Transcript Positioned for Rockies Growth

Energy Growth Story
Corporate Presentation
April 2004
NASDAQ: IFNY
FORWARD-LOOKING STATEMENTS: This presentation contains statements that may constitute forward-looking statements, usually containing the words “believe, estimate, project,
expect” 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. Factors that could cause or could contribute to such
differences include, but are not limited to the results of drilling, the availability of third party financing, and other contractual arrangements at the time and on the terms anticipated
fluctuations in the prices of oil and gas uncertainties inherent in estimating the quantities of oil and gas, and projecting future rates of production and timing of development activities
completion, operating risks, acquisition risks liquidity and capital requirements, the effects of government regulations, adverse changes in the market for the company’s oil and gas
production, continued acceptance of the company’s oilfield services in the marketplace, dependence upon third party vendors and other risks detailed in the company’s periodic reports
and filings with the Securities and Exchange Commission. By making these forward looking statements, the company undertakes no obligation to update these statements for revisions
or changes after the date of this presentation.
IFNY: History

1994: Acquired Oilfield Service Operations
 $5 MM Consideration Consisting of Cash, Stock and Notes
 $4 MM of Revenues in Fiscal 1995; $12 MM of Revenues in Calendar 2003

1996: Acquired Acreage in the Raton Basin
 24,000 Acres; 17,000 Acres Added in 1998
 Drilled 30 Wells by End of 1998
 Gas Gathering Pipeline System Built in 1997

1998: Raton Basin Operations Sold to Evergreen Resources
 500,000 Shares of Evergreen Stock and $1 MM of Cash and Debt Assumption
 Valued at $8.5 Million as of Closing in December 1998;
 Over $15 Million Ultimately Realized and Re-Deployed to Build Current E&P Operations

2000: Labarge, Pipeline and Piceance Basin Prospects Acquired in the Rockies
 Labarge Prospect Acquired in January 2000
 Pipeline Prospect Acquired in July 2000
 Piceance Basin Prospect Acquired in November 2000

2002: Sand Wash Basin Prospect Acquired
 Sand Wash Basin Prospect Acquired in April 2002

2003: Nicaraguan Concession Awarded to Infinity
 Awarded in May 2003; Culmination of Four-Year (1999-2003) Effort by Infinity
 1998 2-D Seismic Survey by Government Indicates Presence of Hydrocarbon-Bearing Structures
 Potential World-Class Cretaceous Carbonate Play Similar to Those Found in Mexico and Venezuela

2004: Letter of Intent for Fort Worth Basin Acreage
 25,000 Acres
 Transaction Pending
 Good Relationship With Partners Who Have a Successful Track Record in the Barnett Shale Play
Energy Growth Story
2
IFNY Today
 Current Projects / Operations
 Infinity Oil & Gas of Wyoming
- Greater Green River Basin - Wamsutter Arch Pipeline Field
- Greater Green River Basin - Labarge Field
- Sand Wash Basin - CBM Prospect
- Piceance Basin - CBM Prospect
 Consolidated Oil Well Services
 E&P Prospects
 Fort Worth Basin - Barnett Shale, et al (pending acquisition)
 Miskito Basin, Offshore Nicaragua - Cretaceous Carbonates; Lower Eocene
Energy Growth Story
3
IFNY: Positioned for Growth
 Experienced Management Team
 Strong Board of Directors
 Production / Reserves
 Current Production:
Approximately 4 MMcfed (net)
 Proved Reserves:
10.8 Bcfe (includes small 2004 acquisition)
Essentially all at the Pipeline Field; None at Labarge
Approximately 70% Developed
 Estimated Value:
$27 MM Pretax PV10 (including recent acquisition)
 Reserve Engineer:
Netherland Sewell (NSAI)
Prepared the Reserve Report
 Resource Potential:
248 Bcfe at Labarge per NSAI
Over 2 Bcfe per 160-Acre Well Location per NSAI
 Labarge Development:
Partnership Agreement With Schlumberger
Recomplete Existing Wells
Drill New Wells
Energy Growth Story
4
Rocky Mountain
Exploration & Production
Energy Growth Story
5
Rocky Mountain E&P

