Exhibit 99.1

Contango to Present at EnerCom Oil & Gas Conference and Updates Operations

    HOUSTON--(BUSINESS WIRE)--Aug. 11, 2006--Contango Oil & Gas
Company (AMEX:MCF) Chairman and CEO, Kenneth R. Peak, will make a
corporate presentation at the EnerCom Oil & Gas Conference in Denver,
Colorado. Details for the presentation, live webcast and replay are as
follows:

    Date & Time: Wednesday, August 16, 2006 at 3:55 p.m. Mountain Time
        (4:55 p.m. Central Time)
    Presenter: Kenneth R. Peak, Chairman and CEO
    Live Webcast Address:
        http://www.investorcalendar.com/CEPage.asp?ID=107603
    Replay Address: www.contango.com (available shortly after
        presentation)

    Operations Update

    During July 2006, in the offshore Gulf of Mexico, we drilled two
dry holes at West Delta 43 ("Skip Jack") and High Island A-279
("Juice"), and had a discovery at Grand Isle 70 ("Red Queen"). The
Grand Isle 70 well is located approximately 26 miles offshore
Louisiana in 155 feet of water and is operated by Contango Operators,
Inc. ("COI"), a wholly-owned subsidiary of the Company.
    The Grand Isle 70 well was drilled to a total measured depth of
10,545 feet and the wireline logs of the well indicated the presence
of hydrocarbons within four zones with approximately 60 feet of
potential net pay. Production casing has been set. The well has been
temporarily abandoned while alternative development scenarios are
being evaluated. Contango Offshore Exploration LLC ("COE"), a
subsidiary in which the Company owns a 76% interest, generated the
prospect and has a 52.6% working interest. Our third party partners
have a 43.75% working interest and COI has a 3.65% working interest.
    Our Eugene Island 10 ("Dutch") prospect was spud in late July 2006
and is currently drilling. We expect to be able to log this well in
September 2006. Our earlier announced discovery at Grand Isle 72
("Liberty") is expected to begin producing in October 2006. A caisson
and production deck have been set and we are waiting on a pipeline
barge to install a pipeline that will run to an existing production
platform on Grand Isle 76, which is operated by a third party.
    In our Arkansas Fayetteville Shale Play, our alliance partner,
Alta Resources LLC ("Alta") has now aggregated 44,000 net mineral
acres and continues to lease additional acreage. Contango has a 70%
working interest (31,000 net mineral acres before a basket payout).
Contango has now committed to a total of 64 wells in this play and
expects this number to rise to 80 to 100 wells by the end of this
calendar year. We have been integrated thus far into 49 wells by a
third party operator. Our average working interest and net revenue
interest in these 49 wells is 8.09% and 6.43%, respectively. Of these
49 wells, 15 wells are producing, 21 wells are being drilled or
awaiting completion and 13 wells are expected to be drilled over the
next three months. Of the 15 producing wells, 13 wells are producing
over 15 million cubic feet per day ("Mmcf/d"). Production data from
the remaining two wells is not yet available.
    We are also working interest owners in 15 wells in the Arkansas
Fayetteville Shale Play that are being operated by Alta and TePee
Petroleum. Our working interest and net revenue interest in these
wells is 42.60% and 33.71%, respectively. The first two wells, the
Alta-Beck #1-32H and the Alta-Briggler #1-31H, have been drilled and
are awaiting completion and pipeline hook-up. We expect to complete
the Alta-Briggler in late August 2006, the Alta-Beck in October 2006
and are currently drilling our third well, the Alta-Thines #1-30H. We
plan to contract a second rig to accelerate our drilling activity in
this play. To date, we have incurred approximately $7.7 million in
leasehold costs and $2.3 million for drilling and development, and
have committed to spending an additional $20 million in drilling and
development costs for all 64 wells. Contango's average working
interest and net revenue interest in the 64 wells is 16.18% and
12.82%, respectively.
    We have expanded our shale play activity into the developing West
Texas Barnett Shale Play in Jeff Davis and Reeves Counties, Texas,
with Alta. The Alta group has leased approximately 5,800 net mineral
acres (4,000 net mineral acres to Contango before a basket payout). A
third party operator has recently drilled two wells and is currently
drilling a third well near our acreage. Our plans are to monitor
activity in this play before commencing operations.
    With our alliance partner Alta, we are also committed to drill
three additional on-shore wells; Ellis #1 in Texas, in which we have a
50% working interest; Temple Inland #1 in Louisiana, in which we have
a 77% working interest; and Alta-Coley #1 in Alabama, in which we have
a 67.5% working interest. We expect to spud these wells by the end of
this calendar year, at an 8/8ths dry hole cost of approximately $1
million per well.
    Our investment in our LNG terminal in Freeport continues to
proceed on time and on budget, with anticipated facility startup in
the first quarter of 2008.
    As of August 10, 2006, the Company has approximately $19 million
in cash, cash equivalents and short term investments. We have $10
million in long-term debt outstanding and $10 million of unutilized
borrowing capacity available.
    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 Fayetteville Shale
Play in Arkansas and offshore in the Gulf of Mexico. Contango also
owns a 10% partnership interest in Freeport LNG Development L.P., and
a 25% interest in Contango Capital Partners LP, 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