Infinity Energy Resources Inc. (OTCMKTS:IFNY) Smashes Through The $3 Barrier

Yesterday Infinity Energy Resources Inc. (OTCMKTS:IFNY) registered one of its best sessions in a while. It opened the day at $2.92, and from then on, the only way was up. It broke through the $3 per share mark about an hour after the start and when trading seized, the ticker was standing at $3.40 which is a new 52-week high. That’s not the most attractive value in Pennyland and IFNY might have ran too high for its own good, which in turn boosts the threat of corrections, but is there anything else to stop their ascend?

Well, if you take a look at their chart, you’ll see that they made a similar run back in February when the value jumped from around $1.50 all the way to $2.25 in less than a month and if you check out our previous article, you’ll see that the ascend was fueled by nothing more than press releases about IFNY‘s participation in investor conferences which, you would agree, bears no effect on their business of pumping oil from their concessions located in the Caribbean Sea. Predictably enough, once the announcements became fewer and farther in between, the ticker slid down and by April, it was standing at around $1.60 once again.

We can see that IFNY led some more investor conferences in the past few weeks, but this time, in addition to these announcements, there were also some relevant news. We’re talking about the press release from July 24 when they said that they have received strategic partnership offers from not one, but two unnamed global geophysical service companies. If IFNY accept the proposals, they will finally start the seismic 3-D mapping of their 1.4 million-acre concessions located near Nicaragua which could potentially be a massive milestone and that is probably why the ticker has been on a winning spree over the last couple of days.

That said, there can be no guarantees that the analysis will reveal any significant reserves of black gold in IFNY‘s lands. Not to mention that if it does, they will need to start thinking about drilling the initial holes which, considering the financial resources depicted in the report for the second quarter of 2013 (which came out yesterday), might turn out to be a tall order. The figures do look better compared to the ones found in the 10-Q for the first three months, but IFNY will still need some help if they are to get the ball rolling. Here’s a summary of the most important figures as of June 30:

• cash: $143 thousand
• current assets: $154 thousand
• current liabilities: $5.9 million
• no revenue since inception
• quarterly net loss: $781 thousand
• accumulated deficit: $106 million

You can see that they’ll either need to find a partnering company that is willing to fund a large portion of the operations, or they’ll need to secure debt and/or equity financing, which in turn could lead to worsening their financial situation and/or dilution.

All in all, predicting IFNY‘s future with any acceptable degree of certainty is nigh on impossible at this point, which is why the ticker remains a risky choice. On the bright side, there’s no current pump running for them, we haven’t manage to intercept such campaigns since the very start and we certainly hope that IFNY will manage to keep it that way. Otherwise, a lot of investors might find themselves gasping for breath under the promotional pressure. Sanborn Resources Ltd (OTCMKTS:SANB) and Xumanii, Inc. f/k/a Medora Corp (OTCMKTS:XUII)’s charts on the right are pretty illustrative of what we mean.