SOURCE: Infinity Energy Resources, Inc.

Infinity Energy Resources, Inc.

February 29, 2012 07:28 ET

Amegy Bank and Off-Shore Finance, LLC to Convert All Outstanding Loans to Infinity Energy Resources Into Common and Convertible Preferred Stock

Upon Closing of Transactions, Company Plans to Aggressively Pursue "World-Class" Potential of 1.4 Million-Acre Offshore Oil and Gas Concession in Nicaragua

OVERLAND PARK, KS--(Marketwire - Feb 29, 2012) - Infinity Energy Resources, Inc. (OTCQB: IFNY) (PINKSHEETS: IFNY) ("Infinity" or the "Company"), an independent oil and gas exploration and development company, today announced that it has entered into definitive agreements with Amegy Bank (the "Bank") and Off-Shore Finance, LLC to convert all of the debt owed by the Company to both entities into Infinity Common and Convertible Preferred Stock.

Under the terms of its agreement with the Bank, Infinity (i) will be relieved of approximately $19.6 million in outstanding debt obligations (including accrued interest and loan fees) and (ii) will cancel 968,000 common stock purchase warrants currently held by the Bank, in exchange for 2.0 million shares of Infinity Common Stock and 130,000 shares of Class A Preferred Stock.

In addition, Off-Shore Finance, LLC, an entity unrelated to the Bank, has agreed to convert the outstanding balance on its loan to the Company (approximately $1.5 million) into 15,016 shares of Series B Preferred Stock.

The transactions with the Bank and Off-Shore Finance are scheduled to close on or before March 6, 2012.

The Series A Preferred and Series B Preferred will accrue a 6% dividend per annum and are convertible into Common Stock at a price of $6.50 per share. Both series of Preferred Stock automatically convert into Common Stock if the average of the closing prices of the Common Stock for 30 consecutive trading days equals at least $7.50 per share. The Company has the right to redeem both series of Preferred Stock at any point for an amount equal to their issue price of $100 per share plus all accrued and unpaid dividends. Commencing January 1, 2013, the Series A Preferred will vote with the Common Stock on all matters presented to the holders of the Common Stock. Beginning January 1, 2014, the Series A Preferred shareholders will have a majority vote on all such matters and the right to elect a majority of the Board of Directors, if the Series A Preferred has not been redeemed or converted into Common Stock. Neither series of Preferred Stock is transferrable for 180 days after issuance.

"We are pleased to announce agreements to retire our outstanding debt obligations to Amegy Bank and Off-Shore Finance, LLC through the issuance of equity," stated Stanton E. Ross, Chief Executive Officer of Infinity Energy Resources, Inc. "If all the shares of Preferred Stock to be issued in conversion of the debt and cancellation of the warrants are eventually converted into Common Stock, it would result in the issuance of just over 3 million new common shares, which equals approximately 16% of the number of common shares currently outstanding. We believe these transactions will greatly improve Infinity's ability to move forward in 2012 with planned exploration and development activities associated with its 1.4 million-acre offshore oil and gas concession in Nicaragua."

"The retirement of this outstanding debt should provide the Company with greater flexibility in raising capital and/or seeking a strategic or financial partner for the Nicaraguan project. We are very encouraged by recent information provided by Noble Energy following the analysis of a 3-D seismic mapping program on its 2 million-acre offshore concession, which is east of and directly adjacent to ours, and we continue to believe that the Tyra and Perlas blocks on our concession have the potential to yield 'world-class' oil and/or gas discoveries."

"Following the approval of our environmental impact studies by the Ministerio del Ambiente y los Recursos Naturales de Nicaragua, an agency of the Nicaraguan government, and the autonomous regions of Nicaragua that are nearest the offshore concessions, we plan, given sufficient financing, to move forward this year with a 3-D seismic mapping program to better define the structures previously identified with reprocessed 2-D seismic data," continued Ross. "Our preliminary analysis identified four prospects covering a total of over 547 square miles. Working in concert with Thompson & Knight Global Energy Services LLC and CGGIP, we have calculated that the potential oil resources present in the Eocene geologic zone alone could approach ten billion barrels, based upon certain assumptions involving porosity, saturation, recovery and other parameters. While the 2-D seismic data did not allow us to identify or evaluate prospects in the deeper Cretaceous zone, we are optimistic that the planned 3-D seismic mapping program will confirm the Eocence hydrocarbon potential and provide valuable insights regarding the presence of hydrocarbons in the Cretaceous zone."

About Infinity Energy Resources, Inc.

Infinity Energy Resources, Inc.'s operations consist of exploration and development activities associated with oil and gas concessions covering approximately 1.4 million acres offshore Nicaragua in the Caribbean Sea.

Infinity is headquartered in Overland Park, Kansas and its common stock is currently traded on the OTCQB Exchange under the symbol "IFNY" and "IFNY.PK". The Company's financial statements and additional information are available on the Internet at www.sec.gov or www.ifnyoil.com.

Forward-Looking Statements

This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe", "estimate", "project", "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Forward-looking statements in this press release include whether the closing of the transactions with Amegy Bank and Off-Shore Finance, LLC under the terms of the definitive agreements will occur as scheduled; the success of the Company's plans to move forward with exploration and development activities in Nicaragua; the Company's ability to obtain financing to conduct a 3-D seismic mapping program and to provide working capital to sustain its operations; whether the retirement of the debt owed to Amegy Bank and Off-Shore Finance will improve Infinity's ability to obtain financing; whether it will receive clearance from the Nicaraguan government for environmental regulation compliance; whether there are hydrocarbons present in the Cretaceous and Eocene zones in the concessions; the quantity of hydrocarbons beneath the Company's concessions, including the accuracy of the its consultants' preliminary analysis and estimate of the Ecocene zone containing up to ten billion barrels of oil and their underlying assumptions; the inability to predict, in advance of drilling and testing, whether any prospect will yield oil in sufficient quantities to recover drilling and/or completion costs or to be economically viable; the necessity for estimates to be based upon available geological, geophysical and engineering data that can vary in quality and reliability; the success of the Company's efforts to acquire and process 3-D seismic data; the Company's ability to eventually extract oil from the offshore concessions and the costs and technical challenges of doing so; and whether the Company will be able to obtain financing to explore or develop its prospects, and if it is able to do so, whether or not the terms will be acceptable to the Company. The Company does not undertake to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. Additional information respecting factors that could materially affect the Company, including risk factors, are contained in the Company's periodic filings with the Securities and Exchange Commission.

Contact Information

  • For additional information, please contact:

    Stanton E. Ross
    President/CEO
    (913) 948-9512