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Contango Oil & Gas Company (NYSE:MCF) ("Contango" or the "Company") announced today that it has entered into an agreement to acquire low decline, conventional gas assets in the Wind River Basin of Wyoming from ConocoPhillips.
HIGHLIGHTS
TRANSACTION DETAILS
The purchase and sale agreement provides that Contango will acquire approximately 446 Bcfe(1) of PDP reserves (unaudited) for a total purchase price of $67 million in cash, subject to customary purchase price adjustments, with a June 1, 2021 effective date. Closing of the transaction is expected to occur in the third quarter of 2021, subject to the satisfaction of certain closing conditions, including those set forth in the purchase and sale agreement.
The company intends to fund the purchase price with cash on hand and availability under its existing revolving credit facility.
(1) Effective date of June 1, 2021. Ran at June 21, 2021 strip pricing
MANAGEMENT COMMENTARY
Wilkie S. Colyer, Contango's Chief Executive Officer, said, "The acquisition of these Wind River Basin assets is yet another step in our consolidation strategy and an excellent fit to our asset profile. This is a huge, conventional gas field with low decline, purchased at an attractive valuation. We are intimately familiar with the area via assets acquired in the MCEP and Silvertip transactions, and we have the right team to maximize the value of these mature, low decline, and conventional properties. Our previously announced merger with Independence was designed to accelerate our acquisition pace rather than slow it down, and this transaction is a perfect example of that. We look forward to closing this transaction and continuing ConocoPhillips' excellent stewardship of these assets."
ADVISORS
Lazard is serving as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor to Contango.
Posted In: MCF