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TheStreet Open House

Contango Announces Quarterly Results And Updates Operations

Stock quotes in this article: MCF

Contango Oil & Gas Company (NYSE MKT: MCF) (“Contango”) announced today its quarterly results for the quarter ended September 30, 2013 and quarterly results for Crimson Exploration Inc. (“Crimson”) for the quarter ended September 30, 2013. Effective October 1, 2013, Crimson merged with Contango. Prior to the merger, Crimson was a publicly-traded company (NASDAQ: CXPO). Financial statements and management discussion and analysis of financial condition and results of operations of Crimson will be included in the Contango’s Current Report on Form 8-K, which will be filed on November 12, 2013. Financial statements of Crimson will be included in the consolidated financial statements of Contango beginning October 1, 2013 and for the quarter ended December 31, 2013.

Highlights

  • Consummation of the merger with Crimson Exploration Inc. on October 1, 2013
  • Successful drilling of the South Timbalier 17 offshore exploratory well in August
  • Four new wells were drilled in the Woodbine play and two new wells were drilled in the Buda play
  • Combined production of Contango and Crimson of 10.3 Bcfe for the quarter ended September 30, 2013
  • $15.6 million gain from investment in Alta Resources Investments, LLC. (“Alta Resources”)
  • Quarterly Adjusted EBITDAX of $42.9 million and $19.6 million for Contango and Crimson, respectively

Net Income

Contango’s net income for the three months ended September 30, 2013 was $19.7 million, or $1.30 per basic and diluted share, compared to a net loss of $27.5 million, or ($1.80) per basic and diluted share, for the three months ended September 30, 2012. Contango’s income before taxes for the three months ended September 30, 2013 was $31.3 million compared to a loss before taxes of $42.1 million for the three months ended September 30, 2012. Income before taxes for the quarter ended September 30, 2013 includes $0.7 million in general and administrative (“G&A”) expenses related to our merger with Crimson and a $15.6 million pre-tax gain from our investment in Alta Resources. Pre-tax income for the quarter ended September 30, 2012 was negatively affected by losses related to two dry holes at Ship Shoal 134 and South Timbalier 75 ($43.7 million), unsuccessful exploration efforts in Jim Hogg County, Texas ($1.2 million), non-cash impairment charges related to our Ship Shoal 263 well ($6.3 million) and unamortized costs of certain previously made improvements on the Eugene Island 24 platform which we no longer use ($2.1 million). Additionally, production downtime due to Hurricane Isaac and planned production enhancement work at our Dutch, Mary Rose and Vermilion 170 wells reduced our income before taxes by $1.8 million. Exclusive of the cash and non-cash items above, income before taxes for the current quarter was $16.4 million, compared to $13.0 million for the prior year quarter.

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