Eagle Rock Energy pockets $204 million from trust units; Global Energy wraps PIPE

By Sheri Kasprzak

New York, July 12 - Eagle Rock Energy Partners, LP led PIPE news on Thursday with a $204 million offering of common trust units as part of its acquisitions of Escambia Asset Co., LLC and Redman Energy Holdings, LP and Redman Energy Holdings II, LP.

The company issued 9,230,770 common units at $22.10 each to a group of investors led By Lehman Brothers MLP Opportunity Fund LP and including New Mountain Vantage; Perry Capital, LLC; Harvest Fund Advisors, LLC; RCH Energy MLP Fund, LP; and Strome MLP Fund.

On Thursday, Eagle Rock's stock gained 8%, or $1.92, to close at $25.93 (Nasdaq: EROC).

Proceeds to fund acquisitions

The proceeds will be used to partially fund its acquisition of Escambia and of Redman Energy Holdings, LP and Redman Energy Holdings II, LP, another natural gas company. The combined purchase price is expected to be $420 million.

"The EAC and Redman transactions solidify Eagle Rock's presence in the upstream sector, enabling us to expand our focus on acquisitions of operated properties," said Joseph Mills, chief executive officer of Eagle Rock, in a statement.

"Our upstream management team has extensive experience in operating oil and gas producing properties including the operation of assets similar to those acquired in the EAC and Redman transactions. In addition, the midstream assets acquired in the EAC transaction validate the advantages of our dual platform upstream and midstream model. Given Eagle Rock's strong operating and commercial capabilities in both upstream and midstream sector, these acquisitions provide unique identified upside opportunities."

Houston-based Eagle Rock is a midstream and upstream natural gas and oil gathering, processing and transporting company.

Global Energy's offering

Elsewhere in the energy sector, Global Energy, Inc. wrapped the initial tranche of its planned $4 million private placement of secured convertible debentures, selling $500,000 in principal of the debentures.

The 5% debentures due July 6, 2010 are convertible into common shares at $2.20 each. The conversion price is a 7.3% premium to the company's $2.05 closing stock price on Wednesday.

The investors will receive warrants for 300,000 shares, exercisable at $2.35 each for five years, and 300,000 shares, exercisable at $2.50 each for five years.

The stock remained unmoved at $2.05 on Thursday (OTCBB: GEYI).

New York-based Global Energy develops alternative energy technologies.

Stocks jump

In the broader market, stocks climbed, but sellsiders said this probably hasn't impacted PIPE volume.

"Stocks go up, stocks go down," he said. "It doesn't really seem to be affecting things too much."

Another sellsider said stocks do sometimes seem to impact volume but didn't think this is the case now.

"In a busier time of the year, it might make a difference," he said. "Right now, I don't think it really matters. I honestly think it's just a slow summer."

The Dow Jones Industrial Average gained 283.86 to close at 13,861.73. The Nasdaq composite index closed up 49.94 to end at 2,701.73, and the Standard & Poor's 500 composite index climbed 28.94 to settle at 1,547.70.

Allied Nevada Gold upsizes PIPE

In other news, Allied Nevada Gold Corp.'s stock rose slightly after the company upsized its private placement of units to C$17,001,600.

The stock gained 2 cents on Thursday to close at C$4.75 (Toronto: ANV).

The company intends to sell 3.696 million units of one share and one warrant at C$4.60 each. The warrants are exercisable at C$5.75 each for two years.

The offering priced on June 25 as a C$15 million offering of 3,260,870 units under the same terms.

Proceeds from the non-brokered deal will be used for mine development, working capital and general corporate purposes.

Located in Reno, Nev., Allied is a gold exploration company.

Forum stock slips

A day after the company closed a $3.5 million private placement of stock, Forum National Investments Ltd.'s stock fell 15 cents, or 4.05%, to close at $3.55 (Pink Sheets: FMNLF) on Thursday.

The company sold shares at $1.00 each to Aliya Life Settlement International, LLC.

The offering was the second such deal in the past month. Aliya bought $2.75 million in shares at $0.50 each on July 5. In that deal, Teeny Acquisitions LLC also bought $2.75 million in shares. After that deal closed, the stock ended at $0.99.

Proceeds from both deals will be used for the company's entry into the life settlement sector by creating a life settlement division.

In other news, Forum announced Wednesday its stock option plan. The plan includes 2.835 million shares, exercisable at $1.00 each for five years and is geared toward certain directors, officers, employees and consultants.

Vancouver, B.C.-based Forum National is an insurance company.

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