Oilex eyes exploration funds; Strategic sells units; Commercial Solutions inks mezzanine deal

By Stephanie N. Rotondo

Portland, Ore., Oct. 16 - The private placement market saw many deals from the resource exploration arena Friday.

For example, oil and gas explorer Oilex Ltd. said it would raise more than A$10 million for exploration use via a private placement of stock.

Another oil and gas company Strategic American Oil Corp. announced it had completed a private placement of equity units. The company took in $2.5 million from the financing.

Elsewhere, Commercial Solutions Inc. secured C$3 million in mezzanine financing. A company spokesperson said the funds would provide working capital through the remainder of the year.

Z Trim Holdings Inc. raised more than $2.5 million by privately placing convertible notes. The bulk of the notes were sold to a single investor, with whom the company has partnered with in its effort to turn cash flow positive.

Also, Altima Resources Ltd. brought a C$2.4 million private placement of units to market. The proceeds will be used for exploration and development.

Oilex to raise exploration funds

Oilex, a West Perth, Australia-based resource exploration company, said it arranged an A$10.12 million private placement of ordinary shares.

The company will issue 44 million of the shares at A$0.23 per share.

The funds will be used for the company's exploration an appraisal activities in regard to its oil and gas assets.

"This is a very exciting period for Oilex with its participation in the imminent drilling of two very attractive large oil prospects to be drilled this year in the Timor Sea JPDA 06-103 contract area," said Bruce McCarthy, managing director, in a press release.

"Windows of opportunity may also develop in the near term in WA388P, Australia to expedite further evaluation of this emerging prospective gas block and in the West Kampar PSC, Indonesia to resume the work program."

Oilex's stock (Australia: OEX) closed at A$0.28.

Strategic settles unit placement

Strategic American Oil raised $2.5 million from a private placement of equity units, the company said in a regulatory filing and subsequent press release.

The deal settled on Oct. 15.

Under the terms of the financing, Strategic American sold 12.5 million units containing one common share and one warrant. The units sold at $0.20 each and warrants are exercisable at $0.35 for five years.

Of the units sold, 10.89 million were issued for cash proceeds of $2.18 million and 1.61 million were sold in exchange for the retirement of $322,000 in debt.

Strategic's shares (OTCBB: SGCA) fell a penny, or 2.63%, to $0.37. Market capitalization is $10.5 million.

Strategic American Oil is a Corpus Christi, Texas-based natural resource exploration and production company.

Commercial Solutions gets financing

Commercial Solutions secured C$3 million via a private placement of 18% subordinated secured promissory notes.

The deal closed Oct. 15.

In addition, investors received warrants equal to 1.2 million common shares, exercisable at C$0.31 for three years.

"We are being caught in the marketplace, like everyone else, with a soft revenue stream," said Jim Barker, president and chief executive officer, in an interview with Prospect News. As such, the company wanted to make sure its bank facility was in place to fund operations through the end of the year.

Proceeds will be used for working capital, as well as for the repayment of outstanding senior security debt.

Commercial's equity (Toronto: CSA) declined 2 cents, or 6.06%, to C$0.31. Market capitalization is C$6.43 million.

Commercial Solutions is an Edmonton, Alta.-based provider of industrial distribution services to maintenance, repair and overhaul operations and original equipment manufacturer clients.

Z Trim raises $2.61 million

Z Trim Holdings took in $2.61 million from a private placement of convertible notes.

Brightline Ventures I, LLC was in the investor. The deal settled on Oct. 15.

The Mundelien, Ill.-based company sold 185.25 million units to Brightline, with each unit holding a $10,000 two-year 8% convertible senior secured promissory notes and one warrant equal to 15,000 common shares.

The warrants are exercisable at $1.50 per share. Each convertible note can be converted into 10,000 common shares at $1.00 per share.

Z Trim sold another 75.3 million units to other investors for proceeds of $753,000.

"We are extremely pleased with the terms and extremely pleased to have Brightline as a partner," Brian Chaiken, chief financial officer, told Prospect News. Chaiken said the company had considered several potential investors, but decided on partnering with Brightline.

"They are a true partner, as they see value over the long-term," he said.

Chaikan explained that the financing was done at this time as the company was "running out of capital." He said that the company is not yet profitable and thus the financing was a step toward becoming cash flow positive.

He added that proceeds would be used for working capital and for capital expenditures.

Z Trim's stock (Amex: ZTM) closed unchanged at $0.07.

Z Trim Holdings manufactures Z Trim, a food ingredient made from corn hulls that is used as a fat replacement or emulsifier.

Altima plans unit sale

Altima Resources will conduct a C$2.4 million private placement of units, according to a press release.

The company will sell 10 million units consisting of one common share and one warrant. The units will be issued at C$0.12 and each warrant is exercisable for two years at C40.20 in the first year and at C$0.40 in the second.

The company will also sell 10 million flow-through units at C$0.12 each. The units will hold one flow-through share and one half-share warrant. Whole warrants are exercisable for two years at C40.278 in the first year and at C$0.40 in the second.

Proceeds will be used for exploration, development and general working capital.

Calls seeking comment went unreturned Friday.

Altima's equity (TSX Venture: ARH) gained C$0.005, or 3.13%, to C$0.265. Market capitalization is C$10.8 million.

Altima Resources is a Vancouver, B.C.-based exploration stage company.

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