Contango Reports Fiscal Year End Results
Contango Oil & Gas Company (AMEX:MCF) reported natural gas and oil sales from continuing operations for the fiscal year ended June 30, 2007 of approximately $18.7 million, compared to $0.9 million for the same period last year. The Company reported a net loss attributable to common stock for the year ended June 30, 2007 of approximately $3.2 million, or $0.21 per basic and diluted share, compared to a net loss attributable to common stock for the year ended June 30, 2006 of approximately $0.8 million, or $0.05 per basic and diluted share.
For the three months ended June 30, 2007, natural gas and oil sales from continuing operations were $11.2 million, up from $0.6 million for the three months ended June 30, 2006. Contango had a net loss attributable to common stock of approximately $0.5 million, or $0.03 per basic and diluted share, compared to a net loss attributable to common stock for the three months ended June 30, 2006 of approximately $1.2 million, or $0.08 per basic and diluted share. The net loss for the three months ended June 30, 2007 is after $4.1 million of dry hole expenses associated with mechanical problems on the Alta-Beck #1-32H and the Alta-Kaufman #1-12H in the Arkansas Fayetteville Shale, which were drilled in fiscal year 2006.
For fiscal year 2008, our capital expenditure budget calls for us to invest a total of $55.6 million, as we continue to develop our Arkansas Fayetteville Shale play, bring Eugene Island 10 ("Dutch") #3 to production, drill additional developmental wells on our Dutch and State of Louisiana ("Mary Rose") prospects, build an associated platform and pipeline and drill at least one additional wildcat exploration offshore well unrelated to Dutch or Mary Rose. Of this $55.6 million, approximately $30.0 million is anticipated to be invested in offshore activities and $25.6 million is expected to be invested in onshore activities.
Kenneth R. Peak, the Company's Chairman and Chief Executive Officer, said, "As of September 13, 2007, our Dutch #1 well is constrained to 30 million cubic feet equivalent per day ("Mmcfe/d") and our Dutch #2 well is temporarily shut-in awaiting an upgrade and increase in onshore gas processing capacity. Approximately $5 million (8/8ths) has been invested over the past several months to upgrade and increase gas processing capacity infrastructure. We anticipate that these upgrades will be completed by the end of September 2007, to allow our Dutch #1, #2 and #3 wells to flow at their anticipated combined rate of between 90 to 110 Mmcfe/d."
Mr. Peak continued, "We are currently drilling our Mary Rose #1 prospect and expect to reach our target depth by mid-October. A production platform and pipeline with a capacity of 300 Mmcfe/d is being built by the Company to process and transport anticipated production from our Mary Rose #1 well, together with anticipated production from an expected additional three to five wells. If successful, the Mary Rose #1 and follow-on developmental wells are anticipated to begin production in May 2008."
As of August 31, 2007, we have approximately $1.5 million in cash, cash equivalents, and short term investments and $30.0 million of unutilized borrowing capacity available to the Company.
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- Contango Spotlights Year-End Results (Aug 29)