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HOUSTON--(BUSINESS WIRE)--
Contango Oil & Gas Company (NYSE MKT: MCF) (“Contango” or the “Company”)
announced today its financial results for the fourth quarter and year
ended December 31, 2014.
Fourth Quarter Highlights
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Production of 9.8 Bcfe for the quarter
-
Adjusted EBITDAX of $34.8 million for the quarter
-
Initiated pad drilling strategy on Chalktown acreage to enhance
recovery and achieve cost efficiencies.
-
Commenced initial production on Elm Hill project in Fayette and
Gonzales Counties, Texas
-
Spud initial horizontal well on new acreage in Natrona County,
Wyoming, targeting the Mowry Shale.
-
Spud vertical pilot well in South Texas to evaluate the Eagle Ford.
Management Commentary
Allan D. Keel, the Company’s President and Chief Executive Officer, said
“We reduced our drilling activity in the fourth quarter in response to
the dramatic downturn in commodity prices. We did, however, continue
drilling to test new formations and concepts and are optimistic about
the initial results. We recently began production from three wells on
our first downspaced multi-well pad drilling strategy at Chalktown, as
well as from our first three wells in our Elm Hill project in Fayette
and Gonzales Counties, Texas. We spud our initial well in our new FRAMS
project in Natrona County, Wyoming targeting the Mowry Shale and will
complete the well in March or April once the difficult winter conditions
subside. We recently spud our initial well targeting the Muddy Sandstone
formation in our North Cheyenne project in Weston County, Wyoming.
Additionally, during the fourth quarter we drilled the Beeler Unit 24H
as a vertical pilot well to evaluate the Eagle Ford and other formations
in Zavala and Dimmit Counties. We are excited about the potential of our
new plays, but will not embark on any development programs until
commodity prices improve. Instead, we will limit our 2015 capital
program to firm commitments and to certain wells designed to test new
plays or formations. We anticipate that our capital program will be less
than cash flow generated; therefore, that excess will be used to improve
our already strong balance sheet. ”
Summary Fourth Quarter Financial Results
Net loss for the three months ended December 31, 2014 was $19.9 million,
or $(1.05) per basic and diluted share, compared to net income of $6.4
million, or $0.34 per basic and diluted share, for the same period last
year. Included in the current quarter figure is a $24.4 million
impairment charge related to unproved leases in non-core areas and
performance declines and lower prices at two non-core producing fields.
Other factors contributing to the decrease in net income were lower
revenues and higher depreciation, depletion and amortization (“DD&A”)
expense, partially offset by a decrease in G&A costs. Average weighted
shares outstanding were approximately 19.0 million for the current and
prior year quarters.
The Company reported Adjusted EBITDAX, as defined below, of
approximately $34.8 million for the three months ended December 31,
2014, compared to $44.4 million for the same period last year, a
decrease mainly attributable to a $16.7 million decrease in revenues,
partially offset by a $5.3 million decrease in current quarter cash G&A
costs.
Revenues for the three months ended December 31, 2014 were approximately
$50.2 million compared to $66.9 million for the same period last year.
This decrease was primarily due to slightly lower production and a 22%
decrease in the weighted average equivalent sales price received,
partially offset by an increase in revenues attributable to exercising a
preferential right to purchase additional interests in our Dutch wells
in December 2013, and the commencement of production from South
Timbalier 17 in July 2014.
