Contango Oil & Gas Company has announced that the previously announced sale of its Western Core Fayetteville Shale properties to Petrohawk Energy Corporation closed on December 21, 2007. The Company received a total of $199.2 million and intends to use the proceeds to finance the purchase of producing properties utilizing a 1031 like-kind exchange structure. Assuming a successful like-kind exchange, the Company expects to report a profit on this sale of approximately $162.4 million in the quarter ending December 31, 2007.
Kenneth R. Peak, the Company’s Chairman and Chief Executive Officer, said, “We have already begun the process to analyze potential property acquisitions to fully utilize our $199.2 million in proceeds in a like-kind exchange. In the meantime, our proceeds will be invested at a rate of approximately 4.5%.”
