Independent oil and gas exploration and development company, Infinity Energy Resources, Inc. entered into a definitive agreement with Amegy Bank and Offishore Finance, LLC to convert all debt owed by the company to both entities into Convertible Preferred and Infinity Common Stock.
Infinity will be relieved of about USD19.6 million in outstanding debt obligations and will cancel 968,000 common stock purchase warrants held by the bank in exchange for 2million shares of Infinity Common Stock and 130,000 shares of Class A Preferred Stock. Off-Shore Finance, LLC will convert the outstanding balance on its approximately USD1.5 million loan to Infinity into 15,016 shares of Series B Preferred Stock.
The Preferred stock will accrue a 6% dividend per annum and are convertible into Common Stock at USD6.50 per share. If the average of the closing prices of the Common Stock for 30 consecutive trading days equals at least USD7.50 per share, both series of Preferred stock will automatically convert into Common Stock. Infinity has the right to redeem Preferred Stock at any point for an amount equal to their issue price of USD100 per share, plus accrued and unpaid dividends. Preferred Stock is not transferable for 180 days after issuance. Series A Preferred will vote on all matters presented to the Common Stockholders beginning 1 January 2013 and the Series A Preferred shareholders will have a majority on matter and the right to elect a majority of the Board of Directors if the stock has not been redeemed of converted to Common Stock, beginning 1 January 2014.
Infinity CEO Stanton E. Ross, announced the agreements stating that the company believes the transactions will improve Infinity’s ability to move forward this year with the exploration and development plans for its 1.4 million-acre offshore oil and gas concession in Nicaragua. The release from the outstanding debt will allow greater flexibility for the company to raise capital and see a strategic or financial partner for the Nicaraguan project. Recent 3-D seismic mapping analysis performed on Noble Energy’s adjacent concession have given the company confidence that their concession has the potential to yield substantial oil and gas discoveries. Infinity intends to better analyze their concession with a 3-D seismic mapping program following the approval of their environmental impact studies by the government agency, Ministerio del Ambiente y los Recursos Naturales de Nicaragua and the autonomous regions of the country near the offshore concessions. The company has calculated that the potential oil resources present could approach 10 billion barrels in the Eocene geologic zone alone.