Paramount prices two PIPEs for C$33.75 each; UTS Energy conducts C$15.6 million stock sale

By Sheri Kasprzak

New York, Nov. 10 - In light private placement activity Friday, Paramount Resources Ltd. said it is negotiating two private placements for total proceeds of C$67.5 million.

One market source based in Vancouver, B.C., said that oil prices may have retreated Friday but the gains made Thursday may have been enough to spark the pricing of a few more deals.

Oil prices gave up $1.06 Friday to end at $60.10 per barrel. Oil prices climbed by $1.33 on Thursday to settle at $61.16 per barrel.

"The gains from Thursday were substantial enough to spark some pricing activity," he said. "It may be short-lived but the two [offerings] that I've seen today were significant."

The Paramount deal led activity, but both that offering and a deal from UTS Energy Corp. were comprised of flow-through shares at a 28% premium to the market price.

Paramount's offering

Paramount plans to sell up to 1 million flow-through shares at C$33.75 each, a 28% premium to the company's C$26.35 closing stock price on Thursday. That portion of the deal is being placed through a syndicate of underwriters led by Peters & Co. Ltd.

"A 28% premium is pretty solid for flow-through shares," said the Vancouver, B.C.-based source. "Flow-through shares are, of course, getting more popular as the year winds down."

The market source noted that the tax break associated with flow-through shares is appealing to investors.

The company also plans to conduct another offering with chief executive officer Clayton H. Riddell and his family members for another C$33.75 million, under the same terms.

Riddell did not return calls for comment on the deal by press time Friday.

Proceeds from the deals, which are expected to close Nov. 28, will be used for exploration and development on the company's Canadian properties.

Paramount has tapped the PIPE market for funds before.

In July 2005, the company sold 1.9 million flow-through shares at C$21.25 each for proceeds of C$40,375,000.

In October 2004, the company pocketed C$59 million from the sale of 2 million flow-through shares sold at C$29.50 each.

Paramount, located in Calgary, Alta., is an oil and natural gas exploration, development and production company.

UTS's private placement

In other oil offerings, UTS Energy Corp. plans to raise C$15.6 million in an offering of flow-through shares.

The deal includes up to 2,496,000 shares at C$6.25 each. The shares are being sold at a 28% premium to the company's C$4.87 closing stock price Thursday.

The offering is being placed through a syndicate of underwriters led by RBC Capital Markets and FirstEnergy Capital Corp.

The placement is scheduled to close Nov. 24.

Proceeds will be used for seismic and core drilling expenses.

UTS also is no stranger to the private placement market.

The company sold 1,490,910 flow-through shares at C$5.50 each for proceeds of C$8.2 million in November 2005.

Calgary, Alta.-based UTS is an oil and natural gas exploration company.

Southern Pacific stock slips

Elsewhere in oil news, Southern Pacific Resource Corp.'s stock fell by a penny on Friday after pricing a flow-through unit offering for C$3 million.

The stock ended down 1.72% at C$0.57 Friday (TSX Venture: STP). On Thursday, after the pricing was announced, the stock lost 3.33%, or 2 cents, to close at C$0.58.

The offering includes units of one flow-through share and one half-share warrant at C$0.55 each.

Proceeds will be used to acquire an 80% interest in the 25 contiguous sections of Leismer South Oil Sands.

The company's stock gave up 3.33%, or 2 cents, to close at C$0.58 (TSX Venture: STP).

Southern Pacific, also based in Calgary, Alta., is an oil sands exploration company.

Vasogen stock dips

On Friday, after closing a previously announced $20.304 million registered stock sale, Vasogen Inc.'s stock dropped slightly.

The stock fell by half a penny to close at C$0.485 Friday. On Thursday, the stock dove by 18.33%, or 11 cents, to close at C$0.49 (Toronto: VAS).

In the placement, the company plans to sell units of one share and two warrants at $0.47 each to a group of institutional investors led by Federated Kaufman Fund and RA Capital.

The volume of Vasogen's stock fell off with 165,512 shares traded compared with the average 379,297 shares. On Thursday, 1,135,740 shares traded.

The units include one warrant for two-fifths of a share and one warrant for one-tenth of a share. The whole two-fifths warrants are exercisable at $0.63 each for five years and the whole one-tenth share warrants are exercisable at $0.53 each for six months.

Rodman & Renshaw, LLC was the placement agent.

Proceeds will be used for the development of the company's Celacade technology and for the development of the drug VP025. The rest will be used for working capital.

Vasogen, based in Mississauga, Ont., develops treatments for chronic inflammation underlying cardiovascular and neurological disease.

Metanor raises C$2 million

Looking to other Canadian offerings, Metanor Resources Inc. completed the first closing of a private placement for C$2,064,538.

The company sold 4,129,077 units at C$0.50 each.

The units consist of one share and one half-share warrant. Each whole warrant is exercisable at C$0.55 for two years.

The company plans to sell another 500,000 units. The deal is scheduled to close Nov. 16.

On Friday, the stock closed unchanged at C$0.55 (TSX Venture: MTO).

Val-d'Or, Quebec-based Metanor is a gold exploration company.

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