17 Dec 2021listing compliance notice▼ BadMajor
CONTANGO OIL & GAS CO terminated the registration of a class of securities, ending its reporting obligation for them.
Announcements, explained
Each one in plain English, with the numbers worked through for a shareholder.
8 Dec 2021listing compliance notice● NeutralMajor
CONTANGO OIL & GAS CO's exchange filed to remove a class of its securities from listing.
7 Dec 2021business combination● NeutralMajor
The Independence Energy combination closed on December 7, 2021. Each Contango share was converted into 0.2000 share of Crescent Energy Class A stock (cash for fractions), leaving former Contango holders with about 25% of Crescent. Contango's JPMorgan credit agreement was paid off and terminated, its hedges moved to Crescent, its directors and officers left their roles, and it is now an indirect subsidiary of Crescent (renamed L Merger Sub LLC). Contango stock stops trading on the NYSE American before the open on December 8, 2021, and the company intends to file a Form 15 to end its SEC reporting. This closes the merger thread begun in June 2021.
3 Nov 2021business combination● NeutralMajor
Contango sent shareholders its final proxy statement on November 3, 2021 for a December 6, 2021 special meeting to vote on the Independence Energy combination announced in June. The board unanimously recommends approval. Each Contango share converts into 0.2 share of the new company (to be called Crescent Energy, planned NYSE ticker CRGY), and former Contango holders would own about 25% of the combined company, up slightly from the 24% first stated. A majority of outstanding shares must approve the merger. The meeting also covers a share issuance for equity awards and an advisory vote on executive pay tied to the deal.
8 June 2021material agreement● NeutralMajor
Contango signed a deal on June 7, 2021 to combine with Independence Energy (managed by KKR) under a new holding company. Each Contango share would convert into 0.2000 shares of the new company's Class A stock, leaving current Contango shareholders with about 24% and Independence holders about 76%. KKR would hold a special preferred share that lets it appoint the entire board, and common holders would not vote on directors. Closing needs Contango shareholder approval, listing approval, regulatory approvals and an effective S-4. Contango would owe a $33,375,989 termination fee in certain cases, such as changing its board recommendation or taking a superior offer, and $6,068,362 in expenses if shareholders vote it down. Either side can walk away if it is not closed by January 7, 2022.
10 Mar 2021business combination● Neutral
Contango filed an 8-K to add Mid-Con's audited 2020 and 2019 financial statements and pro forma combined financials for 2020, mainly so they can be used in its registration statements. Mid-Con's 2020 net loss was $23.0M, and its balance sheet showed $68.5M of current debt. This adds disclosure about the completed merger; it announces no new transaction.
21 Jan 2021business combination● NeutralMajor
Contango completed its merger with Mid-Con Energy Partners on Jan 21, 2021. Mid-Con ceased to exist and became a wholly owned subsidiary (Michael Merger Sub LLC). Each Mid-Con common unit converted into 1.7500 Contango shares, and phantom units vested and converted at the same ratio. This resolves the merger pending since Oct 2020; the S-4 was declared effective Dec 18, 2020. Existing Contango holders keep their shares, now diluted by the issuance.
4 Dec 2020business combination● Neutral
Contango filed Amendment No. 1 to its S-4 for the Mid-Con merger. It now states that Contango and Mid-Con holders are expected to own about 87% and 13% of the combined company, respectively. The Contango consent figures are still blank, and Contango shareholders will not vote. The exchange ratio remains 1.7500 Contango shares per Mid-Con unit.
3 Dec 2020capital raising announcement● NeutralMajor
Contango agreed on Nov 29, 2020 to sell 14,194,516 new shares at $1.55 each in a private placement, raising about $22.0M gross. Existing shareholders are diluted by the new shares. The filing does not state what the money is for; the same-week $58M acquisition (which the company said would be funded partly by capital markets financing) is a possible link, but that is an inference. Contango must try to file a resale registration for these shares within 30 days of issuance.
30 Nov 2020material agreement▲ GoodMajor
Contango signed an agreement on Nov 27, 2020 to buy oil and gas assets in the Big Horn Basin (Wyoming/Montana), Powder River Basin (Wyoming) and Permian Basin (Texas/New Mexico) from an undisclosed seller for about $58M cash, with closing expected Dec 31, 2020. It paid a $5.8M deposit, with $52.2M due at closing, to be funded from cash, its revolving credit facility and capital markets financing. This is a new acquisition running alongside the pending Mid-Con merger; the press release describes the deal as a bank-owned liquidation of assets.
23 Nov 2020business combination● Neutral
Contango filed its S-4 registration statement for the shares to be issued in the Mid-Con merger (up to 25,409,163 shares at the 1.7500 exchange ratio). It is a draft: the ownership split and consent figures are still blank. Contango shareholders won't be asked to vote, since written consent has been delivered by holders of enough shares. Closing can happen no sooner than 20 days after the document is mailed, and Mid-Con needs a majority of its units to approve, which unitholders holding 8,107,900 units have agreed to deliver.
