Contango Announces Third Quarter 2016 Financial Results And Provides Operations Update

Contango Oil & Gas Company (NYSE MKT: MCF) ("Contango" or the "Company") announced today its financial results for the three and nine months ended September 30, 2016 and provided an operational update.

Third Quarter Summary
  • Production of 6.0 Bcfe for the quarter, or 65.7 Mmcfed
  • Quarter-end debt balance of $62.5 million, a $53.0 million decrease from year-end
  • Completed the purchase of approximately 12,100 gross operated undeveloped acres (~5,000 net to MCF) in the Southern Delaware Basin of Texas in July 2016; commenced drilling in October 2016
  • Completed an underwritten public offering of 5,360,000 shares of common stock for net proceeds of approximately $50.5 million

Management Commentary

Allan D. Keel, the Company's President and Chief Executive Officer, commented "We were fortunate to find an excellent entre into the Permian Basin, on economical terms, and are excited about the high quality drilling inventory that our acreage position exposes Contango to for the foreseeable future. Even at current commodity prices, this area offers excellent returns. We spud our first well in the Southern Delaware Basin of the Permian on October 15th, targeting the Upper Wolfcamp formation, and look forward to an active 2017 program given success similar to those experienced by our offset operators. We anticipate spudding an additional two wells by the end of this year, and anticipate initial production from the first well in late December or early January. We were also fortunate to be able to raise approximately $50 million dollars in a publicly marketed equity offering during the quarter that will provide additional financial flexibility to fund the acquisition and development of our Permian position."

Summary Third Quarter Financial Results

Net loss for the three months ended September 30, 2016 was $12.5 million, or $0.55 per basic and diluted share, compared to a net loss of $185.7 million, or $9.79 per basic and diluted share, for the same period last year. This improvement was mainly attributable to lower impairment costs during the current year quarter, as well as a decrease in operating expenses and depreciation, depletion and amortization ("DD&A") expense, offset in part by a decline in revenues resulting from lower prices and production, and lower benefits from derivatives and other income.

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