not, to date, generated sufficient revenue from operations to cover expenses and
 may notgenerate sufficient revenue over the next twelve months to ensure continued oil and gas
 development operations. Should the Company be unable to realize sufficient revenue over that time period, it will be forced to raise
 additional capital to remain in operation.Except for our Agreement with Miller Energy, we
 have no commitments for the provision of additional capital and can offer no assurance that such
 capital will be available as necessary to continue operations.

Risks
 Related to the Oil and Gas Industry



Oil
 and natural gas drilling and producing operations involve various risks which could result in net losses.

Drilling
 activities are subject to many risks, including the risk that no commercially productive reservoirs will be discovered. Wells which
 we drill may not be productive, and, thus, we may not be able to recover all or any portion of our investment in such wells. Drilling
 for oil and natural gas may involve unprofitable efforts, not only from dry wells, but also from wells that are productive but do not
 produce sufficient net reserves to return a profit after deducting drilling, operating and other costs. The seismic data and other
 technologies which we use do not allow us to know conclusively prior to drilling a well that oil or natural gas is present or may be
 produced economically. The cost of drilling, completing and operating a well is often uncertain, and cost factors can reduce the
 feasibility of a project to produce a profit. Further, our drilling operations may be curtailed, delayed or canceled as a result of
 numerous factors, including:

| | · | unexpected drilling conditions;
| | - | -------------------------------

| | · | title problems;
| | - | ---------------

| | · | pressure or irregularities in formations;
| | - | -----------------------------------------

| | · | equipment failures or accidents;
| | - | --------------------------------

| | · | adverse weather conditions;
| | - | ---------------------------

| | · | compliance with environmental and other governmental requirements; and
| | - | ----------------------------------------------------------------------

| | · | cost of, or shortages or delays in the availability of, drilling rigs, equipment and services.
| | - | ----------------------------------------------------------------------------------------------



Our
 operations are subject to all the risks normally incident to the operation and development of oil and natural gas properties and the
 drilling of oil and natural gas wells, including:

9





| | · | encountering well blowouts;
| | - | ---------------------------

| | · | cratering and explosions;
| | - | -------------------------

| | · | pipe failure;
| | - | -------------

| | · | fires;
| | - | ------

| | · | formations with abnormal pressures resulting in uncontrollable flows of oil and natural gas;
| | - | --------------------------------------------------------------------------------------------

| | · | brine or well fluids; and
| | - | -------------------------

| | · | release of contaminants into the environment and other environmental hazards and risks.
| | - | ---------------------------------------------------------------------------------------



The
 nature of these risks is such that some liabilities including environmental fines and penalties could exceed our ability to pay for
 the damages. We could incur significant costs due to these risks that could result in net losses.



The
 Company is subject to federal, state and local laws and regulations which could create liability for personal injuries, property
 damage, and environmental damages.



Exploration
 and development, exploitation, production and sale of oil and natural gas in the United States is subject to extensive federal, state
 and local laws and regulations, including complex tax laws and environmental laws and regulations. Existing laws or regulations, as
 currently interpreted or reinterpreted in the future, or future laws or regulations could harm the Companys business, results
 of operations and financial condition. We may be required to make large expenditures to comply with environmental and other
 governmental regulations. Matters subject to regulation include oil and gas production and saltwater disposal operations and our
 processing, handling and disposal of hazardous materials, such as hydrocarbons and naturally occurring radioactive materials,
 discharge permits for drilling operations, spacing of wells, environmental protection, reports concerning operations, and taxation.
 Under these laws and regulations, we could be liable for personal injuries, property damage, oil spills, discharge of hazardous
 materials, reclamation costs, remediation, clean-up costs and other environmental damages.

Shortages
 of oil field equipment, services and qualified personnel could reduce the Companys profit margin, cash flow and operating
 results.



The
 demand for qualified and experienced field personnel to drill wells and conduct field operations, geologists, geophysicists,
 engineers and other professionals in the oil and natural gas industry can fluctuate significantly, often in correlation with oil and
 natural gas prices, causing periodic shortages. There have also been shortages of drilling rigs and other equipment, as demand for
 rigs and equipment has increased along with the number of wells being drilled. These factors also cause significant increases in
 costs for equipment, services and personnel. Higher oil and natural gas prices generally stimulate increased demand and result in
 increased prices for drilling rigs, crews and associated supplies, equipment and services. We cannot be certain when or if we will
 experience these issues and these types of shortages or price increases which could significantly decrease any profit margin, cash
 flow and operating results on any particular well or restrict our ability to drill additional wells.

The
 results of the Companys operations depend on the explorationand
 operationalefforts of Miller Energy, LLC, Harding
 Company,TRNCO Petroleum Corporation,Dawson
 Geophysical, Fairfield Industries, and certain consultants,all of whom are third
 parties.



Exploration
 and operationalefforts
 through seismic exploration, drilling and operation in Comanche
 and Hamilton Counties have beenprovided by Harding
 Company,explorationeffortsthrough
 seismic exploration, processing and interpretationin Val Verde County have been provided by
 TRNCO, Dawson, Fairfield, Sam Ting and Bill Purves, while drilling on the Val Verde County
 leases will prospectively be conducted by Miller Energy. Despite being leaders in their respective fields, our dependence on third
 parties to initiate, determine and conduct operations could impede our own prospect of success.

10





Oil
 and natural gas prices are volatile, and any substantial decrease in prices could cause the Company to continue to operate at a loss
 in the event that we are successful in producing oil and gas.

Our
 future financial condition, results of operations and the carrying value of our oil and natural gas properties will depend primarily
 upon the prices we receive for production. Oil and natural gas prices historically have been volatile and are likely to continue to
 be volatile in the future. Our cash flow from operations will be highly dependent on the prices that we receive for oil and natural
 gas. This price volatility also affects the amount of cash flow available for capital expenditures and our ability to borrow money or
 raise additional capital. The prices for oil and natural gas are subject to a variety of additional factors that are beyond our
 control. These factors include:

| | · | the level of consumer demand;
| | - | -----------------------------

| | · | the domestic supply;
| | - | --------------------

| | · | domestic governmental regulations and taxes;
| | - | --------------------------------------------

| | · | the price and availability of alternative fuel sources;
| | - | -------------------------------------------------------

| | · | weather conditions; and
| | - | -----------------------

| | · | market uncertainty.
| | - | -------------------



These
 factors and the volatility of the energy markets generally make it extremely difficult to predict future oil and natural gas price
 movements with any certainty. Declines in oil and natural gas prices would not only reduce future revenue, but could reduce the
 amount of oil and natural gas that we can produce economically and, as a result, could cause us to continue to operate at a loss.
 Should the oil and natural gas industry experience significant price declines, we may continue to operate at a loss
 even if we produce oil or gas.



Risks
 Related to the Companys Stock



The
 Company will require additional capital funding.

The
 Company will require additional funds, either through equity offerings or debt placements to develop our operations. Such additional
 capital may result in dilution to our current shareholders. Our ability to meet short-term and long-term financial commitments
 depends on future cash. There can be no assurance that future income will generate sufficient funds to enable us to meet our
 financial commitments.



The
 market for our stock is limited and our stock price may be volatile.

The
 market for our common stock has been limited due to low trading volume and the small number of brokerage firms acting as market
 makers. Because of the limitations of our market and volatility of the market price of our stock, investors may face difficulties in
 selling shares at attractive prices when they want to. The average daily trading volume for our stock has varied significantly from
 week to week and from month to month, and the trading volume often varies widely from day to day.



The
 Company does not paycashdividends.



The
 Company does not paycashdividends.
 We have not paid anycashdividends
 since inception and have no intention of paying anycashdividends
 in the foreseeable future. Any future dividends would be at the discretion of our board of directors and would depend on, among other
 things, future earnings, our operating and financial condition, our capital requirements, and general business conditions. Therefore,
 shareholders should not expect any type of cash flow from their investment.



11





We
 incur significant expenses as a result of being quoted on the Over the Counter Bulletin Board, which may negatively impact our
 financial performance.We incur significant legal, accounting and other
 expenses as a result of being listed on the Over the Counter Bulletin Board. The Sarbanes-Oxley Act of 2002, as well as related rules
 implemented by the Commission, has required changes in corporate governance practices of public companies. We expect that compliance
 with these laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 as discussed in the
 following risk factor, may substantially increase our expenses, including our legal and accounting costs, and make some activities
 more time-consuming and costly. As a result, there may be a substantial increase in legal, accounting and certain other expenses in
 the future, which would negatively impact our financial performance and could have a material adverse effect on our results of
 operations and financial condition.



Our
 internal controls over financial reporting may not be considered effective in the future, which could result in a loss of investor
 confidence in our financial reports and in turn have an adverse effect on our stock price.

Pursuant
 to Section 404 of the Sarbanes-Oxley Act of 2002 we are required to furnish a report by our management on our internal controls over
 financial reporting. Such report must contain, among other matters, an assessment of the effectiveness of our internal controls over
 financial reporting as of the end of the year, including a statement as to whether or not our internal controls over financial
 reporting are effective. This assessment must include disclosure of any material weaknesses in our internal controls over financial
 reporting identified by management. If we are unable to continue to assert that our internal controls are effective, our investors
 could lose confidence in the accuracy and completeness of our financial reports, which in turn could cause our stock price to decline.



The
 Companys shareholders may face significant
 restrictions on their stock.



The
 Companys stock differs from many stocks in that it is a penny
 stock. The Commission has adopted a number of rules to regulate penny stocks including, but not limited to, those
 rules from the Securities Act as follows:

3a51-1     which
 defines penny stock as, generally speaking, those securities which
 are not listed on either NASDAQ or a national securities exchange and are priced under $5, excluding securities of issuers that have
 net tangible assets greater than $2 million if they have been in operation at least three years, greater than $5 million if in
 operation less than three years, or average revenue of at least $6 million for the last three years;

15g-1     which
 outlines transactions by broker/dealers which are exempt from 15g-2 through 15g-6 as those whose commissions from traders are lower
 than 5% total commissions;

15g-2
       which details that brokers must disclose risks of penny stock on Schedule 15G;

15g-3
      which details that broker/dealers must disclose quotes and other information relating to the penny
 stock market;

15g-4
      which explains that compensation of broker/dealers must be disclosed;

15g-5
      which explains that compensation of persons associated in connection with penny stock sales must be
 disclosed;

15g-6
      which outlines that broker/dealers must send out monthly account statements; and

15g-9     which
 defines sales practice requirements.


12





Sincethe
 Companys securities constitute a penny stock
 within the meaning of the rules, the rules would apply to us and our securities. Because these rules provide regulatory burdens upon
 broker-dealers, they may affect the ability of shareholders to sell their securities in any market that may develop; the rules
 themselves may limit the market for penny stocks. Additionally, the market among dealers may not be active. Investors in penny stock
 often are unable to sell stock back to the dealer that sold them the stock. The mark-ups or commissions charged by the broker-dealers
 may be greater than any profit a seller may make. Because of large dealer spreads, investors may be unable to sell the stock
 immediately back to the dealer at the same price the dealer sold the stock to the investor. In some cases, the stock may fall quickly
 in value. Investors may be unable to reap any profit from any sale of the stock, if they can sell it at all.



Shareholders
 should be aware that, according to Commission Release No. 34-29093 dated April 17, 1991, the market for penny stocks has
 suffered from patterns of fraud and abuse. These patterns include:

| | · | control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
| | - | -----------------------------------------------------------------------------------------------------------------------

| | · | manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
| | - | -------------------------------------------------------------------------------------------------------------------

| | · | boiler room practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons;
| | - | -------------------------------------------------------------------------------------------------------------------------------

| | · | excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and
| | - | ------------------------------------------------------------------------------------------

| | · | the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



ITEM
 1B.     UNRESOLVED STAFF COMMENTS



Not
 applicable.



ITEM
 2.PROPERTIES



Oil
 and Gas Properties



The
 Company has approximately 12,832 acres of oil and gas leases located in Val Verde County, Texas
 andapproximately3,000
 acresof oil and gas leasesin
 Comanche and Hamilton County.

Drilling
 Activity



In
 the last three fiscal years, the Company
 has drilled no productivewells.
 In2006 and 2007
 we drilled4exploratory
 wells on our leases inComanche
 County which failed to produce economically recoverably quantities of oil or gas.



Present
 Activities



As
 of the date of this current report on Form
 10-K/A,the
 Company is not in the process of drilling wells, installing
 waterfloods, performing pressure maintenance operations, or performing any other related operations of material importance.

Delivery
 Commitments



The
 Companyhas not contracts toprovide
 a fixed and determinable quantity of oil or gas

13





.

Undeveloped
 Acreage



All
 acreage in which the Company maintains an interest is to be considered undeveloped acreage.

Undeveloped
 acreage is considered to be those lease acres on which wells have not been drilled or completed to a point that would permit the
 production of commercial quantities of oil and gas regardless of whether or not such acreage contains proved reserves. Undeveloped
 acreage should not be confused with undrilled acreage held by production under the terms of a lease.



Oil
 and Gas Reserves



Oil
 and gas reserves for our properties have not been determined
 as of December 31, 2007.



Oil
 and Gas Titles



As
 is customary in the oil and gas industry, we perform only a perfunctory title examination at the time of acquisition of undeveloped
 properties.  Prior to the commencement of drilling, in most cases, and in any event where we are the operator, a title examination
 is conducted and significant defects remedied before proceeding with operations.  We believe that the title to our
 properties is generally acceptable to a reasonably prudent operator in the oil and gas industry.  The properties owned by
 us are subject to royalty, overriding royalty, and other interests customary in the industry, liens incidental to operating
 agreements, current taxes and other burdens, minor encumbrances, easements, and restrictions.  We do not believe that any
 of these burdens materially detract from the value of the properties or will materially interfere with their use in the operation of
 our business.



Office
 and Warehouse
 Facilities



The
 Company currently maintains limited office space in Austin, Texas at5300
 Bee Caves Rd, Bldg 1 Suite 240, Austin Texas, 78746for which we pay no rent.
 Our wholly owned subsidiary Providence Exploration maintained limited officer space at 100
 Crescent Court, 7th Floor, Dallas, Texas, 75201 untilDecember
 of 2007. Providence Exploration paid rent of $Nil
 for the year ended December 31, 2007 and $5,325 for the year ended December 31, 2006.Providence
 Explorations wholly owned subsidiary PDX Drilling I, LLC maintained warehouse space in Young County, Texas untilDecember
 of 2006.
 PDX Drilling I, LLC paid rent of $9,600 for the year
 ended December 31, 2007 and $12,200 for the year ended
 December 31, 2006.We believe
 thatour office
 space will be adequate for the foreseeable future.



ITEM
 3.     LEGAL PROCEEDINGS



The
 Company is currently not a party to any legal proceedings.



ITEM
 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



No
 matters were
 submitted to a vote of the security holders, through the solicitation of
 proxies or otherwise, during the fourth quarter ended December 31, 2007.