5 Nov 2020debt financing● NeutralMajor
Contango signed a Third Amendment to its JPMorgan credit agreement, raising the borrowing base to $130.0M with a $10.0M automatic cut on March 31, 2021. Margins rise 25 basis points, hedging must cover at least 75% of projected producing volumes for 24 months, and a minimum $25M gross cash equity contribution is required. It takes effect only on completion of conditions including the Mid-Con merger, and the lenders postponed the November 1, 2020 borrowing base redetermination to December 31, 2020.
28 Oct 2020capital raising announcement● NeutralMajor
Contango sold 26,451,988 new common shares at $1.50 each in a private placement, raising about $39.7M gross, with shares issued October 27, 2020. This leaves 159,490,918 shares outstanding, so existing holders are diluted. Contango must file a resale registration statement within 30 days of issue. The amended credit agreement (see next filing) requires a minimum $25M equity contribution, which may be related, but this filing doesn't say so (inference).
What it means for a shareholder
26.5m new shares at $1.50 to raise about $39.7m. That's 17% dilution: every existing holder's slice gets 17% smaller. If you held $1,000 of shares (667 at the issue price), your slice goes from 0.000501% to 0.000418% of the company. To keep it you'd need 133 more shares - about $200 at the issue price.
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27 Oct 2020material agreement● Neutral
This is an amended copy of the October 25 merger 8-K, filed only to correct the 'Subject Company' header so it names Mid-Con Energy Partners instead of Contango. The filing states no other changes, so the merger terms (1.7500 Contango shares per Mid-Con unit) are unchanged.
26 Oct 2020business combination● NeutralMajor
Contango agreed to buy Mid-Con Energy Partners, the company it already had a management services agreement with, by merger. Each Mid-Con common unit converts into 1.7500 Contango shares, so Contango shareholders will be diluted by newly issued shares. Closing needs shareholder and unitholder approvals, an effective S-4 registration statement and NYSE American listing of the new shares. Holders of 81,753,700 Contango shares signed voting-support agreements, and either side can terminate if the deal isn't done within 180 days. Break fees are $1.5M plus up to $1.5M expenses, and Contango agreed to reimburse Mid-Con for up to $1.5M of expenses.
24 June 2020material agreement● NeutralMajor
Contango set up an at-the-market program with Jefferies allowing it to sell up to $100 million of common stock from time to time, with commission up to 3.0%. It plans to use proceeds to repay borrowings under the JPMorgan credit agreement and for general corporate purposes such as acquisitions and exploratory drilling. No shares are stated as sold yet; any sales would dilute existing holders.
15 June 2020debt financing▼ BadMajor
Contango amended its JPMorgan credit agreement on June 9, 2020, cutting the borrowing base from the $145 million set in November 2019 to $95.0 million, with further $10.0 million cuts on June 30 and September 30, 2020, and adding stricter terms (higher interest margin, a weekly mandatory prepayment of cash above $5.0 million, a 90-day limit on overdue payables). The current-ratio covenant test is suspended until the quarter ending March 31, 2022. About $82.768 million was outstanding at March 31, 2020. The same release says the Iron Flea exploratory well in the Gulf of Mexico was unsuccessful, and first-quarter 2020 production was about 18,900 barrels of oil equivalent per day, roughly triple the prior-year quarter, which the company attributes mainly to the White Star and Will Energy acquisitions.
24 Dec 2019capital raising announcement● NeutralMajor
Contango raised $53.35 million in a private placement: 19,000,000 common shares at $2.50 plus 2,340,000 non-voting Series C preferred shares at $2.50 (bought by Goff affiliates, CEO Wilkie Colyer and executive W. Farley Dakan) that convert one-for-one on shareholder approval. It also signed a Joint Development Agreement with Juneau Oil & Gas giving it the right to acquire interests in Juneau's Gulf of Mexico prospects for $6.0 million ($1.69 million cash plus 1,725,000 new shares). The new shares dilute existing holders; the release says proceeds are for general corporate purposes including spending under the Juneau agreement. Note the leadership change: Colyer is now President and CEO and Goff is described as Chairman.
5 Nov 2019asset acquisition disposition● NeutralMajor
Contango closed the White Star acquisition on November 1, 2019 (about 315,000 net acres in Oklahoma, $132.5 million purchase price; after closing adjustments it paid about $96 million cash, including the $12.5 million deposit), resolving the pending deal. It funded this with a new $22 million private placement of 1,102,838 Series B convertible preferred shares at $20.00 (some bought by John Goff affiliates) plus borrowings, and the credit facility's borrowing base was raised from $65 million to $145 million with two banks added. Each Series B share converts into 10 common shares once authorized common shares are increased, which dilutes existing holders; Goff affiliates also lent $5 million at 7% on a demand note.
