Contango Oil & Gas Company has reported net income attributable to common stock for the three months ended March 31, 2006 of $0.7 million, or $0.05 per basic and diluted share, compared to a net loss attributable to common stock for the three months ended March 31, 2005 of $1.2 million, or $0.09 per basic and diluted share. The increase was attributable to an increase in crude oil and natural gas prices and an increase in our oil production.
Net income attributable to common stock for the nine months ended March 31, 2006 was $0.4 million, or $0.03 per basic and diluted share, compared to net income attributable to common stock for the nine months ended March 31, 2005 of $13.4 million, or $1.02 per basic and diluted share, which included a gain on the sale of discontinued operations of $16.3 million, from the sale of our south Texas natural gas and oil interests that was completed in December 2004.
EBITDAX for the three months ended March 31, 2006 was $2.1 million compared to $0.6 million for the three months ended March 31, 2005. EBITDAX for the nine months ended March 31, 2006 was $4.2 million compared to $27.4 million for the nine months ended March 31, 2005.
Kenneth R. Peak, Contango’s Chairman and Chief Executive Officer, said, “We expect to begin drilling our High Island A-279 (“Juice”) and our West Delta 43 (“Skip Jack”) prospects in June, and our Eugene Island 10 (“Dutch”) prospect in July.
“In our Arkansas Fayetteville Shale Play, we and our operating group have acquired or received commitments on approximately 42,000 net mineral acres. The Arkansas Oil & Gas Commission has now approved eleven of our 640-acre drilling units, which we estimate will allow our operating group to drill and operate approximately 100 horizontal wells. In addition, we have now been integrated into 35 wells that are being operated by a third party oil and gas exploration company, seven of which are producing. The remaining 28 horizontal wells are either being drilled or are expected to be drilled over the next three months. We recently logged 240 feet of net Fayetteville Shale in our first Alta operated well, the Alta Beck #1-32H, and are currently drilling this well horizontally.
“On March 15, 2006, two affiliated companies were the apparent high bidders on a total of 16 lease blocks at the Central Gulf of Mexico Lease Sale #198. We were recently awarded our 11th lease block from this sale, West Delta 77, bringing the total number of lease blocks Contango and its affiliates have to 62 offshore leases.
“As of May 11, 2006, we have approximately $33 million in cash, cash equivalents, and short term investments. In addition, the Company has $10.0 million of unutilized borrowing capacity. Our principal focus will continue to be our deep shelf Gulf of Mexico and Fayetteville Shale exploration programs.”
