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Contango Reports Fiscal Third Quarter Results
Our Vermilion 170 well was shut-in for 68 days during the quarter for
workover operations, which reduced our revenues by approximately
Our Ship Shoal 263 well began to water-out in
Our on-shore
Reserves Discussion
For the three months ended
Exploration Program Update
In
Investments Update
During the quarter, we invested an additional
Also during the quarter, we invested an additional
As of
Merger Overview
On
The closing of the Merger is subject to the satisfaction or waiver of
certain customary conditions, including, among others, (i) the adoption
of the Merger Agreement by Crimson's stockholders; (ii) the approval by
the Company's stockholders of the issuance of Company common stock in
the Merger to Crimson's stockholders; (iii) the registration statement
on Form S-4 used to register the Company common stock to be issued in
the Merger being declared effective by the
The Company has agreed that, upon the Closing, it will cause the Board
of Directors to consist of eight directors, three of whom will be
appointed by the board of directors of Crimson and five of whom will be
appointed by Contango's Board of Directors. Additionally, Joseph J.
Romano (the current Chairman, President and Chief Executive Officer of
the Company) will serve as Chairman of the Board,
The foregoing descriptions of the Merger Agreement and related
agreements are qualified in their entirety by reference to the full text
of such agreements, which are attached as exhibits to the Company's
report on Form 8-K, dated as of
Below are the Company's results of operations for the three and nine
months ended
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| (thousands, except per share amounts) | ||||||||||||||||
| REVENUES: | ||||||||||||||||
| Natural gas, oil and liquids sales | $ | 31,787 | $ | 41,339 | $ | 96,493 | $ | 139,449 | ||||||||
| Total revenues | 31,787 | 41,339 | 96,493 | 139,449 | ||||||||||||
| EXPENSES: | ||||||||||||||||
| Operating expenses | 9,785 | 5,727 | 21,220 | 18,626 | ||||||||||||
| Exploration expenses | 129 | 76 | 51,743 | 133 | ||||||||||||
| Depreciation, depletion and amortization | 10,494 | 11,710 | 30,830 | 36,203 | ||||||||||||
| Impairment of natural gas and oil properties | — | — | 14,078 | — | ||||||||||||
| General and administrative expenses | 3,208 | 1,226 | 8,607 | 5,778 | ||||||||||||
| Total expenses | 23,616 | 18,739 | 126,478 | 60,740 | ||||||||||||
| Loss from investments in affiliates, net of taxes | (1,147 | ) | — | (639 | ) | — | ||||||||||
| Other income/(expense) | 141 | 42 | (44 | ) | (86 | ) | ||||||||||
| NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 7,165 | 22,642 | (30,668 | ) | 78,623 | |||||||||||
| Income tax benefit (provision) | (3,296 | ) | (7,942 | ) | 9,592 | (28,748 | ) | |||||||||
| NET INCOME (LOSS) FROM CONTINUING OPERATIONS | 3,869 | 14,700 | (21,076 | ) | 49,875 | |||||||||||
| DISCONTINUED OPERATIONS | ||||||||||||||||
| Discontinued operations, net of income taxes | — | (26 | ) | — | (821 | ) | ||||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK | $ | 3,869 | $ | 14,674 | $ | (21,076 | ) | $ | 49,054 | |||||||
| NET INCOME (LOSS) PER SHARE: | ||||||||||||||||
| Basic | ||||||||||||||||
| Continuing operations | $ | 0.25 | $ | 0.96 | $ | (1.38 | ) | $ | 3.23 | |||||||
| Discontinued operations | — | — | — | (0.05 | ) | |||||||||||
| Total | $ | 0.25 | $ | 0.96 | $ | (1.38 | ) | $ | 3.18 | |||||||
| Diluted | ||||||||||||||||
| Continuing operations | $ | 0.25 | $ | 0.96 | $ | (1.38 | ) | $ | 3.23 | |||||||
| Discontinued operations | — | — | — | (0.05 | ) | |||||||||||
| Total | $ | 0.25 | $ | 0.96 | $ | (1.38 | ) | $ | 3.18 | |||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||
| Basic | 15,195 | 15,357 | 15,229 | 15,453 | ||||||||||||
| Diluted | 15,195 | 15,360 | 15,229 | 15,456 | ||||||||||||
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 and nine months ended
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||||
| 2013 | 2012 | Change | 2013 | 2012 | Change | |||||||||||||
| (thousands, except percent change, average sales price and selected data per Mcfe) | ||||||||||||||||||
| Production: | ||||||||||||||||||
| Natural gas (million cubic feet) | 4,367 | 5,547 | (21 | )% | 14,230 | 17,276 | (18 | )% | ||||||||||
| Oil and condensate (thousand barrels) | 91 | 157 | (42 | )% | 290 | 464 | (38 | )% | ||||||||||
| Natural gas liquids (thousand gallons) | 6,311 | 7,321 | (14 | )% | 19,655 | 20,725 | (5 | )% | ||||||||||
| Total (million cubic feet equivalent) | 5,815 | 7,535 | (23 | )% | 18,778 | 23,021 | (18 | )% | ||||||||||
| Natural gas (million cubic feet per day) | 48.5 | 61.0 | (21 | )% | 51.9 | 62.8 | (18 | )% | ||||||||||
| Oil and condensate (thousand barrels per day) | 1.0 | 1.7 | (42 | )% | 1.1 | 1.7 | (38 | )% | ||||||||||
| Natural gas liquids (thousand gallons per day) | 70.1 | 80.5 | (14 | )% | 71.7 | 75.4 | (5 | )% | ||||||||||
| Total (million cubic feet equivalent per day) | 64.6 | 82.7 | (23 | )% | 68.5 | 83.8 | (18 | )% | ||||||||||
| Average Sales Price: | ||||||||||||||||||
| Natural gas (per thousand cubic feet) | $ | 3.67 | $ | 2.57 | 43 | % | $ | 3.38 | $ | 3.40 | (1 | )% | ||||||
| Oil and condensate (per barrel) | $ | 111.85 | $ | 113.41 | (1 | )% | $ | 108.00 | $ | 112.53 | (4 | )% | ||||||
| Natural gas liquids (per gallon) | $ | 0.89 | $ | 1.28 | (30 | )% | $ | 0.87 | $ | 1.38 | (37 | )% | ||||||
| Total (per thousand cubic feet equivalent) | $ | 5.47 | $ | 5.49 | * | $ | 5.14 | $ | 6.06 | (15 | )% | |||||||
| Selected Data per Mcfe: | ||||||||||||||||||
| Lease operating expenses | $ | 1.68 | $ | 0.76 | 121 | % | $ | 1.13 | $ | 0.81 | 40 | % | ||||||
| General and administrative expenses | $ | 0.55 | $ | 0.16 | 244 | % | $ | 0.46 | $ | 0.25 | 84 | % | ||||||
| Depreciation, depletion and amortization of natural gas and oil properties | $ | 1.77 | $ | 1.53 | 16 | % | $ | 1.62 | $ | 1.55 | 5 | % | ||||||
| * Less than 1% | ||||||||||||||||||
Contango is a
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
ADDITIONAL INFORMATION ABOUT THE PROPOSED MERGER AND WHERE TO FIND IT
In connection with the proposed merger, Contango intends to file with
the
Contango and Crimson and their respective directors and executive
officers and other members of management and employees may be deemed to
be participants in the solicitation of proxies in respect of the
proposed transaction. Information about Contango's directors and
executive officers is available in Contango's proxy statement dated
This document shall not constitute an offer to sell or the solicitation of any offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
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