Exploration company Providence Resources has announced it has conditionally raised about $3m through the issue of new shares at a price of 1.5 pence each.

The price represents a discount of 13% to the closing price of an existing ordinary share of 1.73 pence on 3 April.

A total of 178 million new ordinary shares will be issued representing approximately 21% of the company's issued ordinary shares.

The company's chairman Pat Plunkett, chief executive Alan Linn, chief financial officer Simon Brett and non-executive director Angus McCoss all bought shares as part of the deal.

An EGM will take place on 5 May for the purpose of approving the fundraising.

Earlier today Providence said it had agreed a non-binding deal with SpotOn Energy in relation to the farm out of its Barryroe oil and gas field in the Irish Sea.

SpotOn Energy is a Norwegian company, registered in the UK, which takes a progressive approach to cost effective offshore oil and gas field development.

Providence said the Norwegian firm has extensive experience designing and constructing semi-submersible drilling rigs for North Sea deployment and also in the design, development and asset integrity management of offshore facilities.

In a statement today, Providence said it has now completed a re-engineering of its business and has materially reduced its running costs.

A review of its exploration portfolio is now also complete and is expected to result in additional licence and work programme cost reductions during 2020. 

But the company said it has an urgent need for additional working capital in order to allow it to continue as a going concern and to allow it to continue the Barryroe farm out process with SpotOn Energy.

It said it will use the proceeds of its new fundraising mainly to provide general working capital for the business to cover general administration, licencing and placing costs, until April 2021. 

Providence's Barryroe project is the most advanced and appraised oil project offshore Ireland. 

But it still needs to be appraised by additional drilling before major capital commitment to its development will be made. 

In October, Providence Resources failed to received $9m in expected funding from Chinese investor APEC Energy Enterprises. The funds had been intended to cover the exploration costs at the Barryroe site off the Cork coast.  

The company's former CEO Tony O'Reilly said he had staked his reputation on the issue of the Chinese funding, which initially had been due last June and the deadline for which had been extended on several occasions. He resigned from his position in December.

The company appointed Alan Linn as its new chief executive  in January.