Contango Oil & Gas Company has terminated the data room process for companies potentially interested in acquiring their Dutch and Mary Rose fields in the Gulf of Mexico. As a result, the Company will continue to develop and operate its Dutch and Mary Rose fields and continue to drill and explore in the Gulf of Mexico as Contango Oil & Gas Company.
The Company also announced that its Board of Directors has approved the implementation of a $100 million share repurchase program, effective immediately. The shares will be purchased in the open market from time to time by the Company or through privately negotiated transactions. The repurchases will be made subject to market conditions and certain volume, pricing and timing restrictions to minimize the impact of the repurchases upon the market. Repurchased shares of common stock will become authorized but unissued shares, and may be issued in the future for general corporate and other purposes.
Kenneth R. Peak, Contango’s Chairman and Chief Executive Officer, said, “The sharp fall off in near-term natural gas prices from nearly $14.00 per Mmbtu to approximately $7.00 per Mmbtu has greatly diminished our interest in exploring the sale of our Dutch and Mary Rose assets. Further, the decline in our stock price presents us, we believe, with an opportunity to purchase our proved developed reserves and growth potential at attractive prices. I personally will not be a seller in this share repurchase program.”
Mr. Peak continued, “We will be spending the weekend and early next week inspecting our offshore facilities for damage. Our initial survey indicates little to no damage, but we will be unable to ramp up production until full electrical power is restored to our on-shore gas processing facilities.”
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