EX-99.1
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a4791550ex99.txt
CONTANGO OIL & GAS COMPANY EXHIBIT 99.1
Contango Completes $50 Million Sale of South Texas Properties
HOUSTON--December 29, 2004--Contango Oil & Gas Company
(AMEX:MCF) announced today that it has completed the sale of
substantially all of its south Texas natural gas and oil interests to
Edge Petroleum Corporation (Nasdaq:EPEX) for $50 million. The sale was
approved by a majority of the Company's stockholders at a Special
Meeting of Stockholders on Dec. 29, 2004. Pre-tax proceeds to Contango
after netting adjustments will equal approximately $43.2 million.
Adjustments were made for net revenues that Contango received for
production occurring after July 1, 2004, the effective date of sale,
up to the closing date of Dec. 29, 2004. The Company estimates taxes
owed as a result of this sale at approximately $8 million. The Company
has no debt and estimates it will have net proceeds after taxes of $35
million.
Following the sale, the Company has remaining production of
approximately 2,300 MMBtue per day. Based on current prices and
production rates, the Company anticipates production revenues of
$300,000 to $400,000 per month, a level believed to be sufficient to
pay our ongoing estimated general and administrative expenses of
$200,000 per month.
Initially, the Company expects to invest the proceeds from the
sale in short-term U.S. government and investment grade debt
securities. These funds will provide working capital for ongoing
operations and will allow us to continue investing in our existing
onshore exploration programs and to maintain our 10% limited
partnership interest in the Freeport LNG plant, including any
potential expansion in the plant's capacity.
Kenneth R. Peak, Contango's chairman and chief executive officer,
said, "We currently expect that we will participate in approximately
20 onshore wells in calendar year 2005. Our estimated share of dry
hole costs for these wells is approximately $10 million.
"Additionally, the funds will enable the Company to consider
acquiring a 5% to 20% working interest position on a prospect by
prospect basis in offshore Gulf of Mexico exploration opportunities
developed by our two partially owned subsidiaries, Republic
Exploration, LLC (REX) and Contango Offshore Exploration, LLC (COE).
In the offshore our two partially owned subsidiaries, REX and COE, are
scheduled to be carried in four deep shelf wells in calendar year
2005. Our EI-113B exploratory well is expected to begin production in
the summer of 2005. Contango anticipates monthly net revenues of about
$150,000.
"We expect to increase our investment in Contango Capital Partners
Fund I by about $1.5 million in January 2005, bringing our total
investment in Contango Capital related ventures to $2.1 million.
Contango Capital has made and expects to close several transactions in
fuel cell and hydrogen generation technologies. Trulite, one of
Contango Capital's primary investments, has made significant progress
in developing its portable fuel cell and expects to launch commercial
products in calendar year 2005. Contango Capital expects to close Fund
I at a value of approximately $10 million by January 2005".
Contango is a Houston-based, independent natural gas and oil
company. The Company explores, develops, produces and acquires natural
gas and oil properties primarily onshore in the Gulf Coast and
offshore in the Gulf of Mexico. Contango also owns a 10% partnership
interest in Freeport LNG Development L.P., which is developing 1.5
billion cubic feet per day of natural gas capacity at its LNG terminal
to be constructed in Freeport, Texas, and a 32% interest in Contango
Capital Partnership Management, LLC, which was formed to invest in the
alternative energy venture capital market with a focus on
environmentally preferred energy technologies. Additional information
can be found on our Web page at www.contango.com.
This press release contains forward-looking statements that
involve risks and uncertainties, and actual events or results may
differ materially from Contango's expectations. The statements reflect
Contango's current views with respect to future events that involve
risks and uncertainties, including those related to successful
negotiations with other parties, oil and gas exploration risks, price
volatility, production levels, closing of transactions, capital
availability, operational and other risks, uncertainties and factors
described from time to time in Contango's publicly available reports
filed with the Securities and Exchange Commission.