14





PART
 II



ITEM
 5.     MARKET FOR COMMON EQUITY,
 RELATED STOCKHOLDER MATTERS,
 AND ISSUER PURCHASES OF EQUITY SECURITIES



The
 Companys common stock is quoted on the Over the Counter
 Bulletin Board, a service maintained by the National Association of Securities Dealer, Inc., under the symbol PVRS.
 Trading in the common stock over-the-counter market has been limited and sporadic and the quotations set forth below are not necessarily
 indicative of actual market conditions. These prices reflect inter-dealer prices without retail mark-up, mark-down, or commission,
 and may not necessarily reflect actual transactions. The high and low bid prices for the common stock for each of the quarters listed
 below are as follows:



|Year | Quarter Ended | High  | Low  
|---- | ------------- | ----- | -----
|2007 | December 31   | $0.23 | $0.08
|     | September 30  | $0.25 | $0.14
|     | June 30       | $0.33 | $0.14
|     | March 31      | $0.60 | $0.32
|2006 | December 31   | $1.00 | $0.35
|     | September 30  | $1.60 | $0.70
|     | June 30       | $2.50 | $0.96
|     | March 31      | $0.96 | $0.48



Capital
 Stock



The
 following is a summary of the material terms ofthe Companys
 capital stock. This summary is subject to and qualified by our articles of incorporation and bylaws.



Common
 Stock



As
 of April 1,
 2008, there were241
 shareholders
 of record holding a totalof
 59,161,118
 shares of fully paid and non-assessable common stock of the250,000,000
 shares
 of common stock, par
 value $0.0001,
 authorized. The board of directors believes that the number of beneficial owners is greater than the number of record holders because
 a portion of our outstanding common stock is held in broker street names for the benefit of individual investors. The
 holders of the common stock are entitled to one vote for each share held of record on all matters submitted to a vote of
 stockholders. Holders of the common stock have no preemptive rights and no right to convert their common stock into any other
 securities. There are no redemption or sinking fund provisions applicable to the common stock.



Preferred
 Stock



As
 ofApril 1,
 2008, there were no shares issued and outstanding of the25,000,000
 shares of preferred stock authorized. The par value of the preferred stock is $0.0001
 per share. TheCompanys
 preferred stock may have such rights, preferences and designations and
 may be issued in such series as determined by the board of directors.



15





Warrants



As
 ofApril 1,
 2008, the Company has 7,267,650 outstanding
 warrants.The
 Company has issued (i) 348,000 common share purchase warrants
 exercisable at $0.30 per share at any time until December 1, 2010, (ii) 6,684,960 common share purchase warrants exercisable at $1.00
 per share at any time until July 25, 2009, (iii) 188,190 common share purchase warrants exercisable at $0.72 per share at any time
 until November 7, 2009, and (iv) 46,500 common share purchase warrants exercisable at $0.72 per share at any time until November 20,
 2009.



Stock
 Options



As
 ofApril 1,
 2008, the Companyhad
 no outstanding stock options to purchase shares of our common stock.



Convertible
 Debentures
 and Notes

The
 outstanding convertible debenturesand notes issued by theCompany
 are as follows:



During
 2007,the
 Company issued secured eight convertible promissory notesin
 the aggregate amount of $5,000,000
 withinterest
 at 10% per annum. The
 principal and accrued interest on the notes
 may be converted into shares of the Companys common stock
 at any time until three years from the date of issuance
 at a conversion price of $0.08. The notes were issued as follows:one
 note in the principal amountof $1,000,000was
 issued on April 29, 2007, one note in the principal amount of $1,000,000 was issued on May 31, 2007,four
 notes with an aggregate value of $2,500,000 were issued on August
 8, 2007,
 and two notes with an aggregate value of $500,000
 were issued on August 15, 2007.



During
 2005, the Company
 issued
 sevenconvertibledebentures
 in the aggregate amount of $3,320,000with interest at
 7%per
 annum. The principal and accrued interest on the notes may be
 converted into shares of the Companys common stock at any time until five years from the date of issuance at a conversion price
 of $0.35. The notes were issued on November 28, 2005.



Dividends



The
 Company has not declared any cash dividends since inception and does not anticipate paying any dividends in the near future. The
 payment of dividends is within the discretion of the board of directors and will depend on our earnings, capital requirements,
 financial condition, and other relevant factors.  There are no restrictions that currently limit the Company's ability to pay
 dividends on its common stock other than those generally imposed by applicable state law.



Transfer
 Agent and Registrar



TheCompanystransfer
 agent and registrar is Interwest Transfer, 1981 E. Murray-Holladay Road, Holladay, Utah, 84117-5164. Interwests phone number is
 (801) 272-9294.



Purchases
 of Equity Securities made by the Issuer and Affiliated Purchasers



None.



Recent
 Sales of Unregistered Securities



None.



16





ITEM
 6.     SELECTED FINANCIAL DATA



Not
 required.



ITEM
 7.     MANAGEMENTS DISCUSSION
 AND ANALYSISOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



ThisManagements
 Discussion and Analysis of Financial Condition and
 Results of Operations
 and other parts of thiscurrent
 report contain forward-looking statements that involve risks and
 uncertainties. Forward-looking statements can also be identified by words such as anticipates, expects, believes,
 plans, predicts, and similar terms. Forward-looking statements are not guarantees of future performance and
 our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause
 such differences include but are not limited to those discussed in the subsection entitledForward-Looking
 Statements and Factors That May Affect Future Results and Financial Condition
 below. The following discussion should be read in conjunction with our
 financial statements and notes thereto included in thiscurrent
 report. Our fiscal year end is December 31.



Discussion
 and Analysis



During
 theyear endedDecember
 31, 2007, the Company was involved in (i) seismic exploration activities on the Val Verde
 County leases with TRNCO, (ii) raising additional capital by way of loans to fund the exploration, and development of those
 properties under lease (iii) evaluating the performance and results of drilling activities on the Comanche and Hamilton County leases,
 (iv) engaging Miller Energy, LLC. as a partner in the development of the Val Verde County leases,
 and (v)seismicallyexploring
 for gas prospects
 within the Val Verde leases.



Over
 the next twelve months the Company intends to:



·

initiate
 drilling on the Val Verde leases to include multiple deep drilling targets for natural gas production; and

·

evaluate
 the prospect of further development of acreage that remains under lease in Comanche and Hamilton County.



The
 Companys business development strategy is prone to significant risks and uncertainties that can have an immediate impact on
 efforts to realize net cash flow. In the near term, we will not be able to generate sufficient cash flow from operations to sustain
 our business as we continue to incur lease development expenses without any corresponding revenue. Further, we can offer no assurance
 that our efforts to identify commercial quantities or oil or gas that can be produced economically will be successful or that the
 Company will ever produce revenue from oil and gas exploration activities.

Results
 of Operations



Net
 LossesFor the period from inception untilDecember
 31, 2007, the Company incurred a net loss of $38,118,959.
 Net losses for theyear endedDecember
 31, 2007 were $22,204,275
 as compared to $6,761,584
 for theyear endedDecember
 31, 2006. The increase in net losses over the comparative periods can be primarily attributed
 to a loss associated withimpairment charges to our oil and gas leases and pipeline.

We did
 not generate any revenues during this period.



17





 We will continue to operate at a loss through fiscal 2008
 due to the nature of the Companys oil and gas exploration and development operations and cannot
 determine whether we will ever generate revenues from operations.

ExpensesGeneral
 and administrative expenses for theyear endedDecember
 31, 2007 were $1,120,602
 as compared to $2,121,062
 for theyear endedDecember
 31, 2006. The decrease in general and administrative expenses over the comparative periods can
 be primarily attributed to decreases in legal, consulting, and accounting costs. We expect that
 general and administrative expenses will remain relatively consistent
 in future periods.



Otherexpensesfor
 the year ended December 31, 2007were
 $21,117,629
 as compared to other expenses of$4,686,197
 for the year ended December 31, 2006. This increase in other
 expenses is primarily due to impairment charges associated with exploration activities in
 Comanche County. During the
 year ended December 31, 2007, management determined that the
 accounting valuesfor
 our oil and gas leases and our oil and gas pipeline were too high
 in relation to the probability of recouping expenses attributed to the
 Comanche County exploration activities. This determination
 was made based our failure to discover commercial quantities of
 oil and gas on the Comanche County/Hamilton County leases and those expenses attributed to
 theconstruction
 of a pipeline to non-productive wells.
 Accordingly, we recorded impairment charges of $17,881,092 on the leases and $1,509,734
 on the pipeline. Other expenses
 wereoffset
 by interestincome of
 $25,828
 for the year ended December 31, 2007and
 $416,306
 forthe
 year ended December 31, 2006.



Depreciation
 expenses
 for the years ended December 31, 2007 and 2006 was $9,911 and $9,544
 respectively.



Income
 Tax Expense (Benefit)



The
 Company has an income tax benefit resulting from net operating losses that may offset any future operating profit.



Impact
 of Inflation

The
 Company believes that inflation has had an effect on Providence Explorations operations due to the increased interest in oil
 and gas exploration over the last three years which has increased prices for labor, maintenance services and equipment. We believe
 that we can offset inflationary increases by improving operating efficiencies.



Capital
 Expenditures



The
 Company spent no amounts on capital expenditures for the period from February 17, 1993 (inception) to
 December 31,
 2007, except those costs of unproved properties acquired with Providence Exploration, pipeline construction, and related exploration
 costs.



Liquidity
 and Capital Resources

The
 Company had current assets of $1,564,315 and total
 assets of $15,700,299 as ofDecember
 31, 2007. These assets include cash on hand of $1,180,147
 and undeveloped oil and gas leases of $14,115,585.
 Stockholders equity in the Company was $7,141,750 atDecember
 31, 2007.



18




 Cash flows used in operating activities were $227,453
 for theyear endedDecember
 31, 2007, compared to cash flows used in operating activities of $211,623
 for theyear endedDecember
 31, 2006. The cash flows used in operating activities during the current period is due
 primarily to net losses. Cash flows used in investing activities were $6,069,257for
 theyear endedDecember
 31, 2007, compared to $8,379,886
 for theyear endedDecember
 31, 2006. Cash flows used in investing activitiesfocused
 on obtaining seismic data in connection with theVal
 Verde County leases.Cash flows from financing activities were $5,936,700
 for theyear endedDecember
 31, 2007, compared to $8,096,026
 for theyear endedDecember
 31, 2006. Cash flows from financing activities during the current period consisted of proceeds
 from convertible promissory notes of $5,000,000, proceeds from notes payable, and
 the sale of common stock. We had a working capital deficit of $2,247,566
 as ofDecember 31, 2007,
 and have funded our cash needs from inception through revenues and a series of debt and equity transactions, including several
 private placements. We do not believe that our current assets are sufficient to conduct our exploration and development activities
 over the next twelve (12) monthsthough we do intend to rely on the terms and conditions of our
 funding agreement with Miller Energy LLC to finance a prospective drilling program on the Val
 Verde leases. However, no assurances can be given that additional funding, as needed to explore
 and develop our lease interests will be available to us on acceptable terms or at all. Our inability to obtain funding, as necessary,
 would have a material adverse affect on our business. The Company has no current plans for the purchase or sale of any
 plant or equipment.

We have
 no current plans to make any changes in the number of employees.



Off
 Balance Sheet Arrangements

As
 ofDecember 31,
 2007, the Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our
 financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or
 capital resources that is material to stockholders.



Going
 Concern

The
 Companys audit expressed substantial doubt as to the Companys ability to continue as a going concern as a result of
 reoccurring losses, lack of revenue generating activities, and an accumulated deficit of $38,118,959
 as of December 31, 2007.
 These conditions raise substantial doubt about the Companys ability to continue as a going concern.



Managements
 plan to address the Companys ability to continue as a going concern, include the development and prospective production of oil
 and natural gas operations, and the conversion of outstanding debt to equity. The successful outcome of these activities cannot be
 determined at this time, and there is no assurance that, if achieved, we would then have sufficient funds to execute our intended
 business plan or generate positive operating results.



19





Forward
 Looking Statements and Factors That May Affect Future Results and Financial Condition



The
 statements contained in the section titledResults
 of Operations
 andDescription
 of Business,
 with the exception of historical facts, are forward looking statements. A safe-harbor provision may not be applicable to the forward
 looking statements made in thiscurrent report.
 Forward looking statements reflect our current expectations and beliefs regarding our future results of operations, performance, and
 achievements. These statements are subject to risks and uncertainties and are based upon assumptions and beliefs that may or may not
 materialize. These statements include, but are not limited to, statements concerning:



| | · | our anticipated financial performance;
| | - | --------------------------------------

| | · | uncertainties related to oil and gas exploration and development;
| | - | -----------------------------------------------------------------

| | · | our ability to generate revenues through oil and gas production to fund future operations;
| | - | ------------------------------------------------------------------------------------------

| | · | our ability to raise additional capital to fund cash requirements for future operations;
| | - | ----------------------------------------------------------------------------------------

| | · | the volatility of the stock market; and
| | - | ---------------------------------------

| | · | general economic conditions.
| | - | ----------------------------



We
 wish to caution readers that our
 operating results are subject to various risks and uncertainties that
 could cause our actual results to differ materially from those discussed or anticipated, including the factors set forth in the
 section entitledRisk
 Factors
 included elsewhere in this report. We also wish to advise readers not to
 place any undue reliance on the forward looking statements contained in this report, which reflect our beliefs and expectations only
 as of the date of this report. We assume no obligation to update or revise these forward looking statements to reflect new events or
 circumstances or any changes in our beliefs or expectations, other that is required by law.



Stock-Based
 Compensation

On
 January 1, 2006, we adopted SFAS No. 123 (revised 2004) (SFAS No. 123R), Share-Based Payment, which addresses the accounting for
 stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the
 enterprise or (b) liabilities that are based on the fair value of the enterprises equity instruments or that may be settled by
 the issuance of such equity instruments.  In January 2005, the Securities and Exchange Commission (SEC) issued Staff Accounting
 Bulletin (SAB) No. 107, which provides supplemental implementation guidance for SFAS No. 123R. SFAS No. 123R eliminates the ability
 to account for stock-based compensation transactions using the intrinsic value method under Accounting Principles Board (APB) Opinion
 No. 25, Accounting for Stock Issued to Employees, and instead generally requires that such transactions be accounted for using a
 fair-value-based method. We use the Black-Scholes-Merton (BSM) option-pricing model to determine the fair-value of
 stock-based awards under SFAS No. 123R, consistent with that used for pro forma disclosures under SFAS No. 123, Accounting for
 Stock-Based Compensation. We have elected the modified prospective transition method as permitted by SFAS No. 123R and accordingly
 prior periods have not been restated to reflect the impact of SFAS No. 123R. The modified prospective transition method requires that
 stock-based compensation expense be recorded for all new and unvested stock options, restricted stock, restricted stock units, and
 employee stock purchase plan shares that are ultimately expected to vest as the requisite service is rendered beginning on January 1,
 2006, the first day of our fiscal year 2006.  Stock-based compensation expense for awards granted prior to January 1, 2006 is based
 on the grant date fair-value as determined under the pro forma provisions of SFAS No. 123.



20





Prior
 to the adoption of SFAS No 123R, we measured compensation expense for our employee stock-based compensation plans using the intrinsic
 value method prescribed by APB Opinion No. 25. We applied the disclosure provisions of SFAS No. 123 as amended by SFAS No. 148,
 Accounting for Stock-Based Compensation  Transition and Disclosure, as if the fair-value-based method had been applied in
 measuring compensation expense. Under APB Opinion No. 25, when the exercise price of
 our
 employee stock options was equal to the market price of the underlying
 stock on the date of the grant, no compensation expense was recognized.



We
 account for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with
 SFAS No. 123 and the conclusions reached by the Emerging Issues Task Force (EITF) in Issue No. 96-18. Costs are measured
 at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued,
 whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is
 determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined
 by EITF 96-18.



