Contango Oil & Gas appoints Chad Roller COO, Chad McLawhorn general counsel » 16:5407/0607/06/20
Contango Oil & Gas…
Contango Oil & Gas announced that Farley Dakan has been promoted to the position of president of the company. Additionally, the company has appointed Chad Roller as Senior VP COO and Chad McLawhorn as senior VP general counsel and corporate secretary of the company. Wilkie Colyer, previously the company's president and CEO, will remain the company's CEO. Roller most recently served as president and COO of the general partner for Mid-Con Energy Partners. Chad McLawhorn served as VP, general counsel and corporate Secretary of the general partner of Mid-Con Energy Partners, LP, a publicly held upstream master limited partnership, from March 2016 to June.
|Over a week ago|
Contango Oil & Gas reports Q1 production of 1,720 Mboe 08:5606/2206/22/20
Contango Oil & Gas reports Q1 EPS (80c), one est. (10c) » 08:5406/2206/22/20
Reports Q1 revenue…
Reports Q1 revenue $34.6M, one est. $35.56M. Wilkie Colyer, the Company's President and CEO, said, "The first quarter of 2020 presented numerous challenges for most people and businesses in the United States, as well as around the world. For the energy sector specifically, the adverse impact that the COVID-19 pandemic has had on global demand for oil and gas, along with the inability of OPEC and Russia to agree on production quotas in March 2020 and the resulting influx of production into the global market, have put tremendous pressure on many companies with respect to oil, natural gas and natural gas liquids prices, cash flow and balance sheets. We believe we have fared better than most of our peers as our conservative view on capital spending, our simple capital structure, our aggressive hedging program, our focus on cost reduction and our commitment to maintaining our liquidity and balance sheet flexibility have positioned us to manage through this difficult time. We continue to pursue ways to generate/maximize our cash flow at a relatively low cost of capital, such as through our occasional use of excess oil storage capacity to store unhedged production on a short term basis to capitalize on a contango price curve, and our entering into a management services agreement with Mid-Con Energy Partners, LP whereby we plan to utilize our technical operating and administrative support groups, to generate a fee for service cash flow stream that also benefits the counterparty through G&A cost reduction. We added hedges during the fourth quarter of 2019 and March of 2020, prior to the dramatic collapse in oil prices, and currently have approximately 70% of our total forecasted PDP oil production for 2020 hedged with swaps at an average floor price of $55.13 per barrel and 68% of our total forecasted PDP gas production for 2020 hedged at an average price of $2.57 per mmbtu. In 2021, we have approximately 67% of total forecasted PDP oil production hedged at $51.71 per barrel. We anticipate that this price environment will continue to put immense pressure on our already distressed industry, and we will be on the lookout for other ways to take advantage of the dislocation. We appreciate the support of our lenders and shareholders and look forward to continuing to execute our business plan in 2020."
Contango Oil & Gas files to sell 6.2M shares of common stock for holders 17:2906/1006/10/20
|Over a month ago|
Contango announces Management Services Agreement with Mid-Con Energy » 08:4006/0506/05/20
Contango Oil & Gas…
Contango Oil & Gas Company (MCF) announced that it will offer a cost-effective "fee for service" property management option to companies with distressed or stranded assets, or companies with a desire to reduce administrative costs, while providing Contango a new avenue for growth that aligns with the Company's own business strategy. Contango also announced that it has entered into a Management Services Agreement with Mid-Con Energy Partners (MCEP) to provide operational services as operator of record on Mid-Con's oil and gas properties. Under the Management Services Agreement, Contango will take over the operations of Mid-Con's oil and gas assets in exchange for a services fee plus reimbursement of certain costs and expenses, an annual deferred fee component, and warrants to purchase common units in Mid-Con at $4.00 per unit. Contango anticipates hiring several key employees from Mid-Con's technical team to expand Contango's expertise with enhanced oil recovery operations and enhance the Company's fee for service capability for other similar fee for service opportunities.
