GeoResources marks milestone fundraiser; Beach Petroleum funds acquisitions; ICO, GenVec sell stock

By Kenneth Lim

Boston, June 6 - GeoResources, Inc. announced a $34.43 million stock placement that management said is a key milestone for the relatively young company.

In Australia, Beach Petroleum Ltd. said it raised A$191.1 million through a stock offering that will be mostly used to fund three acquisitions in Egypt.

ICO Global Communications (Holdings) Ltd. is selling $23.5 million worth of stock, while GenVec, Inc. plans to place out $17 million of stock-and-warrant units.

GeoResources plans key fundraising

GeoResources is selling $34.43 million of stock in a private placement.

The company will offer 1.53 million common shares at $22.50 apiece. GeoResources common stock (Nasdaq: GEOI) closed at $23.10 on Friday, lower by 18.09%, or $5.10.

Investors will also receive five-year warrants for 613,000 shares, exercisable at $32.43.

GeoResources, a Houston-based owner and operator of producing oil and gas properties, said it will use the proceeds to repay debt, to fund exploration, development, acquisitions and hedging activities and for general corporate purposes. The company completed a merger in April 2007 with Southern Bay and Chandler Energy, LLC.

"This company just came together in April of 2007," GeoResources chief executive and president Frank A. Lodzinski told Prospect News. "We have slightly more than a year under our belt. We look at this from the standpoint of developing broader market support for our company. We have, I believe, had an exceptional run and very sizable growth over the last 15 months or so, and you know the use of proceeds as discussed in the press release this morning said, we are going to use it to pay down debt, accelerate our capital budget and fund our growth."

In a series of presentation slides, GeoResources said it is increasing its 2008 to 2009 capital budget to $61.5 million from the previously planned $40 million.

The company is now focused on growth, Lodzinski said.

"We've grown our stock price significantly over the course of the last year," he said. "We've grown our assets and cash flow, and we hope to keep that growing. We're a small, publicly positioned company and we have a track record, and this is an important step for us."

Despite the pricing of the deal at the discount to the company's current stock price, Lodzinski said he was happy with the placement.

"We're very pleased with the new investors that have come in," he said. "We did do a placement that's at a discount to where the stock closed yesterday or the day before, but if you look at where the stock was before ... it's actually a good price."

And the implications of the deal as a milestone for a developing company is more important for Lodzinski, he said.

"I'm very pleased because I see this as a significant step. ... We've had significant growth and from my point of view it's just another feather in our cap," Lodzinski said.

Beach Petroleum funds acquisitions

Beach Petroleum said it sold A$191.1 million worth of stock in an oversubscribed private placement.

The deal involved about 133.6 million shares at A$1.43 per share. Beach Petroleum common stock (ASX: BPT) slid 8.98%, or A$0.15, on Friday to close at A$1.52.

Beach Petroleum, an oil and gas production and exploration company based in Adelaide, South Australia, said the majority of the proceeds will be used to fund three previously announced acquisitions in Egypt.

The Egypt acquisitions comprise two offshore concessions and one onshore concession and will cost about A$150 million including estimated development expenses, Beach Petroleum said in a statement.

Beach Petroleum also announced a share purchase plan that will let eligible Australian and New Zealand shareholders subscribe for up to A$5,000 of shares at A$1.43 apiece. Eligible shareholders will also be given a chance to subscribe in a one-for-10 listed bonus options issue, with an exercise price of A$2.00 per share and an expiry date of June 30, 2010.

"The response to this capital raising was most enthusiastic and has further underlined the respect and support Beach is attracting in the market place for its strong and growing position in Australian petroleum production, and our expanding international operations," Beach Petroleum managing director Reg Nelson said in a statement. "The support also coincides with our increasing and valuable exposure to the rapidly expanding coal seam gas industry in central Queensland. Beach is now systematically growing its international portfolio, providing shareholders with the opportunity to participate in the strengthening global petroleum industry, while widening the company's balanced exposure to rising global oil and gas prices across a number of countries and petroleum provinces."

ICO Global to sell stock

ICO Global Communications said it is selling $23.5 million worth of stock through a private placement.

The company is offering about 6.5 million class A common shares at a price equal to the 20-day moving average of ICO's closing price as quoted on Nasdaq, less a 5% discount. ICO class A common stock (Nasdaq: ICOG) closed at $4.00 on Friday, lower by 11.11%, or $0.50.

Settlement is expected Monday.

ICO, a Reston, Va.-based mobile satellite services company, said it will use the proceeds to support its current business activities.

The company said the shares were placed with a "small group of institutional investors," according to a press release.

GenVec offers units

GenVec plans to raise $17 million through a direct offering of stock-and-warrant units.

The offering comprises about 11.3 million units at $1.51 per unit. Each unit consists of one common share and a warrant to buy 0.2 common shares. Each five-year warrant has a strike price of $2.016 per share and expires in five years.

Gaithersburg, Md.-based GenVec, a developer of gene-based drug and vaccine therapies, said it will use the proceeds to further develop its lead product and for other general purposes.

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