Contango Announces Signing of Agreement to Acquire Wind River Basin Assets

Source: www.gulfoilandgas.com 7/8/2021, Location: North America

Contango Oil & Gas Company (MCF) (“Contango”) announced that it has entered into an agreement to acquire low decline, conventional gas assets in the Wind River Basin of Wyoming from ConocoPhillips.

HIGHLIGHTS

- Acquisition of PDP heavy reserves for $67 million in cash, representing a discount to the proved producing reserve value of the asset

- Net production run rate of approximately 78 Mmcfe/d (~100% gas) as of July 1, 2021

- Expected to increase Contango’s run rate production by approximately 57% in Q3 of 2021

- Expected production decline of approximately 5% per year over the next 5 years

- Significant potential for upside via Contango’s track record of optimizing cash flow and reserves on acquired assets

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.

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.


Brazil >>  5/13/2022 - Petrobras, following up on the release disclosed on 07/20/2018, informs that it has decided to conclude the current competitive process, which was in ...
Russia >>  5/12/2022 - Shell Overseas Investments B.V. and B.V. Dordtsche Petroleum Maatschappij – subsidiaries of Shell plc – have signed an agreement to sell Shell Neft LL...

United Kingdom >>  5/12/2022 - JERA Americas, the Houston-based subsidiary of global energy leader JERA, has entered into an agreement to acquire a 1,633 megawatt (MW) thermal power...
Australia >>  5/11/2022 - NeuRizer - (formerly Leigh Creek Energy) wholly owned subsidiary Leigh Creek Oil and Gas (LCOG) has announced that Santos will farm-in and take operat...

Brazil >>  5/10/2022 - Petro Rio has entered into an agreement with Aquadrill that gives PRIO the opportunity to acquire the Capricorn semi-submersible rig.

The s...

Brazil >>  5/10/2022 - Petrobras, following up on the release disclosed on July 1 2020, has started the binding phase regarding the sale of its total participation in the T...




Gulf Oil and Gas
Copyright © 2021 Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.