CONTANGO OIL & GAS CO

CONTANGO OIL & GAS CO terminated the registration of a class of securities, ending its reporting obligation for them.

listing compliance notice

CONTANGO OIL & GAS CO's exchange filed to remove a class of its securities from listing.

listing compliance notice

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.

business combination

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.

business combination

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.

material agreement

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.

business combination

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.

capital raising announcement

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.

material agreement

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.

debt financing

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).

capital raising announcement

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.

business combination

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.

material agreement

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.

debt financing

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.

capital raising announcement

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.

asset acquisition disposition

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.

material agreement

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.

capital raising announcement

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.

debt financing

CONTANGO OIL & GAS CO's exchange filed to remove a class of its securities from listing.

listing compliance notice

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.

business combination

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.

material agreement

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.

production update

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.

drilling progress report

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.

material agreement

On October 28, 2014 Contango amended its credit agreement a second time. Interest margins are reset to a sliding scale (LIBOR loans 1.50%-2.50%, versus 1.75%-2.75% originally), and the borrowing base is reaffirmed at $275 million. The company may also spend up to $39.215 million buying back its own shares, provided no default exists and borrowing stays at or below 90% of the borrowing base, and it may use loan proceeds for this. This is the first time the credit facility has allowed share buybacks; the earlier terms restricted dividends.

debt financing

On October 1, 2013 Contango completed its merger with Crimson, which is now a wholly owned subsidiary. Crimson holders receive 0.08288 Contango shares per share (up to about 3.9 million shares in total), and existing Contango shares stay outstanding. Contango also signed a new four-year secured credit facility of up to $275 million with Royal Bank of Canada as agent, with $110 million borrowed at October 1, and used it to refinance its own $40 million Amegy facility and Crimson's first-lien ($400M capacity) and $175M second-lien loans, which were terminated. The board is now eight members (five Contango, three former Crimson), with Jay Brehmer resigning. Allan Keel became President and CEO, replacing Romano in those roles, and E. Joseph Grady became CFO, replacing Castro. Romano, Castro and Duncan resigned as officers 'in connection with the Merger'. This resolves the pending merger thread and ends the Amegy facility. The filing text shown is cut off, so other items (charter changes, vote results) are not visible.

asset acquisition disposition

Contango filed the definitive joint proxy statement/prospectus for the Crimson merger, dated August 22, 2013 and first mailed about August 26. Contango shareholders vote on October 1, 2013 (record date August 20) on issuing shares to Crimson holders, at 0.08288 Contango shares per Crimson share, leaving existing Contango holders with about 79.7% and their shares unchanged. The Peak estate, Brad Juneau and certain executives, holding about 10.6%, have agreed to vote in favour, and Crimson holders tied to Oaktree and Crimson executives, about 37.25% of Crimson, have agreed to vote in favour. The Contango board unanimously recommends a yes vote. This fills in the meeting dates left blank in the earlier drafts, and the Crimson support figure is now 37.25% where the context had held about 38.8%.

business combination

Contango filed the Form S-4 registration statement for the Crimson merger, the first step toward the shareholder votes. It registers up to 4,005,056 Contango shares (48,323,547 Crimson shares and equity awards x 0.08288), and repeats that existing Contango holders would own about 79.7% afterward and Crimson holders 20.3%. The document is preliminary: meeting dates and the voting-support percentages are blank, and it is not yet effective. Contango shareholders will vote on the share issuance, and existing Contango shares are not exchanged or changed in the merger. This continues the merger announced April 29, 2013.

business combination

This filing gives the legal terms of the Crimson merger. Closing needs both companies' shareholder votes, an effective Form S-4 registration, and NYSE listing of the new shares, and either side can terminate if it isn't done by October 31, 2013. Termination fees are $28 million if Contango pays and $7 million if Crimson pays. The combined board would have eight directors (five Contango, three Crimson), and holders of about 10.6% of Contango's shares, including the Peak estate, have agreed to vote in favour. It continues the merger announced in the companion 8-K.

business combination

Contango and Crimson Exploration announced an all-stock merger agreement signed April 29, 2013: each Crimson share converts to 0.08288 Contango shares, leaving Crimson holders with 20.3% of the combined company. Contango would issue about 3.9 million shares and take on about $244 million of Crimson's long-term debt; both companies' shareholders must approve and closing is expected in the third quarter of 2013. Joseph Romano (now Contango's CEO and Chairman) would be Chairman, with Crimson's Allan Keel as CEO. The press release refers to the 'Estate of Kenneth R. Peak', so Peak is no longer alive or leading the company (inference from that wording). This adds onshore Texas oil-and-liquids positions after the 2011 sale of the earlier Texas assets.

