Oil takes a tumble following attacks in London; Nexicon raises $20 million in equity line

By Sheri Kasprzak

New York, July 7 - The anticipated influx of energy offerings in the PIPE market fell through Thursday as the oil market reeled following alleged terrorist attacks on London.

Oil prices dropped $0.98 to close at $60.30 Thursday following news of the London bombings.

Those attacks, some sell-siders here in the United States said, could affect PIPE issuance somewhat.

"I don't think we know what the full [economic] impact will be just yet, so most of us are taking a cautious approach," said one sell-sider based in New York. "Stocks bounced back today so maybe it [volume] will be okay. We're just waiting to see."

"That's fair to say," said another sell-sider. "We're just waiting to see. There have been a few things out there today. Mostly smaller deals, I'd say."

The three major U.S. stock indexes made slight gains Thursday after dipping earlier in the day. Earlier this week, sell-siders, mainly in Canada, predicted a surge of new PIPE offerings following a jump in oil prices over $60 per barrel. For the most part, energy companies remained blasé. Two Calgary, Alta.-based companies, however, bucked the trend and announced rather significant offerings Thursday.

News of those attacks in London, one sell-sider said, may be keeping oil companies away for the time being, however.

"Prices dipped and issuers are probably just waiting it out," he said.

Meanwhile, in the United States, Nexicon, Inc. led private placement news with its announcement that it has received a $20 million standby equity distribution agreement from Cornell Capital Partners, LP.

Under the agreement, Cornell will buy shares from Nexicon at 99% of the lowest volume weighted-average price of the company's stock for five trading days immediately after the notice of a draw. Cornell will retain 5% of each draw.

Based in Albuquerque, N.M., Nexicon is a network controls, security and operational support company.

On Thursday, Nexicon's stock closed down $0.002 at $0.026.

Two large energy deals

Moving back to Canada and to oil offerings, two Calgary-based oil and natural gas exploration companies announced offerings Thursday.

The largest, from Winstar Resources, is for C$21.35 million and includes 30,333,334 subscription receipts at C$0.45 each and 17,111,111 shares at C$0.45 each.

The subscription receipts allow for one common share upon the closing of Winstar's acquisition of Athanor, BV.

First Associates Investments Inc. and Haywood Securities Inc. were the placement agents for the receipts.

The proceeds from both the receipts and the common shares will be used to fund exploration and development activities in Canada, Tunisia and Hungary, retire debt and pay costs associated with the acquisition.

Winstar's stock closed unchanged at C$0.60 Thursday.

The second-largest oil offering Thursday came from Terra Energy Corp., which announced its plans to raise C$15,299,800 in a deal comprised of 3.15 million flow-through shares and 5,294,000 units at C$2 each and C$1.70 each, respectively.

The units include one share and one half-share warrant, the whole of which is exercisable at C$2.10 each for one year.

Placement agents Canaccord Capital Corp. and Research Capital Corp. have an over-allotment option for up to C$3 million in securities, up to half of which may be flow-through shares.

The proceeds will be used for drilling on properties in the Fort St. John core area and for the company's 2005 Canadian exploration program and its 2006 exploration program.

Terra's stock closed down C$0.08 at C$1.61 Thursday.

Incentra's $9 million note offering

Back in the United States, Incentra Solutions, Inc. closed a $9 million convertible revolving note offering on behalf of two of its subsidiaries.

Laurus Master Fund, Ltd. bought the note, which bears interest at Prime plus 100 basis points and matures in three years.

The initial amount available to the subsidiaries is $6 million until Dec. 31, 2005.

The first $3 million in principal is convertible into common shares at $2.05 each, the second $3 million in principal is convertible at $2.56 each and the final $3 million is convertible at $2.99 each.

Laurus also received a warrant for up to 400,000 shares, exercisable at $2.63 each through June 30, 2012.

Based in Boulder, Colo., Incentra provides storage management and data protection services to broadcasters and other clients.

The company's stock closed unchanged at $1.93 on Thursday.

Spur Ventures raises C$20 million

Spur Ventures, Inc., a Vancouver, B.C.-based phosphate mining and fertilizer production company, plans to raise C$20 million in a unit offering, the company said Thursday.

The offering includes 11,428,572 units at C$1.75 each.

The units consist of one share and one half-share warrant. The whole warrants allow for the purchase of an additional share at C$2 each for two years.

A syndicate of placement agents led by Raymond James Ltd. has an over-allotment option for up to 5,714,286 additional units, exercisable for 48 hours before closing.

The proceeds will be used to accelerate the development of projects in China. The remainder will be used for general corporate purposes.

Spur's stock closed down C$0.07 at C$1.73 Thursday.

SmarTire's stock slips

A day after wrapping $190 million worth of private placements, SmarTire Systems Inc.'s stock took a slight dip Thursday.

The company's stock slid $0.001 to end at $0.129.

On Wednesday, when the closings were first announced, the company's stock remained unchanged at $0.13.

SmarTire received a standby equity distribution agreement, priced at 98% of the lowest closing bid price five trading days after notice of a draw. The company also sold convertible debentures with a conversion price at $0.1125 each.

SmarTire, based in Richmond, B.C., develops technologies used to monitor tire pressure.

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