1 Oct 2019material agreement● NeutralMajor
Contango agreed to buy assets from White Star Petroleum, including about 315,000 net acres in the STACK, Anadarko and Cherokee areas of Oklahoma, for about $132.5 million in cash, subject to adjustments. It paid a $12.5 million deposit and owes $120.0 million at closing, which it expects in the fourth quarter of 2019. A bankruptcy court approved the sale on September 30, 2019. This is the Pending Acquisition that the September 2019 stock offering was raised to help pay for; the deal can still fail if closing conditions are not met.
23 Sept 2019material agreement termination● Neutral
Contango terminated its October 1, 2013 credit agreement with Royal Bank of Canada and repaid all obligations under it in full, after entering the new JPMorgan-led credit agreement dated September 17, 2019. This closes the older bank facility that had been due to mature on October 1, 2019.
18 Sept 2019capital raising announcement● NeutralMajor
Contango raised money in two ways: a public offering of 44,736,842 common shares plus 6,710,526 more bought by underwriters (net about $46.13 million), and a $7.5 million private sale of 789,474 Series A preferred shares to entities tied to director John C. Goff. The preferred shares convert automatically to common once more shares are authorized and shareholders approve. The proceeds are meant mainly for the cash due on a pending acquisition, with the rest going to repay revolver debt or short-term investments. Contango also signed a new JPMorgan-led revolving credit facility with a $65 million borrowing base maturing September 17, 2024, which resolves the October 2019 maturity of the old RBC facility. The large share issuance dilutes existing holders.
18 June 2019debt financing▼ BadMajor
Contango and its lenders, led by Royal Bank of Canada, amended the credit agreement, setting the borrowing base at $85 million with $75 million currently available. The company said it is still in talks about refinancing or replacing the facility, which matures October 1, 2019, and that there is no assurance a deal will be reached on acceptable terms. This is a continuation of the 2013 credit agreement, now with a firm maturity date approaching; the next borrowing base review is August 1, 2019.
17 June 2019listing compliance notice● NeutralMajor
CONTANGO OIL & GAS CO's exchange filed to remove a class of its securities from listing.
14 June 2019business combination● NeutralMajor
Contango moved its legal home from Delaware to Texas on June 14, 2019, by merging into a wholly owned Texas subsidiary after shareholders approved it at the annual meeting. Shares converted one-for-one and kept the MCF ticker on NYSE American, authorized shares rose from 55,000,000 to 105,000,000, and shareholders elected six directors including Wilkie S. Colyer, Jr. and John C. Goff.
20 Nov 2018material agreement● NeutralMajor
Contango sold new common stock in an underwritten public offering through Cowen and Intrepid Partners. The base deal was up to 7,500,000 shares, and underwriters bought an extra 1,096,068 shares; net proceeds were about $32.7 million. The money is to reduce borrowings under the revolving credit facility and for general corporate purposes, including possible acquisitions. Existing shareholders are diluted by the new shares, and the company agreed not to sell more stock for 90 days. The filing also adds reserve-engineer consents (including for its 37% interest in Exaro Energy III) tied to the registration statement.
11 Apr 2018production update▲ Good
Contango gave a drilling update on its Southern Delaware Basin acreage in Pecos County, Texas. The River Rattler #1H (44% working interest), its first Wolfcamp B test, began production in March 2018 at an initial 24-hour max rate of 1,416 Boed (74% oil), which the company calls its best well to date. The Ragin Bull #2H is flowing back after completion, and the Sidewinder #1H and Gunner #3H wells are being drilled, with completion expected in June 2018. This continues the one-rig program planned in late 2017.
1 Dec 2017production update● NeutralMajor
In a November 30, 2017 update, Contango said it expects a one-rig program in 2018 on its Southern Delaware Basin acreage (6,775 net acres) in Pecos County, Texas, and put proved reserves at $254M PV-10 as of October 1. It also reported a borrowing base of $115M with about $79.2M drawn at September 30, 2017, 2018 oil hedges, and drilling and completion updates on the Crusader, Ragin Bull and River Rattler wells. It attributed heavy trading the day before partly to a large holder selling and partly to its removal from the S&P SmallCap 600 index. The acreage is larger than the roughly 5,000 net acres bought in 2016 (inference: it was added to since); the filing does not say how.
29 July 2016drilling progress report● NeutralMajor
On July 26, 2016 Contango closed its purchase of half of the seller's interest in about 12,100 gross undeveloped acres (about 5,000 net) in the Southern Delaware Basin of Texas. It paid $10 million cash at closing, owes another $10 million in carried well costs over 14 months, and up to $5 million in contingent fees once additional wells are spud after six are drilled. This is the acquisition the July 2016 share offering was meant to fund, and it begins a new Texas oil area for the company.
27 July 2016material agreement● NeutralMajor
On July 22, 2016 Contango agreed to sell up to 5,750,000 new shares (including 750,000 underwriters' option) through RBC, SunTrust Robinson Humphrey and Seaport Global, for net proceeds of about $46.9 million. The money is meant to fund a newly announced Southern Delaware Basin acreage purchase and drilling there, and meanwhile to pay down the revolver; if the purchase does not close, it goes to general corporate purposes. The new shares dilute existing holders, and the company agreed not to sell more stock for 90 days.