Four Rocky Mountain Properties





Operating Status





Wamsutter Arch Pipeline Field
Labarge Field
Sand Wash Basin
Piceance Basin
Pipeline: Producing; Development
Labarge: Development; Exploration
Sand Wash: Exploration (2004-05 Pilot)
Piceance: Exploration (2004-05 Pilot)
Labarge Field
Pipeline Field
Recent Business Developments




Pipeline: March 2004 Acquisition
Labarge: Schlumberger Agreement
Sand Wash: Seeking Farmout Partners
Piceance: Seeking Farmout Partners
Sand Wash North
Sand Wash South
Legend
Piceance Basin
 Producing and Development
 Development
 Exploration
Energy Growth Story
6
Rocky Mountain E&P
 During 2004, We Expect to
Increase Production by:
- Recompleting Some Wells to
Known Gas Sands
- Performing Workovers,
Frac Jobs, Refracs, etc.
- Drilling New Wells
- Quickly Bringing on Line
New Well Production
- Expansion Opportunities
2002 - 2003 Q u arterly A verag e o f N et D aily P ro d u ctio n
4000
A p p ro x im a te
D a ily G a s E q u iv a le n t P ro d u c tio n (M c fe d )
 Wells Brought On Line in Late
2002 Have Experienced
Typical Gas Well Decline
Rates
 No Workovers or
Optimization Work Has Been
Performed on Any of These
Wells to Date, Only Routine
Maintenance Work
 The Overall Decline Trend
Has Largely Been Arrested in
Q1 2004 by (i) the Bringing on
Line of 6 Wells Drilled in Late
2003 and (ii) Closing a Small
Acquisition
Q 1 2004 Ex it R a te
3500
3000
2500
2000
1500
1000
500
0
Q1-
Q2-
Q3-
Q4-
Q1-
Q2-
Q3-
Q4-
2002
2002
2002
2002
2003
2003
2003
2003
D a ily G a s P r o d u c tio n (M c fd )
D a ily O il a n d C o n d e n s a te P r o d u c tio n (M c fe d )
Note: Q1 2004 daily production exit rate does not equal the quarter’s average net daily production, which Infinity’s management expects will equal or
exceed the fourth quarter of 2003 and is less than the exit rate.
Energy Growth Story
7
Pipeline Field
 Current Position




Wamsutter Arch Pipeline Field
19,550 Gross Acres / 19,150 Net Acres
98% Average WI
80%+ Average NRI
Recently Added 960 Gross Acres + 2 Wells
- 2.1 Bcfe (derived from NSAI report)
- $4.3 MM PV10 (derived from NSAI)
 Conventional Gas and Oil Play
100% Almond &
Shallower
Recently
Relinquished
Farmout
Acreage
 Resource Potential
 Mainly a Proved Reserve Field
 7.5 Bcfe of Non-Proved Resource Potential
(NSAI est.)
 Operations




(1)
(2)
17 Completed / Producing Wells
Enhancements for Selected Wells in 2004
Up to 2-5 New Wells for 2004
Proved Reserves (12/31/03) (1)(2)
- 8.3 Bcfe (10.4 Bcfe with acquisition)
- $23 MM PV10 ($27 MM with acquisition
Based on Netherland Sewell reserve report as of 12/31/03.
Excludes 2.1 Bcfe of proved reserves and $4.3 million of PV-10 value derived from NSAI report.
Energy Growth Story
Anadarko
Patrick Draw
Pipeline
Field
8
Labarge Field
Labarge Field
 Current Position





