FX Energy to close $12.95 million offering; Deep Well wraps $5 million stock sale

By Sheri Kasprzak

New York, July 5 - As the U.S. PIPE market got back to business Thursday following the July 4 holiday, two oil names made headlines as oil prices continued to edge their way higher.

Oil prices Thursday put on 40 cents to end the day at $71.81 per barrel after climbing above $72 per barrel early in the session.

One market source stopped short of saying he felt there would be a surge in oil explorer activity in the PIPE market.

"It's a sector that frequently shows up, especially when oil prices rise," he said. "I think it's too early to tell if we'll see a larger number of them [in the PIPE market]."

Heading up the slate of oil deals on Thursday was a $12.945 million registered direct placement that FX Energy, Inc. is preparing to close.

The company plans to sell 1.5 million shares at $8.63 each, a 7.1% discount to the company's $9.29 closing stock price on Tuesday, to a group of existing institutional investors.

News of the deal sent the company's stock up modestly early in the session, gaining 4 cents by 10:53 a.m. ET. The stock went on to give up 16 cents to close at $9.13 on Thursday (Nasdaq: FXEN).

The shares will be sold under the company's shelf registration through placement agent C.K. Cooper & Co.

Proceeds will be used for the expansion and acceleration of the company's exploration program in Poland as well as for general corporate purposes.

Based in Salt Lake City, FX is an oil and natural gas exploration company.

Deep Well's $5 million deal

Elsewhere in the energy sector, Deep Well Oil & Gas, Inc. sealed a $5 million stock deal on Thursday.

The Edmonton, Alta.-based company issued 8,333,333 shares at $0.60 apiece to one European investor.

The investor also received one warrant per share issued, exercisable at $0.90 each for three years. The offering also includes special warrants for 1 million additional shares, each exercisable at $1.20 for five years.

Proceeds will be used for the development of the company's Sawn Lake property.

The share offering comes not even a month after Deep Well settled a $2 million placement of units.

A single investor bought 5 million units in that deal at $0.40 apiece. The units included one share and one warrant with each warrant exercisable at $0.60 through May 25, 2010.

Deep Well's stock gave up 8.43%, or 7 cents, to end the session on Thursday at $0.76 (Pink Sheets: DWOG).

Deep Well is an oil sands exploration company.

Forum raises $5.5 million

In other PIPE news Thursday, Forum National Investments Ltd. concluded a $5.5 million offering of stock with Aliya Life Settlement International, LLC and Teeny Acquisitions LLC.

The company sold 11 million shares for $0.50 each

Proceeds will be used for the company's entry into the life settlement sector by creating a life settlement division.

"We are extremely excited about the investment made by Aliya and Teeny in Forum, said chief executive officer Dan Clozza in a statement.

"This investment represents the first step in what we believe will be a strong business relationship. Aliya and Teeny both have a proven track record in fundraising and corporate development, which they have agreed to bring to Forum and its new business venture. We believe the life settlement industry is an important and growing sector in North America which has the potential to offer Forum and its investors entirely new avenues of growth and opportunity going forward."

The company's stock remained unmoved at $0.99 on Thursday (Pink Sheets: FMNLF).

Based in Vancouver, B.C., Forum is an insurance company.

Transition's C$25 million deal

In Canadian offerings, Transition Therapeutics Inc. negotiated a C$25 million offering of its shares.

The non-brokered deal includes up to 15.625 million shares at C$1.60 apiece.

The offering will be made to a group of funds managed by Oracle Investment Management Inc., The Invus Group LLC and a large Boston-based investment-management firm.

The offering is set to close July 9.

Proceeds will be used for clinical studies, research and product development, as well as for working capital and general corporate purposes.

Transition, however, must conduct a one-for-nine consolidation of its stock in order to satisfy Nasdaq listing requirements regarding minimum bid price.

On Thursday, the company's stock fell by 4 cents, or 2.3%, to close at $1.71 (Toronto: TTH).

The company last tapped the PIPE market with another C$25 million offering of 26,881,720 shares at C$0.93 in November 2006. The shares were sold to two funds managed by Great Point Partners, LLC.

Toronto's Transition is a biopharmaceutical company focused on treatments for Alzheimer's disease, diabetes and other disorders.

Merit plans offering

In other Canadian news, Merit Mining Corp. priced a C$15 million placement of units comprised of one share and one warrant.

The company intends to sell up to 45,454,545 units at C$0.33 each. The majority of the units will be purchased by Wega Mining ASA, the company's largest shareholder.

The warrants are exercisable at C$0.50 each for two years. The expiry of the warrants may be accelerated if at any time after the first year the company's stock trades above C$0.70 for more than 30 consecutive trading days.

The deal is set to close later this month.

The company intends to use the proceeds for the development and construction of the Greenwood mill and the Lexington-Grenoble mine, which is expected to be in production in the first half of 2008. The rest will be used for exploration and development on the company's J&L polymetallic project near Revelstoke, B.C., and for acquisitions.

"This second investment in our company by Wega Mining will enable us to complete the development of the Greenwood Gold project to production and to pursue other advanced-stage projects," said Fred Sveinson, Merit's CEO, in a news release.

"We look forward to continuing to work with Wega Mining to achieve our goal of building a diversified international mining company."

On Thursday, the company's stock gave up a penny and a half to settle at C$0.30 (TSX Venture: MEM).

Based in Vancouver, B.C., Merit is a gold and mineral exploration company.

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