Contango Oil & Gas Company is a Houston, Texas based, independent energy company whose business is to maximize production from its shallow offshore Gulf of Mexico properties and onshore properties in Texas and Wyoming, and to use that cash flow to explore, develop, exploit, produce and acquire crude oil and natural gas properties in the Texas and Rocky Mountain regions of the United States.
Our primary producing areas as of December 2017 included:
- Gulf of Mexico Offshore Louisiana - water depths less than 300 feet
- Madison and Grimes counties counties, Texas - Woodbine (Upper Lewisville)
- Pecos County, Texas - Southern Delaware Basin (Wolfcamp)
- Other Texas Gulf Coast – Conventional and smaller unconventional formations
- Zavala and Dimmit counties, Texas - Buda / Austin Chalk
- Weston County, Wyoming - Muddy Sandstone
- Sublette County, Wyoming - Jonah Field (1)
(1) Through a 37% equity investment in Exaro Energy III LLC (“Exaro”). Production from this investment is not included in our reported production results or in our reported reserves for any periods reported.
Since October 2013, upon the merger with Crimson Exploration Inc. (“Crimson”) (the “Merger”), and prior to the decline in crude oil and natural gas prices in 2015, we focused our drilling efforts on liquids-rich horizontal resource plays. Beginning in the second half of 2015, we reduced our drilling program in response to the challenging commodity price environment, and instead focused on: (i) the preservation of our strong and flexible financial position, including limiting our overall capital expenditure budget; (ii) the identification of opportunities for cost and production efficiencies in all areas of our operations; and (iii) the maintenance of core leases and the continued identification of new resource potential opportunities. As a result, until the latter half of 2016, our only drilling activity was in Weston County, Wyoming, where we completed our third well targeting the Muddy Sandstone formation. During the third quarter of 2016, we acquired a 12,100 gross acre position (5,000 net) in the Southern Delaware Basin in Pecos County, Texas (the “Acquisition”), and as of December 31, 2017, had increased our acreage in the Southern Delaware Basin to 16,500 gross acres (6,800 net). Since the Acquisition, we have begun production from seven wells in the Southern Delaware Basin and are waiting on completion of an eighth well. We currently expect that the Southern Delaware Basin position will continue to be the primary focus of our drilling program for 2018.
The Company also has (i) operated producing properties in the Haynesville Shale, Mid Bossier and James Lime formations in East Texas and (ii) operated conventional producing properties in the south and southeast areas of Texas.
During the quarter ended September 30, 2016, in conjunction with the purchase of our Southern Delaware Basin position, we completed an underwritten public offering of 5,360,000 shares of our common stock for net proceeds of approximately $50.5 million, which were used to fund the initial purchase of this acreage and provide funding for the costs associated with drilling our initial wells in the Southern Delaware Basin.
Our production for the year ended December 31, 2017 was approximately 20.1 Bcfe (or 55.1 Mmcfe/d), was 68% from our offshore properties and was 69% natural gas. Our production for the three months ended December 31, 2017 was approximately 4.8 Bcfe (or 51.8 Mmcfe/d), was 66% from our offshore properties and was 68% natural gas. As of December 31, 2017, our proved reserves were approximately 65% proved developed, were 40% offshore, were 48% natural gas and were 98% attributed to wells and properties operated by us.
Our mission is to create value for our shareholders through the acquisition, exploitation, exploration and development of oil and gas properties and by investing in a balanced portfolio of longer life reserves and high impact opportunities.
Vision and Values
Our vision is to be recognized as a leading profitable producer of oil and natural gas in the Gulf Coast region and the Gulf of Mexico. We will distinguish ourselves from our competitors by employing strong technical leadership and creative commercial solutions, along with the desire to successfully explore for oil and gas as the low cost producer.
At Contango Oil & Gas Company, we adhere to a defined set of values that promote and sustain relationships based on high ethical standards and personal integrity. Our goal is to maintain a talented, cohesive team committed to those values and standards in promoting Contango as a respected industry leader built on win/win relationships among all employees, shareholders, customers and vendors.
At Contango Oil & Gas Company, every prospect is thoroughly screened to ensure it meets our criteria for performance. Among our key performance indicators are:
- Return on capital employed
- Finding and development costs
- Reserve growth
- EBITDA growth
- Production growth
- Cash margin/unit
- Lease operating costs
- General and administrative cost/unit