11,730 Gross Acres / 11,199 Net Acres
Options on Approximately 18,000 Acres
95% Average WI
~80% Average NRI
Recent Agreement With Schlumberger
- Working to “Crack the Code” Currently
- Complete / Recomplete Existing Wells
- Drill New Wells
 Believed to be a “Blanket” CBM Play
Riley Ridge
Pilot
 Resource Potential
Thompson
Pilot
 Assuming 160-Acre Spacing
 Potential Gross Locations: 185
 Gross Resource Potential: 248 Bcf (1)
Labarge
Field
Farmout
Acreage
 Operations




2 Producing Wells (<100 Mcf per day per well)
3-8 Wells Awaiting Completion or Recompletion
Up to 5-6 New Wells for 2004
Proved Reserves (12/31/03) (1)
- None
Pinedale
Anticline / Jonah
Labarge
Field
Exxon Mobil
Tip Top Unit
(1)
Netherland Sewell estimated zero proved reserves and 248 Bcf of gross resource potential as of 12/31/03.
Energy Growth Story
9
Sand Wash Basin
 Overview
Sand Wash Basin Prospect
 Net Acreage: 112,833
 Target: Iles & Lower William Fork Coals
 Coal Thickness: Est. 55’
Infinity Acreage
With Either Deep
or Shallow Rights
 Gas Content: Est. 135 - 235 SCF/ton
 Drilling Depth: 2,500’ – 3,000’
 ~1.0 Tcfe Unrisked Resource
Potential (IFNY estimate)
 Seeking WI Partner
Infinity
Acreage Not
Expiring in 2004
Routt National
Forest
WY
Carbon Co.
Phillips
Pilot
CO
Moffat Co.
Routt Co.
Rio Blanco Co.
Energy Growth Story
Infinity
Acreage
Expiring
in 2004
10
Piceance Basin
 Overview
 Net Acreage: 20,020
Piceance Basin Prospect
 Target: William Fork & Iles Coals
 Coal Thickness: Est. 100’
ConocoPhillips
 Gas Content: Est. 200 SCF/ton
 Drilling Depth: 1,000’ – 3,000’
 ~500 Bcf Unrisked Resource
Potential (IFNY estimate)
 Pilot to Be Drilled by 11/2005
WY
CO
Moffat Co.
Infinity
Wilson Creek
Federal Unit
(red border)
Chevron
Texaco
Evergreen
Rio Blanco Co.
Energy Growth Story
11
Rocky Mountain E&P
 Investment Highlights
 10.8 Bcfe of Proved Reserves (mainly Pipeline; includes recent acquisition)
 $27 MM of PV10 Value (mainly Pipeline; includes recent acquisition)
 Current Net Daily Production of Approximately 4 MMcfed (mainly from Pipeline)
 Workovers and “Refracs” of Identified Producing Pipeline Wells in 2004
 Drill Up to 2-5 Wells at Pipeline in 2004, Subject to Market & Regulatory Conditions
 Continue Working With Schlumberger to Optimize Completion and Recompletion
Techniques for Sizeable Resource Base at Labarge: “Crack the Code”
 Re-Establish Economic Production at Labarge; Reclassify Reserves as Proved
 Drill Up to 5-6 Wells at Labarge in 2004, Subject to Market & Regulatory Conditions
 Prepare to Drill Pilot at Sand Wash; Continue Search for Partner
 Perform Coring Work; Prepare to Drill Pilot at Piceance; Continue Search for Partner
Energy Growth Story
12
Oilfield Services
Energy Growth Story
13
Consolidated Oil Well Services, Inc.

Four Service Yard Locations





Bartlesville, OK
Chanute, KS
Ottawa, KS
Gillette, WY
Experience & Services Provided




Nearly 50 Years Experience
Serviced Over 250,000 Wells
Approximately 150 Trucks and 100 Employees
Presence in Major Mid-Continent and
Rocky Mountain Gas Basins
 Provide Wide Array of Services:
- Cementing, Acidizing, Fracturing, Nitrogen
Pumping, Production Stimulation, Water
Hauling and Other Services

