Transmeridian Exploration raises $22.5 million; U.S. PIPE volume recovers on better stocks

By Sheri Kasprzak

New York, Sept. 6 - Transmeridian Exploration Inc., a Houston-based oil exploration company, led private placement offerings as markets opened up following the Labor Day holiday.

Transmeridian on Tuesday announced the closing a $22.5 million convertible note deal with Royal Bank of Canada and two funds managed by North Sound Capital LLC.

The 10% notes mature the earlier of Dec. 15, 2005 and the closing of an equity financing other than a public offering.

The notes are convertible into common shares at 110% of the principal being converted, plus interest, at the equity financing price.

On Aug. 1, the company reportedly had 81,418,797 common shares outstanding.

Transmeridian also issued five-year warrants for 4.5 million shares, exercisable at $2.40 each.

Proceeds from the offering will be used to repay past due and current accounts under credit facilities for the company and its subsidiaries, while the rest will be used for working capital.

On Tuesday, the company's stock gained a penny to end at $2.66.

In the broader market Tuesday, U.S. PIPE volume got a slight boost from an improved stock market, and that improvement may continue into the middle of the week, some sell-siders speculated.

"Oil backed off considerably," said one market source. "And we've had some things on the backburner since [oil] went up and stocks went shaky. Some of this stuff is just now pricing because stocks are finally getting more stable."

Another source agreed, noting that some issuers waited out last week with an eye toward oil.

"With the hurricane, with oil, with all of the other news going on, it really was kind of scary to be in a position to price," he said. "I think it'll settle down quite a bit this week."

Oil prices plummeted as oil refineries got back to business. Oil fell $1.61 Tuesday to close at $65.96 per barrel.

The Dow Jones Industrial Average gained 141.87 to close at 10,589.24; the Nasdaq composite index closed up 25.79 at 2,166.86, and the Standard & Poor's 500 composite index finished the day up 15.37 at 1,233.39.

First Community's direct offering

First Community Bancorp, a bank holding company based in Rancho Santa Fe, Calif., was gearing up to close a $14.1 million direct placement on Tuesday.

According to the company's prospectus, the deal had been scheduled to close Tuesday.

The company has entered into agreements to sell 300,000 shares at $47 each to 12 institutions. The price per share is a 0.06% discount to the company's closing stock price of $47.29 on Sept. 2.

As of Aug. 1, the company had 16,047,452 outstanding common shares, excluding 414,831 unvested restricted shares, according to First Community's latest earnings statement.

First Community Bancorp is a holding company for banks in Southern California.

On Tuesday, First Community's stock dipped $0.07 to end at $47.22.

Telular raises $9.27 million

Telular Corp. wrapped a $9,275,000 stock offering just ahead of the long weekend.

The Vernon Hills, Ill.-based company issued 2.65 million shares at $3.50 each to several institutional investors.

Those investors also received series A and series B warrants for 6.25 million shares. Half of the warrants are exercisable at $4.50 each and the remainder at $5.00 each through March 2, 2006.

Telular, which manufactures wireless products for the telecommunications sector, also reported on Tuesday that it has received purchase orders totaling $22.9 million from wireless network operators in Latin America. The most recent purchases bring to $36 million the new orders received so far this quarter.

"We are pleased to have completed this financing, which provides additional working capital for the recent increase in orders and funds for general corporate purposes," said Michael Boyle, the company's president and chief executive officer, in a statement.

Neither Boyle nor director of marketing Mike Unterborn responded to requests for comment on the offering by press time Tuesday.

Both the closing and news of the purchase orders were announced before the stock market opened on Tuesday, and the company's stock gained 6.03%, or $0.24, in pre-market trading. By the close of the market, the company's stock had gained 10.55%, or $0.42, to close at $4.40 and gained yet another $0.16, or 3.64%, in after-hours trading.

Diamond Tree prices C$15.3 million deal

Calgary, Alta.'s Diamond Tree Energy Ltd. led a group of energy offerings spurred by the recent surges in oil on Tuesday when it announced the pricing of a C$15.3 million stock offering.

The offering includes 3 million shares at C$5.10 each.

A syndicate of underwriters led by Canaccord Capital Corp. has a greenshoe for up to 500,000 additional shares.

Diamond Tree, an oil and natural gas exploration company, also said on Tuesday that it has received the go-ahead from its board of directors to increase its 2005 capital program to C$22.5 million from C$17.4 million. The proceeds from the proposed offering will be used to fund the increased capital program. The proceeds not used for the capital program will be used for general corporate purposes.

The company's stock gained C$0.05 to close at C$5.30 Tuesday.

The Diamond Tree offering was one of several oil and gas PIPEs priced on Tuesday.

Another Calgary-based oil company arranged two private placements - one brokered, the other non-brokered - as part of a share purchase agreement related to Sheer's proposed acquisition of Rigo Oil Co. Ltd., Vega Oil s.r.l. and C$6 million in units of Peyto Energy Trust.

In the brokered offering, First Associates Investments Inc. will place 6 million units at C$0.60 each for C$3.6 million.

The units are comprised of one share and 0.4 of a series B warrant. The whole warrants are exercisable at C$0.80 each for a year.

In the non-brokered deal, the company plans to sell 4,444,444 units at C$0.45 each.

Those units include one share and 0.2 of a series A warrant. The whole warrants allow for another share at C$0.60 each for two years.

Sheer's stock remained unmoved at C$0.40 Tuesday.

Yet another of Calgary's many oil and natural gas companies, Raven Energy Ltd., arranged a C$3.3 million offering Tuesday.

That deal is comprised of up to 1.5 million flow-through shares at C$2.20 each.

The company intends to use the proceeds for working capital.

On Tuesday, Raven's stock gained C$0.05 to close at C$2.00.

Poseidis stock gains 8.7%

Poseidis, Inc.'s stock continued to rise on Tuesday, gaining more than 8%.

The West Palm Beach, Fla.-based shell company's stock went up $0.006, or 8.7%, to end at $0.075 Tuesday.

The company's stock previously moved more than 9.5% on Friday, gaining $0.006 to close at $0.069. Last Thursday, when the company announced the closing of an $8 million equity line with Cornell Capital LP, its stock gained $0.003, or 5%, to end at $0.063.

Cornell agreed to buy shares from Poseidis over the course of two years at 96% of the lowest closing bid price for five trading days after notice of a draw.

Poseidis, based in West Palm Beach, Fla., is looking to move into the mineral water bottling business.

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