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HOUSTON, Nov. 04, 2019 (GLOBE NEWSWIRE) -- Contango Oil & Gas Company (NYSE American: MCF) (“Contango” or the “Company”) announced today that the Company has completed its previously announced acquisition of certain assets and liabilities, including approximately 315,000 net acres located in the STACK, Anadarko and Cherokee operating districts in Oklahoma (the “Properties”) from White Star Petroleum, LLC (“White Star”) and certain of its affiliates for a total purchase price of $132.5 million. Following adjustment for the results of operations for the period between the effective and closing dates, and other estimated customary closing adjustments, the Company paid a total cash consideration of $95.8 million, which includes the previously funded cash deposit of $12.5 million (the “Acquisition”).
The acquired White Star assets produced approximately 15,000 barrels of oil equivalent per day as of the July 1, 2019 effective date, and which consisted of approximately 63% oil and NGLs. The acreage is approximately 80% held-by-production. Approximately 65% of the wells are operated by White Star and are mature fields with strong cash flow and that provide significant development potential from PDNP and PUD opportunities. The Properties also include integrated gathering and saltwater disposal systems, which reduces lease operating expenses and adds third party cash flow.
The Company also announced today that it has entered into an amendment (the “Amendment”) to its credit agreement by and among the Company, JPMorgan Chase Bank, N.A., as Administrative Agent, pursuant to which two additional banks were added to the bank group, and the borrowing base under the Credit Agreement increased to $145 million. The Acquisition was funded from net proceeds from the previously announced private placement of Series B Contingent Convertible Preferred Stock and borrowings under the Credit Agreement.
Contango Oil & Gas Company is a Houston, Texas based, independent oil and natural gas company whose business is to maximize production and cash flow from its offshore properties in the shallow waters of the Gulf of Mexico and onshore properties in Texas, Oklahoma and Wyoming and to use that cash flow to explore, develop, exploit, increase production from its existing properties, and to acquire crude oil and natural gas properties in the United States.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on Contango’s current expectations and include statements regarding the Acquisition, expected reserves, cash flow development upside, beliefs, plans, objectives, assumptions, strategies or statements about future events or performance. Words and phrases used to identify forward-looking statements include terms such as “expects,” “believes,” “anticipates,” “plans,” “estimates,” “potential,” “possible,” “efforts,” “goal,” or “intends,” or words and phrases stating that certain actions, events or results “may,” “will,” “should,” or “could” be taken, occur or be achieved. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those reflected in the statements. These risks include, but are not limited to market conditions, industry conditions and factors which could affect Contango’s operations or financial results, including those described in Contango’s Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results and developments may differ materially from the projections in the forward-looking statements. Forward-looking statements speak only as of the date they were made and are based on the estimates and opinions of management at the time the statements are made. Contango does not assume any obligation to update forward-looking statements should circumstances or management’s estimates or opinions change, except as required by law.
Contango Oil & Gas Company
E. Joseph Grady, 713-236-7400
Senior Vice President and Chief Financial Officer
Sergio Castro, 713-236-7400
Vice President and Treasurer
Source: Contango Oil & Gas Company