Contango Oil & Gas closes acquisition of assets of White Star Petroleum
Contango Oil & Gas Company has completed its previously announced acquisition of certain assets and liabilities, including approximately 315,000 net acres located in the STACK, Anadarko and Cherokee operating districts in Oklahoma from White Star Petroleum and certain of its affiliates for a total purchase price of $132.5M. Following adjustment for the results of operations for the period between the effective and closing dates, and other estimated customary closing adjustments, the Company paid a total cash consideration of $95.8M which includes the previously funded cash deposit of $12.5M. The acquired White Star assets produced approximately 15,000 barrels of oil equivalent per day as of the July 1, 2019 effective date, and which consisted of approximately 63% oil and NGLs. The acreage is approximately 80% held-by-production. Approximately 65% of the wells are operated by White Star and are mature fields with strong cash flow and that provide significant development potential from PDNP and PUD opportunities. The Properties also include integrated gathering and saltwater disposal systems, which reduces lease operating expenses and adds third party cash flow. The Company also announced today that it has entered into an amendment to its credit agreement by and among the Company, JPMorgan Chase Bank, N.A., as Administrative Agent, pursuant to which two additional banks were added to the bank group, and the borrowing base under the Credit Agreement increased to $145 million. The Acquisition was funded from net proceeds from the previously announced private placement of Series B Contingent Convertible Preferred Stock and borrowings under the Credit Agreement.