SOURCE: Infinity Energy Resources, Inc.

Infinity Energy Resources, Inc.

April 16, 2012 07:28 ET

Infinity Completes Conversion of Debt to Equity

Goals for 2012 Include Approval of Environmental Impact Statement, Re-Opening of Data Room, and Commencement of 3-D Seismic Mapping Program

OVERLAND PARK, KS--(Marketwire - Apr 16, 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 completed the conversion of all debt owed by the Company to Amegy Bank (the "Bank") and Off-Shore Finance, LLC into Infinity Common and Convertible Preferred Stock. The Company also announced that it will host an investor conference call at 11:15 a.m. Eastern Time on Thursday, April 26, 2012 (see details below), following CEO Stanton Ross' return from scheduled meetings with the government in Nicaragua.

Under the terms of a previously announced definitive agreement ("the Agreement"), approximately $19.6 million in outstanding debt obligations (including accrued interest and loan fees) to the Bank have been exchanged for 2.0 million shares of Infinity Common Stock and 130,000 shares of Class A Preferred Stock. In addition, 968,000 common stock purchase warrants previously held by the Bank have been cancelled as per the Agreement.

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

The Series A Preferred and Series B Preferred shares pay a 6% annual dividend 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 very pleased to announce the completion of these transactions," stated Stanton E. Ross, Chief Executive Officer of Infinity Energy Resources, Inc. "We believe that the achievement of this significant milestone will help the Company move forward with planned exploration and development activities associated with its 1.4 million-acre offshore oil and gas concession in Nicaragua. If all the shares of Preferred Stock issued in conversion of the debt and cancellation of the warrants are eventually converted into Common Stock, it will result in the issuance of just over 3 million new common shares, which equals approximately 16% of the number of common shares currently outstanding."

"The conversion of this outstanding debt into equity provides Infinity with greater flexibility in raising capital and/or seeking strategic or financial partners for the Nicaraguan project," continued Ross. "We have been asked to reopen our data room by several potential strategic exploration and development partners. We have also entered into negotiations with parties regarding the funding of a 3-D seismic mapping program that we hope will commence before the end of calendar 2012, assuming the timely approval of our environmental impact studies by the Ministerio del Ambiente y los Recursos Naturales de Nicaragua. We are very encouraged by the information provided to investors 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 our concession."

Investor Conference Call

The Company will host a conference call at 11:15 a.m. Eastern Time (EDT) on Thursday, April 26, 2012 to provide a corporate update to investors.

Shareholders and interested parties may participate in the conference call by dialing 877-317-6789 (international and local participants dial 412-317-6789) a few minutes before 11:15 a.m. EDT on Thursday, April 26, 2012 and asking to be connected to the "Infinity Energy Resources Conference Call." A replay of the conference call will be available one hour after completion of the call until Monday, June 25, 2012 at 5:00 pm EDT by dialing 877-344-7529 (international/local participants dial 412-317-0088) and entering conference I.D. #10013017.

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" or "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 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 or a strategic partner 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