Each one in plain English, with the numbers worked through for a shareholder.
14 June 2013business combination● NeutralMajor
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.
Contango signed employment agreements with five Crimson executives (A. Carl Isaac, Jay S. Mengle, Thomas H. Atkins, Jeffrey A. Sikora, John A. Thomas) that take effect only if the Crimson merger closes. Base salaries range from $250,000 to $320,000, with severance of two times salary plus prior-year bonus (2.5 times for Isaac, Mengle and Atkins within 12 months of a change in control of Contango), and excise-tax gross-ups apply to the merger itself. Contango's Senior VP of Engineering, Marc Duncan, agreed on June 10, 2013 to stay until the merger closes, then leave with $250,000 severance plus a $75,000 deferred bonus. This continues the pending Crimson merger and shows who will run the combined company's operations.
I.R.S. IDENTIFICATION OF ABOVE PERSON Estate of Kenneth R. Peak, I.R.S. IDENTIFICATION OF ABOVE PERSON Donna Ungermannova Peak, I.R.S. IDENTIFICATION OF ABOVE PERSON Joseph J. Romano reported a CONTANGO OIL & GAS CO shareholding of 1,539,700 shares (10.10% of votes) in a periodic institutional filing.
I.R.S. IDENTIFICATION OF ABOVE PERSON Contango Oil & Gas Company, I.R.S. IDENTIFICATION OF ABOVE PERSON Contango Acquisition, Inc disclosed a new substantial CONTANGO OIL & GAS CO shareholding (38.30% of votes).
I.R.S. IDENTIFICATION OF ABOVE PERSON Estate of Kenneth R. Peak, I.R.S. IDENTIFICATION OF ABOVE PERSON Joseph J. Romano disclosed a new substantial CONTANGO OIL & GAS CO shareholding (10.10% of votes).
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.
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.
I.R.S. IDENTIFICATION OF ABOVE PERSON Kenneth R. Peak reported a CONTANGO OIL & GAS CO shareholding of 1,800,296 shares (11.80% of votes) in a periodic institutional filing.
I.R.S. IDENTIFICATION OF ABOVE PERSON Kenneth R. Peak reported a CONTANGO OIL & GAS CO shareholding of 2,034,296 shares (13.30% of votes) in a periodic institutional filing.
I.R.S. IDENTIFICATION OF ABOVE PERSON Kenneth R. Peak reported a CONTANGO OIL & GAS CO shareholding of 2,284,296 shares (15.00% of votes) in a periodic institutional filing.
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.
18 May 2011asset acquisition disposition● NeutralMajor
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.
I.R.S. IDENTIFICATION OF ABOVE PERSON Kenneth R. Peak reported a CONTANGO OIL & GAS CO shareholding of 2,428,196 shares (15.50% of votes) in a periodic institutional filing.
I.R.S. IDENTIFICATION OF ABOVE PERSON Kenneth R. Peak reported a CONTANGO OIL & GAS CO shareholding of 2,757,915 shares (17.60% of votes) in a periodic institutional filing.