Critical
 Accounting Policies

In
 the notes to the audited consolidated financial statements for the Company for the year ended December 31, 2006, the Company
 discussed those accounting policies that are considered to be significant in determining the results
 of operations and financial position. The Companysmanagement
 believes that their accounting principles conform to accounting
 principles generally accepted in the United States of America. The preparation of financial statements requires
 management to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and
 expenses. By their nature, these judgments are subject to an inherent degree of uncertainty. On an on-going basis, we evaluate our
 estimates, including those related to bad debts, inventories, intangible assets, warranty obligations, product liability, revenue,
 and income taxes. We base our estimates on historical experience and other facts and circumstances that are believed to be
 reasonable, and the results form the basis for making judgments about the carrying value of assets and liabilities. The actual
 results may differ from these estimates under different assumptions or conditions.

Revenue
 RecognitionRevenues are recorded upon the completion of the services,
 with the existence of an agreement and where collectability is reasonably assured. Oil and natural gas production revenue, if any,
 will be recognized at the time and point of sale after the product has been extracted from the ground.



Recent
 Accounting Pronouncements



In
 December 2007, the FASB issued SFAS 160, Noncontrolling interests in Consolidated Financial Statements  an amendment of
 ARB No. 51. This Statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a
 subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership
 interest in the consolidated entity that should be reported as equity in the consolidated financial statements. This Statement is
 effective for fiscal years beginning on or after December 15, 2008. Early adoption is not permitted. Management is currently
 evaluating the effects of this statement, but it is not expected to have any impact on the Companys financial statements.



21





In
 February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS 159 creates
 a fair value option allowing an entity to irrevocably elect fair value as the initial and subsequent measurement attribute for
 certain financial assets and financial liabilities, with changes in fair value recognized in earnings as they occur. SFAS 159 also
 requires an entity to report those financial assets and financial liabilities measured at fair value in a manner that separates those
 reported fair values from the carrying amounts of assets and liabilities measured using another measurement attribute on the face of
 the statement of financial position. Lastly, SFAS 159 requires an entity to provide information that would allow users to understand
 the effect on earnings of changes in the fair value on those instruments selected for the fair value election. SFAS 159 is effective
 for fiscal years beginning after November 15, 2007 with early adoption permitted. The Company is continuing to evaluate SFAS 159 and
 to assess the impact on our results of operations and financial condition if an election is made to adopt the standard.



ITEM
 7A.     QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Not
 required.



ITEM
 8.     FINANCIAL STATEMENTS
 AND SUPPLEMENTARY DATA



Our
 audited financial statements for theyears
 ended December 31, 2007
 and 2006
 are attached hereto as F-1 through F-34.





22







PROVIDENCE RESOURCES, INC.

(An Exploratory Stage Company)
        INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
        December 31, 2007 and 2006



Page



Report of Independent Registered Public Accounting Firm              F-2



Consolidated Balance
        Sheets                                                         F-3



Consolidated Statements of Operations and Comprehensive
        LossF-4

Consolidated Statements of Stockholders’ Equity
        (Deficit)F-5

Consolidated Statements of Cash
        Flows                                         F-11

Notes to Consolidated Financial
        Statements                                    F-12





F-1





REPORT
 OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To
 the Board of DirectorsProvidence Resources, Inc. and SubsidiariesAustin, Texas

We
 have audited the accompanying balance sheets of Providence Resources, Inc. and Subsidiaries(An
 Exploratory Stage Company)at December 31, 2007  and 2006 and the
 related statementsof operations and comprehensive loss,
 stockholders' equity (deficit) and cash flows for the years then ended
 and for the cumulative period from February 17, 1993 (date of inception) to December 31, 2007. These financial statements are the
 responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our
 audits.

We
 conducted our audits in accordance with the standards of the PCAOB (United States). Those standards require that we plan and perform
 the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is
 not required to have, nor were we engaged to perform, an audit of its internal controls over financial reporting. Our audit included
 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
 circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over
 financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the
 amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant
 estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide
 a reasonable basis for our opinion.



In
 our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of
 Providence Resources, Inc. and Subsidiaries at December 31, 2007 and 2006 and the results of its operations and comprehensive loss
 and its cash flows for the years then ended and from February 17, 1993 (inception) through December 31, 2007 in conformity with
 accounting principles generally accepted in the United States of America. The accompanying financial statements have been
 prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company
 has recorded significant losses from operations, and is dependent on financing to continue operations, which together raise
 substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described
 in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



Chisholm,
 Bierwolf & Nilson, LLCBountiful, Utah

October
 17, 2008



F-2





|PROVIDENCE RESOURCES, INC.(An Exploratory Stage Company)CONSOLIDATED BALANCE SHEETS
|-----------------------------------------------------------------------------------
|                                                                                   
|                                                                                   
|ASSETS                                                                             
|                                                                                   
|CURRENT ASSETS:                                                                    
|Cash                                                                               
|Note receivable                                                                    
|Drilling rig inventory                                                             
|Prepaid expenses                                                                   
|Total current assets                                                               
|                                                                                   
|PROPERTY AND EQUIPMENT (Note 3) :                                                  
|Unproved oiland gasproperties, not subject to amortization                         
|Oil and gas pipeline (construction in progress)                                    
|Equipment, net of amortization                                                     
|Total property and equipment                                                       
|                                                                                   
|OTHER ASSETS:                                                                      
|Loan origination fees, net of amortization of $55,851                              
|Deposits                                                                           
|Total other assets                                                                 
|                                                                                   
|Total assets                                                                       
|                                                                                   
|LIABILITIES AND STOCKHOLDERS' EQUITY                                               
|                                                                                   
|CURRENT LIABILITIES:                                                               
|Accounts payable                                                                   
|Accrued expenses                                                                   
|Related party payables                                                             
|Short-term note payable (Note 4)                                                   
|Short-term convertible promissory notes (Note 5)                                   
|Current portion of long-term notes payable (Note 7)                                
|Total current liabilities                                                          
|                                                                                   
|CONVERTIBLE DEBENTURES (Note 8)                                                    
|LONG-TERM CONVERTIBLE PROMISSORY NOTES (Note 6)                                    
|LONG-TERM NOTES PAYABLE (Note 7)                                                   
|                                                                                   
|Total liabilities                                                                  
|                                                                                   
|COMMITMENTS (Note 16)                                                              
|MINORITY INTEREST IN NET ASSETS OF SUBSIDIARY                                      
|                                                                                   
|STOCKHOLDERS' EQUITY                                                               
|Preferred stock, $.0001 par value, 25,000,000 shares                               
|authorized, no shares issued and outstanding                                       
|Common stock, $.0001 par value, 250,000,000 shares authorized,                     
|59,161,118 and 51,855,539 shares issued and outstanding, respectively              
|Additional paid-in capital                                                         
|Accumulated other comprehensive income                                             
|Deficit accumulated during theexploratory stage                                    
|                                                                                   
|Total stockholder's equity                                                         
|Total liabilities and stockholders' equity                                         



The
 accompanying notes are an integral part of these financial statements.

F-3





|PROVIDENCE RESOURCES, INC.(An Exploratory Stage Company)CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSSYears ended December 31, 2007 and 2006 and Cumulative Amounts
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                 
|                                                                                                                                                                                 
|                                                                                                                                                                                 
|                                                                                                                                                                                 
|Sales                                                                                                                                                                            
|Cost of Sales                                                                                                                                                                    
|Gross profit                                                                                                                                                                     
|                                                                                                                                                                                 
|General and administrative expenses                                                                                                                                              
|Loss from operations                                                                                                                                                             
|                                                                                                                                                                                 
|Other income (expense):                                                                                                                                                          
|Interest expense                                                                                                                                                                 
|Debt conversion expense                                                                                                                                                          
|Interest income                                                                                                                                                                  
|Impairment of capital assets                                                                                                                                                     
|Loss on disposal of assets                                                                                                                                                       
|Loss before provision forminority interest,                                                                                                                                      
|income taxes anddiscontinued operations                                                                                                                                          
|                                                                                                                                                                                 
|Minority interest                                                                                                                                                                
|Loss before provision forincome taxes and                                                                                                                                        
|discontinued operations                                                                                                                                                          
|                                                                                                                                                                                 
|Provision for income taxes                                                                                                                                                       
|Loss before discontinued operations                                                                                                                                              
|                                                                                                                                                                                 
|Gain (loss) from discontinued operations, net of tax                                                                                                                             
|Net loss before cumulative effect                                                                                                                                                
|of accounting change                                                                                                                                                             
|                                                                                                                                                                                 
|Cumulative effect of accounting change, net of tax                                                                                                                               
|                                                                                                                                                                                 
|Net loss                                                                                                                                                                         
|                                                                                                                                                                                 
|Loss per share from continuing operations- basic and diluted                                                                                                                     
|                                                                                                                                                                                 
|Net Loss per common share - basic and diluted                                                                                                                                    
|                                                                                                                                                                                 
|Weighted average common shares - basic and diluted                                                                                                                               
|                                                                                                                                                                                 
|                                                                                                                                                                                 
|Net loss                                                                                                                                                                         
|Other comprehensive income                                                                                                                                                       
|Foreign currency translation adjustment                                                                                                                                          
|                                                                                                                                                                                 
|Net comprehensive income (loss)                                                                                                                                                  



The accompanying notes are an integral part of these financial
 statements.

F-4







|PROVIDENCE RESOURCES, INC.(An Exploratory Stage Company)CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
February 17, 1993 ( Date of Inception) to December 31, 2007
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                             
|                                                                                                                                                                             
|                                                                                                                                                                             
|                                                                                                                                                                             
|                                                                                                                                                                             
|                                                                                                                                                                             
|                                                                                                                                                                             
|Balance at February 17, 1993 (date of inception)                                                                                                                             
|                                                                                                                                                                             
|Net loss                                                                                                                                                                     
|                                                                                                                                                                             
|Balance at December 31, 1993                                                                                                                                                 
|                                                                                                                                                                             
|Net loss                                                                                                                                                                     
|                                                                                                                                                                             
|Balance at December 31, 1994                                                                                                                                                 
|                                                                                                                                                                             
|Net loss                                                                                                                                                                     
|                                                                                                                                                                             
|Balance at December 31, 1995                                                                                                                                                 
|                                                                                                                                                                             
|Net loss                                                                                                                                                                     
|                                                                                                                                                                             
|Balance at December 31, 1996                                                                                                                                                 
|                                                                                                                                                                             
|Issuance of common stock for cash                                                                                                                                            
|Net loss                                                                                                                                                                     
|                                                                                                                                                                             
|Balance at December 31, 1997                                                                                                                                                 
|                                                                                                                                                                             
|Issuance of common stock for:                                                                                                                                                
|Services                                                                                                                                                                     
|Cash                                                                                                                                                                         
|Additional shares due to rounding                                                                                                                                            
|after stock split                                                                                                                                                            
|Net loss                                                                                                                                                                     
|                                                                                                                                                                             
|Balance at December 31, 1998                                                                                                                                                 

F-5







|PROVIDENCE RESOURCES, INC.(An Exploratory Stage Company)CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
February 17, 1993 ( Date of Inception) to December 31, 2007
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Balance forward, December 31, 1998                                                                                                                                           
|                                                                                                                                                                             
|Rounding                                                                                                                                                                     
|Issuance of common stock for:                                                                                                                                                
|Cash                                                                                                                                                                         
|Assets                                                                                                                                                                       
|Net book value of Healthbridge, Inc.                                                                                                                                         
|Dividends-in-kind                                                                                                                                                            
|Debt                                                                                                                                                                         
|Reverse acquisition with Healthbridge, Inc.                                                                                                                                  
|and Wattmonitor, Inc.                                                                                                                                                        
|Common stock offering costs                                                                                                                                                  
|Reverse acquisition, retirement of old shares                                                                                                                                
|of Wattmonitor, Inc.                                                                                                                                                         
|Share adjustment for shares previously issued                                                                                                                                
|Net loss                                                                                                                                                                     
|                                                                                                                                                                             
|Balance at December 31, 1999                                                                                                                                                 
|                                                                                                                                                                             
|Issuance of common stock for:                                                                                                                                                
|Debt                                                                                                                                                                         
|Services                                                                                                                                                                     
|Cash                                                                                                                                                                         
|Accounts payable                                                                                                                                                             
|                                                                                                                                                                             
|Common stock offering costs                                                                                                                                                  
|                                                                                                                                                                             
|Stock option compensation expense                                                                                                                                            
|                                                                                                                                                                             
|Net loss                                                                                                                                                                     
|                                                                                                                                                                             
|Balance at December 31, 2000                                                                                                                                                 

F-6







|PROVIDENCE RESOURCES, INC.(An Exploratory Stage Company)CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
February 17, 1993 ( Date of Inception) to December 31, 2007
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Balanceforward, December 31, 2000                                                                                                                                            
|                                                                                                                                                                             
|Issuance of common stock for:                                                                                                                                                
|Services                                                                                                                                                                     
|Accounts payable                                                                                                                                                             
|Debt                                                                                                                                                                         
|                                                                                                                                                                             
|Net loss                                                                                                                                                                     
|                                                                                                                                                                             
|Balance at December 31, 2001                                                                                                                                                 
|                                                                                                                                                                             
|Comprehensive loss:                                                                                                                                                          
|Net loss                                                                                                                                                                     
|Other comprehensive loss -                                                                                                                                                   
|cumulative foreign currency                                                                                                                                                  
|translation adjustment                                                                                                                                                       
|Total comprehensive loss                                                                                                                                                     
|                                                                                                                                                                             
|Issuance of common stock for:                                                                                                                                                
|Intellectual property                                                                                                                                                        
|Services                                                                                                                                                                     
|Accounts payable and services                                                                                                                                                
|                                                                                                                                                                             
|Stock option compensation expense                                                                                                                                            
|                                                                                                                                                                             
|Balance at December 31, 2002                                                                                                                                                 

F-7







|PROVIDENCE RESOURCES, INC.(An Exploratory Stage Company)CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
February 17, 1993 ( Date of Inception) to December 31, 2007
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                             
|Balanceforward, December 31, 2002                                                                                                                                            
|                                                                                                                                                                             
|Comprehensive loss:                                                                                                                                                          
|Net loss                                                                                                                                                                     
|Other comprehensive loss -                                                                                                                                                   
|cumulative foreign currency                                                                                                                                                  
|translation adjustment                                                                                                                                                       
|Total comprehensive loss                                                                                                                                                     
|                                                                                                                                                                             
|Issuance of common stock for:                                                                                                                                                
|Cash                                                                                                                                                                         
|Services                                                                                                                                                                     
|Debt                                                                                                                                                                         
|Common stock offering costs                                                                                                                                                  
|                                                                                                                                                                             
|Issuance of common stock                                                                                                                                                     
|options for services                                                                                                                                                         
|after reverse split                                                                                                                                                          
|                                                                                                                                                                             
|Balance at December 31, 2003                                                                                                                                                 
|                                                                                                                                                                             
|Issuance of common stock for:                                                                                                                                                
|Debt conversion                                                                                                                                                              
|Services                                                                                                                                                                     
|Other comprehensive loss -                                                                                                                                                   
|cumulative foreign currency                                                                                                                                                  
|translation adjustment                                                                                                                                                       
|                                                                                                                                                                             
|Net loss                                                                                                                                                                     
|                                                                                                                                                                             
|                                                                                                                                                                             
|Balance at December 31, 2004                                                                                                                                                 

