Introductory Note
As previously disclosed in the Current Report on Form 8-K filed by Mid-Con Energy Partners, LP (“Mid-Con”) with the Securities and Exchange Commission (the “SEC”) on October 26, 2020, Mid-Con entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among Contango Oil & Gas Company, a Texas corporation (“Contango”), Michael Merger Sub LLC, a Delaware limited liability company and a wholly-owned, direct subsidiary of Contango (“Merger Sub”), Mid-Con, and Mid-Con Energy GP, LLC, a Delaware limited liability company and the general partner of Mid-Con (“Mid-Con GP”), which provided for, among other things, the merger of Mid-Con with and into Merger Sub (the “Merger”), with Merger Sub continuing as the surviving entity (the “Surviving Entity”).
On January 21, 2021, upon the terms set forth in the Merger Agreement and in accordance with the applicable provisions of the Delaware Revised Uniform Limited Partnership Act and the Delaware Limited Liability Company Act, the Merger was completed. At the effective time of the Merger (the “Effective Time”), the separate existence of Mid-Con ceased, and Merger Sub survived the Merger as a wholly owned, direct subsidiary of Contango.
| Item 1.02 | Termination of a Material Definitive Agreement. |
On January 21, 2021, in connection with the closing of the Merger, Mid-Con terminated the Credit Agreement, dated as of December 20, 2011, by and among Mid-Con Energy Properties, LLC, as borrower, Mid-Con, as guarantor, Wells Fargo Bank, National Association, as administrative agent and collateral agent, and the lenders party thereto (as amended, the “Credit Agreement”). In connection with the termination of the Credit Agreement, all outstanding borrowings and unpaid fees and expenses thereunder were paid in full.
Also on January 21, 2021, in connection with the closing of the Merger, Mid-Con terminated the Management Services Agreement (the “Management Services Agreement”) with Contango Resources, Inc. (“Resources”) dated as of July 1, 2020. In light of the Merger, Resources, a subsidiary of Contango, agreed to waive (i) its right to the warrant compensation and (ii) the termination fee Resources was otherwise entitled to under the Management Services Agreement.
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
The information in the Introductory Note of this Current Report on Form 8-K is incorporated herein by reference.
On January 21, 2021, the Merger was consummated in accordance with the terms of the Merger Agreement. In connection with the consummation of the Merger, each common unit representing limited partner interests in Mid-Con (each, a “Mid-Con Common Unit”) issued and outstanding immediately prior to the Effective Time (other than Mid-Con Common Units held in the treasury of Mid-Con or held by Mid-Con GP immediately prior to the Effective Time, which were canceled and extinguished without any conversion thereof, and no consideration delivered in exchange therefor) were at the Effective Time converted into and became exchangeable for 1.7500 (the “Exchange Ratio”) shares of common stock, par value $0.04 per share, of Contango (“Contango Common Stock”).
Additionally, each Mid-Con phantom unit equity award that was outstanding under the Mid-Con Energy Partners, LP Long-Term Incentive Program (as amended and restated) as of immediately prior to the Effective Time, and all rights in respect thereof, fully vested immediately prior to the Effective Time and, at the Effective Time, such awards were cancelled and converted into the right to receive a number of shares of Contango Common Stock equal to the product of (i) the number of Mid-Con Common Units subject to such awards as of immediately prior to the Effective Time and (ii) the Exchange Ratio.
The issuance of shares of Contango Common Stock pursuant to the terms of the Merger Agreement was registered under the Securities Act of 1933, as amended, pursuant to Contango’s registration statement on Form S-4, as amended (File No. 333-250862), which was declared effective by the SEC on December 18, 2020. The definitive joint consent statement/information statement/prospectus included in the registration statement and filed with the SEC on December 18, 2020 (the “Joint Consent Statement/Information Statement/Prospectus”) contains additional information about the Merger.
