Exhibit 99.1

    Contango Announces Freeport LNG Agreement with ConocoPhillips

    HOUSTON--(BUSINESS WIRE)--Dec. 21, 2003--Contango Oil & Gas
Company (AMEX: MCF) today announced the signing of an agreement
between ConocoPhillips (NYSE: COP) and Freeport LNG Development, L.P.
(Freeport LNG), a partnership in which Contango has a 10% limited
partner interest. Under the agreement, ConocoPhillips will participate
in Freeport LNG's project to build a liquefied natural gas (LNG)
receiving terminal on Quintana Island, near Freeport, Texas.
ConocoPhillips will acquire one billion cubic feet (Bcf) per day of
capacity in the terminal for its use, obtain 50% interest in the
general partner of Freeport LNG, and provide construction funding
presently estimated at $400-450 million.
    The management of Freeport LNG will remain in place and be
responsible for all commercial activities and customer interface for
the remaining capacity in the facility. ConocoPhillips will be
primarily responsible for the management of construction and operation
of the facility. The transaction calls for ConocoPhillips, as a user
of the facility, to pay its proportionate share of operating expenses
and fuel costs, a throughput fee of $0.05 per Mcf, and all amounts
necessary to amortize the construction funding. In addition,
ConocoPhillips will pay a non-refundable capacity reservation fee of
$10 million, expected to be received by Freeport LNG in January 2004.
The transaction is expected to close in the spring of 2004, subject to
completion of remaining documentation and satisfaction of closing
conditions.
    The Freeport LNG terminal will be designed with storage capacity
of 6.9 Bcf and send-out capacity of 1.5 Bcf per day. Natural gas will
be transported through a 9.4-mile pipeline to Stratton Ridge, Texas,
which is a major point of interconnection with the Texas intrastate
gas pipeline system. The Freeport LNG terminal is being developed in
response to the growing need for new natural gas supplies for
commercial, industrial and residential consumers in Texas.
    Approval from the Federal Energy Regulatory Commission (FERC) is
expected in the first quarter of 2004, with all other necessary
federal, state and local approvals shortly thereafter. The project
front-end engineering and design study will be completed in January
2004. Construction is scheduled to begin in the second half of 2004,
with commercial startup in mid-2007.
    "This significant step in our LNG import and regasification
development effort provides a near-term opportunity to serve the
growing U.S. natural gas market," said Jim McColgin, ConocoPhillips
Vice President of Exploration and Business Development. "We look
forward to expanding local relationships and working closely with our
co-venturers and stakeholders to continue to be a good neighbor
through this project."
    "This unprecedented LNG terminal transaction brings certainty to
our project," said Michael S. Smith, Freeport LNG Development Chairman
and Chief Executive Officer. "Combined with our previously announced
agreement with the Dow Chemical Company, we will be able to commence
construction on the first new LNG regasification facility in the
United States in more than two decades with up to 100% of our capacity
committed as soon as we receive FERC approval."
    Kenneth R Peak, Contango's Chairman and Chief Executive Officer
said, "We are extremely pleased to have ConocoPhillips as a
co-venturer in our Freeport LNG project. The importance of importing
LNG is highlighted by the fact that natural gas futures are currently
trading above $7.00 per MMBtu, even though the winter has not yet been
particularly cold. The surrounding Houston petrochemical complex is a
major consumer of natural gas, and our Freeport plant is well
positioned to serve this market."
    Mr. Peak continued, "In addition to our Freeport LNG project,
Contango has 4,000 blocks of 3-D seismic in the Gulf of Mexico, a
state-of-the-art reprocessing center and is actively pursuing deep
shelf and deep water Gulf of Mexico natural gas prospects. In
addition, we currently have five south Texas onshore natural gas
plays. We are currently drilling two exploration wells in south Texas
and expect to fracture stimulate a third exploration well around
year-end. Our 33.3%-owned subsidiary Republic Exploration LLC is being
carried on a deep shelf prospect on Vermilion 73. As a result of our
recent property sales and equity financing, we expect to have
approximately $20 million of available bank debt capacity at December
31, 2003. This capital will be available to develop any onshore
discoveries as well as fund additional exploration prospects."
    Freeport LNG Development, L.P. is a Delaware limited partnership
whose sole general partner is currently owned 100% by Michael S.
Smith. Other limited partners are Michael S. Smith, 60 %; Cheniere
Energy, 30%; and Contango Oil & Gas, 10%.
    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 a proposed LNG terminal in Freeport, Texas. Additional
information can be found on our web page at www.mcfx.biz.
    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.mcfx.biz