**UNITED STATES        SECURITIES AND EXCHANGE COMMISSION        Washington, D.C. 20549**

**FORM****10-K**

(Mark One)

þ**ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the fiscal year ended **December 31****, 2009**.

o      **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from      to      .

Commission file number: **000-30377**

**PROVIDENCE RESOURCES****, INC.**

(Exact name of registrant as specified in its charter)

| **Texas**

(State or 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 of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: **(512) 970-2888**

Securities registered under Section 12(b) of the Act: none.        Securities registered under Section 12(g) of the Act: common stock (title of class), $0.0001 par value.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. 

Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of theAct.

Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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. Yes        þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and        post such files).

Yes o No þ

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be 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 or any amendment to this Form        10-K. 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. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Smaller reporting        company þ

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

The aggregate market value of the registrant's common stock, $0.0001 par value (the only class of voting stock), held by non-affiliates (52,464,275shares) was approximately $1,311,607based on the average closing bid and askprices        ($0.025) for the common stock on April13, 2010.

At April14, 2010the number of shares outstanding of the registrant's common stock, $0.0001 par value (the only class of voting stock), was 62,472,179.

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**TABLE OF CONTENTS**

**           **Page**    
**PART I.**
     Item       1.        Business  3  Item       1A.      Risk Factors  8  Item       1B.      Unresolved Staff Comments  14  Item       2.        Properties  14  Item       3.        Legal Proceedings  16  Item       4.        (Removed and Reserved)  17 
**PART II.**
     Item       5.        Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities  17  Item       6.        Selected Financial Data  20  
Item       7.        Management's Discussion and Analysis of Financial Condition and Results of Operations
  20  Item       7A.     Quantitative and Qualitative Disclosures about Market Risk  25  Item       8.        Financial Statements and Supplementary Data  25  Item       9.        Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  26  Item       9A(T).     Controls and Procedures  26  Item       9B.     Other Information  27 
**PART III.**
     Item     10.      Directors, Executive Officers and Corporate Governance  27  Item     11.      Executive Compensation  31  Item     12.      Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters  33  Item     13.      Certain Relationships and Related Transactions, and Director Independence  33  Item     14.      Principal Accountant Fees and Services  34 
**PART IV.**
     Item     15.      Exhibits and Financial Statement Schedules  35                         Signatures  36    **

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**PART I**

**ITEM 1.     ****BUSINESS**

***As used herein the terms “******Company******,” “we,” “us,” and “our,” refer to Providence Resources, Inc., a Texas corporation, and******its******subsidiaries. All references herein to “******PRE******”******refer to******PRE******Exploration, LLC,******the Company’s******wholly owned subsidiary, and its subsidiar******ies******.***

**Corporate History**

The Companywas 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 adopted the name “Healthbridge, Inc.” During early 2002 we acquired exclusive ownershipand intellectual property rights for amedicalwaste disposaltechnology. Prior to year end 2005 we decided to discontinue all operations related to these rights due to our inability to commercialize thetechnology.

OnNovember 18,2005,the Companyexecuted a letter of intent to acquire PRE, an oil and gas exploration company. The intent wasto fund PRE’s lease        purchases and exploration activitiesin anticipation of the acquisition.On April 10, 2006, the Companyexecuted (i) a definitive share exchange agreement with PREand itsmembership unit holders and(ii)a definitive note exchange        agreementwith the holders of certain of PRE’s promissory notes, which agreements ultimately resulted in the acquisition of PREas a wholly owned subsidiary on September 29, 2006.On the acquisition of PREwe changed our name to “Providence Resources, Inc.”

The Company’s principal place of business is located at5300 Bee Caves Road, Building1,Suite 240, Austin, Texas, 78746, and our telephone number is(512) 970-2888.

The Company’s registered statutory office is located at 408 West 17th Street, Suite101, Austin, Texas 78701. 

**The Company**

***Oil and Gas******Exploration in Val Verde County***

Leases

On March 30, 2006, PREacquired approximately12,832gross acres of oil and gas leasesover 57 square milesin Val Verde County, Texasfrom        Global Mineral Solutions, L.P.(“Global”).The leases included underlying multiple oil and gas target zones delineated by 3Dseismicdataand drilling in the area, along a trend that has produced from multiple large gas fields, including the Gomez field, the Brown Bassettfield,and the JM field.Effective December 12, 2008, the lease terms on9,989.2of the acres under leasewere extended pursuant to an Agreement Re Oil and Gas Leaseswith I.W. Carson LLC (“Carson”), the owner of the acreage.        On December 22, 2008,PRE acquired from Global an additional3,352.1acresof oil and gas leases underlying acreage owned by Carsonfor an aggregate of 13,341.3 acres in Val Verde County.On February 28, 2010, PREentered into an        Extension and Amendment Re Oil and Gas LeaseswithCarson to extendthe primary term of the leasesuntil February 28, 2013,in exchange for$510,000 and an additional $834,130 due on or before June 20, 2010. The extension obligates PRE to drill two additional wells on        the leases. PRE can secure the leases past February 28, 2013 with continuous development of the acreage.The Company has allowed leases on approximately 2,843 acres of that acreage acquired in 2006 to lapse. Investment in that acreagewasfully impaired in the year ended December 31, 2009.

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Seismic Exploration 

 

On March 27, 2007,PRE engaged TRNCO Petroleum Corporationto implement an I/O two recording system using the latest in state-of-the-art acquisition andprocessing parameters to generate high quality 3D seismic data from the Val Verde County leases.        Dawson Geophysical Company was concurrently engaged to obtain the actual 3D seismic data while Fairfield Industries Incorporated was subsequently engaged to interpret the data in concert with consulting geologists familiar with the geophysical applications of seismic data.The 3D seismic data collected and interpreted illuminated deep gas targets at depths ranging from 14,000 to 16,000 feet in the Ellenberger carbonate, in addition to targets within        the Strawn carbonate and Pennsylvanian-Wolfcamp sandstone reservoirs at lesser depths. PRE identified 25 prospective drilling locations onthe Val Verde leases based on this information.

Drilling

On August 8, 2008, PRE entered into a Prospect Participation and Joint Operating Agreement with Elm Ridge Exploration Company, LLC (“Elm Ridge”) pursuant to which Elm Ridge acquired a 50% working interest in the Val Verde leases in exchange for $7,212,800 and a $2,000,000 carried interest in the drilling of two exploratory        wells.R.K Ford & Associates, Inc. (“R.K. Ford”) was then engaged to drill two exploratory wells to the Ellenberger formation to test the structureat a depth of approximately 16,000 feet. R.K. Ford finished drilling theCarson 10-1in early March of 2009and the Carson12-1 in late Aprilof 2009. Effective March 1, 2010, PRE and Elm Ridge executed an Assignment, Bill of Sale and Conveyance that assignedall of Elm Ridge’s right, title and interest in the Val Verde County leases to PRE, including the wells, rights, and intellectual property, subject to existing royalties,in accordance with existing        agreements with Global.PRE intendsto complete the Carson 10-1 and Carson 12-1 wellsin 2010. PRE also intends to test theStrawn formation and prospectively develop the Ellenberger formation based on completionresults.

***Oil and Gas Exploration in******Comanche and Hamilton Counties***

PREconcluded the acquisition of approximately 7,374 acres of oil and gas leases in Comanche and Hamilton Countiespursuant to the terms of a definitive joint exploration agreement with The Harding Company(“Harding”) in        November of 2005. Harding acting as operator for the acquired leases completed a seismic data program, identified prospective drill targets, drilled four wells during 2006 in Comanche County and built a pipeline to evacuate prospective production. None of the wells drilledindicated commercial quantitiesof gas. All four wells have since been abandoned and the leases,in        addition to attendant drilling expenses, development costsand the pipeline,werefully impaired in the year ended December 31, 2008.

**Competition**

The oil and gas business in Texas is highly competitive. Companies with greater financial resources, existing staff and labor forces, equipment for exploration, and experience are in a better position than us to compete for leasesand production. In addition, our ability to market any oil and gas which we        might produce could be severely limited by our inability to compete with larger companies operating in the same area, which may be willing or able to offer oil and gas at alower price.

The Companycompetesin Texas with over 1,000 independent companies and 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. 

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We believe that the Companycan successfully compete against otherindependent companies by focusing ourefforts on minimizing corporate expenses and efficientlydevelopingcurrent lease interests. Otherwise, the Company hasa minimal competitive position in the oil and gas industry.

**Marketability**

 

The Company does not produce oil or gas products for market at this time and will have to consider the economics of constructing a natural gas pipeline to transport energy produced from its leases in Val Verde County in the event commercial quantities of natural gas are determined to exist.

The products that the Company intends to market - oil and natural gas products - 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.         

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

We currently have no patents, trademarks, licenses, franchises, concessions, or labor contract, except the leases we have acquired for oil, gas and mineral interests do provide for the payment of royalties in the event production is realized.

**Governmental****and Environmental****Regulation          **

The Company’s oil and gas explorationactivities, 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 couldresult in substantial penalties. The regulatory burden on the oil and gas industry adds to our cost of doing business and may affect future profitability. Sincesuch 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’s oil and gas explorationactivities and the possibility offuture production 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 regulations do provide certain limitations with respect to our operations. 

****

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**Environmental Regulation**

The recent trend in environmental legislation and regulation has been toward stricter standards, and this trend will likely continue. The Company does 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. 

The Company is 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. 

The following environmental laws and regulatory programs appear to be the most significant to our operations in 2010: 

***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***— The Company’soperations 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. PREcurrently 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***— The Company’s 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, EPAhas 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”. Sincehazardous wastes require 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. 

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***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 Companyis not presently aware of any potential adverse claims in this regard. 

***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. 

***Climate Change Legislation and Greenhouse Gas Regulation***— Many studies over the past couple decadeshave indicated that emissions of certain gases contributeto warming of the Earth’s atmosphere. In response to        these studies, many nations have agreed to limit emissions of “greenhouse gases” or “GHGs” pursuant to the United Nations Framework Convention on Climate Change, and the “Kyoto Protocol.” Although the United Stateselectednot to participatein the Kyoto Protocol, several states have adopted legislation and regulations to reduce emissions of        greenhouse gases. Restrictions on emissions of methane or carbon dioxide that may be imposed in various nations and states could adversely affect our operations and demand for our products. 

The United States Supreme Court has ruled, in *Massachusetts, et al. v. EPA*, that the EPA abused its discretion under the Clean Air Act by refusing to regulate carbon dioxide emissions from mobile sources. As a result of the Supreme Court decisionthe EPA issued a finding that serves as the foundation under the Clean Air Act to issue other rules that would result in federal greenhouse gas regulations and emissions limits under the Clean Air Act, even without Congressional action.As part of this array of new regulations the EPA also issued a GHG monitoring and reporting rule that requires certain parties, including participants in the oil and natural gas industry,        to monitor and report their GHG emissions, including methane and carbon dioxide, to the EPA. These regulations may apply to our operations. The EPA has proposed two other rules that would regulate GHGs, one of which would regulate GHGs from stationary sources, and may affect sources in the oil and natural gas exploration and production industry and the pipeline industry. The EPA’s finding, the greenhouse gas reporting rule, and the proposed rules to regulate the emissions of        greenhouse gases would result in federal regulation of carbon dioxide emissions and other greenhouse gases, and may affect the outcome of other climate change lawsuits pending in United States federal courts in a manner unfavorable to our industry. 

Acts of Congress, particularly such asthe“American Clean Energy and Security Act of 2009,” also known as the “Waxman-Markey cap-and-trade legislation,” approved by the United States House of Representatives on June 26, 2009, as well as the decisions of lower        courts,large numbers of states,and foreign governments which affect climate change regulation could have a material adverse effect on our business, financial condition, and results of operations.

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***Compliance***

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 on 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 Company currently has only twoemployeessince we rely on independent contractorsto assist us in managing our interests in oil and gas leases in Val Verde County. Wealsorely        onconsultants, attorneys, and accountants as necessary to assist us 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 the        Securities and Exchange Commission (the “Commission”). The public may read and copy any materials that are filed by the Company with the Commission at the Commission’s Public Reference Room at 100 FStreet, 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 at *http://www.sec.gov*.

**ITEM 1A.     RISK FACTORS**

The Company’soperations and securities are subject to a number of risks. Below we have identified and discussed the material risks that we are likely to face. Should any of the following risks occur, they will adversely affect our operations, business, financial condition and/or operating results as well as the future trading price and/or the value of our        securities.

**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. 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 might never        become profitable.          

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

The Company’s audits for theperiods ended December 31, 2009 and 2008expressed substantial doubt as to its ability to continue as a going concern dueto the lack of revenue generating activities and the accumulation of significant        losses of $52,813,781 asof December 31, 2009. Unless we are able to overcome our dependence on successive financings and begin to generate revenue from operations, our ability to continue as a going concern will be in jeopardy.          

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

The Company acquired PRE Exploration on September 29, 2006, which company first began oil and gas exploration 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 cannot represent that it will be successful in continuing operations.***

The Company has not, to date, generated revenue from operations and may not generate revenue over the next twelve months. Should the Company be unable to realize revenue over the next twelve months, it will be forced to continue to raise capital to remain in operation. We have no commitments for the provision of additional capital and can offer        no assurance that such capital will be available as necessary to sustain operations.

***The outcome of litigation in which we******are involved******is unpredictable and an adverse decision in any such matter could have a material adverse affect on our financial position and results of operations.***

Harding filed a claim against the Companyseekingapproximately $1,500,000in damages as well as attorneys feesfor unpaid invoices. The Companyfiled a        counterclaim for damages for fraud, negligent misrepresentation, and breach of contract arising out of Harding’s solicitation of the Company to invest in the Comanche and Hamilton Counties’project as well as attorneys’fees. The litigation has caused the Company to incursignificant professional feeswhich fees are        expected to increase prior to any final resolution of the respective claims. Further, the Company cannot with any certainty determine the ultimate outcome of the litigation. Should the Company be unsuccessful in this litigation such a result would have a material adverse affect on our financial position and results of operations.

**Risks Related to the Oil and Gas Industry**

 

***Oil and natural gas drilling and producing operations involve 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: 

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|  | ·      | 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:

|  | ·      | encountering wellblowouts; |
|--|----------------------------------------|----------------------------|

|  | ·      | 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 contribute tonet 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.

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***Climate change legislation or regulations restricting emissions of “greenhouse gases” could result in increased operating costs and******reduced demand for******oi******l and natural        gas******.***

On December 15, 2009, the U.S. Environmental Protection Agency (“EPA”) officially published its findings that emissions of carbon dioxide, methane and other “greenhouse gases” present an endangerment to human health and the environment because emissions of such gases are contributing to warming of the Earth’s        atmosphere and other climatic changes. These findings by the EPA allow the agency to proceed with the adoption and implementation of regulations that would restrict emissions of greenhouse gases under existing provisions of the federal Clean Air Act. In late September 2009, the EPA had proposed two sets of regulations in anticipation of finalizing its findings that would require a reduction in emissions of greenhouse gases from motor vehicles and that could also lead to theimposition of greenhouse gas emission limitations in Clean Air Act permits for certain stationary sources. In addition, on September 22, 2009, the EPA issued a final rule requiring the reporting of greenhouse gas emissions from specified large greenhouse gas emission sources in the United States beginning in 2011 for emissions occurring in 2010. The adoption and implementation of any regulations overgreenhouse        gases could require us to incur costs to reduce emissions of greenhouse gases associated with our operations or could adversely affect demand for the oil and natural gas that weintend toproduce. 

