Infinity Energy Resources, Inc., an independent oil and gas exploration and development company, today announced that it has entered into a Third Forbearance Agreement (“the Agreement”) dated October 16, 2008 with Amegy Bank, N.A. (“Amegy”) under the Loan Agreement dated January 9, 2007, as amended and supplemented (the “Loan Agreement”).
“We are very pleased that Amegy Bank has continued to support and work with us as we move forward to ratify and finalize our Nicaraguan concessions,” stated Stanton E. Ross, Chief Executive Officer of Infinity Energy Resources, Inc.
The Third Forbearance Agreement, along with an amendment to Infinity’s Revolving Note with Amegy, extends the maturity of the Revolving Note until May 31, 2009 and grants a forbearance period from June 1, 2008 to May 31, 2009. Under the Agreement, so long as there are no further defaults (as defined in the Agreement) Amegy agrees not to exercise any remedies under the Loan Agreement, the Revolving Note and related loan documents, and to waive the existing defaults for the forbearance period. Under certain circumstances, the forbearance period may be extended until June 15, 2009.
The Company has agreed that on or before December 31, 2008, or at such later date as agreed to by Amegy, it will have received all governmental authorizations necessary for the validation and ratification of its offshore Nicaraguan oil and gas concessions (“Governmental Approval”). In addition, on or before October 31, 2008, the Company shall have obtained one or more subordinate, secured loans for use in developing the Nicaraguan concessions and for general and administrative expenses, the proceeds of which will be held in escrow until Infinity receives the Governmental Approval.
Infinity also agreed to proceed with the sale and marketing of the remaining oil and gas properties held by its wholly-owned subsidiary, Infinity Oil & Gas of Wyoming, Inc. After Infinity receives the Governmental Approval in Nicaragua, Amegy may require, in its sole discretion, Infinity to proceed with the sale and marketing of the assets of its wholly-owned subsidiary, Infinity Oil and Gas of Texas, Inc.
Additional information regarding the Third Forbearance Agreement is available in Infinity’s Form 8-K filing submitted to the Securities and Exchange Commission on October 22, 2008.