Exploration Co. gears up to settle $31.5 million PIPE; oil prices slide but not enough to keep issuers away

By Sheri Kasprzak

New York, March 31 - The Exploration Co.'s stock fell more than 9.5% Friday as oil prices dipped and as the company announced the pending completion of a $31.5 million private placement of stock priced at a 15.5% discount to market.

The stock fell 9.57%, or $1.19, Friday to end at $11.24 (Nasdaq: TXCO). In after-hours trading, the stock shed another 3 cents or 0.27%.

In the placement, a group of institutional investors agreed to buy 3 million shares at $10.50 each, a 15.5% discount to the company's $12.43 closing stock price on March 30.

A.G. Edwards, Inc. and Harris Nesbitt Corp. were the placement agents for the deal.

Proceeds will be used for drilling at the Glen Rose Porosity and San Miguel tar sand plays in the Maverick Basin, to fund drilling on its Marfa Basin property in Texas and fund the acquisition of a drilling rig. The remainder will be used for general corporate purposes.

The company will have 32.9 million outstanding shares when the deal closes.

Looking to the company's latest earnings statement, The Exploration Co. reported a net income of $13.74 million for the year ended Dec. 31, 2005, compared to a net income of $2.80 millioin for 2004.

Located in San Antonio, The Exploration Co. is an oil and natural gas exploration and development company.

The offering comes as oil prices backed off Friday after seesawing all week. On Friday, oil prices lost 52 cents to end at $66.63 per barrel.

However, a substantial jump in prices on Tuesday may have been substantial enough to prompt energy issuers to get their deals priced before prices dip back below $65 per barrel, one market source said.

On Tuesday, prices climbed $1.91 to close at $66.07, but dipped on Wednesday. On Thursday, oil rebounded, gaining 70 cents to end $67.15 per barrel.

"We've had a couple of days of pretty significant jumps in oil [prices]," said the sellside market source who is familiar with the natural resources sector. "I think the positive outweighs the negative days. Energy issuers are looking for that right time to get in and price before things slip too far. I'd say the threshold at this point is about $65 [per barrel]. Once it slips below that, I think they'll probably back off a bit."

Tanganyika Oil Co. Ltd., another oil and natural gas explorer, priced a C$58,179,000 private placement of 4.3 million shares.

The price per share - C$13.53 - represents a 3.28% premium to the company's C$13.10 closing stock price on March 30.

After the deal was announced Friday afternoon, Tanganyika's stock gained C$1.00, or 7.63%, to settle at C$14.10 (TSX Venture: TYK).

Ohman J:or Fondkommission AB and GMP Securities LP were the placement agents for the deal.

Proceeds will be used for the development of oil and natural gas properties in Syria and for general corporate purposes.

Based in Calgary, Alta., Tanganyika is an oil and natural gas exploration company.

Intelligroup wraps $10 million deal

Elsewhere in PIPEs, Intelligroup, Inc. settled a $10 million stock offering with two of its majority shareholders.

Softbank Asia Infrastructure Fund, LP and Venture Tech Assets Pvt. Ltd. bought 6,666,667 shares at $1.50 each.

As of Oct. 28, 2005, Intelligroup had 35,102,440 outstanding common shares.

SAIF now owns 36% of Intelligroup's outstanding stock and Venture Tech owns 26%.

"We continue to believe that Intelligroup is extremely well positioned to benefit from the increasing demand for onsite and offshore [enterprise resource planning] implementation and support services," said Ravi Adusumalli, general partner of Softbank Asia Infrastructure Fund, in a statement. "Further, we believe that this additional investment will contribute to the momentum that the new management team has built over the past few months."

"This additional investment by SAIF [Softbank Asia Infrastructure Fund] and Venture Tech is a testament to the confidence that our existing shareholders have in the company and its ability to successfully execute its business strategy," said Intelligroup CEO Vikram Gulati, in the new release.

The company's stock fell a penny on Friday to end at $1.51 (Pink Sheets: ITIG).

