IRISH OIL and natural gas explorer Providence Resources has reported net profits of €3.25 million for the first six months as revenues increased twelvefold on increased production and rising oil and gas prices.

The company reversed a net loss of €0.26 million from the same period in 2007 as turnover soared by 1,200 per cent to €11.24 million.

Profit from operating activities reached €4.98 million. This compares with a loss of €140,000 during the same period in 2007.

The huge rise in revenues is largely due to the company's acquisition of the Triangle assets in the Gulf of Mexico and the Singleton oil field in the UK.

"Providence's recent corporate activity in the UK and US has had a transformational impact on its financial results," said Davy analyst Caren Crowley.

Production has increased sixteen-fold from 120 barrels of oil equivalent a day (BOEPD) to almost 2,000 BOEPD, Providence said. By the end of 2010 the company said it plans to be producing 5,000 BOEPD.

The company said overall assets had trebled to €130 million. Providence also reported diluted earnings per share of 0.13 cent.

Drilling operations off the Irish coast at Dunmore and Hook Head were "disappointing", the company said, and in the latter the well has been capped to avoid further costs.

However, chief executive Tony O'Reilly played down the result.

"In context of us as a company in real terms this represents a very small percentage of our portfolio. This company has so much more. It has big areas offshore Ireland, it is well financed, it has production cash flow and it has got a portfolio."

He also said Providence had an attractive hedging programme, with a floor price of $100 per barrel for oil and capped with a ceiling price of $160 per barrel for oil.