Contango Awarded His Dudeness, El Duderino and Dude Prospects

Contango Oil & Gas' wholly-owned subsidiary, Contango Operators, Inc., was successful at the State of Texas Lease Sale held on October 6, 2009. We bid a total of approximately $800,000 on five lease blocks, Galveston Area 50, 53, 59, 60 and 74; collectively, this prospect has been named "His Dudeness." All five blocks have been awarded.

The Company also announces that we have been awarded the three lease blocks we bid on at the Western Gulf of Mexico Lease Sale No. 210 on August 19, 2009. The Company was awarded Matagorda Island Blocks 607 and 616 (collectively, "El Duderino") and Matagorda Island Block 617 ("Dude").

Our current net production is approximately 88 million cubic feet equivalent per day. Contango remains debt-free and has approximately $47.0 million of cash on hand and $50.0 million of unused borrowing capacity.

Kenneth R. Peak, the Company's Chairman and Chief Executive Officer, said, "We expect to spud our Ship Shoal 263 ("Nautilus") prospect this weekend, and our goal is to also drill our "Dude" and "His Dudeness" prospects, and depending on the results of these prospects, perhaps our "El Duderino" prospect, all prior to our fiscal year end June 30, 2010."