F-8







|PROVIDENCE RESOURCES, INC.(An Exploratory Stage Company)CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
February 17, 1993 ( Date of Inception) to December 31, 2007
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Balanceforward, December 31, 2004                                                                                                                                            
|                                                                                                                                                                             
|Issuance of common stock for:                                                                                                                                                
|Cash                                                                                                                                                                         
|Debt                                                                                                                                                                         
|                                                                                                                                                                             
|Issuance of warrants for finders fees                                                                                                                                        
|Common stock offering costs                                                                                                                                                  
|                                                                                                                                                                             
|Other comprehensive loss -                                                                                                                                                   
|cumulative foreign currency                                                                                                                                                  
|translation adjustment                                                                                                                                                       
|                                                                                                                                                                             
|Net loss for the period                                                                                                                                                      
|                                                                                                                                                                             
|Balance at December 31, 2005                                                                                                                                                 
|                                                                                                                                                                             
|Issuance of common stock for:                                                                                                                                                
|Acquisition of Providence Exploration                                                                                                                                        
|Cash                                                                                                                                                                         
|Debt                                                                                                                                                                         
|                                                                                                                                                                             
|Issuance of warrants with equity financing                                                                                                                                   
|Issuance of warrants for finders fees                                                                                                                                        
|                                                                                                                                                                             
|Other comprehensive loss -                                                                                                                                                   
|cumulative foreign currency                                                                                                                                                  
|translation adjustment                                                                                                                                                       
|                                                                                                                                                                             
|Net loss for the period                                                                                                                                                      
|                                                                                                                                                                             
|                                                                                                                                                                             
|Balance at December 31, 2006                                                                                                                                                 

F-9







|PROVIDENCE RESOURCES, INC.(An Exploratory Stage Company)CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
February 17, 1993 ( Date of Inception) to December 31, 2007
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Balance at December 31, 2006                                                                                                                                                 
|                                                                                                                                                                             
|Issuance of common stock for:                                                                                                                                                
|Cash                                                                                                                                                                         
|Services                                                                                                                                                                     
|Debt                                                                                                                                                                         
|                                                                                                                                                                             
|Discount on convertible notes                                                                                                                                                
|                                                                                                                                                                             
|Other comprehensive loss -                                                                                                                                                   
|cumulative foreign currency                                                                                                                                                  
|translation adjustment                                                                                                                                                       
|                                                                                                                                                                             
|Net loss for the period                                                                                                                                                      
|                                                                                                                                                                             
|                                                                                                                                                                             
|Balance at December 31, 2007                                                                                                                                                 



The accompanying notes are an integral part of these financial statements.

F-10





|PROVIDENCE RESOURCES, INC.(An Exploratory Stage Company)CONSOLIDATED STATEMENTS OF CASH FLOWSYears ended December 31, 2007
and 2006 and Cumulative Amounts
|----------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                          
|                                                                                                                                                          
|Cash flows from operating activities:                                                                                                                     
|Net loss                                                                                                                                                  
|Adjustments to reconcile net loss to net cash                                                                                                             
|used in operating activities:                                                                                                                             
|Shares issued for services                                                                                                                                
|Shares issued with financing                                                                                                                              
|Shares issued for debt and accrued interest conversion                                                                                                    
|Additional value of shares issued for debt and services conversion                                                                                        
|Amortization of conversion rights on debt                                                                                                                 
|Depreciation, amortization and impairment                                                                                                                 
|Minority interest                                                                                                                                         
|Discontinued operations                                                                                                                                   
|Gain on write-off of liabilities                                                                                                                          
|Loss on disposal of assets                                                                                                                                
|(Increase) decrease in:                                                                                                                                   
|Accounts receivable and prepaid expenses                                                                                                                  
|Inventory                                                                                                                                                 
|Accounts payable                                                                                                                                          
|Accrued expenses                                                                                                                                          
|Related party payables                                                                                                                                    
|Net cash used in operating activities                                                                                                                     
|                                                                                                                                                          
|Cash flows from investing activities:                                                                                                                     
|Advances to Providence Exploration prior to acquisition                                                                                                   
|Cash of Providence Exploration on acquisition date                                                                                                        
|Acquisition of intangible assets                                                                                                                          
|Acquisition of property and equipment                                                                                                                     
|Issuance of notes receivable                                                                                                                              
|Net cash used in investing activities                                                                                                                     
|                                                                                                                                                          
|Cash flows from financing activities:                                                                                                                     
|Proceeds from notes payable                                                                                                                               
|Proceeds from convertible promissory notes payable                                                                                                        
|Issuance of common stock                                                                                                                                  
|Commissions paid to raise convertible debentures                                                                                                          
|Minority investment in subsidiary                                                                                                                         
|Proceeds from (payments for) convertible debentures                                                                                                       
|Payments on notes payable                                                                                                                                 
|Net cash provided by financing activities                                                                                                                 
|                                                                                                                                                          
|Change in accumulated other comprehensive income                                                                                                          
|Net increase (decrease) in cash                                                                                                                           
|Cash, beginning of period                                                                                                                                 
|                                                                                                                                                          
|Cash, end of period                                                                                                                                       
|Cash paid for interest                                                                                                                                    
|Cash paid for taxes                                                                                                                                       

Non-cash investing and financing activities (Note 10)



The accompanying notes are an integral part
 of these financial statements.

F-11







PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006


Note
 1  Organization and Summary of Significant Accounting Policies

Organization

The
 consolidated financial statements consist of Providence Resources, Inc. (Providence Resources) (formerly Healthbridge,
 Inc.) and its wholly owned subsidiaries, Healthbridge AG (Healthbridge AG), Providence Exploration LLC (Providence
 Exploration), PDX Drilling, LLC and Providence Resources LLC and a ninety percent interest in Comanche County Pipeline, LLC
 (collectively the Company).Providence Resources, Inc. was organized on February 17, 1993 (date of inception) under the
 laws of the State of Texas. The Company changed its name from Healthbridge, Inc. to Providence Resources, Inc. on September 29, 2006.
 Healthbridge AG was formed as a German subsidiary during 2002. Providence Exploration, LLC was formed on July 12, 2005, under the
 Laws of the State of Texas as a Limited Liability Company and is headquartered in Dallas, Texas. Providence Exploration formed a
 wholly owned subsidiary, PDX Drilling, LLC (PDX), on July 12, 2005. PDX was formed to acquire drilling and service rigs for the
 purpose of drilling oil and gas wells in Texas. Providence Exploration also formed a wholly owned subsidiary, Providence Resources
 LLC, on September 1, 2005, to acquire leases in Texas for oil and gas exploration and development. In October of 2006, Providence
 Exploration entered into an agreement to form Comanche County Pipeline, LLC with the purpose of constructing an oil and gas pipeline
 in Comanche County, Texas.On January 25, 2002, the Company acquired certain patents related to the infectious medical waste
 sterilization and disposal technologies developed in Germany. During the fourth quarter of 2005, the Company decided to discontinue
 all operations connected to the Valides® Modular Infectious Waste Disposal System and the Medides System due to the
 unsatisfactory level of revenue generated to date. On November 21, 2005, the Company executed a letter of intent to acquire
 Providence Exploration, LLC, as a wholly owned subsidiary in a stock for ownership exchange. On September 29, 2006, the Corporation
 acquired Providence Exploration as a wholly owned subsidiary, pursuant to the closing of a Securities Exchange Agreement and a Note
 Exchange Agreement. The Securities Exchange Agreement, entered into on April 10, 2006 with Providence Exploration and the unit
 holders of Providence Exploration, provided for the exchange of 4,286,330 shares of the Corporations common stock for 1,250,000
 issued and outstanding membership units of Providence Exploration. The Note Exchange Agreement, entered into on April 10, 2006 with
 the holders of certain promissory notes issued by Providence Exploration, provided for the exchange of 12,213,670 shares of the
 Companys common stock for the assignment of those promissory notes to the Company. The agreements were closed pursuant to
 shareholder approval at a special meeting of the shareholders held on September 29, 2006.Providence Exploration is involved in
 exploration activities for the recovery of oil and gas from the Marble Falls and Barnett Shale formations in the Fort Worth basin and
 from the Ellenburger carbonate, Strawn carbonate and Pennsylvanian-Wolfcamp sandstone reservoirs in Val Verde County. The Fort Worth
 basin prospects include approximately 7,374 acres of oil and gas leases and the Val Verde County prospects include approximately
 12,832 acres of oil and gas leases. Providence Exploration has a 90% working interest and its joint venture operating partner,
 Harding Company, has a 10% working interest in the Fort Worth basin projects. The Company is considered an
 exploratorystage
 company as defined in SFAS No. 7.

F-12





PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006


Note 1  Organization and
 Summary of Significant Accounting Policies (continued)

Principles
 of Consolidation The consolidated financial statements
 include the accounts of Providence Resources, Inc. and its wholly owned subsidiaries. All significant intercompany balances and
 transactions have been eliminated.

Cash
 and Cash Equivalents For purposes of the statement of cash
 flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.

UnprovedOil
 and GasProperties,Not
 Subject to Amortization

Oil
 and gas lease costs are recorded at cost and consist of 7,374.5 acres of land leases in North Eastern Texas in the Barnett Shale
 Formation and 12,847.2 acres of land leases in Southwest Texas in Val Verde County. These leases are undeveloped at December 31,
 2007, and accordingly no depletion is included in the accompanying consolidated financial statements.

The
 Company follows the full cost method of accounting for exploration and development of oil and gasproperties
 whereby all costs in acquiring, exploring and developing properties are capitalized, including estimate of abandonment costs, net of
 estimated equipment salvage costs, and subjected to a quarterly
 impairment (ceiling) test, based on the net present value of proved reserves on the property. Management will write this intangible
 down to its net realizable value at the time impairment appears to exist. During fiscal 2007, management determined that due to the
 dry holes experienced to date, that the carrying values of the Companys oil and gas leases and its oil and gas pipeline
 exceeded the ceiling test amounts pursuant to Regulation S-X, Rule 4-10. Accordingly, the Company recorded impairment charges of
 $17,881,092 and $1,509,734 on the leases and pipeline respectively.

Prior
 to acquisition on September 29, 2006, Providence Exploration capitalized $3,278,647 in exploration costs. No costs related to
 production, general corporate overhead, or similar activities have been capitalized. As of December 31, 2007, the Company only has
 capitalized costs of unproved properties acquired and related exploration costs. Leasehold costs
 are depleted based on the units-of-production method based on estimated
 proved reserves. No proved reserves currently exist for the Company and therefore no depletion has been taken as of December 31, 2007.

Convertible
 Notes PayableThe fair value of theconversion
 option on a convertible note payable is calculated using the intrinsic value method and recorded as a discount on the face value of
 the note. This amount is amortized using the straight-line method over the term of the note.

Loan
 Origination Fees

Loan
 origination fees are amortized on a straight line basis over the 36 month
 term of the loans.

F-13





PROVIDENCE RESOURCES, INC.
            (An Exploratory Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and 2006


Note 1 — Organization and Summary of Significant Accounting Policies (continued)

Long-Lived Assets



The Company evaluates its long-lived assets in accordance with SFAS No. 144, “Accounting for the Impairment of Long-Lived Assets”. Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that their net book value may not be
        recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets and is recorded in the period in which the determination was made.

Income Taxes

The Company has adopted FASB 109 to account for income taxes. The Company currently has no issues which create timing differences that would mandate deferred tax expense. Net
        operating losses would create possible tax assets in future years, but due to the uncertainty as to the utilization of net operating loss carry forwards, a valuation allowance has been made to the extent of any tax benefit that net operating losses may generate. No provision
        for income taxes has been recorded due to the net operating loss carry forward which will be offset against future taxable income.

The difference between income taxes at statutory rates and the amount presented in the financial statements is a result of the following:

|                                                         | Years Ended December 31, | Cumulative
                    Amounts
|-------------------------------------------------------- | ------------------------ | --------------------------------------
|                                                         | 2007                     | 2006                                  
|Income tax benefit at statutory rate                     | $(7,549,454)             | $(2,299,000)                          
|Change in valuation allowance                            | 7,549,454                | 2,299,000                             
|                                                         | $ -                      | $ -                                   
|                                                         |                          |                                       
|Deferred tax assets are as follows at December 31, 2007:
|                                                         | 2007                     | 2006                                  
|NOL Carry-forward                                        | 12,270,454               | 4,721,000                             
|Valuation allowance                                      | (12,270,454)             | (4,721,000)                           
|                                                         | $ -                      |                                       

The Company has incurred Net Operating Losses of approximately $38,118,959. These losses will be carried forward to offset future taxable income and will expire beginning in 2014. However, realization of the future tax benefit of these carry-forwards is contingent on the Company’s ability to generate positive net operations.
        A valuation allowance has been recorded for the full amount of the deferred tax asset because it is more likely than not that the deferred tax asset will not be realized. The components of current income tax expense as of December 31, 2007 and 2006 respectively are as follows:



F-14





PROVIDENCE RESOURCES, INC.
            (An Exploratory Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and 2006


Note 1 — Organization and Summary of Significant Accounting Policies (continued)

Income Taxes

|                              | As at December 31,
|----------------------------- | ------------------
|                              | 2007              
|Current federal tax expense   | $ -               
|Current state tax expense     | -                 
|Change in NOL benefits        | 7,549,454         
|Change in valuation allowance | (7,549,454)       
|Income tax expense            | $ -               

Concentration of Credit Risk

The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. At December 31, 2007, the Company had $1,180,147 in bank deposit accounts. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Translation of Foreign Currencies

Assets and liabilities of the Company’s foreign subsidiary are translated into U.S. dollars at the applicable exchange rates at year-end. Net gains or losses resulting from the translation of the Company’s assets and liabilities are reflected as a separate component of stockholders’ equity. A negative translation impact on stockholders’ equity reflects a current relative U.S. dollar value higher than
        at the point in time that assets were actually acquired in a foreign currency. A positive translation impact would result from a U.S. Dollar weaker in value than at the point in time foreign assets were acquired.
        Income and expense items are translated at the weighted average rate of exchange (based on when transactions actually occurred) during the year.

Revenue Recognition

The Company did not have revenues in the year ended December 31, 2007. Revenues are recorded upon the completion of the services, with the existence of an agreement and where collectability is reasonably assured. Oil and natural gas production revenue will be recognized at the time and point of sale after the
        product has been extracted from the ground.

Stock-Based Compensation

At December 31, 2007, the Company has stock-based employee compensation plans and the Company accounts for those plans under the recognition and measurement principles of SFAS 123 (R),“Share Based Payment,” and related Interpretations, and has adopted these
        disclosure provisions.

F-15





PROVIDENCE RESOURCES, INC.
            (An Exploratory Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and 2006


Note 1 — Organization and Summary of Significant Accounting Policies (continued)
        Earnings Per ShareThe numerator for the earnings per share calculation is the net loss for the period. The denominator is the weighted average number of shares outstanding during the period.
        The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the period plus the common stock equivalents which would arise from the exercise or conversion of warrants, options and convertible securities, if any, using the treasury stock method. The Company had 7,267,650 stock equivalents of warrants at December 31, 2007
        (2006 -7,267,650) that were excluded from the calculation of diluted earnings per share. Common stock equivalents are not included in the diluted earnings per share calculation when their effect is antidilutive.
        Earnings Per Share computation for Continuing operations:

Years ended December 31,

20072006





Numerator – (loss from continuing operations)                          
          $     (22,204,275)          $     (6,761,584)
                  Denominator – weighted average
                   number of shares outstanding54,845,40628,296,428Loss per
        share$     (0.38)$     (0.24)





Earnings Per Share computation from Discontinued Operations:

Years ended December 31,

20072006



Numerator – (loss from discontinued operations)                                     
        $     Nil            $     Nil
                  Denominator – weighted average
                   number of shares outstanding
        54,845,40628,296,428Loss per share-discontinued operations$     (0.38)$      (0.00)





Earnings Per Share computation for Net Income:

Years ended December 31,

2007 2006



Numerator – (Net
        Loss)                                                $     (22,204,275)          $     (6,761,584)
                  Denominator – weighted average
                   number of shares outstanding54,845,40628,296,428Loss per share$     (0.38)$     (0.24)



F-16





PROVIDENCE RESOURCES, INC.
            (An Exploratory Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and 2006


Note 1 — Organization and Summary of Significant Accounting Policies (continued)

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
        reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain amounts in the 2006 financial statements may have been reclassified to conform to the 2007 presentation.



