Each one in plain English, with the numbers worked through for a shareholder.
5 Feb 2008asset acquisition disposition▲ GoodMajor
The sale of the Eastern core Fayetteville Shale properties to XTO Energy closed on Jan 30, 2008, and Contango received about $128 million. This completes the January 2008 agreement and, with the Western core sale to Petrohawk, ends Contango's Fayetteville Shale holdings. Management intends to use a large percentage of the proceeds for another like-kind exchange purchase of oil and gas properties; the press release puts the taxable proceeds to be invested that way at about $109 million, and says the cash earns 3.5% in the meantime.
West Coast Asset Management, Inc, Paul J. Orfalea, Lance W. Helfert reported a CONTANGO OIL & GAS CO shareholding of 916,621 shares (5.70% of votes) in a periodic institutional filing.
On Jan 17, 2008 Contango raised its secured term loan facility with Centaurus Capital from $30 million to $60 million, with $15 million outstanding and maturity extended to June 30, 2009 (in December 2007). A $300,000 arrangement fee was paid. Management says that once the Freeport LNG sale closes it expects to be debt free with $60 million unused capacity, kept as extra liquidity given financial market turmoil.
On Jan 4, 2008 Contango and its partners agreed to sell the Eastern core of their Arkansas Fayetteville Shale properties (about 20,000 acres) to XTO Energy for $236 million, about $128 million of it for Contango's 11,200 net acres. Closing is expected in January 2008; this would sell the Fayetteville acreage Contango kept after the Petrohawk sale, and the company plans to seek another like-kind exchange with the proceeds.
On Jan 7, 2008 Contango agreed to sell its 10% limited partnership interest in Freeport LNG Development LP to a major Asian utility company for about $68 million, subject to the buyer's board approval and customary conditions. Management says it will repay the $20 million Royal Bank of Scotland term loan with the proceeds and keep the rest for working capital. The release also reports the three Dutch wells were shut in by condensate line leaks, with lost cash flow estimated at about $5 million.
9 Jan 2008asset acquisition disposition▲ GoodMajor
On Jan 3, 2008 Contango's subsidiary bought additional working interests in the Dutch (Eugene Island 10) discovery and the five Mary Rose State of Louisiana leases from three companies for $200 million, adding 29 Bcfe of estimated proved reserves. The press release says this qualifies as the like-kind exchange for the Western Fayetteville sale proceeds, and raises Contango's working interest to 42.88% in Dutch and an average 48.65% in Mary Rose. Audited financial statements and pro forma information for the acquired properties are still to be filed.
28 Dec 2007asset acquisition disposition▲ GoodMajor
The Western core Fayetteville Shale sale to Petrohawk closed on Dec 21, 2007, and Contango received $199.2 million. It intends to use the money to buy oil and gas properties through a 1031 like-kind exchange, and expects a profit of about $162.4 million on the sale in the December 2007 quarter, assuming the exchange succeeds. This completes the November 2007 agreement.
Contango and its partners agreed on Nov 26, 2007 to sell the Western core of their Arkansas Fayetteville Shale properties (24,078 acres) to Petrohawk for $343 million, about $200 million of it for Contango's roughly 14,200 net acres. Closing is expected in December 2007, and Contango keeps its interest in the Eastern core; the company says the sale is part of its previously announced review of strategic alternatives.
