Irish exploration company Providence Resources expects to raise almost €25.8 million through a placing of 368.2 million new shares.

Providence said that it would allocate the funds raised to a number of specific projects, including appraisal drilling at Hook Head in the Celtic Sea this summer, as well as the development of its other Irish offshore assets.

Funds will also be invested later this year in AJE, the company's Nigerian asset, and possibly in potential oil and gas developments in the Gulf of Mexico.

The chief executive of Providence, Tony O'Reilly jnr, said yesterday that the fund-raising round had attracted 10 new UK institutional shareholders. Cenkos Securities acted for Providence in the placing with these investors.

"The net proceeds of the placing will be actively used to enhance the Providence portfolio of production, appraisal, development and high-impact exploration assets," Mr O'Reilly said.

News of Providence's share placing follows the company's recent announcement that it intended to buy a majority stake in the producing Singleton oilfield in the UK. This acquisition will increase its interest in the oilfield from 20 per cent to more than 99 per cent.

The company said that some of the proceeds of the placing would also be used to make an additional investment in the Singleton oilfield.

The funds might also be used for general working capital purposes, the company said.