Hydrogen Engine stock lifts on $31.95 million placement; rising oil prices sparks PIPE pricing frenzy

By Sheri Kasprzak

New York, June 9 - To round out a relatively light week for PIPE action, Hydrogen Engine Center, Inc. priced a $31.95 million stock offering, pushing its stock up more than 6% on the day.

The stock gained 6.08%, or 90 cents, to close the day at $15.70 (OTCBB: HYEG).

The offering includes up to 3 million shares, at $10.65 each, a 28% discount to the company's $14.80 closing stock price on Thursday.

As of April 21, the company had 25,162,905 outstanding common shares.

The deal was first announced on May 22, without pricing terms, for up to 1.5 million shares.

Looking to the company's latest earnings statement, Hydrogen Engine reported a net loss of $918,457 for the quarter ended March 31, compared with a net loss of $46,590 for the same quarter of 2005.

"Since inception, the company has incurred substantial operating losses and expects to incur additional operating losses into the foreseeable future," said the earnings statement. "The company has financed operations since inception, primarily through equity and debt financings.

"At March 31, 2006, the company has reported accumulated losses of $2,299,145 and has cash and cash equivalents available to fund future losses and developments of $969,506. The company anticipates its expenses will significantly increase as it commences operations in its new manufacturing facility, including additional personnel, product development, inventory purchases and additional construction costs.

"Based on current projections, existing capital will fund the company's operations through June 2006. This timeframe may be even shorter if events occur which negatively effect the company's operations."

Hydrogen Engine, based in Algona, Iowa, manufactures internal combustion engines for the industrial and power-generation sector.

Oil prices climb

Elsewhere, oil prices climbed on Friday, sparking a slew of oil offerings priced in Canada.

"What's really happening is all the deals that were ready to price before oil [prices] started to slip are getting priced now," said one market source based in Vancouver, B.C. "We've got a backlog of sorts."

Oil prices advanced by $1.28 on Friday to end the session at $71.63 per barrel.

Heading up the offerings was a C$25,029,000 offering priced by Canoro Resources Ltd.

Canoro intends to sell up to 24.3 million shares at C$1.03 each, a 4.6% discount to the company's C$1.08 closing stock price on Thursday.

On Friday, the stock lost 2 cents, or 1.85%, to end at C$1.06 (TSX Venture: CNS).

A syndicate of agents led by Jennings Capital Inc. has a greenshoe for up to 4.86 million shares.

The placement is scheduled to close July 14.

Proceeds from the deal will be used for exploration and development on the company's existing properties in northeastern India and for the acquisition of new properties in India. The remainder will be used for general corporate purposes.

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

In other oil offerings, Enterprise Oil Ltd. priced a C$7.5 million deal it first announced in May, without terms, as a C$25 million offering.

The placement includes up to 4,166,667 units at C$1.80 each.

The units consist of one share and one warrant. Each warrant is exercisable at C$2.50 for one year.

The deal is being placed through a syndicate of agents led by Research Capital Corp.

The placement is scheduled to wrap up on June 19.

The stock fell 4 cents, or 2.06%, to settle at C$1.90 (TSX Venture: EON).

The proceeds will be used for potential acquisitions and for working capital.

Enterprise is based in St. Albert, Alta.

Questerre's C$7 million deal

Calgary-based Questerre Energy Corp. priced a C$7,001,300 offering comprised of 6,797,378 flow-through shares. The shares are priced at C$1.03 each,

A syndicate of underwriters led by Dundee Securities Corp. has a greenshoe for up to 2,912,621 flow-through shares.

On Friday, the company's stock gained 3 cents, or 3.61%, to end at C$0.86 (Toronto: QEC).

Proceeds will be used for drilling on the company's oil wells.

Another Calgary-based oil explorer, Yoho Resources Inc., arranged a non-brokered PIPE for C$5,652,500. The deal includes up to 850,000 flow-through shares at C$6.65 each.

The deal is scheduled to close June 23.

Yoho's stock closed unchanged on Friday at C$4.99 (TSX Venture: YO).

Proceeds will be used for exploration.

Also, NuLoch Resources Inc. priced and then upsized a C$4,501,050 private placement on Friday.

The offering includes 2,433,000 class A flow-through shares at C$1.85 each, a 23% premium to the company's C$1.50 closing stock price on June 8.

Underwriter GMP Securities LP has a greenshoe for up to 270,500 shares. The company expects that the greenshoe will be exercised in full.

The offering is slated to close June 29.

The deal priced early Friday as a C$3,500,200 offering of 1,892,000 shares.

Proceeds will be used for the company's capital expenditure program.

On Friday, the stock remained unchanged at C$1.50 (TSX Venture: NLR).

NuLoch is also a Calgary-based oil company.

Western Financial plans C$10 million deal

In other PIPE activity in Canada, Western Financial Group Inc. said it plans to raise C$10 million in a private placement of convertible preferred stock.

The offering includes up to 100,000 preferreds. The 6.75% preferreds are convertible into common shares at C$3.60 each. The preferreds are redeemable after the third anniversary at 95% of the average 20-day trading price before redemption.

The company's stock gained 6 cents, or 1.97%, to close at C$3.10 (Toronto: WES).

The offering is being placed through a syndicate of agents led by Jennings Capital Inc.

Based in High River, Alta., Western Financial operates financial service companies in western Canada.

Earth Biofuels stock slips

Earth Biofuels, Inc. watched its stock drop by 4.82% on Friday after wrapping a $10 million private placement on Thursday.

The company's stock fell 12 cents to close at $2.37 (OTCBB: EBOF).

On Thursday, the stock dropped 4.23%, or 11 cents, to close at $2.49.

Earth Biofuels issued 8% notes, which are convertible into common shares at the greater of $1.00 each or 75% of the market price on the initial maturity date.

Earth Biofuels, based in Dallas, develops alternative fuels, including biodiesel.

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