Infinity Reports Progress in Texas and Nicaragua

Infinity Energy Resources has issued updates regarding its operations in the Fort Worth Basin of north central Texas and its concession in the Caribbean Sea offshore Nicaragua. Summaries of the Denver-based company's progress follow.

Fort Worth Basin
During the first quarter of 2006, Infinity drilled six wells in Erath County, Texas targeting the Barnett Shale formation, five of which were horizontal wells and one of which was a vertical well. As of March 31, four of the five horizontal wells had been completed (one was waiting on completion), three were producing, and one was flowing back frac fluids. The vertical well has been completed and was flowing back frac fluids at the end of the quarter.

The peak gross daily production rates for the most recent producing horizontal Barnett Shale wells averaged 0.9 MMcf per day (0.5 MMcf per day and 1.3 MMcf per day), an improvement from the previous three producing horizontal Barnett Shale wells, which averaged 0.7 MMcf per day. Infinity's management believes the first new well had a lower-than-average peak daily production rate, partially as a result of the use of variable completion rates and volumes in connection with micro-seismic conducted on this well. During the micro-seismic process, the company experimented with various completion approaches, and observed the varying results with advanced monitoring equipment to determine optimal completion techniques going forward.

Excluding the first two horizontal Barnett Shale wells drilled and completed in Erath County more than a year ago, which were negatively affected by the lack of 3-D seismic data and faulting, the last seven producing horizontal Barnett Shale wells have had average peak gross daily production rates of 1.0 MMcf per day. The best four horizontal Barnett Shale wells to date have had average peak gross daily production rates of 1.3 MMcf per day.

In addition, Infinity is using a second drilling rig to drill a vertical well in Comanche County, Texas, targeting both the Barnett Shale and the Lower Marble Falls formations. Infinity plans to drill a total of three wells in Comanche County with this additional drilling rig.

Infinity's previous 2006 drilling guidance of 18 to 20 horizontal wells in Erath County via use of a drilling rig under long-term contract and a limited number of wells in Comanche and Erath counties with a second drilling rig remains unchanged.

Infinity and the Instituto Nicaraguense de Energia (INE), the Nicaraguan energy department, have negotiated final terms of the initial exploration and production contracts for two underlying prospects (Tyra and Perlas), which comprise 1.4 million acres offshore Nicaragua in the Caribbean Sea. The contracts now await final approval and signatures by the president of Nicaragua.

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