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Contango Reports First Quarter Results

Below are the Company’s results of operations for the three months ended September 30, 2012 and 2011:

Three Months Ended
September 30,
2012         2011
(thousands, except per share amounts)
Natural gas, oil and liquids sales $ 29,765   $ 44,203  
Total revenues 29,765   44,203  
Operating expenses 6,464 5,889
Exploration expenses 44,984 24
Depreciation, depletion and amortization 9,566 10,956
Impairment of natural gas and oil properties 8,410

General and administrative expenses 2,580   2,248  
Total expenses 72,004   19,117  
Gain from investments in affiliates, net of tax of $88 164

Other income/(expense) (12 ) (77 )
Income tax benefit (provision) 14,538   (9,423 )
Discontinued operations, net of income taxes

  (682 )
Continuing operations $ (1.80 ) $ 0.99
Discontinued operations

  (0.04 )
Total $ (1.80 ) $ 0.95
Continuing operations $ (1.80 ) $ 0.99
Discontinued operations

  (0.04 )
Total $ (1.80 ) $ 0.95
Basic 15,292   15,639  
Diluted 15,292   15,642  

Below is a summary of the Company’s production data, average sales price received, and selected data per thousand cubic feet equivalent, for the three months ended September 30, 2012 and 2011:
Three Months Ended September 30,
2012         2011         Change
(thousands, except percent change, average sales
price and selected data per Mcfe)
Natural gas (million cubic feet) 4,767 5,159 (8 )%
Oil and condensate (thousand barrels) 101 131 (23 )%
Natural gas liquids (thousand gallons) 6,287 5,710 10 %
Total (million cubic feet equivalent) 6,271 6,761 (7 )%
Natural gas (million cubic feet per day) 51.8 56.1 (8 )%
Oil and condensate (thousand barrels per day) 1.1 1.4 (23 )%
Natural gas liquids (thousand gallons per day) 68.3 62.1 10 %
Total (million cubic feet equivalent per day) 68.2 73.5 (7 )%
Average Sales Price:
Natural gas (per thousand cubic feet) $ 2.95 $ 4.28 (31 )%
Oil and condensate (per barrel) $ 105.31 $ 105.55 *
Natural gas liquids (per gallon) $ 0.80 $ 1.44 (44 )%
Total (per thousand cubic feet equivalent) $ 4.74 $ 6.54 (28 )%
Selected Data per Mcfe:
Lease operating expenses $ 1.03 $ 0.87 18 %
General and administrative expenses $ 0.41 $ 0.33 24 %
Depreciation, depletion and amortization of natural gas and oil properties $ 1.50 $ 1.60 (6 )%
* Less than 1%

Contango is a Houston-based, independent natural gas and oil company. The Company’s business is to explore, develop, produce and acquire natural gas and oil properties onshore and offshore in the Gulf of Mexico. Additional information can be found on our web page at

This press release contains forward-looking statements regarding Contango that are intended to be covered by the safe harbor "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995, based on Contango’s current expectations and includes statements regarding acquisitions and divestitures, estimates of future production, future results of operations, quality and nature of the asset base, the assumptions upon which estimates are based and other expectations, beliefs, plans, objectives, assumptions, strategies or statements about future events or performance (often, but not always, using words such as "expects", “projects”, "anticipates", "plans", "estimates", "potential", "possible", "probable", or "intends", or stating that certain actions, events or results "may", "will", "should", or "could" be taken, occur or be achieved). Statements concerning oil and gas reserves also may be deemed to be forward looking statements in that they reflect estimates based on certain assumptions that the resources involved can be economically exploited. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those, reflected in the statements. These risks include, but are not limited to: the risks of the oil and gas industry (for example, operational risks in exploring for, developing and producing crude oil and natural gas; risks and uncertainties involving geology of oil and gas deposits; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to future production, costs and expenses; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; health, safety and environmental risks and risks related to weather such as hurricanes and other natural disasters); uncertainties as to the availability and cost of financing; fluctuations in oil and gas prices; risks associated with derivative positions; inability to realize expected value from acquisitions, inability of our management team to execute its plans to meet its goals, shortages of drilling equipment, oil field personnel and services, unavailability of gathering systems, pipelines and processing facilities and the possibility that government policies may change or governmental approvals may be delayed or withheld. Additional information on these and other factors which could affect Contango’s operations or financial results are included in Contango’s other reports on file with the Securities and Exchange Commission. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from the projections in the forward-looking statements. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Contango does not assume any obligation to update forward-looking statements should circumstances or management's estimates or opinions change.

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