CONTACT: Contango Oil & Gas Company, Houston
Kenneth R. Peak, 713-960-1901
www.contango.com

EX - 99 . 1 2 a4791550ex99 . txt CONTANGO OIL & GAS COMPANY EXHIBIT 99 . 1 Contango Completes $ 50 Million Sale of South Texas Properties HOUSTON -- December 29 , 2004 -- Contango Oil & Gas Company ( AMEX : MCF ) announced today that it has completed the sale of substantially all of its south Texas natural gas and oil interests to Edge Petroleum Corporation ( Nasdaq : EPEX ) for $ 50 million . The sale was approved by a majority of the Company 's stockholders at a Special Meeting of Stockholders on Dec. 29 , 2004 . Pre - tax proceeds to Contango after netting adjustments will equal approximately $ 43.2 million . Adjustments were made for net revenues that Contango received for production occurring after July 1 , 2004 , the effective date of sale , up to the closing date of Dec. 29 , 2004 . The Company estimates taxes owed as a result of this sale at approximately $ 8 million . The Company has no debt and estimates it will have net proceeds after taxes of $ 35 million . Following the sale , the Company has remaining production of approximately 2,300 MMBtue per day . Based on current prices and production rates , the Company anticipates production revenues of $ 300,000 to $ 400,000 per month , a level believed to be sufficient to pay our ongoing estimated general and administrative expenses of $ 200,000 per month . Initially , the Company expects to invest the proceeds from the sale in short - term U . S . government and investment grade debt securities . These funds will provide working capital for ongoing operations and will allow us to continue investing in our existing onshore exploration programs and to maintain our 10 % limited partnership interest in the Freeport LNG plant , including any potential expansion in the plant 's capacity . Kenneth R . Peak , Contango 's chairman and chief executive officer , said , " We currently expect that we will participate in approximately 20 onshore wells in calendar year 2005 . Our estimated share of dry hole costs for these wells is approximately $ 10 million . " Additionally , the funds will enable the Company to consider acquiring a 5 % to 20 % working interest position on a prospect by prospect basis in offshore Gulf of Mexico exploration opportunities developed by our two partially owned subsidiaries , Republic Exploration , LLC ( REX ) and Contango Offshore Exploration , LLC ( COE ) . In the offshore our two partially owned subsidiaries , REX and COE , are scheduled to be carried in four deep shelf wells in calendar year 2005 . Our EI - 113B exploratory well is expected to begin production in the summer of 2005 . Contango anticipates monthly net revenues of about $ 150,000 . " We expect to increase our investment in Contango Capital Partners Fund I by about $ 1.5 million in January 2005 , bringing our total investment in Contango Capital related ventures to $ 2.1 million . Contango Capital has made and expects to close several transactions in fuel cell and hydrogen generation technologies . Trulite , one of Contango Capital 's primary investments , has made significant progress in developing its portable fuel cell and expects to launch commercial products in calendar year 2005 . Contango Capital expects to close Fund I at a value of approximately $ 10 million by January 2005 " . Contango is a Houston - based , independent natural gas and oil company . The Company explores , develops , produces and acquires natural gas and oil properties primarily onshore in the Gulf Coast and offshore in the Gulf of Mexico . Contango also owns a 10 % partnership interest in Freeport LNG Development L . P . , which is developing 1 . 5 billion cubic feet per day of natural gas capacity at its LNG terminal to be constructed in Freeport , Texas , and a 32 % interest in Contango Capital Partnership Management , LLC , which was formed to invest in the alternative energy venture capital market with a focus on environmentally preferred energy technologies . Additional information can be found on our Web page at www.contango.com . This press release contains forward - looking statements that involve risks and uncertainties , and actual events or results may differ materially from Contango 's expectations . The statements reflect Contango 's current views with respect to future events that involve risks and uncertainties , including those related to successful negotiations with other parties , oil and gas exploration risks , price volatility , production levels , closing of transactions , capital availability , operational and other risks , uncertainties and factors described from time to time in Contango 's publicly available reports filed with the Securities and Exchange Commission . CONTACT : Contango Oil & Gas Company , Houston Kenneth R . Peak , 713 - 960 - 1901 www.contango.com
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