Sonoran Energy to raise up to $10 million; PYR Energy wraps $5.2 million stock deal

By Sheri Kasprzak

New York, Oct. 5 - Sonoran Energy, Inc. led private placement news on Wednesday, announcing its plans to raise a maximum of $10 million and a minimum of $7 million in the PIPE market.

The details of the offering have not yet been released, but Sonoran, a Phoenix-based oil and natural gas explorer, is no stranger to the market.

During the second quarter of 2005, the company raised a total of $4,032,411 in six separate private placements.

In the largest - for $1.95 million - the company issued 2 million shares at $0.98 each.

As of July 31, the company had 37,269,920 outstanding shares.

Its latest offering has received some commitments already from institutional and accredited investors, according to a statement from the company. The largest commitment so far is for $2.5 million.

Proceeds will be used for development of the company's operations in the United States and to support its projects in the Middle East.

The company's stock lost $0.11, or 11.11%, to close at $0.88 Wednesday.

According to its latest earnings report, Sonoran sustained a net loss of $1,114,247 for the quarter ended July 31, 2005, up from a net loss of $696,003 for the corresponding quarter in 2004.

Looking elsewhere in the energy sector Wednesday, PYR Energy Corp. announced the closing of a $5.2 million tranche of a stock offering for up to $8,226,400.

In the first closing of the deal, the Denver-based energy company sold 4 million shares at $1.30 each to funds managed by Wellington Management Co. LLP.

As of May 31, PYR had 31,625,259 common shares outstanding.

The company's earnings have improved, if slightly, over the second quarter of 2004. For the quarter ended May 31, 2005, PYR reported a net loss of $314,973, down from a net loss of $391,890 in the second quarter of 2004.

PYR is based in Denver. Its stock dipped $0.10 to close at $1.65 Wednesday.

Stocks, oil stunt PIPE offerings

Sellsiders said Wednesday that a combination of tumbling stocks and lower oil prices made for a light day of volume.

"Just look at the conditions," said one market source. "We have stocks off on [economic] data; oil's down again. It's not a really good day to price in most sectors, I would think."

Another sellside source agreed with that estimation.

"It really all points back to [rising] oil [prices] from last week," said that market source. "It hit the [U.S.] economy pretty hard and stocks are suffering now."

Even Canadian offerings were sparse Wednesday as lower oil impacted not only energy offerings but mineral deals as well.

"Most of what we do is oil or natural resources," said a sellsider north of the border. "With oil off, energy stocks and mineral stocks are hurting."

The good news, one market source said, was that the broader stock market will likely improve now that oil prices have dropped.

"[It] won't happen overnight, but it will help us [the PIPE market] in the long run because stocks overall will improve, I believe anyway," he said.

As oil slipped $1.11 to finish at $62.79 per barrel Wednesday, the Dow Jones Industrial Average dove 123.75 to end at 10,317.36; the Nasdaq composite index fell 36.34 to close at 2,103.02, and the Standard & Poor's 500 composite index lost 18.08 to close at 1,196.39.

Almaden's new deal

Almaden Minerals Ltd., a Vancouver, B.C.-based mineral exploration company, priced a new offering for up to C$5.95 million. The company had, earlier this week, terminated a previously announced C$5.10 million unit offering.

The new deal includes up to 3.5 million units at C$1.70 apiece.

The units are comprised of one share and one warrant, and the warrants are exercisable at C$2.10 each for two years.

The offering is expected to close Oct. 28.

Proceeds will be used for general corporate purposes.

The company announced the deal late Wednesday, and the company's stock gained C$0.10 to close at C$1.88.

Almaden's previously announced C$5.1 million unit offering, priced on Sept. 22, called for the sale of up to 3 million units at C$1.70 each. Those units included one share and one warrant. The warrants in that offering were exercisable at C$2.10 each for two years.

Strike Petroleum's C$3.9 million offering

Moving to the energy sector, Strike Petroleum Ltd. completed the first tranche of its proposed C$3,934,000 offering.

In the first closing, the company issued 1,792,000 flow-through shares at C$0.80 each.

The company intends to sell another 3,125,000 shares through placement agent Blackmont Capital Inc. The first tranche was non-brokered.

Proceeds will be used for the company's fall drilling program.

The company's stock gained C$0.01 to close at C$0.59 Wednesday.

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

Whitehall's stock continues to sink

Despite commitments from two institutional investors for an $80 million financing, troubled jewelry retailer Whitehall Jewellers, Inc.'s stock dipped for the second straight session.

The Chicago-based company's stock lost $0.03, or 2.56%, to close at $1.14 Wednesday.

On Tuesday, after the company announced that Prentice Capital Management LP and another investor agreed to buy $50 million in convertible notes, the company's stock dipped more than 25%, sliding $0.41 to end at $1.17.

The notes, which will be issued before Jan. 31, 2006, will be convertible into common shares at $0.75 each.

The two investors have also agreed to finance a $30 million bridge loan.

"I would suggest that until they have the money in hand and they've managed to settle all their legal woes, their stock is probably not going to be doing that well," said one market source who saw the deal. "You can't just put a Band-Aid on the problem and expect that your stock will magically improve - which is not to say that this is why they're conducting the financing. It's the beginning to several steps they'll need to bail themselves out."

Matrix Service stock drops 3.2%

A day after wrapping a $14.95 million stock offering, Matrix Service Co.'s stock dipped slightly Wednesday.

The company's stock slipped $0.26, or 3.19%, to close at $7.88 after making slight gains on Tuesday.

Matrix's stock gained $0.03, or 0.37%, to close at $8.14 Tuesday after the announcement of the completion of its private placement. In after-hours trading Tuesday, the company's stock lost $0.12.

Matrix, based in Tulsa, Okla., sold shares at $6.50 each.

The company provides construction, repair and maintenance services to the petroleum, petrochemical and pipeline industries.

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