Each one in plain English, with the numbers worked through for a shareholder.
31 Oct 2014debt financing▲ GoodMajor
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.
16 July 2014material agreement termination● Neutral
After director John B. Juneau resigned from the board, Contango's subsidiary Contaro and Juneau Exploration, L.P. ended on July 15, 2014 their advisory agreement on Contaro's investment in Exaro Energy III LLC. Neither side has further rights or obligations under it. This ends a link to a director who had been tied to the company's prospect generation and Exaro; the filing does not give a reason for the resignation.
On April 11, 2014 Contango and its lenders, led by Royal Bank of Canada, amended the October 2013 credit agreement. The first $150 million of new debt issued is now permanently excluded from the automatic 25% cut to the borrowing base; only debt above $150 million triggers the 25% reduction. This amends the facility set up at the Crimson merger close.
Contango filed Crimson's unaudited financial statements and management discussion for the three and nine months ended September 30, 2013, as follow-up to the October 1, 2013 merger. For the nine months Crimson reported revenues of $92.5M and a net loss of $10.3M; for the quarter, revenues of $31.6M and a net loss of $6.1M. At September 30 it had $229.9M of long-term debt, which the filing's context shows was refinanced at the merger close. These are Crimson's pre-merger results, not Contango's.
2 Oct 2013asset acquisition disposition● NeutralMajor
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.
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%.
Contango filed Amendment No. 3 to the Crimson merger registration statement. The visible text covers only the indemnification of directors and officers, exhibits and legal undertakings; it shows no new deal terms, and what changed from Amendment No. 2 is not visible in the excerpt. The merger process continues.
This 8-K is filed by Crimson (not Contango) and attaches a press release: Crimson stockholders of record at the close of business on August 20, 2013 can vote on the merger, and the special meeting is expected in early October 2013. It says completion still needs Crimson stockholder approval and other conditions. This continues the pending Crimson merger and gives the first expected meeting timing.
Contango filed Amendment No. 2 to the Crimson merger registration statement. The visible text again shows the same terms (0.08288 fixed exchange ratio, 79.7%/20.3% split) and is still preliminary, with meeting dates and voting-support percentages blank. The excerpt does not show what changed, and the registration is not yet declared effective. The merger remains pending ahead of the shareholder votes.
Contango filed Amendment No. 1 to the Crimson merger registration statement. The visible text repeats the same terms (0.08288 exchange ratio, 79.7%/20.3% ownership split) and is still marked preliminary, with meeting dates and voting-support percentages blank. The excerpt does not show what changed from the June filing, and the registration is not yet effective. The merger process is continuing.
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.
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.
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.
Contango arranged a new $40 million secured revolving credit line with Amegy Bank, due October 1, 2014, at LIBOR plus 2.5% (0.75% LIBOR floor), with a $300,000 arrangement fee paid. Nothing has been drawn; the company says it has no debt, about $60 million of net cash and $40 million of unused borrowing capacity as of October 21, 2010. This is a new facility; the earlier Guaranty Bank revolver (due Oct 2010) is not mentioned in this filing.
On Oct 22, 2009 Contango's subsidiary Conterra signed a joint venture with Patara Oil & Gas to develop proved undeveloped Cotton Valley gas reserves in Panola County, Texas. Conterra pays 100% of drilling and completion costs for 90% of net revenues, for up to 15 wells at about $1.5 million each. Patara's CEO, B.A. Berilgen, is a Contango director, so this is a deal with a related party. A Oct 23, 2009 amendment loosened certain negative covenants in the $50 million Guaranty Bank credit agreement (as amended and restated March 31, 2009).
On Oct 3, 2008 Contango and its subsidiary Contango Resources Company arranged a $50 million secured revolving credit facility with Guaranty Bank, paying interest at LIBOR plus 2.0% and due Oct 3, 2010. It can fund Gulf of Mexico drilling, share buybacks, dividends and working capital; a $250,000 arrangement fee was paid. The filing does not say how much has been drawn.
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).
8 Feb 2008asset acquisition disposition▲ GoodMajor
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.
5 Feb 2008asset acquisition disposition▲ GoodMajor
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.
On Jan 17, 2008 Contango raised its secured term loan facility with Centaurus Capital from $30 million to $60 million, with $15 million outstanding and maturity extended to June 30, 2009 (in December 2007). A $300,000 arrangement fee was paid. Management says that once the Freeport LNG sale closes it expects to be debt free with $60 million unused capacity, kept as extra liquidity given financial market turmoil.
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.
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.
9 Jan 2008asset acquisition disposition▲ GoodMajor
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.
28 Dec 2007asset acquisition disposition▲ GoodMajor
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.
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.