On June 26, 2009, the U.S. House of Representatives passed the “American Clean Energy and Security Act of 2009,” or “ACESA,” which would establish an economy-wide cap-and-trade program to reduce U.S. emissions of greenhouse gases including carbon dioxide and methane. ACESA would require a 17% reduction in greenhouse        gas emissions from 2005 levels by 2020 and just over an 80% reduction of such emissions by 2050. Under this legislation, the EPA would issue a capped and steadily declining number of tradable emissions allowances to certain major sources of greenhouse gas emissions so that such sources could continue to emit greenhouse gases into the atmosphere. These allowances would be expected to escalate significantly in cost over time. The net effect of ACESA will be to impose increasing costs on        the combustion of carbon-based fuels such as oil, refined petroleum products, and natural gas. The U.S. Senate has begun work on its own legislation for restricting domestic greenhouse gas emissions and the President Obama Administration has indicated its support of legislation to reduce greenhouse gas emissions through an emission allowance system. Although it is not possible at this time to predict when the Senate may act on climate change legislation or how any bill passed by the        Senate would be reconciled with ACESA, any future federal laws or implementing regulations that may be adopted to address greenhouse gas emissions could adversely affect demand for the oil and natural gas that we intend to produce.

***The results of the Company’s current operations depend on the exploration and operational efforts of third parties.  ***         

Our oil and gas exploration efforts through seismic exploration, processing,interpretation,drilling and operation have been performed by third parties. We will continue tobe dependent upon third parties as we pursue additional        exploration.Despite such third parties being experienced in their respective fields, our dependence on third parties to initiate, determine and conduct operations could impede our own prospect of success.

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***Since oil and natural gas prices are volatile, any substantial decrease in prices could cause the Company to continue to operate at a loss even 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, if any. 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 expect to 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 may require additional capital funding.***

The Company may require additional funds, either through equity offerings, debt placements or joint ventures to develop our operations. Such additional capital may result in dilution to our current shareholders. Our ability to meet long-term financial commitments may depend 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 pay cash dividends.***

The Company does not pay cash dividends. We have not paid any cash dividends since inception and have no intention of paying any cash dividends 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.

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***We incur significant expenses as a result of the Sarbanes-Oxley Act of 2002, which expenses may continue to negatively impact our financial performance.*** 

We incur significant legal, accounting and other expenses as a result of the Sarbanes-Oxley Act of 2002, as well as related rules implemented by the Commission, which control the corporate governance practices of public companies. 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, has substantially increased our expenses, including legal and accounting costs, and made some activities more time-consuming and costly. Further, expenses related to our compliance may increase in the future, as legislation affecting smaller reporting companies comes into effect that may negatively impact our financial performance to the point of having 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. 

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Since the 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.     ****PROPERT****IES**

**Oil and Gas****Properties**

As of the date of this current report, the Company holds up an aggregate of13,341.3 acres ofoil and gas leases located in Val Verde County, Texas.

On March 30, 2006, PRE acquired 9,989.2of its acres of oil and gas leases pursuant to an agreement with Global Mineral Solutions, LP (“Global”). Effective December 12, 2008, the terms of the leases were extended pursuant to an Agreement re Oil and Gas Lease with I.W. Carson LLC (“Carson”), the owner of        the acreage.

| ***Abstract*** | ***Survey*** | ***Block*** | ***Original Grantee*** | ***Acres*** |
|----------------|--------------|-------------|------------------------|-------------|
| 2014           | W. pt. 10    | S-10        | Monroe Ashworth        | 1,098       | .80 |
| 2301           | W. pt. 14    | S-14        | M. A. Allen            | 955         | .40 |
| 2159           | NW pt. 12    | C-15        | R. A. Ashley           | 126         | .00 |
| 2575           | SW pt. 12    | C-15        | R. A. Ashley           | 398         | .30 |
| 1483           | 10           | C-15        | E. J. Hullum           | 556         | .85 |
| 1484           | 11 1/2       | C-15        | M. J. Main             | 556         | .85 |
| 2051           | 30           | G           | C G & S F          | 643         | .60 |

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| 1519        | 31     | G      | G C & S F      | 643     | .60 |
|-------------|--------|--------|--------------------|---------|-----|
| 2302        | 16     | S-10   | E. C. Hamilton     | 1,334   | .80 |
| 1518        | 29     | G      | GC & SF RR Co. | 640     | .00 |
| 2387        | 14     | G      | GC & SF RR Co. | 640     | .00 |
| 2059        | 10     | G      | GC & SF RR Co. | 640     | .00 |
| 1509        | 11     | G      | GC & SF RR Co. | 640     | .00 |
| 1489        | 9      | C-15   | B P. Simmons       | 1,115   | .00 |
| ***Total*** |   |   |               | ***0*** |     |

On December 22, 2008 PRE acquired from Global an additional3,352.1acresof oil and gas leases underlying acreage owned by Carson. 

| ***Abstract*** | ***Part; Section*** | ***Block*** | ***Original Grantee*** | ***Acres*** |
|----------------|---------------------|-------------|------------------------|-------------|
| 2300           | All; 9              | S-10        | S. Bailey              | 1335        | .80 |
| 2303           | All; 4              | S-10        | M. M. Norman           | 1335        | .80 |
| 1922           | W/2, 3              | S-10        | H. Lawson              | 680         | .50 |
| ***Total***    |                |        |                   | ***0***     |  |

On February 28, 2010, PREentered into an Extension and Amendment Re Oil and Gas LeaseswithCarson to extendthe primary term of the leasesuntil February 28, 2013in exchange for$510,000 and an additional $834,130 due on or before June 20, 2010. The extension obligates PRE to drill two additional wells on the leases. PRE can secure the leases past February 28, 2013 with continuous development of the acreage.

***Drilling Activity***

During 2009 PREengaged R.K. Ford to drilltwo exploratory wells to the Ellenberger formationunderlying our Val Verde Countyleases. The Companyanalyzed the drill results and        made a determination to complete the wells in 2010. We intend to act as operator and will complete the wells with the aid of sub-contractors. The Company’sanalysis of the exploratory wells has identifiedprospective secondary production targets in the Strawn and Pennsylvanian Wolfcamp/Canyon Sands.

PREdrilled fourexploratory wellsinComanche County, Texaspursuant to our jointexploration agreement with Harding, all ofwhich failed to produce economically recoverably quantities of oil or gasand have since been abandoned.

PREis not in the process of installing waterfloods, performing pressure maintenance operations, or performing any other related operations of material importance.

***Delivery Commitments***

PREhas nocontracts to provide a fixed and determinable quantity of oil or gas.

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***Undeveloped Acreage***

All acreage in which PREmaintains 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***

The existence of oil and gas reserves for our properties hadnot been determinedas of December 31, 2009. 

***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****Facilit****y**

The Company currently maintains limited office space in Austin, Texas at 5300 Bee Caves Road, Building 1,Suite 240,Austin,Texas, 78746 for which we pay no rent.         

**ITEM 3.     LEGAL PROCEEDINGS**

On August 27, 2008 The Harding Company (“Harding”) filed a complaint in the District Court of the 160thJudicial District of Dallas County, Texas against the Company. Harding sought(i) amounts remaining due of $1,177,032 for        drilling wells in Comanche and Hamilton Counties and $340,358 for the pipeline to these dry wells under the Joint Exploration Agreement dated October 1, 2005, as amended (ii) access to the seismic data from Val Verde County and its purported right to acquire an additional five percent of participation in the Val Verde leases under the Agreement for Purchase and Sale dated February 21, 2006, as amended, and (iii) attorneys’fees.

On November 5, 2008, the Company, represented by Andrews Kurth, LLP, filed a counterclaim against Harding and an original claim against Abram Janz(“Janz”)that soughtdamages for fraud, negligent misrepresentation, breach of contract, and        breach of fiduciary duty arising out of Harding’s and Janz’s solicitation of the Company to invest in a drillingand development venturein Comanche and Hamilton Counties. The Company soughtactual and exemplary damages for (i) the loss of itsinvestment under Joint Exploration Agreement, (ii) specific performance of the        repurchase provision pertaining to Harding’s five percent participation in the Val Verde leases and (iii) attorneys’fees.

On April 5, 2010,Company settled all claimsagainstJanz.

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**ITEM 4.     ****(REMOVED AND RESERVED)**

Removed and reserved.

**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 Financial Industry Regulatory Authority, 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*** |
|--------------|---------------------|------------|-----------|
| **200****9** | December 31         | $0.10      | $0.02     |
|         | September 30        | $0.18      | $0.05     |
|         | June 30             | $0.25      | $0.08     |
|         | March 31            | $0.34      | $0.16     |
| **200****8** | December 31         | $0.25      | $0.11     |
|         | September 30        | $0.26      | $0.15     |
|         | June 30             | $0.29      | $0.15     |
|         | March 31            | $0.35      | $0.15     |

**Capital Stock**

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

***Common Stock***

As ofApril14, 2010,there were 164shareholders of record holding a total of62,472,179 sharesof fully paid and non-assessable common stock        of the 250,000,000sharesof 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 of April14, 2010,there were no shares issued and outstanding of the 25,000,000 shares of preferred stock authorized. The par value of the preferred stock is $0.0001 per share. The Company’spreferred stock may have such        rights, preferences and designations and may be issued in such series as determined by the board of directors.

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***Warrants***

As of April14, 2010,the Companyhas 315,114 common share purchase warrants exercisable at $0.30 per share at any time until December 1, 2010. During 2009 6,919,650common share purchase warrants expired.

***Stock Options***

As of April14, 2010,the Company has 11,875,000outstanding, vestedstock options to purchase shares of our common stock, granted pursuant tothe Providence Resources,        Inc.,2008 Stock Option Plan, with an exercise price of $0.20 per optionover a term of ten years from the date of each respective grant, and anadditional 1,175,000 outstanding, unvestedstockoptions.

***Convertible******Debentures******and Notes***

As of April14,2010,the Company’s outstanding convertible debentures, issued on November 28, 2005, with interest at 7% per annum, andprincipal and accrued interest on the notes which maybe converted into shares of the Company’s common stock at any time until November 30, 2010,are as follows:         

| ***Holder***                          |   | ***Amount*** |   | ***Conversion Rate (Common Shares)*** |
|---------------------------------------|--------|--------------|--------|---------------------------------------|
| Desmodio Management, Inc.             |   | 360,000      |   | 0.08                                  |
| Capriccio Investments, Inc.           |   | 360,000      |   | 0.08                                  |
| FE Global Leveraged Investment Ltd.   |   | 400,000      |   | 0.08                                  |
| FE Global Undervalued Investment Ltd. |   | 250,000      |   | 0.08                                  |
| First Equity Bancorp Ltd.             |   | 100,000      |   | 0.08                                  |
| FE Global Convertible Investment Ltd. |   | 850,000      |   | 0.08                                  |
| FAGEB AG                              |   | 1,000,000    |   | 0.08                                  |

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As of April14,2010the Company’s outstanding secured convertible promissorynotes are as follows:

| ***Holder***                        |   | ***Date Issued***   |   | ***Amount*** |   | ***Interest*** |   | ***Due Date***    |   | ***Conversion Rate (Common Shares)*** |
|-------------------------------------|--------|---------------------|--------|--------------|--------|----------------|--------|-------------------|--------|---------------------------------------|
| Global Project Finance AG           |   | May 31, 2007        |   | 1,000,000    |   | 10%            |   | May 31, 2010      |   | 0.08                                  |
| Global Convertible Megatrend Ltd.   |   | August 8, 2007      |   | 1,400,000    |   | 10%            |   | August 8, 2010    |   | 0.08                                  |
| Golden Beach Company Ltd.           |   | August 8, 2007      |   | 100,000      |   | 10%            |   | August 8, 2010    |   | 0.08                                  |
| CR Innovations AG                   |   | August 8, 2007      |   | 600,000      |   | 10%            |   | August 8, 2010    |   | 0.08                                  |
| Global Project Finance AG           |   | August 8, 2007      |   | 400,000      |   | 10%            |   | August 8, 2010    |   | 0.08                                  |
| Global Undervalued Investment Ltd.  |   | August 15, 2007     |   | 250,000      |   | 10%            |   | August 15, 2010   |   | 0.08                                  |
| FE Global Leveraged Investment Ltd. |   | August 15, 2007     |   | 250,000      |   | 10%            |   | August 15, 2010   |   | 0.08                                  |
| Miller Energy LLC                   |   | April 29, 20082     |   | 1,000,000    |   | 10%            |   | April 29, 2010    |   | 0.08                                  |
| Global Convertible Megatrend Ltd.   |   | February 23, 2010 3 |   | 665,334      |   | 8%             |   | February 23, 2015 |   | 0.04                                  |
| Global Convertible Megatrend Ltd.1  |   | February 26, 2010   |   | 510,000      |   | 8%             |   | February 26, 2015 |   | 0.04                                  |
| FAGEB AG                            |   | March 4, 2010 4     |   | 622,401      |   | 8%             |   | March 4, 2015     |   | 0.04                                  |
| Global Convertible Megatrend Ltd.   |   | March 4, 2010 5     |   | 530,847      |   | 8%             |   | March 4, 2015     |   | 0.04                                  |

1      Unsecured; issued with a carried interest that entitles holder to a five and one tenths percent (5.1%) net revenue interest of the Company’s interest in the Carson 10-1 and Carson 12-1 wells.

2      Renewed from April 29, 2007.

3     Reissued from a loan agreement dated February 23, 2007, as amended by an Amendment to Loan Agreement dated February 29, 2008, in the original principal amount of $500,000.

4     Reissued from a secured convertible promissory note dated March 4, 2008, in the original principal amount of $496,174.

5     Reissued from a secured convertible promissory note dated March 4, 2008, in the original principal amount of $423,188.

***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.

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**Transfer Agent and Registrar**

The Company’s transfer 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.

**ITEM 6.     SELECTED FINANCIAL DATA**

Not required.

**ITEM 7****.     MANAGEMENT’S DISCUSSION AND ANALYSIS****OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

This *Management’s Discussion and Analysi**s of Financial Condition and**Results of Operations*and other parts of this current reportcontain 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 entitled *Forward-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 this current report. Our fiscal year end is December 31. 

**Discussion and Analysis**

During the year ended December 31, 2009the Company was involved in(i) drilling the Carson 10-1and Carson 12-1 wells in Val Verde County, (ii) assessing drilling results, (iii) evaluating with Elm Ridge thedevelopment program going forward, (iv)making preparations to defend the Harding claim and to pursuethe counterclaim against Hardingand Janz, and (v) satisfying continuous public disclosure requirements.

The Company intends to complete the Carson 10-1 and Carson12-1 wells in 2010. PRE also intends to test theStrawn formation and prospectively develop the Ellenberger formation based on completionresultsover the        next twelve months.

