Chesapeake Energy lifts North American deal to $1.1 billion; Excelsior to place units, shares

By Stephanie N. Rotondo

Portland, Ore., May 13 - There continued to be a lot of variance in the size of PIPE deals on Thursday, though there were more single-digit offerings than anything else.

But Chesapeake Energy Corp. - which had announced a $600 million private placement of preferred shares on Wednesday - made headlines again as it increased the previously announced financing to more than $1 billion. In addition, the company also lifted a private placement aimed at Asian investors to $900 million from $600 million.

Away from that, Excelsior Energy Ltd. announced a C$6 million private placement of units and stock. The financing is in addition to a previously announced C$20 million private placement.

Hy-Drive Technologies Ltd. is meantime seeking C$5 million from a private placement of units.

In wrapped deals, Woulfe Mining Corp. said it raised nearly C$4.5 million from a private placement of stock. The funds will be used for a feasibility study.

And Clearford Industries Inc. brought a C$2.5 million private placement of units to market, while Lagasco Corp. said it was seeking C$2 million for work at its Anchaca Project in Peru.

Chesapeake lifts North American deal

Chesapeake Energy increased the size of a private placement of preferred shares to $1.1 billion.

The deal - aimed at North American investors - originally priced at $600 million with a $500 million greenshoe on Wednesday.

The 5¾% series A cumulative non-voting convertible preferreds carry a liquidation preference of $1,000. Each share will be sold at $1,005.00.

The shares are convertible into approximately 35.7961 common shares, based on an initial conversion price of $27.94 per share. The company can choose to mandatorily convert the shares after May 17, 2015 if the price of the stock exceeds 130% of the conversion price for 20 trading days within a consecutive 30-day period.

The funding is in addition to a $600 million private placement of 5¾% cumulative non-voting convertible preferred shares, which was also lifted Thursday to $900 million. That financing is aimed at two Asian investors, Maju Investments (Mauritius) Pte Ltd., an affiliate of Temasek Holdings (Private) Ltd., and Hampton Asset Holding Ltd., an affiliate of Hopu Investment Management Co, Ltd.

The shares being sold in the Asian tranche are not the same series as the North American portion.

Both financings are being done as part of the company's strategic and financial plan, which was announced earlier in the week. The plan includes the sale of a 20% interest in Chesapeake's Appalachia project.

Proceeds raised from all transactions will be used to retire senior debt.

"They have talked for some time about getting an investment grade rating," said Michael Schmitz, an analyst with Boenning & Scattergood Inc. "They think they need to do these strategic initiatives to do it."

Schmitz added that the plan is aimed at "enhancing shareholder value," and, in his opinion, it just might work.

"They have some high quality assets," he said. "Surely they should get a good value for it."

Settlement is expected by May 17.

The company did not return e-mails seeking further comment.

Chesapeake's equity (NYSE: CHK) fell 21 cents, or 0.89%, to $23.32. Market capitalization is $15.2 billion.

Chesapeake Energy is an Oklahoma City-based independent producer of natural gas.

Excelsior to issue stock, units

Excelsior Energy intends to raise C$6 million via a non-brokered private placement of units and equity, according to a press release.

The transaction is in addition to a C$20 million previously announced private placement.

The Calgary, Alta.-based company will issue approximately 10.42 million units at C$0.48 each. The units will hold one common share, one flow-through common share and two common share warrants.

The warrants are exercisable at C$0.32 for five years.

Additionally, the company will sell up to approximately 4.16 million common shares at C$0.24 per share.

Between the C$6 million deal and the C$20 million deal, no more than $8 million in flow-through shares will be issued.

Proceeds will be used for further delineation of the property in the Hangingstone area of Alberta, as well as for general corporate purposes.

Both deals are expected to close concurrently with each other.

Calls to the company seeking comment were not returned Thursday.

Excelsior's stock (TSX Venture: ELE) gained 6 cents, or 17.65%, to C$0.40. Market capitalization is C$49.4 million.

Excelsior Energy is an oil sands exploration and appraisal company.

Hy-Drive wants C$5 million

Hy-Drive Technologies, a Toronto-based developer of hydrogen generation systems for energy production, will conduct a C$5 million private placement of units, the company announced.

Hy-Drive will sell approximately 16.66 million units at C$0.30 each on a best-efforts basis. The units will consist of one common share and one half-share warrant.

Whole warrants are exercisable at C$0.46 for five years.

Proceeds will be used for working capital and general corporate purposes, for research and development, capital expenditures and intellectual property protection.

Calls seeking comment were not returned Thursday.

Hy-Drive's shares (TSX Venture: HGS) closed steady at C$0.37. Market capitalization is C$22.7 million.

Woulfe seeks study funding

Woulfe Mining took in C$4.41 million from a private placement of common shares, according to a press release.

A portion of the deal was non-brokered. According to Mike Rodger, of Nicolas Street Capital, the non-brokered portion was "a small bit that came at the end that didn't go through" GMP Securities Europe LLC, the deal's placement agent.

The Vancouver, B.C.-based mineral exploration company sold approximately 29.38 million shares at C$0.15 per share.

Rodgers noted that the company was pleased with the outcome of the financing, adding, "There was some volatility in the share price before the financing was announced, which made things interesting."

Woulfe intends to use the proceeds for a feasibility study at its Sangdong property in South Korea. Rodgers estimated the study will take 12 to 18 months and that the company hopes to start drilling by 2011.

Once the study is completed, Rodgers said he also expects the company will return to the private placement market for more funding. A portion of the future deal could be debt-based, he said, but would also likely include another equity offering.

Woulfe's stock (TSX Venture: WOF) fell a cent, or 7.69%, to C$0.12. Market capitalization is C$23.9 million.

Clearford plans unit offering

Clearford Industries announced a C$2.5 million private placement of units.

The company will sell the units at C$0.10 each. The units will contain one common share and one warrant, which is exercisable at C$0.25 for two years.

Proceeds will be used for operations and working capital.

Clearford's equity (TSX Venture: CLI) ended unchanged at C$0.08. Market capitalization is C$2.06 million.

Clearford Industries is an Ottawa-based developer of wastewater management systems.

Lagasco to sell subscriptions

Vancouver, B.C.-based Lagasco will sell C$2 million of subscription receipts in a non-brokered private placement.

The receipts will be sold at C$0.20 each and are automatically convertible into one unit consisting of one common share and one half-share warrant.

Whole warrants are exercisable at C$0.35 for one year.

"Proceeds from the sale of the subscription receipts will be used to finance the exploration program on the Anchaca Project in southern Peru, for the acquisition, prospecting and evaluation of a second mineral property and for general working capital and corporate purposes," the company said in a press release.

Lagasco's equity (TSX Venture: LCO.H) dipped 2 cents, or 8%, to C$0.23. Market capitalization is C$9.08 million.

Lagasco is a petroleum and natural gas company.

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