Note 2 — Going Concern

As of December 31, 2007, the Company’s revenue generating activities have not generated sufficient funds for profitable operations, and the Company has incurred losses of $38,118,959 since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

We anticipate that additional funding will be required in the next twelve months and that it will be in the form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with firm assurance that we will be able to raise sufficient funding
        from the sale of our common stock to fund our plan of operations



Note 3 — Property and Equipment

Drilling rigs and equipment were recorded at cost and depreciated over their estimated useful lives of ten years using the straight-line method. Office furniture and equipment and vehicles were
        recorded at cost and depreciated over their estimated useful lives of five to ten years using the straight-line method.
        Upon sale and retirement of property and equipment the cost and related accumulated depreciation of the assets were removed from the Company's accounts and
        a loss was recognized. In the year ended December 31, 2007, the Company recorded a loss on disposal of
        property and equipment in the amount of $35,899.

2007 2006Drilling rigs and equipment - 15,441 Vehicles-          
          27,495
             Office furniture and equipment            -            12,659
             Less accumulated depreciation -           (9,785)

Equipment, net                                 $ - $
        45,810



Depreciation expense for the years ended December 31, 2007 and 2006 was $9,911 and $9,544 respectively.

F-17





PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006


Note4
 
 Short-term
 Note Payable

| | Note Payable - Global Convertible Megatrend LTD, unsecured, principal payable in full on February 23, 2008, interest at 10% payable at the end of each fiscal quarter, interest convertible to common shares at $0.35 per share. | $500,000
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
| |                                                                                                                                                                                                                                  |         

For
 the year ended December 31, 2007, the Company recorded $42,603 as interest and financing expense relating to a short-term note
 payable. Accrued interest as at December 31, 2007 for the outstanding short-term note payable totaled $42,603.



Note5
  Short-term Convertible Promissory Notes

In
 2007, the Company issued a secured convertible promissory note with a total face value of $1,000,000 in exchange for a cash advance
 of the same amount. The principal and interest are due in full on the maturity date of the note. The notes are secured by:

| | 1. | All
 seismic data obtained in connection with the 3D Seismic Project Proposal and Agreement dated March 27, 2007 between the Company and
 TRNCO Petroleum Corporation which seismic data may not be shared with any third party without the express written consent of the
holder of the note.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Any
and all proceeds arising from or attributable to the assets.
| | -- | ----------------------------------------------------------------

At
 the sole discretion of the holder, the principal and accrued interest on the note may be converted into shares of the Companys
 common stock. The promissory notes bear interest at 10% per annum. The principal and interest on the notes can be converted into
 shares of common stock at a conversion price of $0.15. The terms of the note are outlined in the following table.

| | Convertible Promissory Note Payable  Miller Energy LLC, secured, payable in full on April 29, 2008, including interest at 10%, convertible at $0.15 per common share. | $ 1,000,000
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------
| | Total Principal of Convertible Promissory Note                                                                                                                         | $ 1,000,000
| | Less: unamortized note discount                                                                                                                                        | ($ 219,179)
| | Net book value                                                                                                                                                         | $ 780,821  
| |                                                                                                                                                                        |            

For
 the year ended December 31, 2007, the Company recorded $67,123 as interest and financing expense relating to short-term convertible
 promissory notes. Accrued interest as at December 31, 2007 for the outstanding short-term convertible promissory notes totaled
 $67,123.

The
 fair value of the conversion option on the short-term promissory note of $666,667 as calculated using the intrinsic value method was
 recorded as a discount on the face value of the note. This amount will be amortized using the straight-line method over the term of
 the note. In 2007, the Company recorded $447,489 as interest expense due to amortization of the discount.

F-18





PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006


Note6
  Long-term Convertible Promissory Notes

In
 2007, the Company issued secured seven convertible promissory notes with a total face value of $4,000,000 in exchange for a cash
 advance of the same amount. The principal and interest are due in full three years after the issue date of the notes. The notes are
 secured by:

| | 1. | All seismic data obtained in connection with the 3D Seismic Project Proposal and Agreement dated March 27, 2007 between the Company and TRNCO Petroleum Corporation which seismic data may not be shared with any third party without the express written consent of the holder of the note.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Any and all proceeds arising from or attributable to the assets.
| | -- | ----------------------------------------------------------------

At
 the sole discretion of the holder, the principal and accrued interest on the note may be converted into shares of the Companys
 common stock. The promissory notes bear interest at 10% per annum. The principal and interest on notes with a total face value of
 $3,000,000 can be converted into shares of common stock at a conversion price of $0.08. The principal and interest on the remaining
 note with a face value of $1,000,000 can be converted into shares of common stock at a conversion price of $0.15. The terms of the
 note are outlined in the following table.

| | Convertible Promissory Note Payable  Global Project Finance AG, secured, payable in full on May 31, 2010, including interest at 10%, convertible at $0.15 per common share.              | $ 1,000,000  
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------
| | Convertible Promissory Note Payable  Global Convertible Megatrend Ltd., secured, payable in full on August 8, 2010, including interest at 10%, convertible at $0.08 per common share.    | $ 1,400,000  
| | Convertible Promissory Note Payable  Golden Beach Company Ltd., secured, payable in full on August 8, 2010, including interest at 10%, convertible at $0.08 per common share.            | $ 100,000    
| | Convertible Promissory Note Payable  CR Innovations AG, secured, payable in full on August 8, 2010, including interest at 10%, convertible at $0.08 per common share.                    | $ 600,000    
| | Convertible Promissory Note Payable  Global Project Finance AG, secured, payable in full on August 8, 2010, including interest at 10%, convertible at $0.08 per common share.            | $ 400,000    
| | Convertible Promissory Note Payable  Global Undervalued Investment Ltd., secured, payable in full on August 15, 2010, including interest at 10%, convertible at $0.08 per common share.  | $ 250,000    
| | Convertible Promissory Note Payable  FE Global Leveraged Investment Ltd., secured, payable in full on August 15, 2010, including interest at 10%, convertible at $0.08 per common share. | $ 250,000    
| |                                                                                                                                                                                           |              
| | Total Principal Long-Term Convertible Promissory Notes Payable                                                                                                                            | $ 4,000,000  
| |                                                                                                                                                                                           |              
| | Less:  unamortized discount                                                                                                                                                               | ($ 2,924,305)
| |                                                                                                                                                                                           |              
| | Net book value                                                                                                                                                                            | $ 1,075,695  

F-19





PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006




Note6
  Long-term Convertible Promissory Notes
 (continued)

For
 the year ended December 31, 2007, the Company recorded $176,849 as interest and financing expense relating to long-term convertible
 promissory notes. Accrued interest as at December 31, 2007 for the outstanding long-term convertible promissory notes totaled
 $176,849.

The
 fair value of the conversion option on the long-term promissory notes of $3,425,000 as calculated using the intrinsic value method
 was recorded as a discount on the face value of the notes. This amount will be amortized using the straight-line method over the term
 of the notes. In 2007, the Company recorded $500,696 as interest expense due to amortization of the discount.

Note7
  Long-term Notes Payable



| | Note Payable - FAGEB AG, secured by drilling equipment, payable in quarterly installments of $25,119 through July 31, 2008, including interest at 12%.                          | $156,515 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------
| | Note Payable - Global Convertible Megatrend LTD., secured by drilling equipment, payable in quarterly installments of $50,238 through July 31, 2008, including interest at 12%. | 352,608  
| | Note Payable - FAGEB AG, secured by drilling equipment, payable in quarterly installments of $37,722 through September 25, 2008, including interest at 12%.                     | 264,802  
| | Note Payable  Bluemont Investment Ltd, payable in full by August 8, 2010, including interest at 10%.                                                                           | 200,000  
| | Total                                                                                                                                                                           | 973,925  
| | Less current portion                                                                                                                                                            | 773,925  
| |                                                                                                                                                                                 |          
| | Long-Term Notes Payable                                                                                                                                                         | $ 200,000



For
 the year ended December 31, 2007, the Company recorded $99,775 as interest and financing expense relating to long-term notes payable.
 Accrued interest as at December 31, 2007 for the outstanding long-term notes payable totaled $128,670.

Note8
  Convertible Debentures Two
 convertible debentures were issued during 2002 (May 3, 2002-$75,000 and May 6, 2002-$250,000), bearing interest at 7.5% per annum, which
 mature in three years. The convertible debentures become immediately due and payable upon certain events of default unless waived by
 the lender. Interest on the principal amount was due annually on the anniversary date of the issue date. The conversion feature
 allowed the holder at any time to convert any unpaid amount of principal or interest at $5.00 per share for a period of three years
 from the date of issuance. Pursuant to the terms of the convertible debenture, the Company agrees to file a Registration Statement
 within 60 days of conversion with the U.S. Securities and Exchange Commission. On January 14, 2004, the conversion price of the two
 debentures was adjusted to $0.10 per share.

F-20





PROVIDENCE RESOURCES, INC.
            (An Exploratory Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and 2006


Note 8 – Convertible Debentures (continued)

The convertible debentures are secured by substantially all of the Company’s assets consisting of all tangible and intangible property.
        The terms for these two convertible debentures were extended to May 3, 2008 and May 6, 2010, respectively pursuant to the terms of extension agreements dated March 31, 2005. The extension agreements require certain additional conditions related to the Company’s obligations as follows:

1. The interest payable on the convertible debentures, as of May 4, 2005, accrues at a rate of ten percent (10%) per annum payable on a quarterly basis with the initial quarterly interest payments due on September 30, 2005 and at the end of each quarter thereafter until repayment or conversion.
        2. The right to convert the whole part or any part of the principal amounts and accrued interest into shares of the Company extends until May 3, 2008 and May 6, 2010 respectively.
        3. Upon conversion or repayment of the principal amounts and accrued interest, the holders of the convertible debentures are entitled to a ten percent (10%) bonus on the amount due as of such date. The market value of this bonus on the date of the extension was recorded as financing expense of $32,500.

On October 3, 2005 the Company reached an agreement with the beneficiaries of these two outstanding debentures for payment of interest accrued to September 30, 2005. The Company issued 136,298 shares of common stock to Global Convertible Megatrend Ltd. for $13,629 owed, and 56,250 shares of common stock to Max
        Fugman for $5,625 owed.

On April 11, 2006, the principal amount of the $75,000 debenture to Max Fugman and $3,863 of accrued interest were converted into shares of common stock at $0.10 per share. After applying the 10% bonus, the Company issued 867,493 shares of common stock to extinguish $86,749 of debt consisting of $75,000 of
        principal repayment and $11,749 in accrued interest. The Company recorded interest expense of $954,243 to reflect the value of the shares issued upon conversion in excess of the book amounts.

On June 15, 2006, the interest accrued on the $250,000 debenture to Global Convertible Megatrend Ltd. was converted into shares of common stock at $0.10 per share. The Company issued 167,810 shares for $16,781 of interest owed. The Company recorded interest expense of $192,982 to reflect the value of the shares
        issued upon conversion of the book amount.

On December 31, 2006, the interest accrued on the $250,000 debenture to Global Convertible Megatrend Ltd. was converted into shares of common stock at $0.10 per share. The Company issued 145,200 shares for $14,520 of interest owed. The Company recorded interest expense of $65,340 to reflect the value of the shares
        issued upon conversion of the book amount.

On June 13, 2007, the principal amount of the $250,000 debenture to Global Convertible Megatrend Ltd. and $12,357 of accrued interest were converted into shares of common stock at $0.10 per share. After applying the 10% bonus, the Company issued 2,873,563 shares of common stock to extinguish $287,356 of debt
        consisting of $250,000 of principal repayment and $37,356 in accrued interest and bonus. The Company recorded an interest and finance expense of $139,944 to reflect the value of the shares issued upon conversion in
        excess of the debt and interest amounts.

F-21





PROVIDENCE RESOURCES, INC.
            (An Exploratory Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and 2006


Note 8 – Convertible Debentures
        (continued)

On November 28, 2005, the Company issued seven convertible debenture certificates for the total principal sum of $3,320,000 due in full with accrued and unpaid interest on November 30, 2010. The interest at a rate of 7.0% per annum is payable on a semi-annual basis with the initial payment due on
        June 1, 2006. The holders of the debentures has the right to convert all or part of the principal and accrued interest into common shares of the Company at $0.35 per share at any time prior to maturity.

On August 24, 2006, the interest accrued on the seven debentures was partially converted into shares of common stock at $0.35 per share. The Company issued 263,563 shares for $92,247 of interest owed. The Company recorded an additional interest expense of $144,960 to reflect the value of the shares issued upon
        conversion of the book amount.

On December 1, 2006, the interest accrued on the seven debentures was partially converted into shares of common stock at $0.35 per share. The Company issued 260,712 shares for $91,249 of interest owed. The Company recorded an additional interest expense of $52,142 to reflect the value of the shares issued upon
        conversion of the book amount.

On December 1, 2007, the interest accrued on the seven debentures was partially converted into shares of common stock at between $0.08 and $0.35 per share. The Company issued 994,516 shares for $178,214 of interest owed.

For the year ended December 31, 2007, the Company recorded $232,399 as interest and financing expense relating to convertible debentures. Accrued interest as at December 31, 2007 for all outstanding debentures totaled $124,101.

The total value of the principal of the short-term note payable, the short-term convertible promissory note, the seven convertible debentures, the seven long-term convertible promissory notes and the four long-term notes payable outstanding as of December 31, 2007 was $9,793,925. Repayment of this principle is due
        according to the following schedule:

|                                        | 2008      | 2009 | 2010      | 2011 | 2012
|--------------------------------------- | --------- | ---- | --------- | ---- | ----
|Short term note payable                 | 500,000   | -    | -         | -    | -   
|Short-term convertible promissory notes | 1,000,000 | -    | -         | -    | -   
|Convertible debentures                  | -         | -    | 3,320,000 | -    | -   
|Long-term convertible promissory notes  | -         | -    | 4,000,000 | -    | -   
|Long-term notes payable                 | 773,925   | -    | 200,000   | -    | -   
|Total                                   | 2,273,925 | -    | 7,520,000 | -    | -   

F-22





PROVIDENCE RESOURCES, INC.
            (An Exploratory Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and 2006




Note 9 — Related Party Transactions

The Company has entered into an agreement with Markus Mueller, a director of the Company for consulting services. The agreement has an automatic renewal provision unless terminated by either party. During the years ended December 31, 2007 and 2006, the Company recognized consulting expense of $90,000 and $64,500 respectively. In 2007, the Company also recognized compensation expense of $22,500 which relates
        to shares issued to convert an outstanding balance due to Mr. Mueller. In 2007, the Company issued 750,000 shares for $112,500 of consulting fees owed to Mr. Mueller. The Company recorded compensation expense of $22,500 to reflect the value of the shares issued upon conversion of the book amount. The balance of $52,500 was due to Mr. Mueller at December 31, 2007.

