Contango Reports Third Quarter Earnings and Updates Operations
HOUSTON--(BUSINESS WIRE)--May 9, 2007--Contango Oil & Gas Company
(AMEX:MCF) reported net income attributable to common stock for the
three months ended March 31, 2007 of approximately $0.2 million, or
$0.01 per basic and diluted share. This compares to net income
attributable to common stock for the three months ended March 31, 2006
of $0.7 million, or $0.05 per basic and diluted share.
The net loss attributable to Contango common stock for the nine
months ended March 31, 2007 was $2.7 million, or $0.18 per basic and
diluted share, compared to net income attributable to common stock for
the nine months ended March 31, 2006 of $0.4 million, or $0.03 per
basic and diluted share.
Kenneth R. Peak, Contango's Chairman and Chief Executive Officer,
said, "Our net production for the three months ended March 31, 2007
averaged 7.8 million cubic feet equivalent per day ("MMcfe/d") vs. 20
MMcfe/d currently. Our Dutch #2 well at Eugene Island 10, expected to
begin producing in July 2007, is anticipated to add another 7.5
MMcfe/d, which together with on-going drilling in the Arkansas
Fayetteville Shale is projected to increase our daily net production
to 30 MMcfe/d by this summer."
Mr. Peak continued, "We have now drilled the first two of our five
scheduled Alta operated wells and are currently fracture stimulating
our first well, the Alta-Huff #1-29H. This well was drilled in 15 days
at an 8/8ths cost of $2.5 million, compared to our AFE of $2.4
million. Our second well, the Alta-Jones #1-29H was drilled in 12
days, which is two days faster than our AFE estimate, and at a cost of
$2.3 million. We have an aggressive fracture stimulation schedule in
front of us and plan to fracture stimulate six Alta operated wells
over the next three months. We spudded our Dutch #3 exploration well
on April 26, 2007 and expect to spud our Mary Rose #1 development well
upon completion of the Dutch #3 well, expected in July 2007."
As of May 4, 2007, we have approximately $2.5 million in cash and
cash equivalents, $35.0 million in long-term debt outstanding and
$15.0 million of borrowing availability. Our proved reserves, as
estimated by our independent reserve engineers as of March 31, 2007,
were 56.0 billion cubic feet equivalent. The SEC PV-10 pre-tax net
present value of these reserves, using quarter end prices adjusted for
basis and transportation is $238.3 million.
CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
March 31, March 31,
----------------------- ------------------------
2007 2006 2007 2006
----------- ----------- ------------ -----------
REVENUES:
Natural gas and oil
sales $5,416,020 $123,199 $7,458,733 $315,274
----------- ----------- ------------ -----------
Total revenues 5,416,020 123,199 7,458,733 315,274
----------- ----------- ------------ -----------
EXPENSES:
Operating expenses
(credits) 280,302 5,512 557,953 (11,216)
Exploration
expenses 253,741 152,011 1,151,211 978,682
Depreciation,
depletion and
amortization 1,050,200 11,909 1,554,583 99,032
Impairment of
natural gas and
oil properties - 419,918 192,109 419,918
General and
administrative
expenses 2,371,076 1,061,518 4,900,017 3,083,492
----------- ----------- ------------ -----------
Total expenses 3,955,319 1,650,868 8,355,873 4,569,908
----------- ----------- ------------ -----------
INCOME (LOSS) FROM
CONTINUING
OPERATIONS BEFORE
OTHER INCOME
(EXPENSES) AND
INCOME TAXES 1,460,701 (1,527,669) (897,140) (4,254,634)
OTHER INCOME
(EXPENSE):
Interest expense
(net of interest
capitalized) (739,510) (93) (1,297,415) (285)
Interest income 231,253 165,946 638,395 565,314
Gain (loss) on sale
of assets and
other (677,580) (18,519) (1,994,265) 223,167
----------- ----------- ------------ -----------
INCOME (LOSS) FROM
CONTINUING
OPERATIONS
BEFORE INCOME TAXES 274,864 (1,380,335) (3,550,425) (3,466,438)
Benefit (provision)