Mid-Con Energy enters Management Services Agreement with Contango » 08:3906/0506/05/20
The Partnership (MCEP)…
The Partnership (MCEP) has entered into a Management Services Agreement with Contango Resources (MCF) effective as of July 1, 2020, under which Contango Resources will serve as operator of the Partnership's assets for a flat fee arrangement, which is expected to generate pro forma annual cash savings of approximately $6.5 million compared with 2019. Contango will also receive warrants to acquire common units of the Partnership, further aligning it with equityholders. "The Partnership continues to focus on managing operational costs and the shift of operations will allow us to leverage the larger scale of Contango to ultimately reduce cost," said Mr. Roller. "Contango has existing production in our core areas and an operations team with a proven track record, who will be joined by key members of the Partnership's existing operations team." Contango Resources will take over operations in the third quarter of 2020, replacing Mid-Con Energy Operating.
Mid-Con Energy completes strategic recapitalization » 08:3306/0506/05/20
Mid-Con Energy Partners…
Mid-Con Energy Partners (MCEP) has entered into a strategic recapitalization transaction with its preferred equity holders, providing for the conversion of all Series A and B Preferred Units into common units at an average conversion price of $3.12/unit. In connection with the recapitalization, ownership of the Partnership's general partner, Mid-Con GP, has been transferred to the Partnership, resulting in strengthened corporate governance, and a new Board of Directors has been elected by written consent of the holders of a majority of the common unitholders. The Partnership also announced today the close of the spring redetermination of the borrowing base under its senior secured revolving credit facility and an amendment of the Credit Facility. The borrowing base is now set at $64M. The Partnership also announced that Contango Resources (MCF), a subsidiary of Contango Oil & Gas Company will be the new operator of the Partnership's properties, replacing Mid-Con Energy Operating, LLC. The move is expected to generate pro-forma annual cash savings of approximately $6.5 million compared to 2019. Mid-Con an upstream production company focused on conventional assets in Oklahoma and Wyoming, today announced that it has completed a strategic recapitalization transaction, resulting in significant changes to its capital structure and governance to strengthen its balance sheet, create alignment across all unit holders, reduce costs and streamline operations, thereby creating immediate and sustainable value for all unit holders. The holders of all of the Partnership's Class A and B preferred units, led by Goff Capital have agreed to convert their Preferred Units to common units at an average conversion price of $3.12/unit. In addition, the equity holders of the General Partner have agreed to contribute the ownership of the General Partner to the Partnership in exchange for common units. In connection with these transactions, the limited partnership agreement of the Partnership has been amended, the directors of the General Partner have resigned, and a new Board of Directors has been elected by written consent of affiliates of Goff Capital that now hold a majority of the outstanding common units. Following these transactions, the Partnership will have 14,311,522 common units outstanding.
