The share price of Providence Resources slumped by about 15 per cent on Friday after the oil explorer run by Tony O'Reilly jnr confirmed it was looking into the possibility of fresh fundraising.

Providence was hammered in afternoon trading, after rumours emerged in the morning that it was considering a share placing at 25p, a little over a tenth of its 52-week high of more than £2.30 a share.

Statement

It fell by as much as 20 per cent at one stage in the afternoon, before the company issued a statement partly confirming the rumours: “The company can confirm that it is currently in discussions regarding a potential funding but at this stage, no terms for any such funding have been agreed.”

Investors in Providence, which is seeking finance to develop the Barryroe oil find off the Irish coast, have nursed heavy losses over the last 24 months.

Shortly after it announced its Barryroe find in 2012, it raised about £65 million at £4.80 per share.

Those investors are sitting on paper losses of more than 90 per cent.