HOUSTON–(BUSINESS WIRE)– Contango Oil & Gas Company (NYSE MKT: MCF) announced today that the previously announced purchase of one-half of the seller’s interest in approximately 12,100 gross undeveloped acres (~5,000 net acres to MCF) in the Southern Delaware Basin of Texas closed on July 26, 2016. The Company paid $10 million in cash at closing to fund the initial purchase price, and will pay an additional $10 million in carried well costs over the next 14 months and $5 million in additional contingent payments upon success. Additionally, the Company closed on its recently announced equity offering on July 27, 2016 and received approximately $46.9 million, net of fees and expenses.
Allan D. Keel, the Company’s President and Chief Executive Officer, said, “I’m sure all Contango shareholders are as excited as we are to have gained a foothold in one of the most prolific and economic plays in the country. With funding this week from the recently announced equity raise, we have already begun the process to secure a drilling rig to commence drilling in September/October 2016, with initial production expected in the fourth quarter of 2016. The initial plan is to start development with one rig in 2016, and if results warrant, ramp up to two rigs by mid-2017. Throughout this development project, we will continue to focus on maintaining our strong balance sheet and financial flexibility to remain well positioned to take advantage of any additional acquisition opportunities that may arise.”
Contango Oil & Gas Company is a Houston, Texas-based, independent energy company engaged in the acquisition, exploration, development, exploitation and production of crude oil and natural gas offshore in the shallow waters of the Gulf of Mexico and in the onshore Texas Gulf Coast and Rocky Mountain regions of the United States. Additional information is available on the Company’s website at www.contango.com.