Ourbusiness is prone to significant risks and uncertainties thathave an immediate impact on efforts to generate a positive cash flow and maydeter the anticipated expansion of ourinitial drilling program. Since we        have no assurance that future expectations of oil and gas production will be realized, or that revenue realized from such anticipated production will be sufficient to support our continued operation, we may well have to rely on debt or equity financing to remain in businessthough we haveno commitments for additional debt or equity financing. Therefore, unless positive cash flow can be generated from operations,        the future of our business remainsuncertain. 

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**Results of Operations**

***Net Income/Losses***

 

For the period from inception until December 31, 2009,the Company incurred net losses of $52,813,781. Net losses for the yearended December 31, 2009,were $8,456,429as compared to $6,238,393 for theyearended December 31,2008. The increasein net losses canbe attributed toanincrease in general and administrative expenses as well as interest expenses over the comparative periods.

   We will likely continue to operate at a loss through fiscal 2010and due to the nature of the Company’s oil and gas exploration and development operations cannot determine whether we will ever generate revenues from operations.

***General and Administrative******Expenses***

 

General and administrative expenses for the yearended December 31, 2009,were $2,891,125as compared to $2,636,397for the yearended December 31, 2008. The increase in general        and administrative expensesover theperiodscan be primarily attributedto higher professional feesassociated with ongoing legal proceedings.General and administrative expenses include financing costs, accounting costs, consulting fees, leases, employment costs,        professional fees and costs associated with the preparation of disclosure documentation. We expect that overall general and administrative expenses willincrease in the near term as professional fees are expected to increase due to ongoinglegal proceedings.

***Other Income (Expense******)***

Interest income for the year ended December 31, 2009,increased to $51,018from $38,121 for the year ended December 31, 2008.Interest expense for the year ended December 31, 2009,increased to $3,220,900from $2,746,454 for the year ended December 31, 2008.         

Impairment of capital assets for the yearended December 31, 2009,was$1,506,696compared to $2,000,000for the yearended December 31,        2008.The impairmentexpensesin the current periodwerein connection with ourCole leaseinVal Verde Countyand in the previousperiodwere inconnection with our leases in Comanche and Hamilton Counties.Debtextinguishment and conversion expense for the yearended December 31, 2009,was $888,726compared to $48,671 for the year ended December 31, 2008.

In the year endedDecember 31, 2008,the Companyhad a gain on the sale of assetsof $1,155,008in connection withthe sale of a 50% interest in the Val Verde leases to Elm Ridge.

***Income Tax Expense (Benefit)***

The Company has a prospective income tax benefit resulting from a net operating loss carryforward and start up costs that will offset any future operating profit.

***Impact of Inflation***

The Company believes that inflation has had an effect on 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.

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***Capital Expenditures***

The Company has spent significant amounts of capital for the period from February 17, 1993 (inception) to December 31, 2009,on unproved oil and gas properties, pipeline construction, and related exploration costs.

***Liquidity and Capital Resources***

The Company has been in the exploratorystage since inception and has experienced significant changes in liquidity, capital resources, and stockholders’ equity.

At December 31, 2009, the Company had a working capital deficitof $8,342,604. We hadcurrent assets of $2,088,316consisting of cash on hand. The Company had total assets of $10,028,334as of December 31,        2009,that consisted of current assets andundeveloped oil and gas leasesin Val Verde County. 

At December 31, 2009, the Company had current liabilities of $10,430,920, consisting of accounts payable of $1,304,262, accrued expenses of $1,687,383, the current portion of convertible debentures of $3,320,000, the current portion of long-term convertible promissory notes of $3,919,274, and the current portion of long-term notes payable of $200,000. The Company        had total liabilities of$12,140,051 as of December 31, 2009. 

Stockholders deficitin the Company was $2,111,717as of December 31, 2009. 

For the period from inception until December 31, 2009, the Company’s cash flow used in operating activities was$7,603,923. Cash flowused in operating activities for the year ended December 31, 2009,was$2,291,565compared to $926,450 for the yearended December 31, 2008. Cash flow used in operating activities during the current period is due tonet losses and a decrease in related partypayableoffset primarily by an amortization of conversion rights on debt, impairment        expenses, and an increase in accrued expenses. 

Depreciation, amortization, and impairment for the yearsended December 31, 2009and 2008were$1,506,696and $2,020,399 respectively.

For the period from inception until December 31, 2009, the Company’s cash flow used in investing activities was $13,541,265. Cash flowused ininvesting activities for the yearended December 31, 2009,was$2,012,483compared to cash flowprovided byinvesting activities of $6,153,239 for the yearended December 31, 2008. Cash flowused ininvesting activities in the current period isthe result of costs incurred in drilling on the Carsonleases in Val Verde County.Cash flowprovided by investing activities in the previous period wasthe result of the sale of a 50% interest in the Val Verde leases to Elm Ridge.

For the period from inception until December 31, 2009, the Company’s cash flow provided by financing activities was $23,233,504. There wasno cash flowprovided by financing activities for theyearsended        December 31, 2009 or 2008.

The Company has funded its cash needs from inception primarily through a series of debt and equity transactions, including several private placements. While we believe that our current assets may besufficient to conduct our exploration and development activities over the next twelve months, no assurances can        be given that additional funding, if needed to explore and develop our lease interests, will be available to us.Our inability to obtain funding, if necessary, would have a material adverse affect on our business.         

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Cash dividends are not expected to be paid in the foreseeable future.                  The Company had no lines of credit or other bank financing arrangements as of December 31, 2009.           

Commitments for future capital expenditures related to the Company’s drillingprogram were material at December 31, 2009.The Carsonleases in Val Verde County requiredthat we drill two        additional wells on or before March 10, 2010and realize production in order to maintain the leases.The extension and amendment of these leases on February 13, 2010 extendthe primary term of the leasesuntil February 28, 2013.

The Company has no defined benefit plan though it has contractual commitmentswith Gil Burciaga and Nora Coccaro in addition to a stock based compensation plan. 

The Company has no current plans for the purchase or sale of any plant or equipment.          

The Company has no current plans to make any changes in the number of employees. 

      

***Off Balance Sheet Arrangements*** 

As of December 31, 2009the 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 arematerial 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 $52,813,781 as of December 31, 2009. 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.

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

The statements contained in the section titled “*Results of Operations”*and *“**Discussion and Analysis,”*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 this current 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: 

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|  | ·      | 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 ouroperating 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***

We have adopted Accounting Standards Codification Topic (“ASC”) 718, formerly 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. 

We account for equity instruments issued in exchange for the receipt of goods or services from other than employeesin accordance with ASC 505. 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.

***Critical Accounting Policies*** 

In the notes to the audited consolidated financial statements for the Company for the year ended December 31, 2009 and 2008included in this Form 10-Kthe Companydiscussed those accounting policies that are considered to be significant in determining        the results of operations and financial position. The Company’s managementbelievesthat 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.         

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***Revenue Recognition***

Revenues recorded upon the completion of 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***

Please see Note 16 to our consolidated financial statements for recent accounting pronouncements.

**ITEM 7****A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

Not required.

**ITEM 8.     F****INANCIAL STATEMENTS****AND SUPPLEMENTARY DATA**

Ourconsolidatedfinancial statements for the yearsended December 31, 2009and 2008are attached hereto as F-1 through F-29. 

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**PROVIDENCE RESOURCES****, INC.**

**(A****n****Exploratory****Stage Company)        INDEX TO****CONSOLIDATED****FINANCIAL STATEMENTS        December 31, 200****9****and 200****8**

                                                                                                                                   *Page*

Report of Independent Registered Public Accounting Firm                                        F-2

Consolidated BalanceSheets                                                                                          F-3

Consolidated Statements of        Operations                                                                    F-4         

Consolidated Statementof Stockholders’ Equity(Deficit)and Comprehensive Loss     F-5         

Consolidated Statements of Cash        Flows                                                                    F-11         

Notes to Consolidated Financial        Statements                                                               F-12

     **                    **

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors        Providence Resources, Inc. and Subsidiaries        Austin, Texas          

We have audited the accompanying balance sheets of Providence Resources, Inc. and Subsidiaries (An Exploratory Stage Company) at December 31, 2009 and 2008 and the related statements of operations, stockholders' equity(deficit) and comprehensive loss and cash flows for the years then ended and for the cumulative period from February 17, 1993 (date of        inception) to December 31, 2009. 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 Public Company Accounting Oversight Board (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, 2009 and 2008, 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, 2009 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.

/s/ Chisholm, Bierwolf, Nilson & Morrill, LLC         Chisholm, Bierwolf, Nilson & Morrill, LLC        Bountiful, Utah        April 14, 2010

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| PROVIDENCE RESOURCES, INC.                                            |
|-----------------------------------------------------------------------|
| (A Development Stage Company)                                         |
| CONSOLIDATED BALANCE SHEETS                                           |
| December 31, 2009 and 2008                                            |
|                                                                  |   |   |   |   |
| ASSETS                                                                |   | 2009 |   | 2008 |
|                                                                  |   |   |   |   |
| Current assets:                                                       |   |   |   |   |
| Cash                                                                  | $ | 2,088,316 |   | 6,392,364 |
| Receivables                                                           |   | - |   | 172,971 |
| Note receivable                                                       |   | - |   | 107,500 |
|                                                                  |   |   |   |   |
| Total current assets                                                  |   | 2,088,316 |   | 6,672,835 |
|                                                                  |   |   |   |   |
| Unproved oil and gas properties, not subject to amortization          |   | 7,940,018 |   | 7,359,854 |
|                                                                  |   |   |   |   |
| Total assets                                                          | $ | 10,028,334 |   | 14,032,689 |
|                                                                  |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                  |   |   |   |   |
|                                                                  |   |   |   |   |
| Current liabilities:                                                  |   |   |   |   |
| Accounts payable                                                      | $ | 1,304,263 |   | 1,133,642 |
| Accrued expenses                                                      |   | 1,687,383 |   | 1,026,324 |
| Related party payables                                                |   | - |   | 53,500 |
| Current portion of convertible debentures                             |   | 3,320,000 |   | - |
| Current portion of long-term convertible promissory notes             |   | 3,919,274 |   | - |
| Current portion of long-term notes payable                            |   | 200,000 |   | - |
|                                                                  |   |   |   |   |
| Total current liabilities                                             |   | 10,430,920 |   | 2,213,466 |
|                                                                  |   |   |   |   |
| Accrued expenses                                                      |   | 369,111 |   | - |
| Convertible debentures                                                |   | - |   | 3,320,000 |
| Long-term convertible promissory notes                                |   | 840,020 |   | 2,592,382 |
| Long-term notes payable                                               |   | 500,000 |   | 700,000 |
|                                                                  |   |   |   |   |
| Total liabilities                                                     |   | 12,140,051 |   | 8,825,848 |
|                                                                  |   |   |   |   |
| Commitments and contingencies                                         |   |   |   |   |
|                                                                  |   |   |   |   |
| Stockholders' equity (deficit):                                       |   |   |   |   |
| Providence Resources, Inc. stockholders' equity (deficit):            |   |   |   |   |
| 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,        |   |   |   |   |
| 62,472,179 and 62,174,454 shares issued and outstanding, respectively |   | 6,247 |   | 6,217 |
| Additional paid-in capital                                            |   | 50,841,866 |   | 49,929,352 |
| Deferred stock compensation                                           |   | (297,022) |   | (522,349) |
| Deficit accumulated during the development stage                      |   | (52,813,781) |   | (44,357,352) |
|                                                                  |   |   |   |   |
| Total Providence Resources, Inc. stockholders' equity (deficit)       |   | (2,262,690) |   | 5,055,868 |
| Noncontrolling interest                                               |   | 150,973 |   | 150,973 |
|                                                                  |   |   |   |   |
| Total stockholders' equity (deficit)                                  |   | (2,111,717) |   | 5,206,841 |
|                                                                  |   |   |   |   |
| Total liabilities and stockholders' equity (deficit)                  | $ | 10,028,334 |   | 14,032,689 |

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

 

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| PROVIDENCE RESOURCES, INC.                                    |
|---------------------------------------------------------------|
| (A Development Stage Company)                                 |
| CONSOLIDATED STATEMENTS OF OPERATIONS                         |
| Years Ended December 31, 2009 and 2008 and Cumulative Amounts |
|                                                          |   |   |   |   |
|                                                          |   |   |   | Cumulative |
|                                                          |   | 2009 |   | 2008 |   | Amounts |
|                                                          |   |   |   |   |   |   |
| Sales                                                         | $ | - | $ | - | $ | 350 |
| Cost of sales                                                 |   | - |   | - |   | 25,427 |
|                                                          |   |   |   |   |   |   |
| Gross loss                                                    |   | - |   | - |   | (25,077) |
|                                                          |   |   |   |   |   |   |
| General and administrative expenses                           |   | 2,891,125 |   | 2,636,397 |   | 14,052,694 |
|                                                          |   |   |   |   |   |   |
| Loss from operations                                          |   | (2,891,125) |   | (2,636,397) |   | (14,052,694) |
|                                                          |   |   |   |   |   |   |
| Other income (expense):                                       |   |   |   |   |   |   |
| Interest income                                               |   | 51,018 |   | 38,121 |   | 563,451 |
| Interest expense                                              |   | (3,220,900) |   | (2,746,454) |   | (12,965,282) |
| Impairment of capital assets                                  |   | (1,506,696) |   | (2,000,000) |   | (22,897,522) |
| Debt extinguishment and conversion expense                    |   | (888,726) |   | (48,671) |   | (1,099,841) |
| Gain on sale of assets                                        |   | - |   | 1,155,008 |   | 1,119,109 |
|                                                          |   |   |   |   |   |   |
| Loss before income taxes and discontinued operations          |   | (8,456,429) |   | (6,238,393) |   | (49,357,856) |
|                                                          |   |   |   |   |   |   |
| Provision for income taxes                                    |   | - |   | - |   | - |
|                                                          |   |   |   |   |   |   |
| Loss from continuing operations                               |   | (8,456,429) |   | (6,238,393) |   | (49,357,856) |
|                                                          |   |   |   |   |   |   |
| Loss from discontinued operations, net of tax                 |   | - |   | - |   | (3,407,279) |
|                                                          |   |   |   |   |   |   |
| Net loss before cumulative effect of accounting change        |   | (8,456,429) |   | (6,238,393) |   | (52,765,135) |
|                                                          |   |   |   |   |   |   |
| Cumulative effect of accounting change, net of tax            |   | - |   | - |   | (102,500) |
|                                                          |   |   |   |   |   |   |
| Net loss                                                      |   | (8,456,429) |   | (6,238,393) |   | (52,867,635) |
|                                                          |   |   |   |   |   |   |
| Net loss attributable to the noncontrolling interest          |   | - |   | - |   | 53,854 |
|                                                          |   |   |   |   |   |   |
| Net loss attributable to Providence Resources, Inc.           | $ | (8,456,429) |   | (6,238,393) |   | (52,813,781) |
|                                                          |   |   |   |   |   |   |
| Loss per common share from continuing operations -            |   |   |   |   |   |   |
| basic and diluted                                             | $ | (0.14) |   | (0.10) |   |   |
| Loss per common share from discontinued operations -          |   |   |   |   |   |   |
| basic and diluted                                             | $ | - |   | - |   |   |
| Loss per common share -                                       |   |   |   |   |   |   |
| basic and diluted                                             | $ | (0.14) |   | (0.10) |   |   |
| Weighted average common shares outstanding -                  |   |   |   |   |   |   |
| basic and diluted                                             |   | 62,242,156 |   | 59,917,703 |   |   |

