Infinity to Sell Oilfield Services Subsidiaries
Infinity Energy Resources has entered into a non-binding letter of intent with an undisclosed buyer for the sale of its oilfield services subsidiaries, Consolidated Oil Well Services, Inc. and CIS-Oklahoma, Inc. The financial terms of the transaction were not disclosed.
The parties expect to negotiate a definitive agreement over the next several weeks, and the agreement is subject to terms and conditions which the Company considers to be standard. The transaction is expected to close by the end of November.
The net proceeds from the sale of Consolidated will be used to repay existing indebtedness. No significant income tax is expected to be paid on what will likely be a significant gain on the sale of Consolidated due to the Company's net operating loss carry-forwards and other tax attributes.
Capital One Southcoast, Inc. is serving as financial advisor to the Company with respect to the sale process for Consolidated.
Separately, the Company continues to explore its strategic alternatives, including the sale of all or part of the Company's exploration and production assets, and its debt financing alternatives, including new reserve-based credit facilities.
Stanton E. Ross, the Company's Chairman and Chief Executive Officer, said: "We are pleased to have found a prospective buyer for Consolidated who we believe will be a good fit for our customers, employees and vendors. In addition, the agreed upon price for Consolidated will provide sufficient capital for the Company to repay most, if not all, of its existing indebtedness and to position the Company to put into place a more permanent capital structure. We appreciate the patience of investors, employees and other stakeholders during both the process to sell Consolidated as well as during the ongoing strategic alternatives process, which is currently in a relatively early stage."
Infinity Energy Resources, Inc., through its wholly-owned subsidiaries Infinity Oil and Gas of Texas, Inc. and Infinity Oil & Gas of Wyoming, Inc., is an independent energy company engaged in the exploration, development and production of natural gas and oil and the operation and acquisition of natural gas and oil properties. The operations of Infinity Oil and Gas of Texas are focused on exploitation of the Barnett Shale formation in the Fort Worth Basin of north-central Texas. The operations of Infinity Oil & Gas of Wyoming are focused on the Wamsutter Arch Pipeline Field in southwest Wyoming and the Sand Wash Basin in northwest Colorado. The Company provides oilfield services through its wholly-owned subsidiary, Consolidated Oil Well Services, Inc., with operations principally focused in the Mid-Continent region and the Powder River and Big Horn Basins in northern Wyoming. The Company also has a 1.4 million acre oil and gas concession offshore Nicaragua in the Caribbean Sea. The Company's common stock is listed on the NASDAQ Global Market under the symbol "IFNY."
- Infinity Energy Resources Names Technical Team for Offshore Nicaragua (Jun 23)
- Nicaragua Inks New Offshore Exploration Deal (Mar 06)
- Infinity Gets Approval for Offshore Nicaraguan E&D Contracts (Jul 07)