Contango Oil & Gas Company (collectively with its subsidiaries, “Contango” or the “Company”) is a Houston, Texas based, independent oil and natural gas company. The Company’s business is to maximize production and cash flow from its onshore and offshore properties in the shallow waters of the Gulf of Mexico and to use that cash flow to explore, develop, exploit, produce and acquire crude oil and natural gas properties in the onshore Texas and Rocky Mountain regions of the United States.
Our primary producing areas as of September 2016 included:
- Gulf of Mexico Offshore Louisiana - water depths less than 300 feet
- Madison and Grimes counties counties, Texas - Woodbine (Upper Lewisville)
- Zavala and Dimmit counties, Texas - Buda / Austin Chalk
- Weston County, Wyoming - Muddy Sandstone
- Texas Gulf Coast - Conventional formations
- Sublette County, Wyoming - Jonah Field (1)
(1) Through a 37% equity investment in Exaro Energy III LLC (“Exaro”). Production from this investment is not included in our reported production results or in our reported reserves for any periods reported.
Since October 2013, upon the merger with Crimson Exploration Inc., the Company has focused its drilling efforts on liquids-rich horizontal resource plays, such as the Woodbine in Southeast Texas, the Eagle Ford and Buda in South Texas, and the Muddy Sandstone in Wyoming. In addition, the Company has (i) operated producing properties in the Haynesville Shale, Mid Bossier and James Lime formations in East Texas. In July 2016, the Company purchased one-half of the seller’s interest in approximately 12,100 gross undeveloped acres (approximately 5,000 net acres) in the Southern Delaware Basin of Texas for up to $25 million. The Company commenced drilling of its first well on this recently acquired acreage in October 2016.
During the three months ended September 30, 2016, we completed an underwritten public offering of 5,360,000 shares of our common stock for net proceeds of approximately $50.5 million. See Note 3 - "Acquisition and Underwritten Public Offering” for additional information.
Due to the current challenging commodity price environment, the Company has been focusing its 2016 capital program on: (i) the preservation of its healthy financial position; (ii) identification of opportunities for cost efficiencies in all areas of its operations; and (iii) maintaining core leases and continuing to identify new resource potential opportunities internally and, where appropriate, through acquisition. The Company will continuously monitor the commodity price environment, and, if warranted, make adjustments to its strategy as the year progresses. As noted previously, the Company recently began drilling its first well in the newly acquired Southern Delaware Basin acreage.