Infinity, Inc. Closes the Partial Sale of Oilfield Service Assets for $4.1 Million
16 September 2004 - 3:00PM
PR Newswire (US)
Infinity, Inc. Closes the Partial Sale of Oilfield Service Assets
for $4.1 Million Approximately $2.4 Million to be Available for
Capital Expenditures and Other Uses DENVER and CHANUTE, Kan., Sept.
16 /PRNewswire-FirstCall/ -- Infinity, Inc. (NASDAQ:IFNY) today
announced that its wholly-owned oilfield services subsidiary,
Consolidated Oil Well Services, Inc. ("Consolidated"), has closed
the previously announced transaction to sell a portion of its
assets to Quest Resource Corp. (OTC:QRCP), an exploration and
production company and Consolidated customer, for $4.1 million in
cash. After repayment of debt secured by the divested assets and
provision for transition costs, Consolidated realized approximately
$2.4 million in net cash proceeds. The net cash proceeds will be
available for capital expenditures and other general corporate
purposes. The divested assets consist of 37 oil field service
trucks, 13 trailers, real estate and other support equipment,
vehicles and inventory. During the first eight months of 2004,
Consolidated generated revenue in excess of $8.5 million, of which
Quest represented approximately 15%. During the same period, the
Chanute yard generated revenue in excess of $2.5 million, of which
Quest represented less than 50%. The remaining Chanute revenue
related to services provided to other customers, most of which
management believes it should be able to retain. Consolidated plans
to use a portion of the divestiture proceeds to relocate the
Chanute yard operations to a yard in nearby Thayer, Kansas
(approximately 10 miles south) and expects to service such
customers from the Thayer, Eureka, and Ottawa, Kansas yards as well
as the Bartlesville, Oklahoma facility. Both the Thayer and Eureka
yards were acquired in April 2004 as part of the $1.2 million Blue
Star Acid Services acquisition. The sale agreement contains terms
which protect Consolidated from competition with Quest, or its
successors, for a period of five years after closing in Kansas,
Oklahoma, Colorado, Missouri, Iowa, or Wyoming. In addition, the
agreement contains terms that grant Consolidated a "right-of- first
refusal" for a period of three years, during which it may match any
offer to buy the divested assets from Quest or its successors.
Management's Comments Stanton E. Ross, Infinity President and Chief
Executive Officer, said: "We are pleased to have raised $2.4
million of net cash proceeds that can be deployed in the near
future for debt retirement, capital expenditure projects --
including continued drilling in the Rocky Mountain region and
initial drilling in the North Texas region -- and for other general
corporate purposes. The loss of revenues from Quest, which had
associated operating margins that were below average for
Consolidated, reduces our 2004 oilfield service revenue guidance to
a range of between $12.5 million and $14.0 million, as compared to
a range of $13 to $15 million prior to the transaction." About
Infinity, Inc. Infinity, Inc., through its wholly-owned
subsidiaries Infinity Oil & Gas of Wyoming, Inc. and Infinity
Oil and Gas of Texas, 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 Company's current operations are principally
focused on the development and expansion of its producing Wamsutter
Arch (Pipeline) project and emerging Labarge coal bed methane
project, both of which are located in the Greater Green River Basin
in southwest Wyoming. Infinity Oil & Gas of Wyoming also holds
exploration and development rights in the Sand Wash and Piceance
Basins principally in northwest Colorado. Infinity Oil and Gas of
Texas holds leaseholds in the Fort Worth Basin of Texas. Infinity,
Inc. provides oilfield services through its wholly-owned
subsidiary, Consolidated Oil Well Services, Inc., with operations
principally focused in the Mid- Continent region. The Company's
common stock is listed on the NASDAQ National Market under the
symbol "IFNY." Forward-Looking Statements This press release
includes statements that may constitute "forward- looking"
statements, usually containing the words "believe," "estimate,"
"project," "expect," "plan," "should" or similar expressions. These
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements inherently involve risks and uncertainties that could
cause actual results to differ materially from the forward-looking
statements. Forward-looking statements in this press release
include statements regarding the planned use of net cash proceeds
from the sale of the Chanute yard, the ability of the Company to
retain its existing Chanute customers other than Quest, and the
anticipated level of oilfield service revenue during the remainder
of 2004. Factors that could cause or contribute to such differences
include, but are not limited to the loss of existing customers or
business due to the divestiture, decreases in the prices of oil and
gas, operating risks, continued acceptance of the company's oil
field services in their marketplace, weather conditions at oilfield
service jobs, costs of supplies and services used by the Company in
its businesses, and other risks described under "Risk Factors" in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2003 and in the Company's periodic reports filed with
the Securities and Exchange Commission. You can find the Company's
filings with the Securities and Exchange Commission at
http://www.infinity-res.com/ or at http://www.sec.gov/. By making
these forward-looking statements, the Company undertakes no
obligation to update these statements for revisions or changes
after the date of this release. For further information please
contact: Stanton E. Ross, President/CEO, +1-620-431-6200, or James
W. Dean, Vice President, Strategic & Corporate Development,
+1-720-932-7800, both of Infinity, Inc. DATASOURCE: Infinity, Inc.
CONTACT: Stanton E. Ross, President/CEO, +1-620-431-6200, or James
W. Dean, Vice President, Strategic & Corporate Development,
+1-720-932-7800, both of Infinity, Inc. Web site:
http://www.infinity-res.com/
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