Stanton E. Ross, Infinity, Inc.'s President and CEO, said: "This is an acquisition that we believe fits Infinity's desire to diversify the geographic scope of our operations beyond our emerging projects in the Rocky Mountain region. Our upfront capital exposure is small, relative to the potential we believe this play could have, and we plan to operate the acreage with an initial 90% working interest."
Ross continued: "The acreage covered by the LOI provides Infinity with an initial position in the Barnett Shale play in the Fort Worth Basin. According to an independent report from the Potential Gas Committee entitled "Potential Supply of Natural Gas," the Fort Worth Basin has produced more than 9.6 trillion cubic feet (Tcf) of natural gas, with the Barnett Shale being the most significant of the producing zones. The Barnett Shale is estimated in the report to cover 60 square miles crossing 15 counties northeast to southwest across North Texas and includes the area covered by the LOI. The largest producer in the region is Devon Energy, with active ongoing exploration and development by a number of other companies.
"We understand the stratigraphic features prevalent in the Fort Worth Basin and, together with our partners in this area, will aggressively develop other acreage leads and prospects for drilling once the transaction is closed. The LOI initially contemplates, at our option, the drilling of four horizontal test wells, including three targeting the Barnett Shale."
Ross concluded: "Some of the features of this acquisition that are particularly appealing to us are the year-round drilling access, presence of nearby gathering and processing infrastructure, and ample supply of drilling and oilfield services. Typical horizontal wells in this area are drilled for $800,000 and find 1 to 2 Bcfe of natural gas, generating finding and development ("F&D") costs of $0.40 to $0.80 per thousand cubic feet equivalent ("Mcfe"). We believe the typical well on the acreage that is covered by our LOI may ultimately be less expensive to drill in terms of absolute dollar costs than these other typical wells, with similar or lesser F&D costs per Mcfe of found gas, due to the contemplated shallower drilling depths. We are pleased to have the opportunity to expand into another operating region."
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