|Over a quarter ago|
Contango Oil & Gas undertaking extensive review of producing areas » 08:3603/1203/12/20
Contango Oil & Gas…
Contango Oil & Gas Company as a result of the decline in commodity prices in the last several days, and especially oil prices, today provides a brief update on its response to that decline. The Company has consistently been diligent in protecting the vast majority of expected cash flow from such commodity price declines, as evidenced by the fact that it currently has hedges in place for 71% and 67% of currently forecasted hedgeable PDP oil production for 2020 and 2021, respectively, at average floor prices of $55.13 and $51.71 per barrel, respectively. The Company also has 72% and 54% of currently forecasted hedgeable PDP natural gas production for 2020 and 2021, respectively, hedged at average floor prices of $2.57 and $2.51 per Mcf. Approximately 98% of the Company's hedges are swaps, and the Company has no three way collars or short puts. The "hedgeable PDP" does not include Gulf of Mexico production that the Company's credit agreement precludes it from hedging during peak hurricane season, which is only one percent of current daily oil production. The Company currently forecasts product mix for 2020 production as approximately 47% natural gas, 27% oil and 26% natural gas liquids. The Company is currently undertaking an extensive review of all of its producing areas to determine the economic or operational justification for continuing to produce unhedged barrels in this price environment, and where determined not justified, and operationally feasible, evaluate potentially shutting in or curtailing production. The Company is also reevaluating the economic justification in this price environment for proceeding with the production-enhancing workover program originally scheduled for the first half of 2020. The limited onshore development drilling the Company had planned for 2020 is also being reevaluated. Because of the Company's low debt profile and borrowing cost of capital, the Company believes it is in the fortunate position of being able to temporarily shut in or curtail higher cost production when there is a decline in the commodity markets. The Company's exploratory test in the shallow waters off the Louisiana coast in Grand Isle will proceed as planned. While the Company does not expect to bring this project online at current prices, even at a $30 flat WTI price, the base forecasted success case for the prospect is 19.2 Mmboe of potential reserves, a 70% IRR, and a fully developed PV-10 of an estimated $178 million. The Company believes this justifies the forecasted $6.3 million investment to drill the first test well. If the test well is successful, production is not currently expected to commence until 2021. The Company had already commenced a cost reduction program in its midcontinent region acquired in the fourth quarter last year, primarily the PDP-heavy Oklahoma properties, as well as cost-focused initiatives in its other core areas in the Southern Delaware Basin and Eugene Island 10/11. Those initiatives will continue to be a priority for the Company in 2020.
Contango Oil & Gas announces private equity capital raise » 09:1412/2012/20/19
Contango Oil & Gas…
Contango Oil & Gas Company announced the execution of agreements with a select group of institutional and accredited investors, including certain funds and accounts advised by T. Rowe Price Associates, Inc., to sell 19,000,000 shares of common stock in a private placement. Concurrently with the common stock offering, the Company entered into agreements with affiliates of John C. Goff, Chairman of the Board, Wilkie S. Colyer, Jr., President and CEO of the Company, and W. Farley Dakan, Senior Vice President of Corporate Development of the Company, to sell 2,340,000 shares of Series C preferred stock, which rank pari passu with the Company's common stock and which will automatically convert into common stock upon approval of the Company's shareholders. The Company expects to receive gross proceeds from the equity capital raise of $53.35M, which it intends to use for general corporate purposes, including capital expenditures under the Company's concurrently announced Joint Development Agreement with Juneau Oil & Gas, LLC. The closing is expected to occur on December 23, 2019.
Contango Oil & Gas signs joint development agreement with Juneau Oil & Gas » 09:1112/2012/20/19
Contango Oil & Gas…
Contango Oil & Gas Company announced that the Company entered into a Joint Development Agreement with Juneau Oil & Gas to develop certain exploration prospects in the offshore Gulf of Mexico shelf. The Joint Development Agreement provides that the Company will have the right to acquire an interest in all of Juneau's prospects located in the Gulf of Mexico for aggregate consideration of $6M, consisting of $1.69M in cash and $4.31M in stock consideration. The first such prospect to be acquired by the Company, the Iron Flea, is located in the Grand Isle Block 45 Area, which management currently estimates could have an expected reserve potential of approximately 19 MMBoe net to Contango's interest. The Company has elected to acquire approximately 85-90% of Juneau's working interest in such prospect, and we expect the dry hole cost of the exploration well, net to Contango's interest after project payout, to be $6.3M. More information on the Iron Flea, which we anticipate drilling in the second quarter of 2020, can be found in our most recent corporate presentation on our website. During the term of the Joint Development Agreement, Contango will also have the right to acquire an interest in all future Juneau-generated prospects located in the Gulf of Mexico, on similar terms and conditions, subject to the execution of an Advisory Services Agreement, after the first well has been drilled. Juneau will deliver to the Company no less than an 80% net revenue interest on all acquired prospects, excluding the Iron Flea prospect to be acquired by the Company.