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

 

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| PROVIDENCE RESOURCES, INC.                                                       |
|----------------------------------------------------------------------------------|
| (A Developmental Stage Company)                                                  |
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) AND COMPREHENSIVE LOSS |
| February 17, 1993 ( Date of Inception) to December 31, 2009                      |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Deficit |   |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   | Accumulated |   |   |
|                                                                             |   |   |   |   |   |   |   |   |   | Additional |   | Deferred |   | Other |   | During the |   |   |
|                                                                             |   | Preferred Stock |   | Common Stock |   | Paid-in |   | stock |   | Comprehensive |   | Development |   |   |
|                                                                             |   | Shares |   | Amount |   | Shares |   | Amount |   | Capital |   | compensation |   | Income |   | Stage |   | Total |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at February 17, 1993 (date of 

inception)                               |   | - | $ | - |   | 60,000 | $ | 6 | $ | 1,194 | $ | - |   | - | $ | - | $ | 1,200 |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                         |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | (200) |   | (200) |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 1993                                                     |   | - |   | - |   | 60,000 |   | 6 |   | 1,194 |   | - |   | - |   | (200) |   | 1,000 |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                         |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | (240) |   | (240) |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 1994                                                     |   | - |   | - |   | 60,000 |   | 6 |   | 1,194 |   | - |   | - |   | (440) |   | 760 |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                         |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | (240) |   | (240) |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 1995                                                     |   | - |   | - |   | 60,000 |   | 6 |   | 1,194 |   | - |   | - |   | (680) |   | 520 |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                         |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | (240) |   | (240) |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 1996                                                     |   | - |   | - |   | 60,000 |   | 6 |   | 1,194 |   | - |   | - |   | (920) |   | 280 |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of common stock for cash                                                |   | - |   | - |   | 32,068 |   | 3 |   | 80,269 |   | - |   | - |   | - |   | 80,272 |
| Net loss                                                                         |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | (79,765) |   | (79,765) |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 1997                                                     |   | - |   | - |   | 92,068 |   | 9 |   | 81,463 |   | - |   | - |   | (80,685) |   | 787 |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of common stock for:                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Services                                                                         |   | - |   | - |   | 6,500 |   | 1 |   | 12,999 |   | - |   | - |   | - |   | 13,000 |
| Cash                                                                             |   | - |   | - |   | 26,170 |   | 3 |   | 26,167 |   | - |   | - |   | - |   | 26,170 |
| Additional shares due to rounding                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| after stock split                                                                |   | - |   | - |   | 300 |   | 1 |   | (1) |   | - |   | - |   | - |   | - |
| Net loss                                                                         |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | (36,896) |   | (36,896) |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 1998                                                     |   | - |   | - |   | 125,038 |   | 14 |   | 120,628 |   | - |   | - |   | (117,581) |   | 3,061 |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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| Balance forward, December 31, 1998              |   | -      |   | -      |   | 125,038   |   | 14     |   | 120,628   |   | -      |   | -      |   | (117,581)   |   | 3,061       |
|-------------------------------------------------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|-------------|--------|-------------|
|                                            |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Rounding                                        |   | -      |   | -      |   | (38)      |   | -      |   | -         |   | -      |   | -      |   | -           |   | -           |
| Issuance of common stock for:                   |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Cash                                            |   | -      |   | -      |   | 22,500    |   | 2      |   | 899,998   |   | -      |   | -      |   | -           |   | 900,000     |
| Assets                                          |   | -      |   | -      |   | 128,012   |   | 13     |   | 1,020,452 |   | -      |   | -      |   | -           |   | 1,020,465   |
| Net book value of Healthbridge, Inc.            |   | -      |   | -      |   | 20,500    |   | 2      |   | (2)       |   | -      |   | -      |   | -           |   | -           |
| Dividends-in-kind                               |   | -      |   | -      |   | 50,202    |   | 5      |   | 2,008,091 |   | -      |   | -      |   | (2,008,096) |   | -           |
| Debt                                            |   | -      |   | -      |   | 242,500   |   | 23     |   | 999,978   |   | -      |   | -      |   | -           |   | 1,000,001   |
| Reverse acquisition with Healthbridge,          |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Inc.and Wattmonitor, Inc.                       |   | -      |   | -      |   | 147,500   |   | 15     |   | 798,046   |   | -      |   | -      |   | -           |   | 798,061     |
| Common stock offering costs                     |   | -      |   | -      |   | -         |   | -      |   | (105,000) |   | -      |   | -      |   | -           |   | (105,000)   |
| Reverse acquisition, retirement of old          |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| shares of Wattmonitor, Inc.                     |   | -      |   | -      |   | (147,500) |   | (15)   |   | (915,627) |   | -      |   | -      |   | 117,581     |   | (798,061)   |
| Share adjustment for shares previously 

Issued |   | -      |   | -      |   | 150       |   | -      |   | -         |   | -      |   | -      |   | -           |   | -           |
| Net loss                                        |   | -      |   | -      |   | -         |   | -      |   | -         |   | -      |   | -      |   | (3,196,076) |   | (3,196,076) |
|                                            |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Balance at December 31, 1999                    |   | -      |   | -      |   | 588,864   |   | 60     |   | 4,826,564 |   | -      |   | -      |   | (5,204,172) |   | (377,549)   |
|                                            |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Issuance of common stock for:                   |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Debt                                            |   | -      |   | -      |   | 34,950    |   | 4      |   | 349,496   |   | -      |   | -      |   | -           |   | 349,500     |
| Services                                        |   | -      |   | -      |   | 11,000    |   | 1      |   | 71,199    |   | -      |   | -      |   | -           |   | 71,200      |
| Cash                                            |   | -      |   | -      |   | 19,500    |   | 2      |   | 194,998   |   | -      |   | -      |   | -           |   | 195,000     |
| Accounts payable                                |   | -      |   | -      |   | 7,500     |   | 1      |   | 74,999    |   | -      |   | -      |   | -           |   | 75,000      |
| Common stock offering costs                     |   | -      |   | -      |   | -         |   | -      |   | (15,600)  |   | -      |   | -      |   | -           |   | (15,600)    |
| Stock option compensation expense               |   | -      |   | -      |   | -         |   | -      |   | 6,000     |   | -      |   | -      |   | -           |   | 6,000       |
| Net loss                                        |   | -      |   | -      |   | -         |   | -      |   | -         |   | -      |   | -      |   | (816,545)   |   | (816,545)   |
|                                            |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Balance at December 31, 2000                    |   | -      |   | -      |   | 661,814   |   | 67     |   | 5,507,656 |   | -      |   | -      |   | (6,020,717) |   | (512,994)   |
|                                            |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Issuance of common stock for:                   |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Services                                        |   | -      |   | -      |   | 84,400    |   | 9      |   | 258,941   |   | -      |   | -      |   | -           |   | 258,950     |
| Accounts payable                                |   | -      |   | -      |   | 13,750    |   | 1      |   | 59,999    |   | -      |   | -      |   | -           |   | 60,000      |
| Debt                                            |   | -      |   | -      |   | 41,603    |   | 4      |   | 249,614   |   | -      |   | -      |   | -           |   | 249,618     |
| Net loss                                        |   | -      |   | -      |   | -         |   | -      |   | -         |   | -      |   | -      |   | (422,008)   |   | (422,008)   |
|                                            |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Balance at December 31, 2001                    |   | -      |   | -      |   | 801,567   |   | 81     |   | 6,076,210 |   | -      |   | -      |   | (6,442,725) |   | (366,434)   |
|                                            |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |

F- 6

Return to Table of Contents

----

| Balanceforward,December 31, 2001                |   | -      |   | -      |   | 801,567   |   | 81     |   | 6,076,210 |   | -      |   | -      |   | (6,442,725) |   | (366,434)   |
|-------------------------------------------------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|-------------|--------|-------------|
|                                            |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Comprehensive loss:                             |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Net loss                                        |   | -      |   | -      |   | -         |   | -      |   | -         |   | -      |   | -      |   | (1,221,203) |   | (1,221,203) |
| Other comprehensive income -                    |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| cumulative foreign currency                     |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| translation adjustment                          |   | -      |   | -      |   | -         |   | -      |   | -         |   | -      |   | 4,869  |   | -           |   | 4,869       |
| Total comprehensive loss                        |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   | (1,216,334) |
| Issuance of common stock for:                   |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Intellectual property                           |   | -      |   | -      |   | 37,500    |   | 4      |   | 224,996   |   | -      |   | -      |   | -           |   | 225,000     |
| Services                                        |   | -      |   | -      |   | 143,000   |   | 14     |   | 806,086   |   | -      |   | -      |   | -           |   | 806,100     |
| Accounts payable and services                   |   | -      |   | -      |   | 5,000     |   | 1      |   | 10,999    |   | -      |   | -      |   | -           |   | 11,000      |
| Stock option compensation expense               |   | -      |   | -      |   | -         |   | -      |   | 12,500    |   | -      |   | -      |   | -           |   | 12,500      |
|                                            |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Balance at December 31, 2002                    |   | -      |   | -      |   | 987,067   |   | 99     |   | 7,130,791 |   | -      |   | 4,869  |   | (7,663,928) |   | (528,169)   |
|                                            |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Comprehensive loss:                             |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Net loss                                        |   | -      |   | -      |   | -         |   | -      |   | -         |   | -      |   | -      |   | (232,560)   |   | (232,560)   |
| Other comprehensive loss -                      |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| cumulative foreign currency                     |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| translation adjustment                          |   | -      |   | -      |   | -         |   | -      |   | -         |   | -      |   | (806)  |   | -           |   | (806)       |
| Total comprehensive loss                        |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   | (233,366)   |
| Issuance of common stock for:                   |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Cash                                            |   | -      |   | -      |   | 314,165   |   | 32     |   | 102,801   |   | -      |   | -      |   | -           |   | 102,833     |
| Services                                        |   | -      |   | -      |   | 2,100     |   | -      |   | 3,888     |   | -      |   | -      |   | -           |   | 3,888       |
| Debt                                            |   | -      |   | -      |   | 1,537,113 |   | 154    |   | 475,583   |   | -      |   | -      |   | -           |   | 475,737     |
| Common stock offering costs                     |   | -      |   | -      |   | -         |   | -      |   | (2,000)   |   | -      |   | -      |   | -           |   | (2,000)     |
| Issuance of common stock options for 

services |   | -      |   | -      |   | -         |   | -      |   | 15,000    |   | -      |   | -      |   | -           |   | 15,000      |
|                                            |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |
| Balance at December 31, 2003                    |   | -      |   | -      |   | 2,840,445 |   | 285    |   | 7,726,063 |   | -      |   | 4,063  |   | (7,896,488) |   | (166,077)   |
|                                            |   |   |   |   |   |      |   |   |   |      |   |   |   |   |   |        |   |        |

F- 7

Return to Table of Contents

----

| Balance forward,December 31, 2003            |   | -      |   | -      |   | 2,840,445  |   | 285    |   | 7,726,063  |   | -      |   | 4,063  |   | (7,896,488) |   | (166,077) |
|----------------------------------------------|--------|--------|--------|--------|--------|------------|--------|--------|--------|------------|--------|--------|--------|--------|--------|-------------|--------|-----------|
|                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   |      |
| Comprehensive loss:                          |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   |      |
| Net loss                                     |   | -      |   | -      |   | -          |   | -      |   | -          |   | -      |   | -      |   | (311,757)   |   | (311,757) |
| Other comprehensive income -                 |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   |      |
| cumulative foreign currency                  |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   |      |
| translation adjustment                       |   | -      |   | -      |   | -          |   | -      |   | -          |   | -      |   | 1,250  |   | -           |   | 1,250     |
| Total comprehensive loss                     |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   | (310,507) |
| Issuance of common stock for:                |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   |      |
| Debt conversion                              |   | -      |   | -      |   | 2,735,555  |   | 273    |   | 197,673    |   | -      |   | -      |   | -           |   | 197,946   |
| Services                                     |   |   |   |   |   | 1,050,000  |   | 105    |   | 80,395     |   |   |   |   |   |        |   | 80,500    |
|                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   |      |
| Balance at December 31, 2004                 |   | -      |   | -      |   | 6,626,000  |   | 663    |   | 8,004,131  |   | -      |   | 5,313  |   | (8,208,245) |   | (198,138) |
|                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   |      |
| Comprehensive loss:                          |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   |      |
| Net loss                                     |   | -      |   | -      |   | -          |   | -      |   | -          |   | -      |   | -      |   | (944,857)   |   | (944,857) |
| Other comprehensive income -                 |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   |      |
| cumulative foreign currency                  |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   |      |
| translation adjustment                       |   | -      |   | -      |   | -          |   | -      |   | -          |   | -      |   | 9,057  |   | -           |   | 9,057     |
| Total comprehensive loss                     |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   | (935,800) |
| Issuance of common stock for:                |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   |      |
| Cash                                         |   | -      |   | -      |   | 7,520,000  |   | 752    |   | 2,005,248  |   | -      |   | -      |   | -           |   | 2,006,000 |
| Debt                                         |   | -      |   | -      |   | 2,334,841  |   | 233    |   | 349,992    |   | -      |   | -      |   | -           |   | 350,226   |
| Issuance of warrants for finder’s fees |   | -      |   | -      |   | -          |   | -      |   | 191,400    |   | -      |   | -      |   | -           |   | 191,400   |
| Common stock offering costs                  |   | -      |   | -      |   | -          |   | -      |   | (125,400)  |   | -      |   | -      |   | -           |   | (125,400) |
|                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   |      |
| Balance at December 31, 2005                 |   | -      |   | -      |   | 16,480,841 |   | 1,649  |   | 10,425,371 |   | -      |   | 14,370 |   | (9,153,102) |   | 1,288,288 |
|                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   |      |
|                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |        |   |      |

