Exhibit 99.1


Contango Reports Freeport LNG Development, L.P. Finalization of
Transaction with ConocoPhillips

    HOUSTON--(BUSINESS WIRE)--July 6, 2004--Contango Oil & Gas Company
(AMEX:MCF) today announced that Freeport LNG Development, L.P had
finalized its transaction with ConocoPhillips (NYSE:COP) for the
construction and use of a proposed liquefied natural gas (LNG)
receiving terminal in Quintana, Brazoria County, Texas. ConocoPhillips
has acquired 1 billion cubic feet (BCF) per day of regasification
capacity in the terminal, has obtained a 50 percent interest in the
general partner managing the venture and will provide substantial
construction funding to the venture.
    The Freeport LNG terminal is being developed in response to the
growing need for natural gas supplies for commercial, industrial and
residential consumers in Texas. The terminal is designed with storage
capacity of nearly 7 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 Dow Chemical Company
(NYSE:DOW) has contracted for the remaining 0.5 BCF per day of
capacity.
    Approval for the facility was received from the Federal Energy
Regulatory Commission (FERC) on June 18. Receipt of all other
necessary federal, state and local approvals is expected in the third
quarter of this year. The current management of Freeport LNG will
remain in place and will oversee the commercial activities of the
partnership. ConocoPhillips employees will manage the construction of
the facility and oversee its operations.
    "This project is a critical link for the development of one or
more of several LNG projects under consideration by ConocoPhillips
that will deliver clean natural gas to the United States' growing
market," said Sig Cornelius, ConocoPhillips president, Global Gas. "It
is a strong addition to the company's growing LNG portfolio."
    "We are now in a position to build the first new LNG receiving
terminal in the continental US in the past twenty years," said Michael
S. Smith, Freeport LNG Development chairman and chief executive
officer. "The capacity of the facility is equivalent to about 3% of
the current US gas production and will contribute significantly to
addressing the United States energy needs long into the future." Smith
added, "I would like to thank the dedicated team at Freeport LNG who
has done all of the work to make this project a success since we took
over full control of the project from Cheniere Energy in 2002. I would
also like to thank all of our technical, legal and commercial
contractors and advisors whose assistance and support has been
indispensable."
    Freeport LNG and the ConocoPhillips team continue to negotiate its
engineering, procurement and construction (EPC) contract for the
facility. "We are in discussions with a leading engineering and
construction firm to complete design and construct this world-class
LNG receiving terminal," said Charles M. Reimer, Freeport's president
and chief operating officer. "We expect to have the EPC contract
finalized by the middle of August and to begin construction shortly
thereafter."
    Freeport LNG is marketing volumes available immediately following
completion of construction. "Due to the supply profile of our existing
customers, we still have one third of our capacity available for sale
between 2007 and mid-2009," said Hugh S. Urbantke, vice president and
chief financial officer. "We are in discussions with several parties
who are interested in these early volumes as well as parties that
would be interested in any expansion of the facility we decide to
pursue."
    Kenneth R. Peak, Contango Oil & Gas Company's chairman and chief
executive officer, said, "This transaction brings to our Freeport LNG
project ConocoPhillips' construction management expertise and a
significant portion of the capital needed for the plant's completion.
Working together with our partners, we expect to be able to finance
and fund Contango's 10 percent share of any additional capital
requirements."

    About Freeport LNG Development, L.P.

    Freeport LNG Development, L.P. is a Delaware limited partnership.
Management of the Freeport partnership is solely under the control of
the general partner, which is owned equally by Michael S. Smith and
ConocoPhillips. The limited partners are Michael S. Smith, 60 percent;
Cheniere Energy (AMEX:LNG), 30 percent; and Contango Oil & Gas Company
(AMEX:MCF), 10 percent.

    About ConocoPhillips

    ConocoPhillips is an integrated petroleum company with interests
around the world, including a major operating presence in Brazoria
County through the company's refining, chemical and transportation
businesses. Headquartered in Houston, the company had approximately
37,200 employees and $84 billion of assets as of March 31, 2004. For
more information, go to www.conocophillips.com.

    About Contango Oil & Gas Company

    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 a 1.5
BCF per day LNG terminal in Freeport, Texas. 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