The sliding oil price and a revolt by investors forced Oilexco, the North Sea oil explorer, to scrap a highly dilutive rescue bond and share issue yesterday, only hours after announcing it.

The company has to repay some $160 million (£108 million) of debt next year and needs several hundred millions more to fund further plans. In the morning it unveiled a plan to raise $150 million in convertible bonds and $36 million in new shares. However, the market price fell well below the price of the new shares and both issues were very dilutive to existing holders, as analysts were quick to point out. Meanwhile, the oil price slid below $50.

Oilexco’s board hurriedly convened and, after the shares had closed down 29½p at 91½p, announced that it would scrap the plan, falling back on hopes of finding new lenders or industry partnerships. Tristone Capital says that Oilexco should be putting itself up for sale and could fetch about £3.50. However, Richard Savage, of Mirabaud Securities, said: “The financial crisis has called into question Oilexco’s highly leveraged, capital-intensive business model and, in turn, the premium rating that the company has enjoyed.”

Mining clients suddenly cancelling or shelving contracts with Bateman Engineering, which builds processing plants for them, forced the company to issue a profit warning and it fell 28p to 21½p.

Ennstone fell 1.1p to 1¾p as Marwyn Materials, controlled by Peter Tom, confirmed that it was considering a bid but said that it may not happen.

Louisiana Oil & Gas, a Plus-listed explorer in the United States, flat at 6½p, is understood to have cut from $2.875 million to $1.94 million the price that it is paying for acreage with 1.3 million barrels of proven oil and will issue shares at 10p to fund its deal.

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