Contango Pleased with Dutch 3 Test Results
Contango Oil & Gas says its Dutch #3 well on Eugene Island 10 has been successfully completed and production tested at a rate of approximately 34 million cubic feet equivalent per day ("Mmcfe/d"). The Company's net revenue interest in Dutch #3, before payout, is approximately 30%, inclusive of its 42.7% investment in Republic Exploration LLC ("REX"). The Dutch #3 well is expected to produce at a rate of 45 to 55 Mmcfe/d and is expected to come on stream this fall.
The Company spudded its Mary Rose #1 well today, located on State of Louisiana Lease No. 18640, and expects its Dutch #2 well to begin production next week, which when combined with our Dutch #1 well, will bring our Dutch production to approximately 70 Mmcfe/d, or approximately 21 Mmcfe/d net to Contango. Current net production to Contango from our Fayetteville Shale is approximately 8.7 Mmcfe/d, thus Contango's net production will be approximately 30 Mmcfe/d.
Kenneth R. Peak, Contango's Chairman and Chief Executive Officer, said, "Our monthly cash flow is expected to continue to grow in quantum steps as we ramp up production from our future Dutch and Mary Rose wells. We expect that our Mary Rose #1 well will be at least as productive as our Dutch #3 well. In addition, we are now less than a year away from first revenues and cash flow from our Freeport LNG investment. We currently have approximately $4 million in cash and $30 million of unutilized debt capacity."
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