1/7/2008 - 2:59:09 PM
Forest Oil Corp. buys Infinity Oil & Gas of Wyoming
By Staff
DENVER – Infinity Energy Resources Inc. announced last month that its wholly owned subsidiary Infinity Oil and Gas of Wyoming has been purchased by Forest Oil Corp. for $17.4 million in cash. The sale includes all of Infinity’s oil and gas producing properties in Colorado and Wyoming, plus 80 percent of Infinity’s working interest in undeveloped leaseholds in Colorado and in Wyoming’s Sweetwater County. The sale is expected to close today.
Infinity expects the adjusted proceeds from the sale to be approximately $16 million. The cash will be used to retire approximately $12 million in outstanding bank debt, settle commodity derivative liabilities and pay interest.
“We are very pleased to announce this agreement to sell our Colorado and Wyoming producing properties to Forest Oil Corporation,” said Stanton E. Ross, chairman and CEO of Infinity Energy Resources, Inc. “Not only will the transaction allow Infinity to significantly reduce its bank debt, but we will retain 100 percent ownership of the Piceance Basin and Labarge exploratory properties in the Rocky Mountains and have retained the right to a 20 percent working interest in any future wells that Forest may drill in the Sand Wash Basin on the exploratory acreage sold.”
Also announced in December was a farm-out of Infinity’s Texas properties for development by Forest. “The sale of the Rocky Mountain properties and the farm-out of the Texas acreage to an experienced and well-qualified operator completes the first part of a business plan designed to resolve Infinity’s liquidity problems and bring the company back to growth mode,” said Dr. Renato Bertani, Infinity’s COO.
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