Contango Oil & Gas Company has announced that two affiliated companies bid on five blocks and were the apparent high bidders on three blocks offered at the Central Gulf of Mexico Lease Sale #194 held March 16, 2005 in New Orleans. The sale covered areas in the central part of the Outer Continental Shelf, offshore from the Louisiana coastline. An apparent high bid ("AHB") gives the bidding party propriety in award of offered tracts, notwithstanding the fact that the Minerals Management Service ("MMS") may reject all bids for a given tract. The MMS review process can take up to 90 days on some bids. Upon completion of that process, final results for all AHBs will be known.
Contango's affiliates, Republic Exploration LLC ("Republic") and Contango Offshore Exploration LLC ("COE"), had the AHB on the following lease blocks:
Republic - West Cameron 107 (100%)
COE - Viosca Knoll 475 (100%)
Republic/COE - Eugene Island 168 (50%)
Contango owns 33% and 67% of Republic and COE, respectively. If these blocks are awarded, Contango will own interests, both directly and indirectly vis-a-vis its affiliates, in 44 federal lease blocks in the Gulf of Mexico.
Kenneth R. Peak, Contango's chairman and chief executive officer, said, "The Company is pleased with its inventory of offshore prospects. Currently, we are drilling one onshore well and one offshore well, and are still on track to drill approximately 25 exploration wells during the calendar year 2005. We have $37 million in cash on hand and are currently producing approximately 2.2 MMcfe per day."
