Infinity Energy to redeem senior secured notes on Dec. 15

By Jennifer Chiou

New York, Dec. 11 - Infinity Energy Resources, Inc. announced the redemption of its $51 million of senior secured notes on Dec. 15.

Infinity said it will pay par plus accrued interest.

The company had issued the notes in several tranches since January 2005 with maturities ranging from 42 months to 48 months. The notes accrue interest at Libor plus 675 basis points.

On Dec. 1, the company said it entered into a definitive purchase agreement to sell its Consolidated Oil Well Services, Inc. and CIS-Oklahoma, Inc. oilfield service subsidiaries to Q Consolidated Oil Well Services, Inc. for $52 million.

"This represents a milestone in Infinity's history and an important step in our previously announced program to enhance shareholder value," chief executive officer Stanton E. Ross said in a news release.

"The repayment of our senior indebtedness will allow Infinity to proceed more effectively with the exploitation of our oil and gas resources in the Barnett Shale formation in Texas and in the Rocky Mountain area."

On Oct. 3, the company amended the terms of the notes to provide the company with additional time to explore strategic financing alternatives.

The amendments to the notes provide for, among other things:

• A final maturity date for all remaining notes of Jan. 15, 2007 instead of payments of $2 million per month in cash or stock for nine of the next ten months and $9 million in cash on each of Jan. 15, April 15, 2007 and July 15, 2007;

• An increase in the outstanding principal notes balance by 20% or, $9 million, plus an additional $1.4 million equal to the interest that would have been due on Monday for a total of $55.4 million;

• Provisions for conversion of the notes into common stock prior to maturity at the election of the noteholders. The company will allow conversion of up to roughly $3.4 million of the notes through the end of October (the $3.4 million includes October interest expense on all of the notes); up to $2 million of additional notes plus accrued interest beginning Nov. 1 and up to an additional $2 million of notes plus accrued interest beginning Dec. 1.

Infinity previously said it retained Capital One Southcoast, Inc. as its financial adviser to help the company explore strategic alternatives to increase shareholder value, including the possible sale of all or part of the company. Infinity previously reported it received expressions of interest by potential acquiring firms.

Infinity is an oil and natural gas exploration company based in Denver and Chanute, Kan.

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