INFINITY NATURAL RESOURCES, INC.INR
INFINITY NATURAL RESOURCES, INC. Debt Disclosure
Debt
On September 25, 2024, INR Holdings entered into a credit facility led by Citibank, N.A. (the “Credit Facility” and the credit agreement governing the Credit Facility, as amended, the “Credit Agreement”) with a syndicate of financial institutions with an initial aggregate elected commitment amount and initial borrowing base of $325.0 million. On March 31, 2025, the Company amended the Credit Agreement to, among other things, increase each of the aggregate elected commitment amount and borrowing base from $325.0 million to $350.0 million. On May 29, 2025, the Company amended the Credit Agreement to, among other things, amend certain provisions relating to hedging requirements and restrictions in the Credit Agreement. Effective October 1, 2025, the borrowing base under the Credit Facility was increased from $350.0 million to $375.0 million and the aggregate elected commitment amount was also increased from $350.0 million to $375.0 million.
On December 5, 2025, INR Holdings entered into that certain Third Amendment to Credit Agreement, which among other things, amended certain provisions relating to hedging requirements and restrictions, debt incurrences and permitted acquisitions in the Credit Agreement. The borrowing base is based on the net present value of our oil and gas properties and is subject to semi-annual redeterminations. The Credit Facility is guaranteed by INR Holdings’ subsidiaries and is secured by first priority security interests on substantially all of INR Holdings’ consolidated assets.
Borrowings under the Credit Facility may be base rate loans or Secured Overnight Financing Rate (“SOFR”) loans. Base rate loans bear interest at a rate per annum equal to the greater of: (i) the administrative agent bank’s prime rate; (ii) the federal funds effective rate plus 50 basis points; or (iii) the adjusted Term SOFR rate (as defined in the Credit Agreement), plus an additional basis point credit spread, plus an applicable margin ranging from 275 basis points to 375 basis points, depending on the percentage of the borrowing base utilized. SOFR loans bear interest at SOFR plus an applicable margin ranging from 275 basis points to 375 basis points, depending on the percentage of the borrowing base utilized, plus an additional basis point credit spread. We also pay a commitment fee on unused elected commitment amounts under the Credit Facility, which is also dependent on the percentage of the borrowing base utilized. Interest is payable quarterly for base rate loans and at the end of the applicable interest period for SOFR loans. The Credit Facility matures in September 2028. As of December 31, 2025, the Company’s reserves supported a $375.0 million borrowing base of which $150.9 million was outstanding, leaving $224.1 million of unused capacity.
For the years ended December 31, 2025 and 2024, total interest expense on the Credit Facility was $7.8 million and $19.1 million, respectively. We did not capitalize any interest expense for the years ended December 31, 2025 and 2024. For the years ended December 31, 2025 and 2024, the Company’s weighted-average interest rate was 7.2% and 8.3%, respectively.
Debt issuance costs associated with the Credit Facility are capitalized and presented as other assets within the unaudited condensed consolidated balance sheets. Debt issuance costs are amortized using the straight-line method over the term of the related agreement. We capitalized an additional $1.1 million of debt issuance costs related to the Credit Facility for the year ended December 31, 2025. As of December 31, 2025 and December 31, 2024, capitalized debt issuance costs were approximately $6.7 million and $7.9 million, respectively. Amortization of debt issuance costs, which is included within interest expense in the consolidated statements of operations, was approximately $2.3 million and $2.4 million for the years ended December 31, 2025 and 2024, respectively.
The Credit Facility also requires INR Holdings to maintain compliance with financial ratios including a current ratio of not less than 1.0 to 1.0 and a leverage ratio no greater than 3.0 to 1.0, each of which is defined within the terms of the Credit Agreement. INR Holdings is in compliance with the covenants and financial ratios under the Credit Agreement described above through the date these audited consolidated financial statements were available to be issued.
Other Long-Term Debt
Other long-term debt principally relates to car loans associated with our car fleet to support service and maintenance of our operated wells.
Payments due by fiscal year related to other long-term debt as of December 31, 2025 are as follows:
| Notes Payable | |||||
| (in thousands) | |||||
| 2026 | $ | 40 | |||
| 2027 | 15 | ||||
| 2028 | — | ||||
| 2029 | — | ||||
| 2030 | — | ||||
| Total payments | $ | 55 | |||
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.