business combination

On March 31, 2012, Contango formed Exaro Energy III LLC through its subsidiary Contara Company, committing up to $82.5 million over five years alongside partners (total commitments $182.5 million) to develop and acquire non-operated oil and gas properties in Wyoming. Contango owns about 45%, which could fall to about 34% if another party buys about $15 million of its commitment; it expects to fund about $41.3 million in April 2012. This is a new onshore investment after the 2011 sale of the Texas assets.

capital raising announcement

Contango sold substantially all of its onshore Texas assets to Patara Oil & Gas LLC for $40.0 million on May 13, 2011 (effective April 1, 2011). This includes the Panola County wells from the Conterra/Patara joint venture started in late 2009. Patara's CEO, B.A. Berilgen, is a Contango director, so this is a related-party sale, though the filing says the price was set by arm's-length negotiation. The company expects a roughly $0.3 million pre-tax loss and says it will use the proceeds to help fund its 2011 capital program.

asset acquisition disposition

On April 3, 2008 Contango bought more working interest in Dutch (Eugene Island 10) and the Mary Rose leases from two companies for $100 million, adding 21 Bcfe of proved reserves. This lifts its working interest to 47.05% in Dutch and an average 53.21% in Mary Rose, bringing like-kind exchange purchases to $309 million, and a partly-owned subsidiary (Republic Exploration LLC) has handed its interests to the company directly. The company also said its board authorized Merrill Lynch to seek proposals to buy Dutch and Mary Rose; if an acceptable offer arrives, it would likely sell Contango to the buyer while spinning the remaining assets to shareholders in a new company, Contango Energy Company. Any deal is subject to terms, approvals and, if needed, a shareholder vote. Audited statements and pro forma information for the acquired interests are still to be filed (waiver requested April 8, 2008).

asset acquisition disposition

The sale of Contango's 10% limited partnership interest in Freeport LNG Development LP to Turbo LNG LLC, an affiliate of Osaka Gas, closed on Feb 5, 2008 for $68 million. Of that, $20.3 million repaid the Royal Bank of Scotland debt and another $20.0 million repaid a private investment firm (the secured term loan with Centaurus Capital is the likely lender, an inference), leaving $27.7 million for working capital. Management says it now has over $150 million of cash and $60 million of available borrowing capacity, and still plans to put $109 million into a like-kind exchange. This completes the January 2008 agreement.

asset acquisition disposition

The sale of the Eastern core Fayetteville Shale properties to XTO Energy closed on Jan 30, 2008, and Contango received about $128 million. This completes the January 2008 agreement and, with the Western core sale to Petrohawk, ends Contango's Fayetteville Shale holdings. Management intends to use a large percentage of the proceeds for another like-kind exchange purchase of oil and gas properties; the press release puts the taxable proceeds to be invested that way at about $109 million, and says the cash earns 3.5% in the meantime.

asset acquisition disposition

On Jan 4, 2008 Contango and its partners agreed to sell the Eastern core of their Arkansas Fayetteville Shale properties (about 20,000 acres) to XTO Energy for $236 million, about $128 million of it for Contango's 11,200 net acres. Closing is expected in January 2008; this would sell the Fayetteville acreage Contango kept after the Petrohawk sale, and the company plans to seek another like-kind exchange with the proceeds.

material agreement

On Jan 7, 2008 Contango agreed to sell its 10% limited partnership interest in Freeport LNG Development LP to a major Asian utility company for about $68 million, subject to the buyer's board approval and customary conditions. Management says it will repay the $20 million Royal Bank of Scotland term loan with the proceeds and keep the rest for working capital. The release also reports the three Dutch wells were shut in by condensate line leaks, with lost cash flow estimated at about $5 million.

material agreement

On Jan 3, 2008 Contango's subsidiary bought additional working interests in the Dutch (Eugene Island 10) discovery and the five Mary Rose State of Louisiana leases from three companies for $200 million, adding 29 Bcfe of estimated proved reserves. The press release says this qualifies as the like-kind exchange for the Western Fayetteville sale proceeds, and raises Contango's working interest to 42.88% in Dutch and an average 48.65% in Mary Rose. Audited financial statements and pro forma information for the acquired properties are still to be filed.

asset acquisition disposition

The Western core Fayetteville Shale sale to Petrohawk closed on Dec 21, 2007, and Contango received $199.2 million. It intends to use the money to buy oil and gas properties through a 1031 like-kind exchange, and expects a profit of about $162.4 million on the sale in the December 2007 quarter, assuming the exchange succeeds. This completes the November 2007 agreement.

asset acquisition disposition

Contango and its partners agreed on Nov 26, 2007 to sell the Western core of their Arkansas Fayetteville Shale properties (24,078 acres) to Petrohawk for $343 million, about $200 million of it for Contango's roughly 14,200 net acres. Closing is expected in December 2007, and Contango keeps its interest in the Eastern core; the company says the sale is part of its previously announced review of strategic alternatives.

material agreement