Gastar plans for $20 million private placement financing; Halozyme places $13.9 million stock

By Sheri Kasprzak

Atlanta, Oct. 13 - Private placement action was led Wednesday by a natural gas exploration company announcing it was looking for a $20 million financing.

Gastar Exploration Ltd. said Wednesday it will enter the private placement market with a $20 million financing.

The company will issue unsecured convertible senior subordinated debentures with Westwind Partners Inc. acting as financial advisor in connection with the best-efforts financing.

The pricing and terms of the agreement will be announced in the next 30 days, according to the company.

One sell-side source said deals like this generally price in favor of the buyer.

"For a company of Gastar's size, this is a bit unusual, but I do not know the company," the source said. "They could have some well or play that is driving the stock."

Gastar president and chief executive officer J. Russell Porter said in an interview Wednesday that the company plans to target mostly European and Canadian institutional investors.

"We have used private placements in the past successfully," Porter said. "The attraction of the private placement is the fact that the financing can possibly be accomplished much faster than a registered transaction."

On the same day, the company announced it had finished a $10 million offering of 15% senior notes.

The unsecured notes mature on Oct. 13, 2007.

Warrants for 1,989,475 shares at $3.63 were also issued to investors in the deal.

Gastar is a Mount Pleasant, Mich.-based natural gas exploration and production company. On Wednesday, its stock, which is traded on the Toronto Stock Exchange, closed down C$0.05 at C$4.

Halozyme's $13.9 million placement

San Diego biopharmaceutical company Halozyme Therapeutics Inc. agreed to sell $13.9 million in a private placement through agent SG Cowen & Co.

Halozyme will issue about 7.9 million shares at $1.75 per share with warrants to buy up to 2.4 million additional shares at $2.25.

"This financing provides Halozyme with sufficient cash to fund our currently planned operations well into 2006," said Jonathan Lim, the company's chairman and chief executive officer.

Hesperia sells $1 million

Hesperia Holding Inc. finished a $1 million private placement with Laurus Master Funds Wednesday.

In the agreement, the Hesperia, Calif.-based company issued a $1 million secured convertible term note with an initial interest rate of Prime plus 300 basis points. The issue is secured by Hesperia's assets.

Laurus received warrants to purchase up to 461,000 shares. Details of the deal were not available by press time Wednesday.

Hesperia, through its subsidiary Hesperia Truss Inc., designs, engineers and manufactures roof and floor trusses. Its stock closed unchanged Wednesday at $0.65.

Canadian deals

Heading up action north of the border was a C$15 million flow-through deal by NovaGold Resources Inc.

The company sold 1,485,150 flow-through shares at C$10.10 to a syndicate co-led by Salman Partners Inc. and Canaccord Capital Corp. The underwriters also have an option to increase the offering by 495,050 flow-through shares for a total of $5 million, exercisable any time before closing. The deal is expected to close Oct. 28.

In other Canadian private placement news, Deep Resources increased the amount of its previously announced C$5 million private placement to C$5.75 million.

The new placement amount is comprised of C$1.5 million in flow-through shares and C$4.25 in common shares.

The financing, which will be used for oil and gas development by the Calgary, Alta.-based company, is scheduled to close Oct. 27.

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