The Company has entered into an agreement with Nora Coccaro, a director of the Company for consulting services. The agreement has an automatic renewal provision unless terminated by either party. During the years ended December 31, 2007 and 2006, the Company recognized consulting expense of $109,500 and $406,500 respectively. Of the 2007 charge, $16,000 relates to the fair market
        value of 100,000 shares of common stock issued to Ms. Coccaro. Of the 2006 charge, $360,000 relates to the fair market value of 300,000 shares of common stock. The balance of $8,000 was due to Ms. Coccaro at December 31, 2007.

The Company has entered into an agreement with Gil Burciaga, a director of the Company for consulting services. During the years ended December 31, 2007 and 2006, the Company recognized consulting expense of $75,000 and $Nil respectively. The balance of $75,000 was due to Mr. Burciaga at December 31, 2007.

Note 10 — Stockholders’ Equity Transactions

During the year ended December 31, 2007, the Company issued 1,450,000 shares of common stock valued at $285,000 for consulting and legal services. The Company recorded an additional interest and financing
        expense of $22,500 to reflect the value of the shares issued upon conversion in excess of the debt and interest amounts.

During the year ended December 31, 2007, the principal amount of a $250,000 convertible debenture to Global Convertible Megatrend Ltd. and $12,357 of accrued interest were converted into shares of common stock at $0.10 per share. After applying a 10% bonus, the Company issued 2,873,563 shares of common stock to
        extinguish $287,356 of debt consisting of $250,000 of principal repayment and $37,356 in accrued interest and bonus. The Company recorded compensation expense of $139,944 to reflect the value of the shares issued upon conversion in excess of the debt and interest amounts.

During the year ended December 31, 2007, the Company issued 994,516 shares of common stock to extinguish $178,214 in accrued interest on convertible debentures.
        During year ended December 31, 2007, the Company issued 1,987,500 shares of common stock for total proceeds of $236,700.
        During the year ended December 31, 2007, the Company recorded $4,091,667 of discount on promissory notes to value their conversion option as calculated using the intrinsic value method.

F-23





PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006


Note10
  Stockholders Equity Transactions (continued) On
 July 25, 2006, the Company issued 1,336,992 units in an equity financing for a total of $8,021,952. Each $6.00 unit comprised of 10
 shares of common stock and 5 share purchase warrants, which warrants are exercisable at $1.00 for a period of three years from the date
 of grant. A total of 13,369,920 shares of common stock were issued and 6,684,960 warrants were issued. The Company recorded
 $3,409,330 as a financing cost related to the issuance of the warrants. As finders fees, the Company paid $225,096 in cash and issued
 234,690 warrants exercisable at $0.72 for a period of three years from the date of grant. The Company recorded $122,743 as a finders
 fee expense related to the issuance of these warrants.On September 29, 2006, the Company issued 16,500,000 shares of common stock
 valued at $13,200,000 pursuant to the acquisition of Providence Exploration.  In connection with the acquisition, the Company issued
 a further 3,500,000 shares of common stock valued at $2,800,000 as payment of the outstanding balance for oil and gas leases in Val
 Verde County.The Company acquired the following fixed assets upon acquisition:

F-24





PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006


|Drilling rig inventory           | $              724,515
|-------------------------------- | ----------------------
|Property and equipment           | 47,979                
|Oil and gas leases - undeveloped | 24,792,635            
|                                 | $25,565,129           

During
 the year ended December 31, 2006, the Company issued 2,004,778 shares of common stock valued at $2,071,214 for debt.

Note11
  Minority Interest Minority
 interest relates to the 10% interest in County Pipeline, LLC that is not held by the Company. This subsidiary was formed in October
 of 2006 with the purpose of constructing an oil and gas pipeline in Comanche County, Texas.

Note12
  Preferred Stock The
 Companys preferred stock may have such rights, preferences and designations and may be issued in such series as determined by
 the Board of Directors. No shares were issued and outstanding at December 31, 2007.

Note13
  Warrants

During
 2005, in connection with the offering of 6,270,000 shares common stock and $3,320,000 of convertible debentures during the year, a
 sales commission was partially paid in warrants.  The warrants are exercisable in whole or in part allowing the holders to purchase
 348,000 shares at an exercise price of $0.30 before the expiry date of December 1, 2010.  On the date granted, the fair market value
 of these warrants, totaling $191,400, consisted of $68,970 for warrants issued in connection with the common stock offering, and
 $122,430 for warrants issued in connection with the debenture offering.  The value of the warrants issued in connection with the
 debenture offering was recorded as a financing expense.

F-25





PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006


Note13
  Warrants (Continued)

As
 part of the equity financing completed in July 2006, the Company issued 6,684,960 warrants exercisable until July 25, 2009 at $1.00
 per share. The Company recorded $3,409,330 as a financing expense related to the issuance of these warrants based on their value as
 calculated using the Black-Scholes model. The following assumptions were used for the Black-Scholes valuation of the warrants
 granted in 2006:

Risk-free
 interest rate          4.50%

Expected
 life of options          3.0 years

Annualized
 volatility          177%

Dividend
rate               0.00%



Transactions
 involving the Companys warrant issuance are summarized as follows:



|            |  | Warrants Outstanding |      |                           |  |                                           | Warrants Exercisable
|----------- |  | -------------------- | ---- | ------------------------- |  | ----------------------------------------- | --------------------
|Year Issued |  | Exercise Price       |      | Number Shares Outstanding |  | Weighted Average Contractual Life (Years) |                     
|2005        |  | $                    | 0.30 |                           |  | 348,000                                   |                     
|2006        |  | $                    | 1.00 |                           |  | 6,684,960                                 |                     
|2006        |  | $                    | 0.72 |                           |  | 234,690                                   |                     



|                                                       |  | Number of Shares |           | Weighted AverageExercise Price |  
|------------------------------------------------------ |  | ---------------- | --------- | ------------------------------ | -
|                                                       |  |                  |           |                                |  
|Outstanding at December 31, 2004                       |  |                  |          |                                | $
|                                                       |  |                  |           |                                |  
|Granted                                                |  |                  | 348,000   |                                | $
|Exercised                                              |  |                  |          |                                | $
|Cancelled                                              |  |                  | (        | )                              | $
|Outstanding at December 31, 2005                       |  |                  | 348,000   |                                | $
|                                                       |  |                  |           |                                |  
|Granted                                                |  |                  | 6,919,650 |                                | $
|Exercised                                              |  |                  |          |                                | $
|Cancelled                                              |  |                  |           |                                | $
|Outstanding at December 31, 2006 and December 31, 2007 |  |                  | 7,267,650 |                                | $

F-26





PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006




Note14
   Acquisition of Providence ExplorationOn
 September 29, 2006, the Company entered into a share purchase agreement pursuant to which the Company acquired 100% control over
 Providence Exploration through the acquisition of all of its outstanding member shares.
 Thistransaction
 was accounted for using the purchase method as required by SFAS 141 Business
 Combinations.

The
 purchase price of the transaction required the Company to issue 20,000,000 common shares with a fair market value of $16,000,000.
 However, at the time of the acquisition, there was an intercompany account balance of $9,189,364 for principal and interest of cash
 advances made by the Company to Providence Exploration prior to the acquisition, and this balance was eliminated upon the completion
 of the transaction. Prior to the transaction, Providence Exploration had $73,271 in cash, $724,515 of drilling rig equipment, $47,979
 in equipment, $10,402,797 of unproved oil and gas properties, an intercompany balance due to the Company of $9,189,364, debt of
 $3,571,311, other assets and liabilities with a net balance of negative $449,036. Therefore, Providence Exploration had a net assets
 deficit of $1,961,149 on the date of the transaction. The $3,571,311 of debt held by Providence Exploration was eliminated on the
 date of the transaction by the assignment
 of a portion of the 20,000,000 shares to certain creditors. The fair market value of the shares issued of $16,000,000 plus the net
 assets deficit of $1,961,149, less the $3,571,311 of debt extinguished as a result of the transaction, amounted to $14,389,838, which
 was allocated to the value of undeveloped oil and gas leases held by Providence Exploration at the time of the acquisition.
 Accordingly, the value of the unproved oil and gas properties acquired was recorded at $24,792,635.

Note15
 - Agreements

In
 October 2005, the Company signed a joint exploration agreement with Harding Company. Under the terms of the agreement, the Company
 and Harding Company intend to explore, develop and produce oil and gas from Marble Falls and Barnett Shale formations in targeted
 areas of the Ft. Worth basin. Harding Company is appointed as operator.



The
 Company is required pursuant to the agreement to fund 100% of all costs of the management and operation for a minimum of 3 wells. The
 Company will carry Harding for its 10% working interest in all wells drilled and completed through the pipeline connection phase, in
 the project. Effective February 22, 2006, the Company entered into an agreement to purchase oil and gas leases in Val
 Verde County, Texas. The purchase price was $3,849,600, consisting of $1,924,800 in cash and a $1,924,800 note payable. In March
 2006, Harding Company paid the Company $192,480 related to the purchase
 for a 5% working interest in the the Val Verde lease.
 In connection with the acquisition of Providence Exploration, the Company issued 3,500,000 shares of common stock valued at
 $2,800,000 as payment of the outstanding balance for the oil and gas leases in Val Verde County.

F-27





PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006




Note
 15  Agreements (continued)

In
 early 2007, the Company engaged TRNCO Petroleum Corporation (TRNCO)
 of Midland, Texas todesign
 andimplement a
 high-tech,high-quality
 3D seismicsurveyofthose
 leases located in Val Verde County. The data is intended to illuminate deep gas targets at depths ranging from 14,000 to 16,000 feet
 within the identified carbonates. TRNCO will supervise the acquisition, processing, licensing and interpretation of all seismic data
 and has engaged Dawson Geophysical Company to be responsible for obtaining the actual 3D seismic data. Founded in 1952, Dawson is a
 leading provider of onshore seismic data acquisition and processing services that operates two state-of-the-industry data processing
 centers in Houston and Midland, Texas, staffed by experienced geophysicists. The processing professionals use the latest kits of
 powerful processing tools and back their analytical excellence with practical geophysical field experience in correlating complex
 producing horizons. Dawsons prior experience in the Val Verde Basin is expected to be of considerable benefit to Providence in
 acquiring reliable 3D seismic data.

The
 contract commitment cost for the agreement with TRNCO Petroleum Corporation (see Note 15) was $4,553,787, payable in installments on
 or before August 1, 2007. The Company had paid $5,000,000 to TRNCO by December 31, 2007 to cover project overruns of which all but
 $34,168 was used by the contractor by December 31, 2007.The royalty on the Companys Val Verde property
 is 25%of
 netrevenue.
 In addition, the Company must make annual installments for
 property leases in the amounts of
 $2,858on
 February 24 and $320April 13.

Note16
  Fair Value of Financial Instruments

The
 Companys financial instruments consist of cash, accounts receivable, accounts payable and notes payable. The carrying amount of
 these items approximates fair value because of their short-term nature and the notes payable bear interest at the market interest
 rate.

Note17
  Stock Based Compensation The
 Company has adopted the disclosure provisions of Statement of Financial Accounting Standards (SFAS) No. 123 (R), Share Based
 Payment as described in Note 1. No stock options were granted in 2007 and 2006.  No stock options were outstanding at December
 31, 2007.

Note18
  Reverse Common Stock SplitEffective
 August 25, 2003, the Company approved a 1-for-20 reverse common stock split. All common share amounts, common stock option amounts
 and per share information have been retroactively adjusted to reflect this common stock split in the accompanying financial
 statements.

F-28





PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006




Note19
  Recent Accounting Pronouncements

In
 February 2006 the Financial Accounting Standards Board (FASB) issued Statement of Financial Standards No. 155 Accounting for
 Certain Hybrid Financial Instruments  an amendment of FASB Statements No. 133 and 140 (SFAS 155). This standard
 permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would
 require bifurcation. SFAS 155 allows an entity to make an irrevocable election to measure such a hybrid financial instrument at
 fair value on an instrument-by-instrument basis. The standard eliminates the prohibition on a QSPE from holding a derivative
 financial instrument that pertains to a beneficial interest other than another derivative financial instrument. SFAS 155 also
 clarifies which interest-only and principal-only strips are not subject to the requirements of SFAS 133, as well as determines that
 concentrations of credit risk in the form of subordination are not embedded derivatives. SFAS 155 is effective for all financial
 instruments acquired or issued after the beginning of the fiscal year that begins after September 15, 2006. Adoption of SFAS 155didnot
 have a material impact on our consolidated financial position or results of operations. In July 2006, the Financial
 Accounting Standards Board (FASB) issued Interpretation No. 48 (FIN 48), Accounting for
 Uncertainty in Income Taxes, which clarifies the accounting for uncertainty in income taxes recognized in the financial
 statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 provides guidance on the
 financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides
 guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition.Adoption
 ofFIN 48did
 not have a material impact on our Consolidated Financial
 Statements. In September 2006, the FASB issued FASB Statement of Financial Accounting Standards (SFAS) No. 157,
 Fair Value Measurements, which establishes a framework for reporting fair value and expands disclosures about fair value
 measurements. SFAS No. 157 becomes effective beginning with our first quarter 2008 fiscal period. We are currently evaluating
 the impact of this standard on our Consolidated Financial Statements.

In
 September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other
 Postretirement Plans. Effective for our fiscal year ending 2006, we will be required to fully recognize the assets and obligations
 associated with our defined benefit plans. Effective for fiscal year ending 2008, we will be required to measure a plans assets
 and liabilities as of the end of the fiscal year.SFAS No. 158
 becomes effective beginning with our first quarter 2008 fiscal period. We are currently evaluating the impact of this standard on our
 Consolidated Financial Statements.

In
 February 2007, the FASB issued SFAS No. 159,The Fair Value option
 for Financial Assets and Financials Liabilities  Including an Amendment of FASB No. 115.This
 statements objective is to improve financial reporting by providing the Company with the opportunity to mitigate volatility in
 reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting
 provisions. This statement is expected to expand the use of fair value measurement, which is consistent with the FASBs
 long-term measurement objective for accounting for financial instruments. The Company presently comments on significant accounting
 policies (including fair value of financial instruments) in Note 2 to the financial statements.
 SFAS No. 159 becomes effective beginning with our first quarter 2008
 fiscal period. We are currently evaluating the impact of this standard on our Consolidated Financial Statements.



F-29





PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006


Note19
  Recent Accounting Pronouncements (continued)

In
 December 2007, the FASB issued SFAS No. 160,Non-controlling
 interests in Consolidated Financial Statements  An amendment of ARB No. 51.
 This statements objective is to improve the relevance, comparability, and
 transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing
 accounting and reporting standards that require ownership interests in the subsidiaries held by parties other than the parent be
 clearly identified.SFAS No. 160 becomes effective beginning
 with our first quarter 2009 fiscal period. We are currently evaluating the impact of this standard on our Consolidated Financial
 Statements.

In
 December 2007, the FASB issued SFAS No. 141 (revised),Business
 Combinations. This revision statements objective is to improve the
 relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its effects on
 recognizing identifiable assets and measuring goodwill.SFAS No.
 141 (revised) becomes effective beginning with our first quarter 2009 fiscal period. We are currently evaluating the impact of this
 standard on our Consolidated Financial Statements.