F- 8

Return to Table of Contents

----

| Balance forward,December 31, 2005            |   | -      |   | -      |   | 16,480,841 |   | 1,649  |   | 10,425,371 |   | -      |   | 14,370 |   | (9,153,102)  |   | 1,288,288    |
|----------------------------------------------|--------|--------|--------|--------|--------|------------|--------|--------|--------|------------|--------|--------|--------|--------|--------|--------------|--------|--------------|
|                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   |         |
| Comprehensive loss:                          |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   |         |
| Net loss                                     |   | -      |   | -      |   | -          |   | -      |   | -          |   | -      |   | -      |   | (6,761,584)  |   | (6,761,584)  |
| Other comprehensive income -                 |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   |         |
| cumulative foreign currency                  |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   |         |
| translation adjustment                       |   | -      |   | -      |   | -          |   | -      |   | -          |   | -      |   | 190    |   | -            |   | 190          |
| Total comprehensive loss                     |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   | (6,761,394)  |
| Issuance of common stock for:                |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   |         |
| Acquisition of Providence Exploration        |   | -      |   | -      |   | 20,000,000 |   | 2,000  |   | 15,998,000 |   | -      |   | -      |   | -            |   | 16,000,000   |
| Cash                                         |   | -      |   | -      |   | 13,369,920 |   | 1,337  |   | 8,020,615  |   | -      |   | -      |   | -            |   | 8,021,952    |
| Debt                                         |   | -      |   | -      |   | 2,004,778  |   | 200    |   | 2,071,014  |   | -      |   | -      |   | -            |   | 2,071,214    |
| Issuance of warrants with equity 

financing |   | -      |   | -      |   | -          |   | -      |   | 3,409,330  |   | -      |   | -      |   | -            |   | 3,409,330    |
| Issuance of warrants for finders fees        |   | -      |   | -      |   | -          |   | -      |   | 122,743    |   | -      |   | -      |   | -            |   | 122,743      |
|                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   |         |
| Balance at December 31, 2006                 |   | -      |   | -      |   | 51,855,539 |   | 5,185  |   | 40,047,072 |   | -      |   | 14,560 |   | (15,914,684) |   | 24,152,133   |
|                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   |         |
| Comprehensive loss:                          |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   |         |
| Net loss                                     |   | -      |   | -      |   | -          |   | -      |   | -          |   | -      |   | -      |   | (22,204,275) |   | (22,204,275) |
| Other comprehensive income -                 |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   |         |
| cumulative foreign currency                  |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   |         |
| translation adjustment                       |   | -      |   | -      |   | -          |   | -      |   | -          |   | -      |   | 12     |   | -            |   | 12           |
| Total comprehensive loss                     |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   | (22,204,263) |
| Issuance of common stock for:                |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   |         |
| Cash                                         |   | -      |   | -      |   | 1,987,500  |   | 199    |   | 236,501    |   | -      |   | -      |   | -            |   | 236,700      |
| Services                                     |   |   |   |   |   | 1,450,000  |   | 145    |   | 284,855    |   | -      |   | -      |   | -            |   | 285,000      |
| Debt                                         |   |   |   |   |   | 3,868,079  |   | 387    |   | 580,126    |   | -      |   | -      |   | -            |   | 580,513      |
| Discount on convertible notes                |   | -      |   | -      |   | -          |   | -      |   | 4,091,667  |   | -      |   | -      |   | -            |   | 4,091,667    |
|                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   |         |
| Balance at December 31, 2007                 |   | -      |   | -      |   | 59,161,118 |   | 5,916  |   | 45,240,221 |   | -      |   | 14,572 |   | (38,118,959) |   | 7,141,750    |
|                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   |         |
|                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |         |   |         |

F- 9

Return to Table of Contents

----

| Balance forward,December 31, 2007  |   | -      |   | -      |   | 59,161,118 |   | 5,916  |   | 45,240,221 |   | -         |   | 14,572   |   | (38,118,959) |   | 7,141,750   |
|------------------------------------|--------|--------|--------|--------|--------|------------|--------|--------|--------|------------|--------|-----------|--------|----------|--------|--------------|--------|-------------|
|                               |   |   |   |   |   |       |   |   |   |       |   |      |   |     |   |         |   |        |
| Comprehensive loss:                |   |   |   |   |   |       |   |   |   |       |   |      |   |     |   |         |   |        |
| Net loss                           |   | -      |   | -      |   | -          |   | -      |   | -          |   | -         |   | -        |   | (6,238,393)  |   | (6,238,393) |
| Other comprehensive loss -         |   |   |   |   |   |       |   |   |   |       |   |      |   |     |   |         |   |        |
| cumulative foreign currency        |   |   |   |   |   |       |   |   |   |       |   |      |   |     |   |         |   |        |
| translation adjustment             |   | -      |   | -      |   | -          |   | -      |   | -          |   | -         |   | (14,572) |   | -            |   | (14,572)    |
| Total comprehensive loss           |   |   |   |   |   |       |   |   |   |       |   |      |   |     |   |         |   | (6,252,965) |
| Issuance of common stock for:      |   |   |   |   |   |       |   |   |   |       |   |      |   |     |   |         |   |        |
| Services                           |   | -      |   | -      |   | 1,100,000  |   | 110    |   | 219,890    |   | -         |   | -        |   | -            |   | 220,000     |
| Interest on convertible debentures |   | -      |   | -      |   | 1,913,336  |   | 191    |   | 286,809    |   | -         |   | -        |   | -            |   | 287,000     |
| Stock compensation - stock options |   | -      |   | -      |   | -          |   | -      |   | 2,012,842  |   | (522,349) |   | -        |   | -            |   | 1,490,493   |
| Discount on convertible notes      |   | -      |   | -      |   | -          |   | -      |   | 2,169,590  |   | -         |   | -        |   | -            |   | 2,169,590   |
|                               |   |   |   |   |   |       |   |   |   |       |   |      |   |     |   |         |   |        |
| Balance at December 31, 2008       |   | -      |   | -      |   | 62,174,454 |   | 6,217  |   | 49,929,352 |   | (522,349) |   | -        |   | (44,357,352) |   | 5,055,868   |
|                               |   |   |   |   |   |       |   |   |   |       |   |      |   |     |   |         |   |        |
| Stock compensation - stock options |   | -      |   | -      |   | -          |   | -      |   | -          |   | 225,327   |   | -        |   | -            |   | 225,327     |
| Issuance of common stock for:      |   |   |   |   |   |       |   |   |   |       |   |      |   |     |   |         |   |        |
| Interest on convertible debentures |   | -      |   | -      |   | 297,725    |   | 30     |   | 23,788     |   | -         |   | -        |   | -            |   | 23,818      |
| Debt extinguishment on             |   |   |   |   |   |       |   |   |   |       |   |      |   |     |   |         |   |        |
| long term convertible debentures   |   | -      |   | -      |   | -          |   | -      |   | 888,726    |   | -         |   | -        |   | -            |   | 888,726     |
| Net loss                           |   | -      |   | -      |   | -          |   | -      |   | -          |   | -         |   | -        |   | (8,456,429)  |   | (8,456,429) |
|                               |   |   |   |   |   |       |   |   |   |       |   |      |   |     |   |         |   |        |
| Balance at December 31, 2009       |   | -      | $      | -      |   | 62,472,179 | $      | 6,247  | $      | 50,841,866 | $      | (297,022) | $      | -        | $      | (52,813,781) | $      | (2,262,690) |

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

 

F- 10

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----

| PROVIDENCE RESOURCES, INC.                                    |
|---------------------------------------------------------------|
| (A Development Stage Company)                                 |
| CONSOLIDATED STATEMENTS OF CASH FLOWS                         |
| Years Ended December 31, 2009 and 2008 and Cumulative Amounts |
|                                                          |   |   |   |   |
|                                                          |   |   |   | Cumulative |
|                                                          |   | 2009 |   | 2008 |   | Amounts |
| Cash flows from operating activities:                         |   |   |   |   |   |   |
| Net loss                                                      | $ | (8,456,429) |   | (6,238,393) |   | (52,813,781) |
| Adjustments to reconcile net loss to net cash                 |   |   |   |   |   |   |
| used in operating activities:                                 |   |   |   |   |   |   |
| Shares and options issued for services                        |   | 225,327 |   | 1,710,493 |   | 2,360,820 |
| Shares issued for debt and accrued interest                   |   | - |   | - |   | 7,308,665 |
| Amortization of conversion rights on debt                     |   | 2,166,912 |   | 1,986,094 |   | 5,101,190 |
| Depreciation, amortization, and impairment                    |   | 1,506,696 |   | 2,020,399 |   | 23,154,151 |
| Noncontrolling interest                                       |   | - |   | - |   | (53,854) |
| Discontinued operations                                       |   | - |   | - |   | 2,542,150 |
| Loss from debt extinguishments                                |   | 888,726 |   | - |   | 792,456 |
| Loss on sale of assets                                        |   | - |   | (1,155,008) |   | (1,119,109) |
| Allowance for losses on receivables, net                      |   | 33,123 |   | - |   | 33,123 |
| (Increase) decrease in:                                       |   |   |   |   |   |   |
| Accounts receivable and prepaid expenses                      |   | 172,971 |   | 34,168 |   | 317,864 |
| Inventory                                                     |   | - |   | - |   | 374,515 |
| Related party receivable                                      |   | - |   | (172,971) |   | (172,971) |
| Increase (decrease) in:                                       |   |   |   |   |   |   |
| Accounts payable                                              |   | 170,621 |   | 51,420 |   | 1,901,287 |
| Accrued expenses                                              |   | 1,053,988 |   | 919,348 |   | 2,569,259 |
| Related party payables                                        |   | (53,500) |   | (82,000) |   | 100,312 |
| Net cash used in operating activities                         |   | (2,291,565) |   | (926,450) |   | (7,603,923) |
|                                                          |   |   |   |   |   |   |
| Cash flows from investing activities:                         |   |   |   |   |   |   |
| Advances to PRE Exploration prior to acquisition              |   | - |   | - |   | (8,886,761) |
| Cash of PRE Exploration on acquisition date                   |   | - |   | - |   | 73,271 |
| Acquisition of property and equipment and intangibles         |   | (2,086,860) |   | (1,302,061) |   | (12,256,836) |
| Proceeds from sale of assets                                  |   | - |   | 7,212,800 |   | 7,212,800 |
| Payments received on notes receivable                         |   | 74,377 |   | 242,500 |   | 316,877 |
| Issuance of notes receivable                                  |   | - |   | - |   | (616) |
| Net cash provided by (used in) investing activities           | (2,012,483) |   | 6,153,239 |   | (13,541,265) |
|                                                          |   |   |   |   |   |   |
| Cash flows from financing activities:                         |   |   |   |   |   |   |
| Proceeds from debt                                            |   | - |   | - |   | 10,047,172 |
| Issuance of common stock                                      |   | - |   | - |   | 13,347,979 |
| Commissions paid to raise convertible debentures              |   | - |   | - |   | (41,673) |
| Minority investment in subsidiary                             |   | - |   | - |   | 136,915 |
| Payments on notes payable                                     |   | - |   | - |   | (256,889) |
| Net cash provided by financing activities                     |   | - |   | - |   | 23,233,504 |
|                                                          |   |   |   |   |   |   |
| Change in accumulated other comprehensive income              |   | - |   | (14,572) |   | - |
| Net increase (decrease) in cash                               |   | (4,304,048) |   | 5,212,217 |   | 2,088,316 |
|                                                          |   |   |   |   |   |   |
| Cash, beginning of period                                     |   | 6,392,364 |   | 1,180,147 |   | - |
|                                                          |   |   |   |   |   |   |
| Cash, end of period                                           | $ | 2,088,316 |   | 6,392,364 |   | 2,088,316 |

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

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

Note 1 — Organization and Summary of Significant Accounting Policies

Organization 

The consolidated financial statements consist of Providence Resources, Inc. (“Providence Resources”) and its wholly owned subsidiaries, Healthbridge AGand PRE Exploration, LLC (“PRE”). PREhas two wholly owned subsidiaries, PDX Drilling I, LLC        (“PDX”) and PRT Holdings, LLC (“PRT”), and a ninety percent interest in Comanche County Pipeline, LLC (“CCP”). Collectively, these entities are referred to as the “Company”.                  Providence Resources was organized on February 17, 1993 (date of inception) under the laws of the State of Texas. Healthbridge AG was formed as a German subsidiary. PRE was formed to acquire leases in Texas for oil and gas exploration and development. PDX was formed to acquire drilling and service rigs for the purpose of drilling oil and gas wells in Texas. CCP was formed for constructing an oil and gas pipeline in Comanche County, Texas.                   PRE is involved in exploration activities for the recovery of oil and gas from the Ellenburger carbonate, Strawn carbonate, and Pennsylvanian-Wolfcamp sandstone reservoirs in Val Verde County. The Val Verde County prospect includes approximately 13,341 gross acres of oil and gas leases. PRE has up to a 50% working interest and its joint venture operating partner, Elm Ridge Exploration Company LLC (Elm Ridge) has a 50% working interest in the Val Verde County prospect.                  The Company is considered a development stage company as defined in ASC 915.           

Principles of Consolidation 

The consolidated financial statements include the accounts of Providence Resources and its subsidiaries. All significant intercompany balances and transactions have been eliminated.           

Reclassifications 

Certain amounts in the 2008 financial statements have been reclassified to conform to the 2009 presentation. 

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.

Cash and Cash Equivalents 

For purposes of the statements of cash flows, the Company considers all highly liquid investments with an original or current maturity of three months or less to be cash equivalents. 

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

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

Unproved Oil and Gas Properties, Not Subject to Amortization          

The Company follows the full cost method of accounting for exploration and development of oil and gas properties whereby all costs in acquiring, exploring and developing properties are capitalized, including an estimate of abandonment costs, net of estimated equipment salvage costs, and subjected to a quarterly impairment test, based on the        estimated net realizable value of the property. Management records the impairment of its unproved oil and gas properties at the time impairment appears to exist.           

No costs related to production, general corporate overhead, or similar activities have been capitalized. As of December 31, 2009 and 2008 the Company only hascapitalized 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, 2009 and 2008.

Convertible Debts

In accordance with ASC 470-20, the Company calculated the value of any beneficial conversion features embedded in its convertible debts. If the debt is contingently convertible, the intrinsic value of the beneficial conversion feature is not recorded until the debt becomes convertible.                  Convertible debts are split into two components: a debt component and a component representing the embedded derivatives in the debt. The debt component represents the Company’s liability for future interest coupon payments and the redemption amount. The embedded derivatives represent the value of the option that debtholders have to convert into ordinary shares of the Company. If the number of shares that may be required to be issued upon conversion of the convertible debt is        indeterminate, the embedded conversion option of the convertible debt is accounted for as a derivative instrument liability rather than equity as in accordance with ASC 815-40.                   The debt component of the convertible debt is measured at amortized cost and therefore increases as the present value of the interest coupon payments and redemption amount increases, with a corresponding charge to finance cost – other than interest. The debt component decreases by the cash interest coupon payments made. The embedded derivatives are measured at fair value at each balance sheet date, and the change in the fair value is recognized in the income statement. 

Income Taxes

The Company accounts for income taxes in accordance with ASC 740. This standard requires the Company to provide for deferred income taxes that arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the        classification of the assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

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

Income Taxes(continued)

The Company considers many factors when evaluating and estimating its tax positions and tax benefits. Tax positions are recognized only when it is more likely than not (likelihood of greater than 50%), based on technical merits, that the positions will be sustained upon examination. Reserves are established if it is believed certain positions may be challenged        and potentially disallowed. If facts and circumstances change, reserves are adjusted through the provision for income taxes. The Company recognizes interest expense and penalties related to unrecognized tax benefits in the provision for income taxes.

The Company is no longer subject to examination by federal and state taxing authorities for years prior to 2006.

Concentration of Credit Risk 

The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. 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. The amount in excess of federally insured limits at December 31, 2009 was approximately        $1,800,000.

