frac-12-2.JPGIn April 2011, the Company announced a commitment to invest up to $20 million in Alta Resources Investments, LLC (“Alta Energy”), a venture that will acquire, explore, develop and operate onshore unconventional oil and natural gas shale assets. We have invested approximately $14.9 million in Alta Energy to lease approximately 60,000 acres in the Kaybob Duvernay, a liquids rich shale play in Alberta, Canada.  Alta Energy has built one of the largest acreage blocks in the core of the play.  Alta Energy has drilled four vertical test wells and taken whole cores on two of those.  Additionally, Alta Energy has successfully drilled and completed two horizontal wells. The Alta Energy 1-32 well is on production while the Alta Energy 14-25 is planned to beging production this summer. Contango has a 2% interest in Alta Energy and a 5% interest in the Kaybob Duvernay project.

Offsetting activity in the Kaybob Duvernay continues to provide encouraging early results.  Initial production began with 508 barrels of oil equivalent per day ("Boed") for the first well and continuously improved to 2,123 Boed for the fourth well which tested 7.7 MMcfd and 839 Bbls per day. Condensate yields continue to rise to close to 100 bbls/MMcf plus encouraging amounts of NGL's.  We expect an active summer of offsetting activity with additional information being slowly provided by competitors to the market.