Gastar negotiates $50 million stock offering; oil offerings sparked despite lower oil prices

By Sheri Kasprzak

New York, Nov. 14 - Even though oil prices slipped on Tuesday, a few energy offerings made their way to the private placement market, led by a $50 million stock deal from Gastar Exploration, Ltd.

Similarly, gold and silver prices have slipped, but on Tuesday, a few offerings from explorers of those minerals were also priced.

Oil prices slipped by 30 cents on Tuesday to end at $58.28 per barrel.

A market source based in Vancouver, B.C., said Tuesday that when energy deals like these price during drops in oil prices, it generally has more to do with the individual issuer than the sector as a whole.

"Sometimes you get [issuers] that need the money and this is the only way," he said. "It's not an ideal time to price, but then the past few weeks have not been the best time to price."

In the Gastar deal, the company plans to sell up to 25 million shares to a group of institutional investors led by Chesapeake Energy Corp. on Nov. 17.

The price per share represents a 9% discount to the company's $2.20 closing stock price on Monday.

The offering will bring Chesapeake's ownership of Gastar stock to 16.6%.

The deal was announced Tuesday morning, and the stock ended the day up 5 cents, or 2.27%, to close at $2.25 (Amex: GST).

Proceeds will be used for drilling programs in east Texas, Wyoming and southeastern Australia. The rest will be used for general corporate purposes.

Houston-based Gastar is an oil and natural gas exploration company.

Sahara plans unit deal

In energy offerings north of the border, Sahara Energy Ltd. negotiated an offering for up to C$4.018 million and at least C$3.038 million.

The deal includes up to 820,000 units and at least 620,000 units at C$4.90 each.

The stock dropped by 8 cents, or 5.33%, to end at C$1.42 (TSX Venture: SAH).

The deal is being placed through agents Leede Financial Markets Inc. and Blackmont Capital Inc.

The units are comprised of two flow-through shares - one for C$1.60 each for Canadian development expenses and the other for C$1.70 for Canadian exploration expenses.

Proceeds from the deal, set to close Nov. 28, will be used for exploration and development.

Calgary, Alta.-based Sahara is an oil and natural gas exploration, development and acquisition company focused on properties in western Canada.

In a similar offering, Mirage Energy Ltd. also hired Leede and Blackmont to conduct an offering for up to C$4.08 million and least C$3.06 million.

The deal includes up to 2.4 million units and at least 1.8 million units at C$1.70 each.

The units consist of two flow-through shares - one for C$0.55 for Canadian development expenses and the other at C$0.60 each for Canadian exploration expenses.

This deal is also set to close Nov. 28, and the proceeds will also be used for exploration and development in Canada.

The stock gained 2 cents, or 4%, to end at C$0.52 Tuesday (TSX Venture: MGE).

Mirage is a Calgary, Alta.-based oil explorer.

First Majestic prices offering

Even as both silver and gold prices took a dip, a slate of offerings from both silver and gold explorers was announced Tuesday.

"Silver and gold may be down now but there's a lot of talk that prices, especially silver prices, will rebound before the end of the year and that's going to help stocks," said one market source based in Vancouver, B.C.

Heading up those offerings Tuesday was a C$14.4 million unit deal from First Majestic Resource Corp.

The silver exploration company plans to sell 4 million units at C$3.60 each on a non-brokered basis. The unit price represents only a slight premium to the company's C$3.56 closing stock price on Monday.

The units in the deal include one share and one half-share warrant. Each whole warrant is exercisable at C$4.25 for two years.

The company's stock gained 8 cents Tuesday to close at C$3.64 (TSX Venture: FR).

The deal is set to close Nov. 23.

Proceeds will be used for exploration on the company's three silver mines. The rest will be used for working capital.

First Majestic is based in Vancouver, B.C.

Bullion's $2.86 million deal

In other gold and silver news, Bullion River Gold Corp. wrapped a private placement of 12% unsecured convertible debentures for $2.861 million.

The debentures due Oct. 1, 2008 are convertible into common shares at $0.75 each.

The investors include 4P Management Partners SA; Abundance Partners LP; AU Capital, LP; Bank Sal. Oppenheimer Jr. & Cie (Schwiz) AG; Steven Bommarito; Cyrus Capital Investment Corp.; Gerbino Gold Group, LLC; Goldberg Partners, LP; Mitchell Golden; Alfred Haber; Angela Hockwimmer; Engelbert Hoermannsdorfer; Susan Jeffs; Michael P. Marcus; Edward Newman; Sandra Proshan; John Schneller; Susanne Schoen; Robert A. Shaya; Richard Steinberg; and Peter-Paul Stengel.

Proceeds from the deal will be used for exploration on the company's French Gulch mine.

The investors will receive warrants for 3,814,673 shares, exercisable at $1.00 each for two years.

Bullion River is no stranger to the PIPE market. The company settled a $2 million convertible debenture deal in August. The 10% debentures are convertible at $0.75 each.

In July, some of the same investors in the most recent deal funded a $4,244,251 private placement of units at $0.50 each.

Based in Reno, Nev., Bullion River is a gold exploration company.

Midway's C$5 million deal

In other gold news, Midway Gold Corp. settled a C$5 million offering of 2 million units.

The units consist of one share and one half-share warrant with each whole warrant exercisable at C$3.00 for one year.

Barrick Gold Corp. bought 1 million of the units, bringing its ownership of Midway stock to 8.3%.

Midway is also based in Vancouver, B.C.

World Heart secures $14.1 million

Looking to the biotech sector, World Heart Corp. announced its plans to close a $14.1 million private placement before the end of the year.

The offering, comprised of 56.4 million shares at $0.25 each, sent the company's stock off by a penny on Tuesday to close at $0.50 (Nasdaq: WHRT). The price per share represents a 51% discount to the company's $0.51 closing stock price on Monday.

Volume of shares traded Tuesday was elevated with 465,210 shares traded compared with the average 116,952 shares.

The investors in the offering include Maverick Ventures Management, LLC; Special Situations Fund; Medical Strategy; Greenway Capital; and members of World Heart's management.

The first tranche of the deal, for $2.8 million, will close later this week. The remaining portion for $11.3 million will close in December.

Proceeds will fund operations through the start of U.S. clinical trials for the company's products in 2007 and into the second quarter of 2008.

Financing to fund U.S. trial

"This financing will enable World Heart to focus its energies exclusively on the final development, evaluation and eventual commercialization of our next-generation Levacor rotary ventricle assist device," said Jal Jassawalla, the company's chief executive officer, in a statement.

"We expect to initiate clinical use of the Levacor in Canada in the near-term and start a U.S. feasibility trial in the latter half of 2007."

In other news, World Heart said it plans to restructure and realign its business to control spending. The company intends to reduce manufacturing costs associated with its Novacor left-ventricle assist system product due to decreased demand.

World Heart, based in Oakland, Calif., develops mechanical circulatory support systems.

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