Contango Comments on DOI 60-Day Suspension of Leasing and Permitting on Federal Lands and Provides Update on Silvertip Acquisition Closing
- Temporary suspension of approvals expected to have no impact on legacy Contango production or production acquired through Mid-Con Energy Partners (“MCEP”) and Silvertip transactions
- Pine Tree growth project acquired in the MCEP transaction already has necessary permits approved for base case development program
- Temporary suspension not expected to interfere with any plans to restore shut in production with favorable economics at current oil prices across the portfolio
- Project Silvertip acquisition is expected to close February 1, 2021
FORT WORTH, Texas, Jan. 25, 2021 (GLOBE NEWSWIRE) -- Contango Oil & Gas Company (NYSE American: MCF) (“Contango” or the “Company”) today provided commentary on the US Department of Interior’s 60-day suspension of authority for federal permitting, leasing, or other fossil fuel authorizations.
Contango does not expect any negative impact on its legacy production or production from either of the recently announced MCEP and Silvertip acquisitions, or on permitting in any of its onshore areas. To the extent Contango has plans to restore shut in production, convert producing wells to injection wells for enhanced oil recovery, or conduct routine well interventions to optimize production, it does not anticipate the suspension will have any effect on those operations.
Wilkie S. Colyer, Jr., Contango’s Chief Executive Officer, commented, “Our business model, which is focused on acquisition and management of cash-flowing, longer-lived assets at attractive prices, is not expected to be impacted by the Department of Interior’s suspension of authority. Federal acreage within our asset base is comprised largely of developed reserves, thereby mitigating any impact the temporary suspension, or any increased regulation on the leasing and permitting process on federal lands, might have on our operations. Any increased regulation on drilling could ultimately be beneficial to companies with PDP-heavy profiles to the extent that it leads to higher future commodity prices. Lastly, we are excited for the closing of the Silvertip acquisition on February 1 and look forward to welcoming the employees of Silvertip to Contango.”
Contango Oil & Gas Company is a Fort Worth, Texas based, independent oil and natural gas company whose business is to maximize production and cash flow from its offshore properties in the shallow waters of the Gulf of Mexico and onshore properties in Oklahoma, Texas, Wyoming and Louisiana and, when determined appropriate, to use that cash flow to explore, develop, and increase production from its existing properties, to acquire additional PDP-heavy crude oil and natural gas properties or to pay down debt. Additional information is available on the Company’s website at http://contango.com. Information on our website is not part of this release.
This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on Contango’s current expectations. The words and phrases “should”, “could”, “may”, “will”, “believe”, “plan”, “intend”, “expect”, “potential”, “possible”, and similar expressions identify forward-looking statements and express Contango’s expectations about future events. All statements, other than statements of historical facts, included in this communication that address activities, events or developments that Contango expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond Contango’s control. Consequently, actual future results could differ materially from Contango’s expectations due to a number of factors, including, but not limited to market conditions, increased governmental regulation, industry conditions, the impact of COVID-19 pandemic, the consummation of the asset acquisition, actions by third parties (including investors and the seller), and other factors which could affect Contango’s operations or financial results, including those described in Contango’s Annual Report on Form 10-K and other reports on file with the Securities and Exchange Commission. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results and developments may differ materially from the projections in the forward-looking statements. Forward-looking statements speak only as of the date they were made and are based on the estimates and opinions of management at the time the statements are made. Contango does not assume any obligation to update forward-looking statements should circumstances or management’s estimates or opinions change, except as required by law.
Contango Oil & Gas Company
E. Joseph Grady, 713-236-7400
Senior Vice President and Chief Financial Officer
Source: Contango Oil & Gas Company
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