Revenue Recognition

Revenues are recorded upon the completion of the services, with the existence of an agreement and where collectibility 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 

The Company records stock-based compensation in accordance with ASC 718 which requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. Under ASC 718, the Company’s volatility is based on the historical volatility of the        Company’s stock or the expected volatility of similar companies. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.                   The Company uses the Black-Scholes option-pricing model which was developed for use in estimating the fair value of options. Option-pricing models require the input of highly complex and subjective variables including the expected life of options granted and the Company’s expected stock price volatility over a period equal to or greater than the expected life of the options. Because changes in the subjective assumptions can materially affect the estimated value of the        Company’s employee stock options, it is management’s opinion that the Black-Scholes option-pricing model may not provide an accurate measure of the fair value of the Company’s employee stock options. Although the fair value of employee stock options is determined in accordance with ASC 718 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.                   The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

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

Earnings Per Share 

The computation of basic earnings per common share is based on the weighted average number of shares outstanding during each year.                  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 of stock options outstanding using the treasury stock method and the average market price per share during the period. Common stock equivalents are not included in the diluted earnings per share calculation when their effect is antidilutive. In 2009 and 2008, the Company’s common        stock equivalents were antidilutive. Common stock equivalents that could potentially dilute earnings per share in the future are the common stock options and warrants and convertible debts representing approximately 174,000,000 shares.         

Note 2 — Going Concern 

As of December 31, 2009, the Company’s revenue generating activities have not generated sufficient funds for profitable operations, and the Company has negative working capital, negative cash flows from operations, and has incurred losses of approximately $53,000,000 since inception. These factors raise substantial doubt about the Company’s ability to        continue as a going concern.                  Management anticipates 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.Therefore, there can be no assurance that this funding will be        accomplished and that the Company will continue operations.         

Note 3 – Convertible Debentures

The Company has 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 accrues at a rate of 7.0% per annum and is payable on a semi-annual basis. The holders of the debentures have the right to convert all or part of the principal        and accrued interest into common shares of the Company at $0.08 per share at any time prior to maturity. The convertible debentures are secured by substantially all of the Company’s assets consisting of all tangible and intangible property.                  Convertible debentures consist of:

|                         |   | 2009        |   | 2008        |
|------------------------------|--------|-------------|--------|-------------|
|                         |   |        |   |        |
| Total convertible debentures | $      | 3,320,000   |   | 3,320,000   |
| Less current portion         |   | (3,320,000) |   | (3,320,000) |
|                         |   |        |   |        |
|                         | $      | -           |   | -           |

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

Note 3 – Convertible Debentures(continued)          

On October 9, 2009, the accrued interest on one debenture was converted into shares of common stock at $0.08 per share. The Company issued 297,725 shares for $23,818 of interest owed. On that same date, the conversion price for all remaining outstanding debentures and accrued interest changed from $0.35 to $0.08 per share. This modification resulted in the        Company recognizing the fair value of the new conversion price, $888,726, as a debt extinguishment in accordance with ASC 470.         

On December 12, 2008, the interest accrued on five debentures was converted into shares of common stock at $0.15 per share. The Company issued 1,913,336 shares for $287,000 of interest owed.                     

Note 4 – Long-Term Convertible Promissory Notes

Long-term convertible promissory notes consist of:

|                                                                                                                                                                                         |   | 2009      |   | 2008      |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|--------|-----------|
| Convertible Promissory Note Payable – Global Project Finance AG, secured, payable in full on May 31, 2010, including interest at 10%, convertible at $0.08 per common share.           | $      | 1,000,000 |   | 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 |   | 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 |   | 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 |   | 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 |   | 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 |   | 250,000 |
|                                                                                                                                                                                           |   |    |   |    |

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

Note 4 – Long-Term Convertible Promissory Notes(continued)

|                                                                                                                                                                                            |   | 2009        |   | 2008        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|-------------|
| 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     |   | 250,000     |
|                                                                                                                                                                                            |   |        |   |        |
| Convertible Promissory Note Payable – Miller Energy LLC, secured, payable in full on April 29, 2010, including interest at 10%, convertible at $0.08 per common share.                    |   | 1,000,000   |   | 1,000,000   |
|                                                                                                                                                                                            |   |        |   |        |
| Convertible Promissory Note Payable – FAGEB AG, secured, payable in full on March 4, 2010, including interest at 12%, convertible at $0.08 per common share.                              |   | 496,174     |   | 496,174     |
|                                                                                                                                                                                            |   |        |   |        |
| Convertible Promissory Note Payable – Global Convertible Megatrend Ltd., secured, payable in full on March 4, 2010, including interest at 12%, convertible at $0.08 per common share.     |   | 423,188     |   | 423,188     |
|                                                                                                                                                                                            |   |        |   |        |
|                                                                                                                                                                                            |   | 5,919,362   |   | 5,919,362   |
| Less unamortized discount                                                                                                                                                                       |   | (1,160,068) |   | (3,326,980) |
|                                                                                                                                                                                            |   |        |   |        |
|                                                                                                                                                                                            |   | 4,759,294   |   | 2,592,382   |
| Less current portion                                                                                                                                                                            |   | (3,919,274) |   | -           |
|                                                                                                                                                                                            |   |        |   |        |
|                                                                                                                                                                                            | $      | 840,020     |   | 2,592,382   |

The notes listed above are secured by:          

|  | ·      | All seismic data obtained in connection with the 3D Seismic Project Proposal and Agreement 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. |
|--|----------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|  | ·      | Oil and gas lease interests held by the Company. |
|--|----------------------------------------|--------------------------------------------------|

The fair values of the conversion options on the long-term promissory notes are $1,160,068 and $3,326,980 at December 31, 2009 and 2008, respectively, and are calculated using the intrinsic value method and are recorded as discounts on the face values of the notes. These amounts are amortized using the straight-line method over the term of the notes. In 2009 and        2008, the Company recorded $2,166,912 and $1,986,094 as interest expense due to amortization of the discounts.

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

Note 4 – Long-Term Convertible Promissory Notes(continued)

On March 4, 2010 the convertible promissory notes payable in the amounts of $496,174 and $423,188, along with accrued interest of $126,227 and $107,659, respectively, were refinanced with the same respective creditors. The new promissory notes bear an interest rate of 8% per annum, are due March 4, 2015, are non-dilutable, and have the option to convert all or        part of the principal and accrued interest into shares of common stock of Providence Resources at $0.04 per share at any time prior to maturity. The notes are secured by the same seismic data and oil and gas lease which secured the original notes. All outstanding principal and accrued interest as of December 31, 2009 on the refinanced notes are shown on the balance sheet as non-current liabilities. 

Future maturities of these notes are as follows:         

| Year       |   | Amount    |
|------------|--------|-----------|
|       |   |      |
| 2010       | $      | 3,919,274 |
| 2011       |   | -         |
| 2012       |   | -         |
| 2013       |   | -         |
| 2014       |   | -         |
| Thereafter |   | 840,020   |
|       |   |      |
|       | $      | 4,759,294 |

Note 5 – Long-Term Notes Payable

Long-term notes payable consist of:

|                                                                                                                                                                                                                                          |   | 2009      |   | 2008    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|--------|---------|
| Note Payable – Bluemont Investment Ltd, payable in full by August 27, 2010, including interest at 10%.                                                                                                                                  | $      | 200,000   |   | 200,000 |
|                                                                                                                                                                                                                                          |   |      |   |    |
| Note Payable - Global Convertible Megatrend Ltd., unsecured, principal payable in full on February 23, 2010, interest at 10% and payable at the end of each fiscal quarter, accrued interest convertible to common shares at $0.08 per share. |   | 500,000   |   | 500,000 |
|                                                                                                                                                                                                                                          |   |      |   |    |
|                                                                                                                                                                                                                                          |   | 700,000   |   | 700,000 |
| Less current portion                                                                                                                                                                                                                          |   | (200,000) |   | -       |
|                                                                                                                                                                                                                                          |   |      |   |    |
|                                                                                                                                                                                                                                          | $      | 500,000   |   | 700,000 |

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

Note 5 – Long-Term Notes Payable(continued)

On February 23, 2010 the long term note payable in the amount of $500,000 and related accrued interest of $165,334 were refinanced with the same creditor in the form of a long term convertible promissory note. The new note bears interest at 8% per annum, is due February 23, 2015, is non-dilutable, is secured by properties, rights, and assets of the Company, and        has the option to convert principal and accrued interest at any time before maturity at $0.04 per share into common stock of Providence Resources. All outstanding principal and accrued interest as of December 31, 2009 on the refinanced note are shown on the balance sheet as non-current liabilities.                     

Note 6 – Related Party Payables

Related party payables consist of amounts due to directors of the Company for consulting fees and were $0 and $53,500 at December 31, 2009 and 2008, respectively.

Note 7 — Related Party Transactions 

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, 2009 and 2008, the Company recognized consulting expense of $118,000 and $96,000 respectively.         The Company has an agreement with Gil Burciaga as the Company’s president, CEO, and director. The agreement provides for an annual base salary of $150,000, incentive stock options for1,700,000shares of common stock, tenure stock options for5,650,000, and performance stock options if he successfully meets certain performance requirements. The term of the agreement is        for four years. During 2009 and 2008, the Company recognized consulting expense of $150,000 and $150,000 respectively to Gil Burciaga. During 2009 and 2008, the Company’s board of directors authorized cash bonuses to Gil Burciaga of $150,000 and $250,000, respectively.         

Note 8 — Supplemental Cash Flow Information           

Actual amounts paid for interest and income taxes are as follows:          

|       |   |   |   |   |   | 2009   |   | 2008   |
|------------|--------|--------|--------|--------|--------|--------|--------|--------|
|       |   |   |   |   |   |   |   |   |
| Interest   |   |   |   |   | $      | -      |   | -      |
| Income tax |   |   |   |   | $      | -      |   | -      |

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

Note 8 — Supplemental Cash Flow Information(continued)

During the year ended December 31, 2009, the Company:          

|  | ·      | Recorded an impairment loss of $1,506,696related to the expiration of an oil and gas lease. |
|--|----------------------------------------|---------------------------------------------------------------------------------------------|

|  | ·      | Issued 297,725 shares of common stock to extinguish $23,818 in accrued interest on convertible debentures. |
|--|----------------------------------------|------------------------------------------------------------------------------------------------------------|

During the year ended December 31, 2008, the Company:          

|  | ·      | Recorded an impairment loss of $2,000,000 related to the expiration of oil and gas leases. |
|--|----------------------------------------|--------------------------------------------------------------------------------------------|

|  | ·      | Recorded deferred stock compensation of $522,349 related to common stock options. |
|--|----------------------------------------|-----------------------------------------------------------------------------------|

|  | ·      | Issued 500,000 shares of common stock to Markus Mueller, a director of the Company, at $0.15 per share in satisfaction of amounts due for consulting services totaling an aggregate of $75,000. Fair value of shares issued was $100,000. The excess $25,000 was recorded as a Debt Conversion Expense. |
|--|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | ·      | Recorded $2,169,590 of discount on promissory notes to value the conversion options as calculated using the intrinsic value method. |
|--|----------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------|

|  | ·      | Issued 1,913,336 shares of common stock to extinguish $287,000 in accrued interest on convertible debentures. |
|--|----------------------------------------|---------------------------------------------------------------------------------------------------------------|

Note 9 – Income Taxes

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 |
|---------------------------------------|--------|--------|-------------|-----------|-------------|--------------------------|--------------|------------|
|                                  |   |   |        |      |        | 2009                     |         | 2008       |   | Amounts |
|                                  |   |   |        |      |        |                     |         |       |   |   |
| Federal tax benefit at statutory rate |   | $      | (2,875,000) |      | (2,120,000) |                     | (17,265,000) |
| Change in valuation allowance         |   |   |        | 2,875,000 |        | 2,120,000                |         | 17,265,000 |
|                                  |   |   |        |      | $           | -                        |         | -          |   | - |

Deferred tax assets are as follows:

|                             |   |   |       |         |       | 2009         |   | 2008   |   |   |
|----------------------------------|--------|--------|------------|--------------|------------|--------------|--------|--------|--------|--------|
|                             |   |   |       |         |       |         |   |   |   |   |
| Net operating loss carryforwards |   | $      | 17,265,000 |         | 14,390,000 |         |   |
| Valuation allowance              |   |   |       | (17,265,000) |       | (14,390,000) |   |   |
|                             |   |   |       |         | $          | -            |   | -      |   |   |

The Company has net operating loss carryforwards of approximately $53,000,000, which begin to expire in the year 2014. The amount of net operating loss carryforwards that can be used in any one year will be limited by significant changes in the ownership of the Company and by the applicable tax laws which are in effect at the time such carryforwards can be        utilized.

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

Note 10 — 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, 2009.                     

Note 11 – Common Stock Options and Warrants 

Common stock options and warrants are as follows:

|                             |   |       |   |      |   |       |   |        |   | Exercise   |
|----------------------------------|--------|------------|--------|-----------|--------|------------|--------|-------------|--------|------------|
|                             |   |       |   |      |   | Number of  |   | Price       |
|                             |   |       |   |      |   | Options    |   | Warrants    |   | Per Share  |
|                             |   |       |   |      |   |       |   |        |   |       |
| Outstanding at January 1, 2008   |   |       |   | -         |   | 7,267,650  | $      | .30 - 1.00  |
| Granted                          |   |       |   |      |   | 11,600,000 |   | -           |   | .20        |
| Outstanding at December 31, 2008 |   | 11,600,000 |   | 7,267,650 |   | .20 - 1.00 |
| Expired                          |   |       |   |      |   | -          |   | (6,952,536) |   | .72 - 1.00 |
| Outstanding at December 31, 2009 |   | 11,600,000 |   | 315,114   | $      | .20 - .30  |

The following table summarizes information about common stock options and warrants outstanding at December 31, 2009:

| Outstanding    |   | Exercisable        |
|----------------|--------|--------------------|
| Exercise Price |   | Number Outstanding |   | Weighted Average Remaining Contractual Life (Years) |   | Weighted Average Exercise Price |   | Number Exercisable |   | Weighted Average Exercise Price |
|           |   |               |   |   |
|           |   |               |   |   |
|           |   |               |   |   |
|           |   |               |   |   |
|           |   |               |   |   |   |   |   |   |   |   |
| .20            |   | 11,600,000         |   | 8.6 |   | .20 |   | 10,150,000 |   | .20 |
| .30            |   | 315,114            |   | 1.0 |   | .30 |   | 315,114 |   | .30 |
| $ .20 - .30    |   | 11,915,114         |   | 8.4 |   | $ .20 - .30 |   | 10,465,114 |   | $ .20 - .30 |

Note 12 – Commitments and Contingencies

In 2008, the Company entered into a prospect participation and joint operating agreement with Elm Ridge, whereby Elm Ridge acquired a 50% interest in certain oil and gas leases. Under the agreement the Company received a payment of $7,212,800 (including a credit for the $100,000 paid as a non-refundable option) and was carried on two wells by        Elm Ridge for a collective total of $2,000,000 during 2008 and 2009. See related subsequent event information in Note 15.

The Company has a royalty commitment of 25% of net revenue on certain of its oil leases.                  The Harding Company (“Harding”) has filed a complaint against the Company for amounts remaining due for drilling wells in Comanche and Hamilton Counties and for the pipeline to these dry wells under a Joint Exploration Agreement. 

