Two coal-bed methane companies wrap private placements; oil climbs, might impact PIPEs, sellsider says

By Sheri Kasprzak

New York, Sept. 26 - BPI Industries Inc. led private placement news on Monday as one of two coal-bed methane exploration companies to seal PIPE offerings.

BPI, based out of Cleveland, issued 18 million shares at $1.7057 to five institutional investors. As of Sept. 1, the company had 44,317,961 outstanding common shares.

The company said in a statement issued Monday afternoon that it had originally planned to raise only $20 million to $25 million from the offering.

The closing was announced Monday afternoon, and BPI's stock slipped $0.03 to finish at $1.81.

Proceeds from the deal, placed through agents KeyBanc Capital Markets and Sanders Morris Harris, will be used to develop the company's projects in the Illinois Basin.

"Today's closing represents a significant milestone in our mission to further develop and prove up greater portions of our mineral rights," said James Azlein, the company's president and chief executive officer, in a statement. "This financing - our second in the past nine months - enables us to accelerate our aggressive well-drilling schedule. All of our wells that have initiated production continue to ramp up gas flow rates consistent with projections."

In January, BPI completed a $13 million unit offering with 50 investors, selling 5.2 million units at $2.50 apiece.

The units in that deal were comprised of one share and one warrant. The warrants were exercisable at $1.50 each for two years.

Sanders Morris Harris was placement agent for that offering as well.

Far East raises $10.9 million

Another coal-bed methane exploration company, Houston's Far East Energy Corp., finished a $10.9 million private placement of stock on Monday.

The company issued 12,111,111 shares at $0.90 each. On July 27, the date of the company's latest earnings report, Far East had 77,459,910 outstanding common shares.

After the settlement was announced Monday morning, Far East's stock lost $0.03 to close at $1.37.

Bill Conboy, a spokesman for the company, did not immediately return phone calls requesting comment.

The proceeds will be used for coal-bed methane drilling on its properties in China and for working capital.

Financially, Far East's net losses have more than doubled over the second quarter of 2004.

For the quarter ended June 30, 2005, the company reported a net loss of $2,498,000, up from a net loss of $1,192,000 for the corresponding quarter in 2004.

"Based on funds currently available to use and escrowed funds that we expect will become available to us during 2005, management believes that we have adequate cash resources to fund our operations and exploration and development operations in China through late 2005," said the company's earnings statement.

"However, to continue to operate and explore and develop our projects in China, we will need to raise additional funds before the end of 2005.

"Management is currently seeking to raise additional funds through equity offerings or debt. Our ability to continue as a going concern depends upon our ability to raise substantial funds for use in our development activities and upon the success of our planned exploration and development activities."

Far East has coal-bed methane exploration operations in Beijing, Kunming and Taiyhuan City in China.

Higher oil may affect PIPE offerings

New private placement offerings out of the United States may be impacted by higher oil prices this week, said one sellside source.

Oil climbed on Monday, gaining $1.31 to finish at $65.50 per barrel, as heating oil demands increase as temperatures drop.

"This time, it's not just about the weather, or a hurricane, or anything else," said the sellsider. "It's about heating oil. As it gets colder, the demand for heating oil is going to go up, naturally. I don't necessarily think that other factors won't bring oil prices down, but at least for a while this could bring stocks down to a point where [PIPE issuers] may hold off."

Stocks on Monday, however, appeared to be unaffected by the substantial jump in oil prices. The Dow Jones Industrial Average gained 24.04 to finish at 10,443.63; the Nasdaq composite index closed up 4.62 at 2,121.46 and the Standard & Poor's 500 composite index edged up 0.34 to end at 1,215.63.

Powerhouse wraps $6.05 million deal

Moving to the technology sector, Powerhouse Technologies Group Inc. settled a $6,052,928 private placement of stock on Monday.

The company issued 19,910,950 shares at $0.304 each and issued warrants for 10,900,400 shares.

Half of the warrants are exercisable at $0.04 each for three years and the remaining half is exercisable at $0.48 each for three years.

The closing was announced Monday morning, and Powerhouse's stock dove 25.33%, or $0.19, to end the day at $0.56.

Of the proceeds raised from the offering, $833,000 comes from the conversion of a short-term bridge loan into common shares.

Proceeds will be used for working capital and general corporate purposes.

On the earnings front, Powerhouse's net losses increased slightly over the first quarter of 2005. For the quarter ended June 30, 2005, the company reported a net loss of $1.530 million, up from a net loss of $1.383 million in the first quarter of 2005.

Based in Redwood City, Calif., Powerhouse develops mobile computing software.

Eurasian prices C$3.9 million unit deal

Heading up private placement activity in Canada, Vancouver, B.C.-based Eurasian Minerals Inc. has announced its plans to head to the PIPE market with a C$3.9 million unit offering.

The non-brokered deal is comprised of up to 3 million units at C$1.30 each.

The units include one share and one warrant. The warrants are exercisable at C$2.00 each for two years.

The proceeds will be used for exploration and property acquisitions in Turkey, the Kyrgyz Republic and Serbia. The rest will be used for working capital.

Eurasian is a mineral exploration company.

On Monday, the company's stock gained C$0.04 to close at C$1.40.

Education Realty stock gains 2.6%

After announcing the pending settlement of a $70 million private placement, Education Realty Trust Inc.'s stock edged up on Monday.

The company's stock gained $0.44, or 2.63%, to close at $17.14.

On Friday, when the offering was first announced, Education Realty's stock gained $0.22 to end at $16.70.

The company plans to issue shares at $16.00 each on Sept. 30.

Based in Memphis, Education Realty acquires and operates collegiate student housing.

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