WHITTIER ENERGY CORP: announcements explained, share price

Announcements, explained

Each one in plain English, with the numbers worked through for a shareholder.

8 June 2005capital raising announcement● NeutralMajor

On June 7, 2005 Whittier priced a private sale of 833,333 shares of Series A 8% convertible preferred stock at $60 per share, expected to close June 15 alongside the RIMCO purchase. This is the equity part of the funding for RIMCO. Each preferred share converts into 30 common shares, or 10 after a planned one-for-three reverse split and a Nasdaq National Market listing. This confirms the reverse split inferred earlier and means new shares for existing holders (inference: dilution). 8% dividends start only if conversion has not happened by Dec 31, 2005.

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30 Dec 2004capital raising announcement▲ Good

The SEC declared effective Whittier's resale registration statement (Form SB-2) covering up to 4,320,470 shares, including shares, $2.50 warrants and shares under the $2.00 convertible note. Because it became effective before the Dec 31, 2004 deadline, the company says it will not have to issue the extra 345,000 shares and warrants to the June placement investors. This resolves that open thread; Whittier receives no money from resales by the holders.

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15 July 2004capital raising announcement● NeutralMajor

The private placement that opened in June closed on June 30, 2004: 1.38 million shares at $1.75 plus three-year warrants for 1.38 million shares at $2.50, raising $2,415,000, fully subscribed. If the resale registration is not effective by December 31, 2004, the company must issue another 345,000 shares and warrants to the buyers. This resolves the earlier offering announcement and adds dilution from new shares and warrants.

What it means for a shareholder

1.4m new shares at $1.75 to raise about $2.4m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.

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18 June 2004capital raising announcement● NeutralMajor

The company completed the first closing of a private placement of units, each of 15,000 common shares plus a warrant for 15,000 shares at $2.50, priced at $26,250 per unit, for up to 92 units and $2,415,000 in total. Proceeds partly paid for its South Texas gas field acquisition. If the resale registration is not effective within six months of the final closing, buyers get extra units worth 25% of their subscription, which would dilute existing holders.

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