UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 10, 2007
INFINITY ENERGY RESOURCES, INC.
(Exact name of registrant as specified in its charter)
| | | | | |
DELAWARE
State or other jurisdiction of
incorporation or organization) | | 0-17204
(Commission
File Number) | | 20-3126427
(I.R.S. Employer
Identification Number) |
| | | |
633 Seventeenth Street, Suite 1800
Denver, Colorado
(Address of principal executive offices) | | 80202
(Zip Code) |
Registrant’s telephone number, including area code:(720) 932-7800
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
On January 10, 2007, Infinity Energy Resources, Inc. (“Infinity”) entered into a $50 million reserve-based revolving credit facility (the “Credit Facility”) with Amegy Bank N.A. (“Amegy”). Under the Loan Agreement (the “Loan Agreement”) between Infinity, Infinity Oil and Gas of Texas, Inc. and Infinity Oil & Gas of Wyoming, Inc. (both wholly owned subsidiaries of Infinity, the “Guarantors”) and Amegy, dated effective as of January 9, 2007, Infinity may borrow, repay and reborrow on a revolving basis up to the lesser of (i) the aggregate sums permitted under the borrowing base, initially set at $27 million, or (ii) $50 million. Infinity executed a revolving promissory note (the “Revolving Note”) dated January 9, 2007 in the amount of $50 million. At closing, Infinity borrowed $8.9 million under the Loan Agreement, which was used to settle past due trade payables, fund working capital needs and pay expenses of the financing transaction. Additional amounts borrowed under the facility may be used to fund the plan of development agreed to by Infinity and Amegy.
The Credit Facility has an initial term of two (2) years. Amounts borrowed under the Revolving Note will bear interest at graduated variable rates based on LIBOR or the prime rate, which rates shall be adjusted based on the percentage of the applicable borrowing base used by Infinity from time to time. LIBOR rates can range between LIBOR plus 2.50% and LIBOR plus 3.25%, and prime rates can range between prime and prime plus 0.50%. Interest payments are due on a monthly basis beginning in February 2007, and principal payments may be required under the Loan Agreement to meet a borrowing base deficiency or monthly borrowing commitment reductions. The borrowing base under the Credit Facility and the applicable interest rate are subject to adjustment at least once every six (6) months. The Revolving Note is secured by substantially all of the assets of Infinity and its subsidiaries and is guaranteed by the Guarantors.
The Loan Agreement contains certain standard continuing covenants and agreements and requires Infinity to maintain certain financial ratios and thresholds. Under the Loan Agreement, Infinity and the Guarantors are subject to certain limitations with respect to their hedging transactions. In addition, the Guarantors are required to enter into certain hedging transactions covering in the aggregate at least seventy percent (70%) of anticipated production from their proved developed producing oil and gas properties. In accordance with requirements of the Loan Agreement, Infinity entered into the following crude oil and natural gas hedging arrangements on January 16, 2007:
Crude Oil
| | | | | | | | | |
| Term of Arrangements | | Bbls per Day | | NYMEX Swap Price |
| April 1, 2008 — December 31, 2008 | | | 65 | | | $ | 57.40 | |
| January 1, 2009 — December 31, 2009 | | | 55 | | | $ | 57.95 | |
| January 1, 2010 — December 31, 2010 | | | 50 | | | $ | 58.90 | |
Natural Gas
| | | | | | | | | |
| Term of Arrangements | | MMBtu per Day | | WAHA Swap Price |
| October 1, 2007 — December 31, 2007 | | | 1,000 | | | $ | 6.915 | |
| | | | | | | | | |
| Term of Arrangements | | MMBtu per Day | | WAHA Swap Price |
| January 1, 2008 — December 31, 2008 | | | 800 | | | $ | 7.235 | |
| January 1, 2009 — December 31, 2009 | | | 600 | | | $ | 7.170 | |
| January 1, 2010 — December 31, 2010 | | | 500 | | | $ | 6.865 | |
| | | | | | | | | |
| Term of Arrangements | | MMBtu per Day | | CIG Swap Price |
| February 1, 2007 — December 31, 2007 | | | 600 | | | $ | 5.200 | |
| January 1, 2008 — December 31, 2008 | | | 400 | | | $ | 6.475 | |
| January 1, 2009 — December 31, 2009 | | | 400 | | | $ | 6.810 | |
| January 1, 2010 — December 31, 2010 | | | 300 | | | $ | 6.565 | |
The foregoing summary description of the terms of the Credit Facility may not contain all information that is of interest. For further information regarding the terms and conditions of the Credit Facility and the provisions of the Loan Agreement and the Revolving Note, reference is made to such agreements or forms thereof which are filed as Exhibits 10.1 and 10.2 hereto, and are incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
See Item 1.01, which is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits. The following exhibits are filed as part of this report
| | | |
| 10.1 | | Loan Agreement |
| | | |
| 10.2 | | Revolving Promissory Note |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: January 17, 2007.
| | | | | |
| | Infinity Energy Resources, Inc.
| |
| | By: | /s/ Timothy A. Ficker | |
| | | Timothy A. Ficker | |
| | | Vice President and Chief Financial Officer | |
EXHIBIT INDEX
| | | |
| 10.1 | | Loan Agreement |
| | | |
| 10.2 | | Revolving Promissory Note |
