Jumping oil prices will likely spark energy offerings, sellsiders say; O2Diesel prices two PIPEs

By Sheri Kasprzak

New York, April 20 - As oil prices reached record highs before giving up 4 cents on Thursday, sellsiders based in both the United States and Canada said energy companies may be heading to the PIPE market in the coming days.

"Oil doesn't look like it's going to retreat that much in the foreseeable future," said one Vancouver, B.C.-based sellside source. "Energy stocks are going to improve and that's going to persuade some [energy] issuers [to conduct a PIPE]."

Even though oil prices fell 4 cents to end at $72.14 per barrel, the price is high enough to positively impact energy stocks, the sellsider said.

"The better the energy stocks, the more likely they are to price," said another sellsider, this one based in New York.

Related to the energy sector, O2Diesel Corp. has priced two offerings for total proceeds of $6.5 million.

For one offering, UBS AG agreed to buy 5,333,333 shares at $0.75 each and received warrants for 2,666,667 shares, exercisable at $0.825 each for 42 months.

In the other, Standard Bank plc will buy 3,333,333 shares at $0.75 each. Standard Bank will also receive warrants for 1,666,667 shares, exercisable at $0.825 each for five years.

After the deal was announced Thursday afternoon, O2Diesel's stock dropped 13.23%, or 25 cents, to settle at $1.64, but gained a penny in after-hours trading (Amex: OTD).

The offering comes on the same day that O2Diesel released its year-end earnings report.

For the year ended Dec. 31, the company reported revenues of $195,607, compared with revenues of $127,451 for the year ended 2004. O2Diesel reported a net loss of $7.5 million for the year, compared with a net loss of $6.7 million for 2004.

The two placements are being conducted because, according to the earnings report, O2Diesel will require additional equity to continue as a going concern.

Based in Newark, Del., O2Diesel develops cleaner-burning diesel fuel.

Mart's C$29 million offering

Looking elsewhere in the energy sector, Mart Resources, Inc. priced a C$29 million stock offering to fund two drilling rigs and to fund drilling on the company's Nigerian oil and gas fields.

The placement consists of 29 million shares.

The remainder of the proceeds will be used for working capital.

The placements were announced late in the session Thursday, and Mart's stock fell 3%, or 3 cents, to close at C$0.95 (TSX Venture: MMT).

Mart has tapped the PIPE market before, raising C$34 million on Oct. 7, 2005.

The company issued 40 million shares in that deal at C$0.85 each to U.S.-based and offshore institutional investors.

Calgary, Alta.-based Mart is an oil and natural gas exploration company with projects in Africa.

ProspEx plans C$7 million deal

Another Canadian oil company, ProspEx Resources Ltd., priced a C$7,015,000 stock deal comprised of up to 1.22 million flow-through shares at C$5.75 each.

Peters & Co. Ltd. is the lead agent in a syndicate placing the deal, which is scheduled to close May 5.

Proceeds will be used for the expansion of the company's 2006 capital budget to C$55 million from C$51 million.

The stock closed down 2.44%, or 11 cents, to end at C$4.39 (Toronto: PSX).

Located in Calgary, Alta., ProspEx is an oil and natural gas exploration and development company.

Veridium raises $4.4 million

Leaving the oil sector, Veridium Corp. wrapped a $4.4 million convertible debenture deal with Cornell Capital Partners, LP.

The 5% debentures are due April 1, 2009 and are convertible into common shares at the lower of $0.10 or the average of the three lowest closing market prices for the 30 trading days before conversion.

Cornell received warrants for 75 million shares exercisable for five years. Of the warrants, 10 million shares are exercisable at $0.10 each; 10 million are exercisable at $0.15 each; 10 million are exercisable at $0.20 each; 20 million are exercisable at $0.25 each and 25 million at $0.50 each.

The proceeds will be used for the deployment of Veridium's subsidiary, Veridium Industrial Design Corp., and certain of its technologies including Veridium Industrial Design's corn oil extraction and CO2 BioReactor technologies.

Veridium's stock advanced by 13%, or 2.8 cents, on Thursday to close at $0.243 (OTCBB: VRDM).

Located in Paterson, N.J., Veridium provides waste disposal and recycling programs and technologies.

Discovery Labs stock advances

Discovery Laboratories, Inc. saw its stock climb on Thursday, gaining more than 5.5%, a day after settling a $50 million equity line with Kingsbridge Capital Ltd.

The stock closed up 24 cents, or 5.61%, at $4.52. In after-hours trading, the stock gained another 4 cents (Nasdaq: DSCO).

On Wednesday, the stock closed down 10 cents at $4.28 but rebounded by 3 cents in after-hours trading.

Under the terms of the equity line, Kingsbridge will buy shares of Discovery at discounts ranging from 6% to 10%, depending upon market capitalization. There is a minimum price equal to the higher of $2.00 or 85% of the volume weighted average price for the day before an eight-day pricing period. There is a three-year term on the agreement.

Based in Warrington, Pa., Discovery is a biotechnology company focused on surfactant replacement therapies for respiratory diseases.

CV Therapeutics stock climbs again

CV Therapeutics, Inc.'s stock continued to climb, two days after closing a $200 million equity line with Azimuth Opportunity Ltd.

The stock gained 28 cents, or 1.22%, to end at $23.16 (Nasdaq: CVTX).

On Wednesday, the stock climbed 1.46%, or 33 cents, to settle a $22.88, and on Tuesday, when the equity line was announced, the stock moved up 83 cents, or 3.82%, to close at $22.55 and another 45 cents in after-hours trading.

Under the equity line, Azimuth agreed to buy shares of CV at discounts ranging from 3.8% to 5.8% of the daily volume weighted average price on the date of a draw. The discount will be dependent upon the company's market capitalization at the time of a draw.

Based in Palo Alto, Calif., CV is a biopharmaceutical company focused on developing treatments for cardiovascular diseases.

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