Map of Yard Locations
Gillette
South
Dakota
Powder
River
Basin
Forest
City Basin
Nebraska
Wyoming
Colorado
Salina
Basin
Ottawa
Kansas
Chanute
Cherokee Basin
Bartlesville
New
Mexico
Oklahoma
Anadarko
Basin
Texas
Arkoma
Basin
Solid Customer Base
 Approximately 400 Customers in 2003
 Serving Small and Large E&P Firms
 Benefiting from Emerging Plays in Cherokee
and Forest City Basins
 Benefiting from Rejuvenated Powder River Basin
Energy Growth Story
14
Consolidated Oil Well Services, Inc.
Quality Equipment Fleet Serving Customer Needs
Cement Pumper
Pumper / Blender
Blender (50 Bbl / min.)
Frac Trailers (1,350 HP)
Energy Growth Story
15
Consolidated Oil Well Services, Inc.




Financial Results
Improved
Dramatically in
2003 vs. 2002
Seasonality
Primarily Impacts
the First Quarter of
Each Year
Q4 2003 Effected
by M&A Among
Customers
We Expect Further
Improvement in
2004 vs. 2003
Preliminary
Guidance of $13 $15 MM of
Revenues During
2004
Energy Growth Story
2002 - 2003 Q u arterly F in an cial R esu lts
$ 4 ,0 0 0
$ 3 ,5 0 0
$ 3 ,0 0 0
$ 2 ,5 0 0
$ M illio n s

$ 2 ,0 0 0
$ 1 ,5 0 0
$ 1 ,0 0 0
$500
$0
Q1-
Q2-
Q3-
Q4-
Q1-
Q2-
Q3-
Q4-
2002
2002
2002
2002
2003
2003
2003
2003
Rev enues
G ro s s P ro fit
16
E&P Prospects
Energy Growth Story
17
E&P Prospects
 Ft. Worth Basin / Barnett Shale
 Along With the San Juan Basin, the Powder River Basin, and the
Pinedale Anticline / Jonah Field, the Barnett Shale is One of the Largest
Non-Conventional Gas Plays Discovered in the U.S. Over the Past 25 Years
 Infinity Has a Letter of Intent (LOI) to Acquire 25,000 Gross Acres in this Play
With an Initial 90% Working Interest; Opportunities Exist to Add More Acreage
 The LOI Contemplates the Drilling of Four Horizontal Test Wells, Including
Three That Target the Barnett Shale
 Miskito Basin / Offshore Nicaragua
 One of the Least Explored High Potential Basins in the World
 Cretaceous Reserves / Production in Area Among the Best in the World
 Excellent Nicaraguan Production Contract – Awaiting Final Approvals
 Infinity Will Control 1.4 Million Acres
 Multi-Billion Barrel Field Potential Based on Regional Analogs
Energy Growth Story
18
Fort Worth Basin Prospect

Summary of Infinity Position





Fort Worth Basin / Barnett Shale
25,000 Gross Acres
90% Initial WI
Location: Undisclosed Fort Worth Basin
Targeted Formations: Barnett Shale, et al
Basin Statistics (1)
 9.6 Tcf of Gas Produced in Core Area
 Barnett Shale Covers Up to 16 Counties
 2,000 – 5,000 Additional Wells
May Be Drilled in the Field
 Production Growth of 30%+ Per Annum
Over the Past 4+ Years 275 MMcfd to 900 MMcfd (2)
 Largest Gas Producing Play in Texas (2)
 DVN, EOG, BR, XTO are Active in Region (2)

Non-Core Areas (2)




