Contango O&G announced that it will complete its wildcat exploration well (Rexer # 1) in south Texas. The Company has a 100% working interest and a 72.5% net revenue interest in this well, before payout. Production is expected to begin by the end of September 2010. The Company has invested approximately $2.0 million to drill this well and expects to invest an additional $1.5 million to complete and bring this well to production. The reserves associated with this discovery will be included in our June 30, 2010 year-end reserves.
The Company's on-shore drilling program with its joint venture partner, Patara Oil & Gas (the "Conterra JV"), is currently producing at a rate of approximately 5 million cubic feet per day (Mmcfd), net to Contango, from eight wells. Five additional wells are waiting to be fracture stimulated, and one well is currently drilling.
Our Ship Shoal 263 well (Nautilus) and our Eugene Island 10 well (Eloise South) discoveries are now both on production and are producing at a combined rate of 15 Mmcfd and 1,000 barrels of condensate per day (bopd), or approximately 21 million cubic feet equivalent per day (Mmcfed), net to Contango. This brings our total offshore production to 87 Mmcfd and 2,500 bopd, or approximately 102 Mmcfed, net to Contango. The Company's combined offshore and onshore production is now 107 Mmcfed, or a 19% increase over the 90 Mmcfed in production we reported in our last update at June 10, 2010.
We have continued to purchase shares of the Company's common stock under our $100 million share repurchase program. Since implementation of this program, we have now purchased approximately 1.7 million shares for $76.0 million, for an average price of $44.71 per share. Our fully diluted share count now stands at 15.97 million, or 10% fewer shares than when we began our share repurchase program in September 2008.
We have no debt, approximately $30 million in cash and cash equivalents and $50 million of unused borrowing capacity.
Kenneth R. Peak, Contango's Chairman and Chief Executive Officer, said, "With current natural gas prices of around $4.50/Mcf and production of approximately 92 Mmcfd and crude oil at $75.00/bbl and production of approximately 2,500 bopd, our projected revenues are approximately $600,000 per day when all of our wells are online and producing. Our preliminary capital expenditure budget for fiscal year 2011 is approximately $50 million, consisting of one well per month under our Conterra JV, and two offshore prospects we plan to spud in the November 2010/January 2011 time frame.
"Our capital expenditure budget will likely increase throughout the year as we generate new prospects and various drilling opportunities become available to us. We also plan to continue to opportunistically use our cash to purchase our stock and depending upon our liquidity, may also decide to pay a one-time dividend."
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