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

Note 12 – Commitments and Contingencies(continued)                  The Company filed a counterclaim against Harding and an original claim against Abram Janz (“Janz”) that seeks damages for fraud, negligent misrepresentation, breach of contract, and breach of fiduciary duty arising out of Harding’s and Janz’s solicitation of the Company to invest in a drilling and development venture in Comanche and Hamilton Counties. The Company believes that it will be successful in its defense of the Harding claims and in pursuing its        counterclaim against Harding and Janz.        At December 31, 2009 and 2008, the Company had accounts payable to Harding of approximately $1,061,000 and $1,061,000, respectively.          

Note 13 — Fair Value of Financial Instruments 

The Company’s financial instruments consist of cash, receivables, 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. 

Note 14 – Impairment of Capital Assets

During 2008, the Company recorded an impairment charge of $2,000,000 which was the capitalized cost of Comanche and Hamilton County leases that expired on their own terms. During 2009, the Company recorded an impairment charge of $1,506,696which was the capitalized cost of the Cole Lease in Val Verde County, Texas that        expired on its own terms.                    

Note 15 - Subsequent Events         The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were available to be issued. Other than the events noted below, the Company is not aware of any subsequent events which would require recognition or disclosure in the financial statements.

Certain debts existing as of December 31, 2009 were refinanced subsequent to December 31, 2009 (see Notes 4 and 5).                  On February 26, 2010 the Company entered into a long term convertible promissory note agreement in the amount of $510,000 with Global Convertible Megatrend Ltd. The note matures on February 26, 2015 and bears interest at 8% per annum. Principal and interest are payable at maturity and the note is unsecured. Principal and interest are convertible at any time before maturity at $0.04 per share of common stock of Providence Resources. The note contains an anti-dilution feature and entitles        the creditor to a 5.1% carried interest in the Carson 10-1 and Carson 12-1 wells located in Val Verde County, Texas.          

On February 28, 2010, PRE extended its Carson acreage leases until February 28, 2013 in exchange for$510,000 and an additional $834,130 due on or before June 20, 2010. The extension obligates PRE to drill two additional wells on the Carsonacreage. PRE can secure the leases past February 28, 2013        with continuous development of the acreage.

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

Note 15 - Subsequent Events(continued)

On March 1, 2010, PRE and Elm Ridge executed an Assignment, Bill of Sale, and Conveyance that assigned all of Elm Ridge’s right, title and interest in the Val Verde County leases to PRE, including the wells, rights, and intellectual property, subject to existing royalties, in accordance with existing agreements.

On April 5, 2010 the Company settled all claims asserted both by and against Janz made in connection with its counter claim dated November 5, 2008 in response to claims asserted by Hardingin the District Court of the 160thJudicial District of Dallas County, Texas on August 27, 2008.

Note 16 – Recent Accounting Pronouncements

In January 2010, the FASB issued Accounting Standards Update (ASU) 2010-02, Consolidation (ASC 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary. This amendment to ASC 810 clarifies, but does not change, the scope of current US GAAP. It clarifies the decrease in ownership provisions of ASC 810-10 and removes the potential        conflict between guidance in that ASC and asset derecognition and gain or loss recognition guidance that may exist in other US GAAP. An entity will be required to follow the amended guidance beginning in the period that it first adopts FAS 160 (now included in ASC 810-10). For those entities that have already adopted FAS 160, the amendments are effective at the beginning of the first interim or annual reporting period ending on or after December 15, 2009. The amendments should be        applied retrospectively to the first period that an entity adopts FAS 160. The adoption of ASU 2010-02 has had no material effect on the Company’s financial condition, results of operation, or cash flows.

In January 2010, the FASB issued ASU 2010-01, Equity (ASC 505): Accounting for Distributions to Shareholders with Components of Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). This amendment to ASC 505 clarifies the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a limit on the amount of cash that        will be distributed is not a stock dividend for purposes of applying ASC 505 and ASC 260, and is effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis. The adoption of ASU 2010-01 has had no material effect on the Company’s financial condition, results of operation, or cash flows.

In December 2009, the FASB issued ASU 2009-17, Consolidations (ASC 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. This ASU amends the FASB Accounting Standards Codification for Statement 167. (See FAS 167 effective date below.)

In December 2009, the FASB issued ASU 2009-16, Transfers and Servicing (ASC 860): Accounting for Transfers of Financial Assets. This Accounting Standards Update amends the FASB Accounting Standards Codification for Statement 166. (See FAS 166 effective date below.)

In October 2009, the FASB issued ASU 2009-15, Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing. This Accounting Standards Update amends the FASB Accounting Standard Codification for EITF 09-1. (See EITF 09-1 effective date below.) 

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

Note 16 – Recent Accounting Pronouncements(continued)

In October 2009, the FASB issued ASU 2009-14, Software (ASC 985): Certain Revenue Arrangements That Include Software Elements. This update changed the accounting model for revenue arrangements that include both tangible products and software elements. The update is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning        on or after June 15, 2010. Early adoption is permitted. The Company does not expect the provisions of ASU 2009-14 to have a material effect on the financial position, results of operations, or cash flows of the Company.

In October 2009, the FASB issued ASU 2009-13, Revenue Recognition (ASC 605): Multiple-Deliverable Revenue Arrangements. This update addressed accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than as a combined unit and which will be separated in more        circumstances thanunder existing US GAAP. This amendment has eliminated that residual method of allocation. The update is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The Company does not expect the provisions of ASU 2009-13 to have a material effect on the financial position, results of operations, or cash flows of the        Company.                  In September 2009, the FASB issued ASU 2009-12, Fair Value Measurements and Disclosures (ASC 820): Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). This update provides amendments to ASC 820 for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent). It is effective for interim and annual periods ending after December 15, 2009. Early application is permitted in financial        statements for earlier interim and annual periods that have not been issued. The adoption of ASU 2010-01 has had no material effect on the Company’s financial condition, results of operation, or cash flows.          

In July 2009, the FASB ratified EITF No. 09-1, (ASC 470) “Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance” (“EITF 09-1”). The provisions of EITF 09-1 clarify the accounting treatment and disclosure of share-lending arrangements that are classified as equity in the financial statements of the        share lender. An example of a share-lending arrangement is an agreement between the Company (share lender) and an investment bank (share borrower) which allows the investment bank to use the loaned shares to enter into equity derivative contracts with investors. EITF 09-1 is effective for fiscal years that begin on or after December 15, 2009 and requires retrospective application for all arrangements outstanding as of the beginning of fiscal years beginning on or after December 15,        2009. Share-lending arrangements that have been terminated as a result of counterparty default prior to December 15, 2009, but for which the entity has not reached a final settlement as of December 15, 2009, are within the scope. EITF 09-1 is effective for share-lending arrangements entered into on or after the beginning of the first reporting period that begins on or after June 15, 2009. The Company does not expect the provisions of EITF 09-1 to have a material effect on the financial        position, results of operations, or cash flows of the Company.

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

Note 16 – Recent Accounting Pronouncements(continued)

In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162, which is codified in ASC 105, Generally Accepted Accounting Principles. ASC 105 establishes the Codification as the source of authoritative        GAAP in the United States (the “GAAP hierarchy”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. Once the Codification is in effect, all of its content will carry the same level of authority and the GAAP hierarchy will be modified to include only two levels of        GAAP, authoritative and non-authoritative. ASC 105 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of ASC 105 has had no material effect on the Company’s financial condition, results of operation, or cash flows.

In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. 46(R) (“SFAS 167”) (ASC 810), which amends the consolidation guidance applicable to variable interest entities. The amendments significantly affect the overall consolidation analysis underASC 810, and        require an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity. SFAS 167 is effective as of the beginning of the first fiscal year that begins after November 15, 2009 and early adoption is prohibited. The adoption of this update will have no material affect on the Company’s financial condition, results of operations, or cash flows.

In June, 2009, the FASB issued Statement of Financial Accounting Standards No. 166, *Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140*”(“SFAS 166”) (ASC 860). This statement removes the concept of a        qualifying special-purpose entity and removes the exception from applying Interpretation No. 46 (revised December 2003), *Consolidation of Variable Interest Entities,*to qualifying special-purpose entities. SFAS 166 is effective for financial asset transfers occurring after the beginning of an entity’s first fiscal year that begins after November 15, 2009 and early adoption is prohibited. The        adoption of this statement will have no material affect on the financial statements. 

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

**Supplemental Oil and Gas Information – ASC 932**

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 ASC 932. 

*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.

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

**Supplemental Oil and Gas Information –****ASC 932****(continued)**

**Net Proved Reserves***(1, 2)*         

|                            |   |   |   |                        |   |                     |   | Crude oil and Natural Gas |
|---------------------------------|--------|--------|--------|-----------------------------|--------|--------------------------|--------|---------------------------|
|                            |   |   |   |                        |   | Natural Gas              |   | Liquids                   |
| Net proved reserves             |   |   |   | *(millions of**cubic feet)* |   | *(thousands of barrels)* |
|                            |   |   |   |                        |   |                     |   |                      |   |   |
| December 31, 2007               |   |   |   | -                           |   |                     |   | -                         |
| Purchase of reserves in place   |   |   |   | -                           |   |                     |   | -                         |
| Productions                     |   |   |   |                        |   | -                        |   |                      |   | - |
| Adjustment for uneconomic wells |   | -      |   |                        |   | -                        |
|                            |   |   |   |                        |   |                     |   |                      |   |   |
| December 31, 2008 and 2009      |   |   |   | -                           |   |                     |   | -                         |
|                            |   |   |   |                        |   |                     |   |                      |   |   |
| Developed                       |   |   |   |                        |   | -                        |   |                      |   | - |
| Undeveloped                     |   |   |   |                        |   | -                        |   |                      |   | - |
|                            |   |   |   |                        |   |                     |   |                      |   |   |
| Total                           |   |   |   |                        |   | -                        |   |                      |   | - |

|  | *(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 economicand 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 |
|--|----------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

**Supplemental Oil and Gas Information –****ASC 932****(continued)**

|  | ii.      | installed program in the reservoir, provides support for the engineering analysis on which the project or program was based. |
|--|-----------------------------------|------------------------------------------------------------------------------------------------------------------------------|

|  | iii.      | 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 shale, coal, gilsonite and other such sources.

*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 installedprogram 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 units that are reasonably certain of production when drilled. Proved reserves for other undrilled units 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.*

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PROVIDENCE RESOURCES INC.            (A Development Stage Company)            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            December 31, 2009 and 2008

**Supplemental Oil and Gas Information –****ASC 932****(continued)**

**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, 2009               |   |   |      | United States |
|---------------------------------|--------|--------|-----------|---------------|
|                            |   |   |      |          |   |   |
| Proved oil and gas properties   |   |   | $         | -             |
| Unproved oil and gas properties |   |   | 7,940,018 |
|                            |   |   |      |          |   |   |
| Total capital costs             |   |   |      | 7,940,018     |
| Accumulated depletion           |   |   |      | -             |
|                            |   |   |      |          |   |   |
| Net capitalized costs           |   |   | $         | 7,940,018     |

**Costs Incurred         **

| Year Ended December 31, 2009 |   |   | United States |
|------------------------------|--------|--------|---------------|
|                         |   |   |          |   |   |   |
| Acquisitions:                |   |   |          |   |   |   |
| Proved reserves              |   |   | $             | - |
| Unproved reserves            |   |   |          | 149,661 |
|                         |   |   |          |   |   |   |
| Total acquisitions           |   |   |          | 149,661 |
| Exploration costs            |   |   |          | - |
| Development costs            |   |   |          | 1,937,199 |
| Asset retirement obligations |   |   |          | - |
|                         |   |   |          |   |   |   |
| Total costs incurred         |   |   | $             | 2,086,860 |

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

None.

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

**Evaluation of Disclosure Controls and Procedures**

In connection with the preparation of this annual report, an evaluation was carried out by the Company’s management, with the participation of the chief executive officer and the chief financial officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange        Act of 1934 (“Exchange Act”)) as of the end of the period covered by this report.Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to management,        including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures.                  Based on that evaluation, the Company’s management concluded, as of the end of the period covered by this report, that the Company’s disclosure controls and procedures were effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commission’s rules and forms, and such information was accumulated and communicated to management, including the chief executive officer and the chief        financial officer, to allow timely decisions regarding required disclosures.          

**Management’s Report on Internal Control over Financial Reporting**

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process, under the supervision of the chief executive officer and chief financial officer, designed to provide reasonable assurance regarding the reliability of        financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with United States generally accepted accounting principles (GAAP). Internal control over financial reporting includes those policies and procedures that:          

|  | ·      | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets; |
|--|----------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | ·      | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the board of directors; and |
|--|----------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | ·      | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. |
|--|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Because of its 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.

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The Company’s management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, which assessment did not identify any material        weaknesses in internal control over financial reporting. A material weakness is a control deficiency, or a combination of deficiencies in internal control over financial reporting that creates a reasonable possibility that a material misstatement in annual or interim financial statements will not be prevented or detected on a timely basis. Since the assessment of the effectiveness of our internal control over financial reporting did not identify any material weaknesses, management        considers its internal control over financial reporting to be effective.         This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. We were not required to have, nor have we, engaged our independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Commission that permit us to provide only management’s report in this annual report.

***Changes in Internal Controls******over Financial Reporting***

During the period ended December 31, 2009, 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.

**ITEM****9B.     OTHER INFORMATION**

None.

**PART III**

**ITEM****10****.     DIRECTORS, EXECUTIVE OFFICERS, AND****CORPORATE GOVERNANCE**

**Officers and Directors**

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

| ***Name***             | ***Age*** | ***Year                    Elected/Appointed*** | ***Positions Held***               |
|------------------------|-----------|-------------------------------------------------|------------------------------------|
| Gilbert Burciaga       | 56        | 2007                                            | CEO,CFO, PAO, anddirector          |
| Markus Mueller         | 51        | 2003                                            | Chairman of the board of directors |
| Nora Coccaro           | 53        | 1999                                            | Director                           |
| Christian Russenberger | 41        | 2008                                            | Director                           |

***Gilbert Burciaga***was appointed as chief executive officer, chief financial officer, principal accounting officer, and director on July 2, 2007. 

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Mr. Burciaga has been involved in the natural gas supply and marketing business for over 25 years. Mr. Burciaga has beena director of Miller Energy,LLC,as well as the chairman/chief executive officer of Miller’sgas marketing company, Vintage Gas Marketing, LLC. He was a founding member of Dynegy, Inc., and served as one of six senior vice-presidents involved in the company’s development, whicheventuallybecame a Fortune 500 trading company. Mr. Burciaga wasalso formerlythe president of NGC Energy        Resources(1992 to 1997), a division of Dynegy, Inc., whichfocused on the acquisition and operation of downstream assets.                   The appointment of Mr. Burciaga to the board ofdirectors was included in an agreement with MillerEnergy, LLC, with whichMr. Burciaga is an affiliate.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***was appointed to the Company’sboard 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 the management ofinvestment funds. Prior to Mr.        Mueller’s current engagementshe acted as a director of Jefferies AG Zurich(1995 to2000)and as the managing director of JefferiesManagement AG Zug (1995 to2000). The Jefferies companies are also involved in asset management for private clients.         