According to the company's latest earnings report, Intelligroup reported a net loss of $5,553,000 for the quarter ended Sept. 30, 2005, compared to a net income of $1,894,000 for the same quarter of 2004.

Intelligroup, based in Edison, N.J., develops information technology products for corporations and public sector organizations.

Northwest Biotherapeutics' stock dives on PIPE

After announcing the pending completion of a $5.53 million private placement of stock at a 75.4% discount to market, Northwest Biotherapeutics, Inc.'s stock dropped 21.05%, or 12 cents, to end at $0.45 (OTCBB: NWBT).

Some institutional investors agreed to buy 39.5 million shares at $0.14 each, a 75.4% discount to the company's $0.57 closing stock price March 30.

Northwest will also issue warrants for 19.7 million shares, exercisable at $0.14 each for five years.

C.E. Unterberg, Towbin, LLC is the placement agent.

The deal was scheduled to close Friday.

Proceeds will be used for clinical trials and for general corporate purposes.

Based in Bothell, Wash., Northwest develops immunotherapy products used to treat cancer.

Guyana Goldfields prices C$15 million PIPE

As metal prices zoomed on the week, Guyana Goldfields Inc. negotiated a C$15 million unit offering to lead private placement activity in Canada Friday.

Gold prices settled down on Friday, losing $4.70 to end at $582.00 per ounce after climbing to $586.70 per ounce, a 25-year high, on Thursday.

The Guyana Goldfields placement is composed of 3,703,704 units at C$4.05 each, a 5.8% discount to the C$4.30 closing stock price March 30.

The units are comprised of one share and one half-share warrant with each whole warrant exercisable at C$5.50 for two years.

Underwriter Sprott Securities Inc. has a greenshoe for up to 1,234,568 additional units.

The placement is scheduled to close April 20.

Proceeds will be used for exploration on the company's Aurora mine properties and for working capital.

Guyana Goldfields' stock fell 14 cents, or 3.26%, to settle the day at C$4.16 (Toronto: GUY).

Toronto-based Guyana Goldfields is a gold exploration company.

Stella-Jones' C$13.5 million private placement

Elsewhere in Canada, Stella-Jones Inc. prepared to close a C$13,515,000 private placement and priced another deal for C$4,505,000.

Stella Jones International SA and Fonds de Solidarite des travailleurs du Quebec agreed to buy 795,000 subscription receipts at C$17.00 each, a 5% discount to the company's C$17.90 closing stock price March 30.

In another deal, Stella-Jones intends to sell 265,000 receipts at C$17.00 each through underwriter Acumen Capital Finance Partners Ltd.

The two placements are scheduled to close May 2.

After the deals were announced Friday morning, Stella-Jones's stock ended the day up 60 cents, or 3.35%, to close at C$18.50 (Toronto: SJ).

Proceeds will be used to partially fund the company's acquisition of Bell Lumber & Pole Co.

The receipts are exchangeable on a one-for-one basis for common shares once the acquisition is completed.

Stella-Jones, based in Westmount, Quebec, produces and markets treated wood products specializing in treated railway ties.

SulphCo's stock gains 6.6%

After closing a $27.22 million stock offering Thursday, SulphCo, Inc.'s stock advanced for the second straight session.

SulphoCo's stock gained 6.6%, or 52 cents, to settle at $8.40 (AMEX: SUF).

On Thursday, when the settlement was announced, the company's stock gained 5.91%, or 44 cents, to close at $7.88.

A group of investors, including investors in Europe, bought units of one share and one warrant at $6.805 each, the average unit price between March 8 and March 22. The price per unit was an 8% discount to the company's $7.44 closing stock price March 29.

Half of the units, which include one share and one warrant, were sold to investors of a July 2004 private placement and the other half to investors in Europe.

SulphCo, based in Sparks, Nev., develops technologies to upgrade sour heavy crude oil into sweeter, lighter crudes.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.