for income taxes (96,152) 524,792 1,156,420 1,326,191
----------- ----------- ------------ -----------
INCOME (LOSS) FROM
CONTINUING
OPERATIONS 178,712 (855,543) (2,394,005) (2,140,247)
DISCONTINUED
OPERATIONS
Discontinued
operations, net of
income taxes - 1,754,965 - 3,032,583
----------- ----------- ------------ -----------
NET INCOME (LOSS) 178,712 899,422 (2,394,005) 892,336
Preferred stock
dividends 22,222 150,000 314,722 451,000
----------- ----------- ------------ -----------
NET INCOME (LOSS)
ATTRIBUTABLE TO
COMMON STOCK $156,490 $749,422 $(2,708,727) $441,336
=========== =========== ============ ===========
NET INCOME (LOSS) PER
SHARE:
Basic
Continuing
operations $0.01 $(0.07) $(0.18) $(0.18)
Discontinued
operations - 0.12 - 0.21
----------- ----------- ------------ -----------
Total $0.01 $0.05 $(0.18) $0.03
=========== =========== ============ ===========
Diluted
Continuing
operations $0.01 $(0.07) $(0.18) $(0.18)
Discontinued
operations - 0.12 - 0.21
----------- ----------- ------------ -----------
Total $0.01 $0.05 $(0.18) $0.03
=========== =========== ============ ===========
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING:
Basic 15,759,324 14,865,965 15,262,085 14,675,586
=========== =========== ============ ===========
Diluted 16,068,154 14,865,965 15,262,085 14,675,586
=========== =========== ============ ===========
The Company did not have any discontinued operations for the three
or nine months ended March 31, 2007. The summarized financial results
for discontinued operations for the periods ended March 31, 2006 are
as follows:
Operating Results : Three Months Ended Nine Months Ended
March 31, March 31,
---------------------- ----------------------
2007 2006 2007 2006
---------- ----------- ---------- -----------
Revenues $- $1,555,134 $- $4,377,017
Operating credits - 466,362 (a) - 1,266,320 (a)
Exploration expenses - - - (1,093,139)
Depreciation,
depletion and
amortization - (380,000) - (966,734)
Gain on sale of
discontinued
operations - 1,058,450 - 1,082,048
---------- ----------- ---------- -----------
Gain before income
taxes $- $2,699,946 $- $4,665,512
Provision for
income taxes - (944,981) - (1,632,929)
---------- ----------- ---------- -----------
Gain from
discontinued
operations,
net of income
taxes $- $1,754,965 $- $3,032,583
========== =========== ========== ===========
(a) credit due to severance tax refunds
Production, Prices, Operating Expenses, and Other
Three Months Ended Nine Months Ended
March 31, March 31,
------------------- -------------------
2007 2006 2007 2006
--------- --------- --------- ---------
(Dollar amounts in (Dollar amounts in
000's, except per 000's, except per
Mcfe amounts) Mcfe amounts)
Production Data:
Natural gas (million cubic
feet) 648 116 896 342
Oil and condensate (thousand
barrels) 12 13 17 28
Total (million cubic feet
equivalent) 720 194 998 510
Natural gas (million cubic
feet per day) 7.2 1.3 3.3 1.2
Oil and condensate (thousand
barrels per day) 0.1 0.1 0.1 0.1
Total (million cubic feet
equivalent per day) 7.8 1.9 3.9 1.9
Average sales price:
Natural gas (per thousand
cubic feet) $7.36 $8.00 $7.19 $9.14
Oil and condensate (per
barrel) $56.20 $58.17 $59.81 $56.89
Selected data per Mcfe:
Total lease operating
expenses $0.39 $(2.38) $0.56 $(2.52)
General and administrative
expenses $3.31 $5.49 $4.91 $6.08
Depreciation, depletion and
amortization of natural gas
and oil properties $1.30 $1.96 $1.34 $1.99
Contango is a Houston-based, independent natural gas and oil
company. The Company's core business is to explore, develop, produce
and acquire natural gas and oil properties primarily offshore in the
Gulf of Mexico and onshore in the Arkansas Fayetteville Shale. The
Company also owns a 10% interest in a limited partnership formed to
develop an LNG receiving terminal in Freeport, Texas, and holds
investments in companies focused on commercializing 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