Non-Core Area Covers 3,500 sq. mi.
~17-20 Tcf Recoverable Reserves
3 Recent Horizontal Successes in Johnson Co.
Shallow, Horizontal Drilling Mitigates Risk of
Excessive Natural Fracturing and Water
 Lease Costs and Royalty Rates Increasing
(1) Source: Report of the Potential Gas Committee, “Potential Supply of Natural Gas – 2002”
(2) Source: Morgan Stanley Equity Research, “Barnett Shale Update – Non-Core Confidence Rises” (4/16/04)
Energy Growth Story
19
Fort Worth Basin Prospect
 Investment Highlights
 One of the Most Prolific and Prospective Non-Conventional Gas Plays in the U.S.
 Our LOI Acreage is in a Relatively Unexplored Portion of the Barnett Shale
 Infinity Would Operate With a 90% Initial Working Interest in the Acreage
 Infinity’s Partners Have Had a Successful Track Record in the Barnett Shale
 Up to Four Horizontal Test Wells in 2004 and 2005, Three Targeting the Barnett Shale
 Land Acquisition and Development Costs Remain Attractive in the LOI Acreage Area
 Less Operational Seasonality for Infinity Relative to the Rocky Mountain Projects
 Ample Number of Drilling and Oilfield Service Providers
 Proximity and Likely Availability of Gathering, Processing and Pipeline Infrastructure
 Potential for 1-2 Bcf of Gas per Well, if Successful
 Expansion Opportunities Would Likely Exist, if Successful
Energy Growth Story
20
Nicaraguan Prospect

Negotiated Position







Total 1,388,989 Acres
Tyra (North) 822,861 Acres
Perlas (North) 566,128 Acres
100% Average WI
85% or Greater Average NRI
Awaiting Final Approvals and Execution
History





Offshore Nicaragua Concession
No Significant Exploration Activity Since 1978
26 Wells Drilled / 10 With Hydrocarbon Shows
Two Have Tested Measurable Hydrocarbons
Nearby Producer: Shell #1 Perlas / 350 BOPD
Resource Base and Potential






Strong Evidence for Oil Potential
Geology is Very Complex
Proven Source Rock / Hydrocarbons
Several Known Potential Reservoir Rocks
High-Risk / High-Return Exploration
Infinity’s Block Has Multi-Billion Barrel Potential
Energy Growth Story
21
Nicaraguan Prospect
 World Class Cretaceous Analog Fields
 Cantarell Complex – Mexico
- Discovered in 1979; Cretaceous Fractured Carbonate Reservoir; 2,700’ Thickness
- Estimated Ultimate Recovery of Approximately 8 Billion Bbls of Oil
- Among Highest Flow Rates in Mexico With Some Wells in Excess of 50,000 BOPD
 Reforma Area – Mexico
- Upper Jurassic and Cretaceous Fractured Carbonate Reservoirs; 1,200’ Thickness
- Estimated Ultimate Recovery of Approximately 7 Billion Bbls of Oil
 LaPaz Field – Venezuela
- Discovered in 1944; Cumulative Oil Production Through 1992 of 867 MMBbls
- Estimated Ultimate Recovery of Approximately 1 Billion Bbls of Oil
- Peak Production in 1950 of 160,000 Bbld
 Lama Field – Venezuela
- Cretaceous Fractured Carbonate Reservoir
- Estimated Ultimate Recovery of Approximately 300 MMBbls of Oil
 Rubelsanto Field – Guatemala
- Discovered in 1974; Cretaceous Fractured Dolomites Reservoir
- Estimated Ultimate Recovery of Approximately 25-50 MMBbls of Oil
- Peak Production of 7,000 Bbld
Energy Growth Story
22
Nicaraguan Prospect
Exploration Plan – Four Two-Year Sub Phases:

Sub Phase I ($2.4 MM: $800K in Year 1 and $1.6 MM in Year 2)





Prepare Environmental Impact Assessment
Define Structural and Depositional Trends, Highlight Areas of Highest Potential
Determine Areas for New 2-D Seismic Data Acquisition
Acquire New 2-D Seismic (shot in 1998 by government)
Sub Phase II
 Continue to Generate and Refine Additional Geological Definition
 Determine Areas for New 3-D Seismic Data
 Acquire 3-D Seismic Data

Sub Phase III
 Interpret 3-D Seismic Data
 Identify Drilling Locations
 Drill Minimum of One Initial Exploration Well

