Infinity doubles coalbed methane leasehold acreage

By OGJ editors

HOUSTON, May 17 -- Infinity Inc., Chanute, Kan., has moved forward in its program for purchasing coalbed methane properties in the US Rocky Mountains. The latest purchase—116,100 acres in the Sand Wash basin in Colorado and Wyoming—was acquired from Phillips Petroleum Co. and Tom Brown Inc. The purchase price, in cash and promissory notes, was not disclosed.

The majority of the leasehold acquired has an 80% net revenue interest and is comprised of fee, federal, and state leases, most of which expire during 2004-08. The acreage is divided into two areas—a northern block consisting of about 12,900 acres and a southern block consisting of about 103,200 acres. Fewer than 4% of the properties have preferential rights-to-purchase that may be exercised.

"This acquisition more than doubles Infinity's coalbed methane acreage position in the Rocky Mountain region of the [US]," said Infinity Pres. and CEO Stanton E. Ross. He said the company had previously acquired leasehold interests on over 70,000 acres of coalbed methane properties in the Greater Green River basin in Wyoming and the Piceance basin in northwestern Colorado.

Ross said Infinity also has deep gas rights on about half of the Sand Wash basin properties, which may enable it to seek out a strategic partner for developing both the coalbed methane and deeper gas horizons.

"We have already been contacted by a number of energy companies that are interested in partnering with us on the development of the acreage, and we expect to enter into negotiations with these and other potential strategic partners in the next several months," he said.

Ross said the location of the Sand Wash basin properties between Infinity's Antelope and Pipeline coalbed methane projects also has logistical advantages. "Once development activities are under way, our oil field services subsidiary [in Rock Springs, Wyo.] should be able to provide well completion services," he said.