Note20
  Subsequent EventsOn
 February 29, 2008, the Company amended the terms of the $500,000 note payable to Global Convertible Megatrend Ltd. The amendment
 changed the maturity date to February 23, 2010 and conversion price for accrued interest to $0.08 per common share. On February
 29, 2008, the Company amended the terms of the $1,000,000 convertible promissory note payable to Miller Energy LLC. The amendment
 changed the maturity date to April 29, 2010 and conversion price for principal and accrued interest to $0.08 per common share.On
 February 29, 2008, the Company amended the terms of the $1,000,000 convertible promissory note payable to Global Project Finance AG.
 The amendment changed conversion price for principal and accrued interest to $0.08 per common share.On March 4, 2008, the Company
 issued a convertible promissory note to FAGEB AG in the amount of $496,174 with a maturity date of March 4, 2010. The convertible
 promissory note bears interest at 12% per annum. The principal and interest on the note can be converted into shares of common stock
 at a conversion price of $0.08. This note was issued in exchange for the full release and discharge of two promissory notes due to
 FAGEB AG for the same amount.On March 4, 2008, the Company issued a convertible promissory note to Global Convertible Megatrend
 Ltd. in the amount of $423,188 with a maturity date of March 4, 2010. The convertible promissory note bears interest at 12% per
 annum. The principal and interest on the note can be converted into shares of common stock at a conversion price of $0.08. This note
 was issued in exchange for the full release and discharge of a promissory note due to Global Convertible Megatrend Ltd. for the same
 amount.

End
 of Notes to Financial Statements

F-30





PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006


Supplemental Oil and Gas
 Information  FAS69



The
 following unaudited disclosures on standardized measures of discounted cash flows and changes therein relating to proved oil and gas
 reserves are determined in accordance with United States Statements of Financial Accounting Standards No. 69 Disclosures About
 Oil and Gas Producing Activities.



Standardized
 Measure of Discounted Future Net Cash Flows and Changes Therein



In
 calculating the standardized measure of discounted future net cash flows, year-end constant prices and cost assumptions were applied
 to the Companys annual future production from proved reserves to determine cash inflows. Future production and development
 costs are based on constant price assumptions and assume the continuation of existing economic, operating and regulatory conditions.
 Future income taxes are calculated by applying statutory income tax rates to future pre-tax cash flows after provision for the tax
 cost of oil and natural gas properties based upon existing laws and regulations.  The discount was computed by application of a 10
 percent discount factor to the future net cash flows. The calculation of the standardized measure of discounted future net cash flows
 is based upon discounted future net cash flows prepared by the Companys independent qualified reserve evaluators in relation to
 the reserves they respectively evaluated, and adjusted by the Company to account for managements estimate obligations and
 future income taxes.  The Company cautions that the discounted future net cash flows relating to proved oil and gas reserves are an
 indication of neither the fair market value of the Companys oil and gas properties, nor of the future net cash flows expected
 to be generated from such properties. The discounted future net cash flows do not include the fair market value of exploratory
 properties and probable or possible oil and gas reserves, nor is consideration given to the effect of anticipated future changes in
 crude oil and natural gas prices, development, asset retirement and production costs, and possible changes to tax and royalty
 regulations. The prescribed discount rate of 10 percent may not appropriately reflect future interest rates.  The Companys
 projections should not be interpreted as being equivalent to fair market value.

Net
 Proved Reserves(1, 2)

|                                        | Natural Gas(millions of cubic feet) |  | Crude Oil and Natural Gas Liquids(thousands of barrels)
|--------------------------------------- | ----------------------------------- |  | -------------------------------------------------------
|December 31, 2005                       | -                                   |  | -                                                      
|Purchase of reserves in place           | -                                   |  | -                                                      
|Production                              | -                                   |  | -                                                      
|Adjustment for uneconomic wells         | -                                   |  | -                                                      
|December 31, 2006 and December 31, 2007 | -                                   |  | -                                                      
|                                        |                                     |  |                                                        
|Developed                               | -                                   |  | -                                                      
|Undeveloped                             | -                                   |  | -                                                      
|Total                                   | -                                   |  | -                                                      

F-31





PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006




Supplemental
 Oil and Gas Information  FAS69 (continued)



| | (1) | Definitions:
| | --- | ------------



a.     Net
 reserves are the remaining reserves of the Company, after deduction of estimated royalties and including royalty interests.

b.     Proved
 oil and gas reserves.Proved oil and gas reserves are
 the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with
 reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, i.e.
 prices and costs as of the date the estimate is made. Prices include consideration of changes in existing prices provided only by
 contractual arrangements, but not on escalations based upon future conditions.



Reservoirs
 are considered proved if economic product ability is supported by either actual production or conclusive formation test.  The area of
 a reservoir considered proved includes that portion delineated by drilling and defined by gas-oil and /or oil-water contacts, if any;
 and the immediately adjoining portions not yet drilled, but which can be reasonably judged as economically productive on the basis of
 available geological and engineering data.  In the absence of information on fluid contacts, the lowest known structural occurrence
 of hydrocarbons controls the lower proved limit of the reservoir.



| | i. | Reserves which can be produced economically through application of improved recovery techniques (such as fluid injection) are included in the proved classification when successful testing by a pilot project, or the operation of an installed program in the reservoir, provides support for the engineering analysis on which the project or program was based.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | Estimates of proved reserves do not include the following:
| | --- | ----------------------------------------------------------



Oil
 that may become available from known reservoirs but is classified separately as indicated additional reserves; Crude
 oil, natural gas, and natural gas liquids, the recovery of which is subject to reasonable doubt because of uncertainty as to geology,
 reservoir characteristics, or economic factors; Crude oil, natural gas, and natural gas liquids, that may occur in
 undrilled prospects; and  Crude oil, natural gas, and natural gas liquids, that may be recovered from oil shales, coal,
 gilsonite and other such sources.



F-32





PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006


Supplemental
 Oil and Gas Information  FAS69 (continued)



c.     Proved
 developed oil and gas reserves.Proved developed oil and
 gas reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.
 Additional oil and gas expected to be obtained through the application of fluid injection or other improved recovery techniques for
 supplementing the natural forces and mechanisms of primary recovery should be included as proved developed reserves only
 after testing by a pilot project or after the operation of an installed program has confirmed through production response that
 increased recovery will be achieved.



d.     Proved
 undeveloped reserves.Proved undeveloped oil and gas
 reserves are reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a
 relatively major expenditure is required for recompletion.  Reserves on undrilled acreage shall be limited to those drilling units
 offsetting productive unites that are reasonably certain of production when drilled.  Proved reserves for other undrilled unites can
 be claimed only where it can be demonstrated with certainty that there is continuity of production from the existing productive
 formation.  Under no circumstances should estimates, for proved undeveloped reserves be attributable to any acreage for which an
 application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved
 effective by actual tests in the area and in the same reservoir.



(2)
 The Company does not file any estimates of total net proved crude oil or natural gas reserves with any U.S. federal authority or
 agency other than the SEC.



Standardized
 Measure of Discounted Future Net Cash Flows Related to Proved Oil and Gas Reserves

The
 Company has no proved reserves and no oil and gas production and therefore has not presented the Standardized Measure of Discounted
 Future Net Cash Flows or operating results.



Capitalized
 Costs

|December 31, 2007               | United States
|------------------------------- | -------------
|Proved oil and gas properties   | $-           
|Unproved oil and gas properties | 14,115,585   
|Total capital costs             | 14,115,585   
|Accumulated depletion           | (-)          
|Net capitalized costs           | $14,115,585  

F-33





PROVIDENCE RESOURCES,
INC.(An ExploratoryStage
Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 and
2006




Supplemental
 Oil and Gas Information  FAS69 (continued)



Costs
 Incurred

|                              | United States   
|----------------------------- | ----------------
|Years ended December 31, 2007 |                 
|Acquisitions:                 |                 
|Proved reserves               | $-              
|Unproved reserves             | -               
|Total acquisitions            | -               
|Exploration costs             | 5,729,696       
|Development costs             | -               
|Asset retirement obligations  | -               
|Total costs incurred          | $      5,729,696



F-34





ITEM
 9.     CHANGES IN AND DISAGREEMENTS
 WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE



None.



ITEM
 9A.     CONTROLS AND PROCEDURES
 (ITEM 9A
 (T))



Management's
 Annual Report on Internal Control over Financial Reporting



The
 Companys management, including our chief executive officer
 and chief financial officer,is responsible for
 establishing and maintaining adequate internal control over our
 financial reporting.
 Internal control over financial reporting is a process designed by, or under the
 supervision of,our
 chief executive andchieffinancial
 officers and implemented byour board of directors,
 management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
 of financial statements for external purposes in accordance with generally accepted accounting principles and includes thosepolicies
 and procedures that: (i) pertain to the maintenance of records that, in
 reasonable detail, accurately and fairly reflect the transactions and dispositions ofour
 assets; (ii) provide
 reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
 generally accepted accounting principles, and thatourreceipts
 and expenditures are being made only in accordance with authorizations ofourmanagement
 and directors; and (iii) provide
 reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition ofour
 assets that could have a material effect on the financial statements. Because oftheir
 inherent limitations, internal control over financial reporting may not prevent or detect
 misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
 become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



Under
 the supervision and with the participation of our management, including our principal executive officer and principal financial
 officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework inInternal
 Control  Integrated Frameworkissued by the Committee of Sponsoring
 Organizations of the Treadway Commission. Based on our evaluation, our management concluded that our internal control over financial
 reporting was effective as of December 31, 2007.



This
 annual report does not include an attestation report ofour
 registered public accounting firm regarding internal control over financial reporting. Management's
 report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Commission that
 permit us to provide onlythe managements report
 in thisForm 10-K/A.



Changes
 in Internal Controls over Financial Reporting



During
 the period ended December 31, 2007,
 there has been no change in internal control over financial reporting that has materially affected, or is reasonably likely to
 materially affect our internal control over financial reporting.



9B.
           OTHER INFORMATION



None.



23





PART
 III



ITEM10.     DIRECTORS,
 EXECUTIVE OFFICERS, ANDCORPORATE GOVERNANCE



Officers
 and Directors



The
 following table sets forth the name, age and position of each director and executive officer ofthe
 Company:



|Name                   | Age | YearElected/Appointed | Positions Held                    
|---------------------- | --- | --------------------- | ----------------------------------
|Gilbert Burciaga       | 54  | 2007                  | CEO, CFO, PAO, anddirector        
|Markus Mueller         | 49  | 2003                  | Chairman of the board of directors
|Nora Coccaro           | 51  | 1999                  | Director                          
|Christian Russenberger | 39  | 2008                  | Director                          



Gilbert
 Burciagawas appointed as chief executive officer, chief
 financial officer, principal accounting officer, and director on July 2, 2007.  Mr. Burciaga is a director of Miller
 Energy, LLC, as well as the chairman/chief executive officer of Millers recently created gas marketing company, Vintage Gas
 Marketing, LLC. Mr. Burciaga has been involved in the natural gas supply and marketing business for over 25 years in which time he
 was a founding member of Dynegy, Inc. Mr. Burciaga served as one of six senior vice-presidents involved in the startup and
 development of Dynegy, which became a Fortune 500 trading company. Between 1992 and 1997, Mr. Burciaga was the president of NGC
 Energy Resources, a division of Dynegy. NGC Energy Resources focused on the acquisition and operation of downstream assets.  The
 appointment of Mr. Burciaga to the board of directors was included in the Agreement with Miller. Mr. Burciaga is an affiliate of
 Miller, serving as a director of Miller and as a director/chief executive officer of Millers subsidiary Vintage Gas Marketing.
 The Agreement provides that both the Company and Miller waive any conflict of interest rights that may arise as result of the
 relationships between the parties.



Markus
 Mueller wasfirstappointed
 to the Corporations board of directors on May 28, 2003.

Mr.
 Mueller currently acts as a director of Scherrer & Partner Portfolio Management AG Zurich and of First Equity Securities AG
 Zurich. He has held these positions since August of 2000. Both companies are involved in asset management for private clients and
 manage investment funds. Prior to Mr. Muellers current engagements, he acted as a director of Jefferies (Switzerland) AG Zurich
 and as the managing director of Jefferies Management AG Zug (Switzerland) from 1995 until 2000. The Jefferies companies are also
 involved in asset management for private clients.

24







Nora
 Coccaro was first appointed to the Companys board of
 directors on November 16, 1999.

Ms.
 Coccaro attended medical school at the University of Uruguay before becoming involved in the management of public entities. Ms.
 Coccarohasserved
 as officer and/or director with the following companies:



| | · | an officer and director (November 2005 toSeptember 2008) of ASP Ventures, Inc., an OTC: BB quoted company without operations,
| | - | -----------------------------------------------------------------------------------------------------------------------------

| | · | an officer and director (December 2005 to September 2008) of Newtech Resources, Inc., an OTC:BB quoted company without operations, and
| | - | --------------------------------------------------------------------------------------------------------------------------------------

| | · | an officer and director (March 2007 to September 2008) of Enwin Resources, Inc, an OTC: BB quoted company without operations.
| | - | -----------------------------------------------------------------------------------------------------------------------------

| | · | an officer and director (January 2000 to June 2007) of Sibling Entertainment Corp. (formerly Sona Development Corp.) an OTC: BB quoted company formerly without operations, and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | an officer and director (February 2000 to January 2004) of SunVesta Inc. (formerly OpenLimit, Inc.), an OTC: BB quoted company formerly involved in credit card encryption technology, and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | a director (February 2004 to March 2007) of Solar Energy Limited an OTC:BB quoted company involved in the development of alternative sources of energy.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------



Between
 September 1998 and December 2005 Ms. Coccaro acted as the Consul of Uruguay to Western Canada.



Christian
 Russenberger was appointed as
 a director on March 31, 2008.

Mr.
 Russenberger isthe sole owner anddirector
 of CR Innovations Holding AG,CR
 Innovations AG (financial consulting),Global Project Finance AG
 (long term investments),T2MConnect
 International AG (telecom operations) and Satellutions GmbH
 (telecom operations).
 Since 2004 Mr. Russenberger has been involved in the management and
 direction of each of these companies. Prior to his
 current experience
 Mr. Russenberger worked with Finter Bank in Zurich, Switzerland
 (1993-2004)
 as a relationshipmanager
 and analyst.Before
 joining Finter Bank, Mr. Russenberger worked in Zurich as an analyst with Anlage-und Kreditbank AKB (1991-1993) and Bank Leu AG
 (1990-1991).



Nopersonsother
 than executive officers or directors of the Companyare expected to
 make any significant contributions to management.

Term
 of OfficeOur directors are appointed forstaggered
 terms of one (1) year, two (2) years and three (3) years
 to hold office until the next annual meeting of our shareholders or until removed from office in
 accordance with our bylaws. Our executive officers are appointed by ourboard
 ofdirectors and hold office until removed by the board.

Family
 RelationshipsThere are no family relationships between or among the
 directors or executive officers.



25





Director
 Independence

The
 Company is quoted on the OTC Bulletin Board inter-dealer quotation system, which does not have director independence requirements.
 However, for purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 4200(a)(15).
 NASDAQ Rule 4200(a)(15) states that a director is not considered to be independent if he or she is also an executive officer or
 employee of the corporation. Accordingly, we consider Mr.Berndtto
 be an independent director.



Involvement
 in Certain Legal ProceedingsTo the best of our knowledge, during the past
 five years, none of the following occurred with respect to a present or former director, executive officer, or employee: (1) any
 bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the
 time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a
 pending criminal proceeding (excluding traffic violations and other minor offences); (3) being subject to any order, judgment or
 decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily
 enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking
 activities; and (4) being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodities Futures
 Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed,
 suspended or vacated.