Sub Phase IV
 Evaluate Results of Initial Exploration Well
 Drill a Minimum of Two Additional Exploration Wells
 Evaluate Results of All Exploration Wells
Energy Growth Story
23
Conclusion
Energy Growth Story
24
IFNY: Energy Growth Story
 Investment Highlights
 Steadily Improving Production from Pipeline
 Continuing Development of Emerging Labarge CBM Play With Schlumberger
 Expected Increase in Free Cash Flow From Oilfield Service Arm
 Expansion Opportunities in Oilfield Services
 Addition of New Upside Potential in the Barnett Shale
 Continuing Evolution of Potential “World Class” Play in Nicaragua
 Pursuing Partnering Arrangements for the Sand Wash and Piceance CBM
Projects; Coring Work at Piceance and “5-Spot” Pilots for Both Prospects in
2004 and 2005
 Even On a Heavily-Risked Basis, Little or No Value for Considerable
Development and Exploratory Upside
Energy Growth Story
25
Energy Growth Story
NASDAQ: IFNY
IFNY: Positioned for Growth

Market & Financial Data
 Shares Outstanding:
9.396 MM Shares
Includes 1.0 MM Shares Issued in January
 Recent Closing Price:
$3.71 per Share (April 15, 2004)
 Equity Market Cap.:
$34.9 MM
 Total Enterprise Value:
$62.2 MM
 Total Debt:
$28.0 MM (12/31/03)
- $11.2 MM of 7% Convertible Debt ($8.07 strike price)
- $2.8 MM of 8% Convertible Debt ($4.88 strike price)
- $3.0 MM of Related Party Debt ($1.3 MM repaid in 2004)
- $5.5 MM E&P Facility (US Bank; $0.4 MM repaid in 2004)
- $5.5 MM Oilfield Service Facility (LaSalle) / Other Debt
 Cash:
$0.7 MM (12/31/03)
 Private Placement:
$4.0 MM of Net Proceeds in January 2004
1.0 MM Shares of Common Stock
Leading Early-Stage Energy Institutional Investor
 Debt Service:
2004 - $1.8 MM
2005 - $2.1 MM (net of $1.7 MM repaid in 2004)
2006 - $8.9 MM
2007 - $11.5 MM
2008 - $0.1 MM
Energy Growth Story
27
IFNY: Corporate Information
Senior Management
Infinity, Inc.
Subsidiaries
Stanton E. Ross
President and CEO
James A. Tuell
President, Infinity Oil &
Gas of Wyoming
Jon D. Klugh
CFO and Secretary
James W. Dean
VP, Strategic & Corporate
Development
Gerald D. Gentry
Vice President of
Operations, Infinity
Oil & Gas of Wyoming
Stephen D. Stanfield
Chief Operations
Officer, Consolidated Oil
Well Services, Inc.
Office Locations
211 W. 14th Street
Chanute, Kansas 66720
Phone: (620) 431-6200
Fax: (620) 431-6262
www.infinity-res.com
Energy Growth Story
Board of Directors
Stanton E. Ross
Chairman; currently President and CEO of Infinity
Robert O. Lorenz
Director; currently director of Panhandle Royalty Co.; formerly
Partner at Arthur Andersen LLP and Audit Division Head and
Managing Partner of Oklahoma practice
Leroy C. Richie
Director; currently director of Kerr-McGee Corp. and J.W.
Seligman & Co.; formerly VP Chrysler Corp. and General
Counsel of Automotive Operations
O. Lee Tawes
Director, currently Managing Director of Equity Research at
C.E. Unterberg Towbin; formerly Director of Equity Research at
CIBC World Markets and Oppenheimer and analyst at
Goldman Sachs
Professional Firms
950 17th St., Suite 800
Denver, CO 80202
Phone: (720) 932-7800
Fax: (720) 932-5409
Auditors: Ehrhardt Keefe Steiner & Hottman PC
Reservoir Engineers: Netherland Sewell and Associates Inc.
Legal Counsel: Davis, Graham & Stubbs LLP
Outside Investor Relations: EnerCom, Inc.
28