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

Ms. Coccaro was appointed as chief executive officer, chief financial officer,andprincipal accounting officer onNovember 16, 1999,and resigned from these positions onJuly 2, 2007,at which time she was appointed as Vice-President of Corporate Affairs.         

Ms. Coccaro attended medical school at the University of Uruguay before becoming involved in the management of public entities. Ms. Coccaro has also served as officer and/or directorwith the following companies:

|  | ·      | an officer and director (November 2005 to September 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 developmentof alternative sources of energy. |
|--|----------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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***Christian Russenberger***was appointedto the Company’s board of directorson March 31, 2008. 

Mr. Russenberger is the sole owner and director of CR Innovations Holding AG, CR Innovations AG (financial consulting), Global Project Finance AG (long term investments), and Profumeria.ch AG.  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 to 2004) as a relationship manager and analyst. Before joining Finter Bank, Mr. Russenberger worked in Zurich as an analyst with Anlage-und Kreditbank AKB (1991 to 1993) and Bank Leu AG (1990 to1991).

No persons other than executive officers or directors of the Company are expected to make any significantcontributions to management.          

***Term of Office***         Our directors are appointed for staggered terms ofone (1) year, two (2) years and three (3) yearsto 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 our board of directors and hold office until removed by the board.          

***Family Relationships***         There are no family relationships between or among the directors or executive officers.

***Involvement in Certain Legal Proceedings***         To 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 to the Company, we are unaware persons who, during the period ended December 31, 2009, failed to file, on a timely basis, reports required by Section 16(a) of the Securities Exchange Act of 1934.

***Code of Ethics***

The Companyhas adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-Kof 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 Companyhas incorporated a copy of its Code of Ethics as Exhibit 14 to this form 10-K. Further, ourCode of Ethics is available in print, at no charge, to any security holder who requests such information by contacting us.

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**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. 

**Director Compensation**

Non-executive directors are compensatedfor attendance at meetings in the amount $500 per meeting but are not reimbursed for out-of-pocket costs incurred in attending meetings.          

During the year ended December 31, 2009, the Companydid not compensate it non-executive directors.          

During the year ended December 31, 2008, the Company compensated its non-executive directors for services rendered by granting stock options to purchase common shares pursuant to our2008 Stock Option Plan.          

During the year ended December 31, 2009, the Company compensated one ofitsdirectors pursuant to a consulting agreement for her services as vice-president of corporate affairs. 

During the year ended December 31, 2009, the Company compensated one of its directors pursuant to an employment agreement for his services as chief executive officer.

The following table provides summary information for the year 2009concerning cash and non-cash compensation paid or accrued by the Companyto or on behalf of itsdirectors.

| ***Director’s******Summary Compensation Table*** |
|--------------------------------------------------------|
| Name                                                   | Fees earned or paid in cash 

($) | Stock awards

($) | Option

Awards

($) | Non-equity incentive plan compensation

($) | Nonqualified deferred compensation

($) | All other compensation

($) | Total

($) |
| Markus Mueller, chairman                               | - | - | - | - | - | - *** | - |
| Nora Coccaro                                           | 118,000* | - | - | - | - | - | 118,000 |
| Gilbert Burciaga                                       | 150,000** | - | 225,327 | - | - | 150,000 | 525,327 |
| Christian Russenberger                                 | - | - | - | - | - | - *** | - |

*      Pursuant to a consulting agreement;amount paid for Ms. Coccaro’sservices as vice-president of corporate affairs.

****     **Pursuant to an employment agreement; amount paid for Mr. Burciaga’s services as chief executive officer.

*************     **On April 30, 2009 Mr. Mueller and Mr. Russenberger entered into an agreement with the Company whereby the Company agreed to pay the directors’ legal costs related to a third-party claim against        Abram Janz (*see Item 3. Legal Proceedings*) in exchange for 100% of the recovered damages; as of December 31, 2009, legal fees paid on the behalf of Mr. Mueller and Mr. Russenberger were in the amount of $102,960.90.

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**ITEM 11****.     EXECUTIVE COMPENSATION**

**Compensation Discussion and Analysis**

 

The objective of the Company’s compensation program is to incentivize our chief executive officer for services rendered that includes a salary,stock options awards, and at the sole discretion of the Company, an annual bonus. We utilizetheseformsof compensation because we feel that these compensatory elementsareadequate to retain and motivate our chief executive officer. The amountswe have deemedappropriate to compensate our chief executive officerweredetermined in accordance with compensatory packages similar to otherdevelopment stage exploration companies though we have no specific formula to determine compensation. While we have determinedthat our current compensatoryprogram is appropriately suited to accomplishingour current objectives, we may in the        future expand our compensation program to include additional benefits as the Company realizes those objectives.

Executive compensation paid to our chief executive officer for the year ended December 31, 2009was $525,327as compared to $1,234,000 for the year ended December 31, 2008. The decrease in executive compensation over the comparative periodsis attributable tothedecrease in bonus compensation and vested option awards. The decrease in the cash bonus awarded to our chief executive officer in 2009 can be attributed to fiscal constraints in the current annual period due to the non-productive nature of drilling activities to date and the mounting cost of professional fees. The decrease invested stock options in2009 can be attributed to the terms of our chief executive officer’s employment agreement that provided for stock options based on tenure in 2009 as compared to stock options based ontenure, performance,and the execution ofan employment agreement.We expect future executive compensationfor our chief executive officerto fluctuate from that paid within the year ended December 31, 2009 based on the results of the Company’s operations moving forward.

Compensation paid to vice-president of corporate affairs for the year ended December 31, 2009 was $118,000 as compared to $162,000for the year ended December 31,2008. The decrease in compensation over the comparative periods is attributed to a decrease in vested option        awards mitigated by an increase in salary. Options awards were vested in our vice-president of corporate affairs for the year ended December 31, 2008 for her services rendered as a director of the Company. We expect future compensation for our vice-president of corporate affairs to remain relatively consistent with that amount paid within the year ended December 31, 2009.

**Tables**

The following table provides summary information for the years 2009 and 2008 concerning cash and non-cash compensation paid or accrued by the Company to or on behalf of (i) the chief executive officer and (ii) any other employee to receive compensation in excess of $100,000.

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| ***Executive’s******Summary Compensation Table*** |
|---------------------------------------------------------|
| Name and Principal Position                             | Year | Salary                    ($) | Bonus                    ($) | Stock Awards                    ($) | Option                    Awards                    ($) | Non-Equity Incentive Plan Compensation                    ($) | Change in Pension Value and Nonqualified Deferred Compensation                    ($) | All Other Compensation                    ($) | Total                    ($) |
| Gilbert Burciaga:CEO, CFO, PAOand director              | 2009

2008 | 150,000

150,000 | 150,000

250,000 | -                    - | 225,327

834,000 | -                    -

- | -                    -

- | -                    -

- | 525,327

1,234,000 |
| Nora Coccaro:

director;

former CEO, CFO,andPAO*       | 2009

2008 | 118,000

96,000 | -

- | -

- | -

66,000** | -                    - | -                    - | -                    - | 118,000

162,000 |

***     **Pursuant to a consulting agreement;amount paid for Ms. Coccaro’sservices as vice-president of corporate affairs.

**     Options grantedfor services as director (please see the *Directors Summary Compensation Summary*table, above).

The following table provides summary information for 2009concerning unexercised options, stock that has not vested, and equity incentive plan awards by the Companyto or on behalf of (i) the chief executive officer and (ii) any other employee to receive compensation in excess of        $100,000:

| ***Outstanding Equity Awards at Fiscal Year-End*** |
|----------------------------------------------------|
|                                               | Option awards | Stock awards |
| Name                                               | Number of securities underlying unexercised options                    (#) exercisable | Number of securities underlying unexercised options                    (#) unexercisable | Equity incentive plan awards: number of securities underlying unexercised unearned options                    (#) | Option exercise price                    ($) | Option expiration date | Number of shares or units of stock that have not vested                    (#) | Market value of shares or units of stock that have not vested                    (#) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested                    (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested                    ($) |
| Gilbert Burciaga                                   | 8,050,000 | 8,137,500 | - | 0.20 | June 12, 2018 | - | - | - | - |
| Nora Coccaro                                       | 550,000 | - | - | 0.20 | June 12, 2018 | - | - | - | - |

*     As of March 31, 2010,Mr. Burciaga had an additional 275,000 unexercised options exercisable.

The Companyhas a consulting agreement with its executive officer,effective May 1, 2007,through April 30, 2011, for (i) an annual salary of$150,000, (ii) at the Company’s discretion, an annual bonus and (iii)        performance, tenure, and incentive stock options. 

The Company has noplansthat provides for the payment of retirement benefits, or benefits that will be paid primarily following retirement.

The Company has noagreementthat provides for paymentto our executive officer at, following, or in connection with the resignation, retirement or other termination, or a change in control of Company or a change in ourexecutive officer's responsibilities following a change in control.

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

The following table sets forth certain information concerning the ownership of the Company’s 62,472,179shares of common stock issued and outstanding as of April14, 2010with 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, director

5300 Bee Caves Rd Bldg 1 Suite 240                    Austin, Texas 78746 | Common                                   | 0                    (8,325,000 options)                                                        | 0%                                         |
| Markus Mueller, director                     Bleicherweg 66, CH-8022

Zurich, Switzerland                            | Common                                   | 8,434,384                    (700,000 options)                                                  | 13.5%                                      |
| Nora Coccaro, director 

Rio Negro 1245, Apartment 102                     Postal Code 1100, Montevideo, Uruguay     | Common                                   | 453,520                    (550,000 options)                                                    | 0.7%                                       |
| Christian Russenberger*, director                    Meierhofrain 36, CH-8820 

Wädenswil, Switzerland          | Common                                   | 1,120,000                    (700,000 options,

25,000,000 convertibleshares, 166,543 warrants) | 1.8%                                       |
| Officer and directors (four) as a group                                                                              | Common                                   | 10,007,904                                                                                      | 16.0%                                      |

*     Christian Russenberger is considered the beneficial owner of(i)1,120,000 common shares and $1,400,000 in debt convertible into 17,500,000 common shares held by Global Project Finance AG and (ii) $600,000 in debt convertible into 7,500,000 common        sharesand 166,543 warrants to purchase common sharesheld by CR Innovations AG.

**ITEM 13****.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS****AND DIRECTOR INDEPENDENCE**

***Certain Relationships and Related Transactions***

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 usexcept the following consulting fees, bonus and option grants:

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|  | ·      | Gilbert Burciaga,our sole executive officer and a director,entered into an employment agreement dated effective May 1, 2007 pursuant to which he realized$150,000in consulting fees                    anda bonus in the amount of $150,000for the annual period ended December 31, 2009.Mr. Burciaga had further vestedan additional1,100,000stock options to purchase shares of the Company’s common stock at an exercise price of $0.20 exercisable for                    ten years from the date of grant as of the year ended December 31, 2009. |
|--|----------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | ·      | Nora Coccaro, vice-president of corporate affairs and a director, pursuant to a consulting agreement dated March 16, 2000, realized $118,000in consulting fees for the year ended December 31, 2009. |
|--|----------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Director Independence*** 

The Company is quoted on the OTC Bulletin Board inter-dealer quotation system, which does not have director independence requirements. 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. Under this standardMr. Russenbergerand Mr. Muellercould each be considered independent directors.Nonetheless, due to the number of financing transactionsbetween the Company and entities managed by either Mr. Russenberger or Mr. Mueller, we do not believe that our board of directors includes any independent        directors.

**ITEM 14.****     ****PRINCIPAL ACCOUNTANT FEES AND SERVICES**

******

***Audit Fees***

Chisholm, Bierwolf,Nilson& Morrill, LLC(“Chisholm”)provided audit services to the Companyin connection with its annual report for the fiscal year ended        December 31, 2009and 2008. The aggregate fees billed by Chisholmfor the 2009and 2008audit of our annual financial statements and a review of our quarterly financial statements were$29,000and $35,500, respectively. 

***Audit Related Fees***

Chisholm billed to the Companyno fees in 2009or 2008for professional services that are reasonably related to the audit or review of our financial statements that are not disclosed in “Audit Fees” above. 

******

***Tax Fees***

Chisholm billed to the Companyno fees in 2009or 2008for professional services rendered in connection with the preparation of our tax returns for the period. 

******

***All Other Fees***

Chisholm billed to the Companyno fees in 2009or 2008for other professional services rendered or any other services not disclosed above. 

******

***Audit Committee Pre-Approval***

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

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**PART IV**

**ITEM 15.     EXHIBITS,****FINANCIAL STATEMENT SCHEDULES**

***(a)******Financial Statements***

The following documents are filedunder “*Item 8. Financial Statements and Supplementary Data**,*”pages F-1 through F-29,and are included as part of this Form 10-K: 

     Financial Statements ofthe Companyfor the years ended December 31, 2009and 2008:

Reportof Independent Registered Public Accounting Firm**     **

ConsolidatedBalance Sheets

ConsolidatedStatements of Operations

Consolidated Statementof Stockholders’ Equity(Deficit) and Comprehensive Loss

ConsolidatedStatements of Cash Flows

Notes to Consolidated Financial Statements

***(b) Exhibits***

The exhibits required to be attached by Item 601 of Regulation S-Kare listed in the Index to Exhibits on page37of this Form 10-K, and are incorporated herein by this reference.

***(c)******Financial Statement Schedules***

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

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**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.         

| ***Providence Resources, Inc.****          *                                                             | ***Date***    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|
| /s/ Gilbert Burciaga

By: Gilbert Burciaga                    Chief Executive Officer, Chief Financial Officer, Principal 

Accounting Officerand Director | April14, 2010 |

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.     

|                                                                                                                                                   | ***Date***     |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|
| /s/ Gilbert Burciaga

Gilbert Burciaga                    Chief Executive Officer, Chief Financial Officer, Principal 

Accounting Officerand Director | April 14, 2010 |
| /s/ Markus Mueller

Markus Mueller

Director                                                                                                           | April 14, 2010 |
| /s/ Nora Coccaro

Nora Coccaro

Director                                                                                                               | April 14, 2010 |
| /s/ Christian Russenberger

Christian Russenberger

Director                                                                                           | April 14, 2010 |

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**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)*       Amendmentsto 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 (incorporated by reference from the Form 10-QSB filed with the Commission on August 14, 2007).

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 of the Company (incorporated by reference from the Form 8-K filed with the Commission on October 26, 2006).     

10(i)*     Project Participation Agreement with Elm Ridge Exploration Company, LLC, dated July 31, 2008 (filed on Form 10-Q/A with the Commission on October 20, 2008).

10 (ii)*     Extension and Amendment Re Oil and Gas Leaseswith I.W. Carson LLC, dated February 29, 2010(filed on Form 8-K with the Commission on April6, 2010).

10 (iii)*     Assignment, Bill of Sale and Conveyance with Elm Ridge dated March 1, 2010(filed on Form 8-K with the Commission on April6, 2010).

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

21     Subsidiaries of the Company (incorporated by reference from the Form 10-K filed with the Commission on April 7, 2008).

31     Certification of the Chief Executive Officer and Chief Financial Officer pursuant 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 (attached).

32          Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (attached).

     *      Incorporated by reference to previous filings of the Company.

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