Compliance
 with Section 16(A) of the Exchange Act



Based
 solely upon a review of Forms 3, 4 and 5 furnished tothe Company,we
 are not
 aware ofany
 persons who, during the period ended December 31, 2007, failed to file,
 on a timely basis, reports required by Section 16(a) of the Securities Exchange Act of 1934.



Code
 of Ethics



The
 Company has adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-B of the
 Securities Exchange Act of 1934. The Code of Ethics applies to directors and senior officers, such as the principal executive
 officer, principal financial officer, controller, and persons performing similar functions.The
 Company has incorporated a copy of its Code of Ethics as Exhibit 14 to thisform
 10-K/A. Further,our
 Code of Ethics is available in print, at no charge, to any security holder who requests such
 information by contacting us.



Board
 of Directors Committees



The
 board of directors has not established an audit committee. An audit committee typically reviews, acts on and reports to the board of
 directors with respect to various auditing and accounting matters, including the recommendations and performance of independent
 auditors, the scope of the annual audits, fees to be paid to the independent auditors, and internal accounting and financial control
 policies and procedures. Certain stock exchanges currently require companies to adopt a formal written charter that establishes an
 audit committee that specifies the scope of an audit committees responsibilities and the means by which it carries out those
 responsibilities. In order to be listed on any of these exchanges, the Company will be required to establish an audit committee.
 The board of directors has not established a compensation committee.



26





Director
 Compensation



Directors
 currently are not reimbursed for out-of-pocket costs incurred in attending meetings
 nor are they compensated for their service as directors. However,we
 have entered into a consulting agreement with the chairman ofour
 board of directors for the rendition of services pertinent toour
 operation (see theSummary
 Compensation Table,below).
 The Company may adopt a provision for compensating directorsfor
 their servicesin the future.



The
 following table provides summary information for the year 2007 concerning cash and non-cash compensation paid or accrued bythe
 Company to or on behalf ofour
 directors.



|Summary Compensation Table
|--------------------------
|Name                      
|Markus Mueller            



*Fees
 earned in 2007 pursuant to a consulting agreement paid with 602,813
 sharesof
 our common stock.



ITEM
 11.     EXECUTIVE COMPENSATION



Compensation
 Discussion and Analysis



The
 objective of the Companys compensation program is to provide compensation
 for services rendered by ourexecutive officer.Salaries
 aregenerally
 the only type of compensation we utilize in ourexecutivecompensation
 program however we have used stock compensation
 awards to further incentivize executive officers.We
 have utilized these forms
 of compensation
 because we feel that same are adequate to retain and
 motivate our executive officers.
 The amounts we deem appropriate to compensate our executive officersare
 determined in accordance with market forces; we have no specific formula to determine compensatory amounts at this time. While we
 have deemed that our current compensatory program and the decisions regarding compensation are easy to administer and are
 appropriately suited for our objectives, we may expand our compensation program to any additional future employees to include options
 and other compensatory elements.



Tables



The
 following table provides summary information for the years 2007, and 2006 concerning cash and non-cash compensation paid or accrued
 bythe Company
 to or on behalf of (i) the chief executive officer and (ii) any other employee to
 receive compensation in excess of $100,000.



27





|Summary Compensation Table                 
|-------------------------------------------
|Name and Principal Position                
|Gilbert BurciagaCEO, CFO, PAO and director*
|Nora CoccaroCEO, CFO, PAO, and director**  

*Appointed
 to executive positions onJuly 2, 2007.

**     Resigned
 executive positions onJuly 2, 2007.



We
 have no Grants of Plan-Based Awards, Outstanding Equity Awards at Fiscal Year-End, Option Exercises and
 Stock Vested, Pension Benefits, or Nonqualified Deferred Compensation. Nor do we have any Post
 Employment Payments to report.



ITEM
 12.     SECURITY OWNERSHIP OF
 CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
 STOCKHOLDER MATTERS



The
 following table sets forth certain information concerning the ownership ofthe
 Companys59,161,118
 shares ofcommon
 stockissued and outstandingas
 ofApril 1,
 2008, with respect to: (i) all directors; (ii) each person known by us to be the beneficial owner of more than five percent of our
 common stock; and (iii) our directors and executive officers as a group.



|Names and Addresses of Managers and Beneficial Owners                                          | Title of Class | Number of Shares | Percent of Class
|---------------------------------------------------------------------------------------------- | -------------- | ---------------- | ----------------
|Gilbert Burciaga, CEO, CFO, PAO, director5300 Bee Caves Rd Bldg 1 Suite 240Austin, Texas 78746 | Common         | 0                | 0%              
|Markus Mueller, director Bleicherweg 66, 8022Zurich, Switzerland                               | Common         | 7,934,384        | 13.41%          
|Nora Coccaro, director 2610-1066 West Hastings St.,Vancouver, BC. Canada                       | Common         | 453,520          | 0.77%           
|Christian Russenberger*, directorMeierhofrain 368820 Wädenswil                                 | Common         | 1,120,000        | 1.89%           
|Nicolas Mathys Weinberghohe 17, 6340Baar, Switzerland                                          | Common         | 3,366,670        | 5.69%           
|Officer anddirectors(4)as a
group                                                              | Common         | 9,507,904        | 16.07%          

*Christian
 Russenberger is considered the beneficial owner of1,000,000
 shares held by Global Project Finance AG.

28





ITEM
 13.     CERTAIN RELATIONSHIPS AND
 RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE



None
 of our directors or executive officers, nor any proposed nominee for election as a director, nor any person who beneficially owns,
 directly or indirectly, shares carrying more than 5% of the voting rights attached to all of our outstanding shares, nor any members
 of the immediate family (including spouse, parents, children, siblings, and in-laws)
 of any of the foregoing persons has any material interest, direct or indirect, in any transaction since the beginning of our last
 fiscal year or in any presently proposed transaction which, in either case, has or will materially affect us,
 except as listed below.



During
 the year ended December 31, 2007 the Company recognizedaconsulting
 expense of $75,000 to Gilbert Burciaga, our chief executive
 officer, chief financial officer and principal accounting officer
 and one of our directors,
 which was due to Mr. Burciaga at December 31, 2007.



During
 the year ended
 December 31,2007,
 the Company issued 750,000 sharesof its common stock
 to Mr. Mueller, the chairman of our board of directors, to satisfy
 $112,500 due forconsulting fees
 incurred pursuant to a consulting agreement dated July 1, 2003.
 The Company recordedacompensation
 expense of $22,500 to reflect the value of the shares issued upon conversion
 of the book amount due.
 A balance of $52,500 was due to Mr. Mueller at December 31, 2007.
 For the
 year ended December 31, 2007, the Company recognizeda consulting
 expense of $90,000 pursuant to this agreement.



During
 the year endedDecember 31, 2007 the Company recognized a
 consulting expense of $109,500 to Nora Coccaro, formerly our chief executive officer, chief financial officer and principal
 accounting officer, currently our vice-president of corporate affairs and one of our directors pursuant to a consulting agreement
 datedMarch 16,2000.For
 the 2007
 charge, $16,000 is thedeemed
 valueattributed to100,000
 shares of commonstock issued to Ms. Coccaro. A
 balance of $8,000 was due to Ms. Coccaro at December 31, 2007.



During
 the year ended December 31, 2007 the Company issued an aggregate of $3,000,000 in convertible promissory notes to entities owned by
 Christian Russenberger, one of our directors.Each note
 bears 10% interest, is convertible at the holders option into the
 Companys common stock at $0.08
 a share on or before
 the maturity dates ranging from May 31, 2010 to August 15, 2010 and are
 secured byall
 seismic data obtained in connection with the Carson/Cole Ranch leases in Val Verde County, Texas
 on a pro rata basis with like holders of the security.



ITEM
 14.PRINCIPAL
 ACCOUNTANT FEES AND SERVICES



Audit
 Fees



Chisholm,
 Bierwolf & Nilson, LLC provided audit services tothe Company
 in connection with its annual report for the fiscal year ended December 31, 2007
 and 2006. The aggregate
 fees billed by Chisholm, Bierwolf & Nilson, LLC for the 2007 and 2006
 audit of our annual financial statements and a review of our quarterly financial statements was$25,000
 and $19,000, respectively.



Audit
 Related Fees



Chisholm,
 Bierwolf & Nilson, LLC billed tothe Company no fees
 in 2007 or 2006
 for professional services that are reasonably related to the audit or review of our financial
 statements that are not disclosed in Audit Fees above.

29









Tax
 Fees



Chisholm,
 Bierwolf & Nilson, LLC billed tothe Company no fees
 in 2007 or 2006
 for professional services rendered in connection with the preparation of our tax returns for the
 period.



All
 Other Fees



Chisholm,
 Bierwolf & Nilson, LLC billed tothe Company no fees
 in 2007 or 2006
 for other professional services rendered or any other services not disclosed above.



Audit
 Committee Pre-Approval



The
 Company does not have a standing audit committee. Therefore, all services provided to us by
 Chisholm, Bierwolf & Nilson, LLC, as detailed above, were pre-approved by our board of directors. Our independent auditors,
 Chisholm, Bierwolf & Nilson, LLC, performed all work using only their own full time permanent employees.



ITEM
 15.     EXHIBITS AND FINANCIAL STATEMENT SCHEDULES



(a)
 Consolidated Financial Statements



The
 following documents are filed underItem
 8. Financial Statements and Supplementary Data,
 pages F-1 through F-11,
 and are included as part of this Form 10-K/A:



Financial
 Statements of the
 Company for theyears ended
 December 31, 2007 and 2006:

Report
 of Independent Registered Public Accounting Firm

Consolidated
 Balance Sheets

Consolidated
 Statements of IncomeConsolidated Statements
 of Stockholders EquityConsolidated
 Statements of Cash Flows

Notes
 to Consolidated Financial Statements



(b)
 Exhibits



The exhibits
 required to be attached by Item 601 of Regulation S-B are listed in the Index to Exhibits on page
 32 of
 this Form 10-K/A,
 and are incorporated herein by this reference.



(c)
 Financial Statement Schedules



We are
 not filing any financial statement schedules as part of this Form 10-K/A
 because such schedules are either not applicable or the required information is included in the
 financial statements or notes thereto.

30





SIGNATURES



In
 accordance with the requirements of the Securities Exchange Act of 1934, the
 registrant caused this report to be signed on its behalf by the undersigned
 thereunto duly authorized this17th
 day ofOctober,
 2008.



PROVIDENCE
 RESOURCES, INC.





/s/
 Gilbert Burciaga

Gilbert BurciagaChief
 Executive Officer, Chief Financial Officer, and Principal Accounting Officer



In
 accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the
 capacities and on the dates indicated.



Signature     Title     Date



/s/
 Markus MuellerDirectorOctober
 17, 2008

Markus Mueller



/s/
 Gilbert BurciagaDirectorOctober
 17, 2008

Gilbert Burciaga



/s/
 Nora CoccaroDirectorOctober
 17, 2008

Nora Coccaro



/s/
 Christian RussenbergerDirectorOctober
 17, 2008

Christian Russenberger



31





INDEX
 TO EXHIBITS



Exhibit     Description



3(i)(a)*       Articles
 of Incorporation (incorporated by reference from the Form 10-SB filed with the Commission on April 17, 2000).

3(i)(b)(c)*       Amendment
 to Articles of Incorporation (incorporated by reference from the Form 10-SB filed with the Commission on April 17, 2000).

3(i)(d)*     Amended
 and Restated Articles of Incorporation (incorporated by reference from the Form 10-SB filed with the Commission on April 17, 2000).

3(i)(e)*     Articles
 of Amendment to the Amended and Restated Articles of Incorporation (incorporated by reference from the Form 10-QSB filed with the
 Commission on November 17, 2003).

3(i)(f)*     Amendment
 to the Amended and Restated Articles of Incorporation (incorporated by reference from the Form 8-K filed with the Commission on
 October 2, 2006).

3(i)(g)*     Amendment
 to the Amended and Restated Articles of Incorporation.

3(ii)(a)*     Bylaws
 of the Company
 (incorporated by reference from the Form 10-SB filed with the Commission
 on April 17, 2000).

3(ii)(b)*       Amended
 and Restated Bylaws ofthe
 Company (incorporated by reference from the Form 8-K filed with the
 Commission on October 26, 2006).

10(i)*       Joint
 Venture Agreement betweenProvidence
 Exploration and Harding Company, dated October 1, 2005 (incorporated by
 reference from the Form 8-K filed with the Commission on October 2, 2006).

10(ii)*       Extension
 of the Term of Series A Convertible Debenture Certificate with Max Fugman (incorporated by reference from the Form
 10-KSB/A filed with the Commission on October 11, 2005).

10(iii)*       Extension
 of the Term of Series A Convertible Debenture Certificate with Global Convertible Megatrend Ltd. (incorporated by
 reference from the Form 10-KSB/A filed with the Commission on October 11, 2005).

10(iv)*       Agreement
 for Purchase and Sale betweenProvidence
 Exploration and Global Mineral Solutions, L.P., dated February 22, 2006
 (incorporated by reference from the Form 8-K filed with the Commission on October 2, 2006).

10(v)*       Letter
 Agreement betweenProvidence
 Exploration and Harding Company, dated March 30, 2006 (incorporated by
 reference from the Form SB2/A-2 filed with the Commission on February 28, 2007).

10(vi)*       Consulting
 Agreement with Eastgate Associates Ltd., dated April 1, 2006 (incorporated by reference from the Form 10-QSB filed with the
 Commission on November 13, 2006).

10(vii)*       Securities
 Exchange Agreement dated April 10, 2006, betweenthe
 Company,Providence
 Exploration, and the membership unit holders of
 Providence
 Exploration (filed on Form 8-K with the Commission on April 14, 2006).

10(viii)*       Note
 Exchange Agreement dated April 10, 2006, betweenthe
 Company and the holders of certain promissory notes issued byProvidence
 Exploration (filed on Form 8-K with the Commission on April 14, 2006).

32





10(ix)*       Amendment
 to the Terms of the Securities Exchange Agreement dated effective as of May 26, 2006, betweenthe
 Company,Providence
 Exploration, and the membership unit holders ofProvidence
 Exploration (filed on Form 8-K with the Commission on July 3, 2006).

10(x)*       Amendment
 to the Terms of the Note Exchange Agreement dated effective as of May 26, 2006, betweenthe
 Company and the holders of certain promissory notes issued byProvidence
 Exploration (filed on Form 8-K with the Commission on July 3, 2006).

10(xi)*       Exploration
 and development agreement with Miller Energy, LLC and certain of its affiliates dated June 29, 2007 (filed on Form 8-K with the
 Commission on July 11, 2007).

10(xii)*       Secured
 Revolving Convertible Promissory Note with Miller Energy, LLC dated June 29, 2007 (filed on Form 8-K with the Commission on July 11,
 2007).

14*       Code
 of Ethics, adopted as of March 1, 2004 (incorporated by reference from the form 10QSB filed with the Commission on November 17, 2004).

21Subsidiaries
 ofthe Company

31     Certification
 of the Chief Executive Officerand Chief Financial Officerpursuant
 to Rule 13a-14 of the Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
 of 2002.

32Certification
 of the Chief Executive Officerand Chief Financial Officerpursuant
 to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



*Incorporated by reference to previous
 filings ofthe Company.



33