Production for the fourth quarter of 2014 was approximately 9.8 Bcfe, or
106.2 Mmcfe per day, approximately 4% less than production for the
fourth quarter of 2013 due to minimal new production being added in the
second half of 2014 as a result of our change to a multi-well pad
drilling strategy in our Chalktown area late in the third quarter of
2014. The change to multi-well pad drilling provides drilling cost
efficiencies and overall recovery enhancement; however, the related
delay in initial production from the two new three-well pads drilled in
September through December precluded us from reflecting an increase in
production compared to the prior year quarter. One pad began producing
in mid-January and the second pad is expected to begin production in
early-March. Further impacting fourth quarter production, and expected
production for 2015, was our reduction in drilling activity associated
with the dramatic downturn in crude oil and natural gas prices during
the fourth quarter. Partially offsetting this decrease in production was
incremental production from additional interests in our Dutch wells
acquired in December 2013 and new production from our 2013 discovery at
South Timbalier 17 which began producing in July 2014. Crude oil and
natural gas liquids production during the fourth quarter of 2014 was
approximately 5,600 barrels per day, or 32% of total production,
compared to approximately 6,300 barrels per day, or 34% of total
production, in the fourth quarter of 2013, a decline related to lower
capital expenditures in the fourth quarter and the deferral of initial
production from fourth quarter drilling at Chalktown. Our first quarter
2015 production guidance of 95-105 Mmcfed reflects the impact of the
reduced fourth quarter 2014 and first quarter 2015 capital program (as
described herein) due to the low and uncertain commodity price
environment.
The weighted average equivalent sales price during the three months
ended December 31, 2014 was $5.14 per Mcfe, compared to $6.60 per Mcfe
for the same period last year, a decrease due to the decline in all
commodity prices over the past few months and a slight decrease in the
percentage that oil and liquids represented of total production for the
quarter.
Operating expenses for the three months ended December 31, 2014 were
approximately $10.8 million, or $1.11 per Mcfe, compared to $10.8
million, or $1.06 per Mcfe, for the same period last year. Included in
operating expenses are lease operating expenses, transportation and
processing costs, workover expenses and production and ad valorem taxes.
Lease operating expenses (“LOE”), transportation and processing costs
and workover expenses for the three months ended December 31, 2014 were
approximately $8.6 million, or $0.88 per Mcfe, compared to approximately
$8.5 million, or $0.84 per Mcfe, for the same period last year, a slight
increase attributable to incremental costs associated with compression
added at Eugene Island 11 and the addition of South Timbalier 17.
DD&A expense for the three months ended December 31, 2014 was $41.3
million, or $4.22 per Mcfe, compared to $33.3 million, or $3.29 per
Mcfe, for the same period last year. This increase is primarily
attributable to additional wells brought on-line during the year,
including the additional interests purchased in our Dutch wells and the
commencement of production on South Timbalier 17.
Impairment and abandonment expense from oil and gas properties was $24.4
million for the three months ended December 31, 2014. Of this amount,
$13.0 million was due to the impairment of certain unproved properties
due to the estimated decline in the value of leases expiring in the near
term and/or not likely to be drilled prior to expiration. The impairment
relates primarily to certain portions of our Tuscaloosa Marine Shale
acreage position and to our Gulf of Mexico exploratory acreage. Also
recorded in the fourth quarter of 2014 was an impairment charge of $11.4
million related to producing properties at South Timbalier 17 and in the
Tuscaloosa Marine Shale area, a charge necessitated by performance
declines and lower oil and gas prices.
G&A expenses for the three months ended December 31, 2014 were $7.6
million, or $0.77 per Mcfe, compared to $14.9 million, or $1.47 per
Mcfe, for the prior year quarter. G&A expenses for the current and prior
year quarter, exclusive of $1.2 million and $3.2 million, respectively,
in non-cash stock compensation expense, were $6.4 million and $11.7
million, respectively, as the prior year quarter included merger-related
costs and costs related to the post-merger combination of staff and
facilities of both companies. For the first quarter of 2015, we have
provided guidance of $7.3 million to $7.8 million for general and
administrative expenses, exclusive of non-cash stock compensation (“Cash
G&A”).
2014 Capital Program
Capital expenditures incurred for the three months ended December 31,
2014 were approximately $46.0 million, of which $24.9 million was spent
drilling in the Woodbine formation in Madison and Grimes Counties,
Texas; $12.1 million spent drilling the Buda formation in Dimmit County,
Texas; $4.4 million spent in Wyoming; $3.6 million invested in acreage
positions primarily in new areas; and $1.0 million for other capital
expenditures. We have previously provided guidance of a reduced 2015
capital budget of approximately $51 million; a budget that is focused on
limiting capital expenditures to that determined to be warranted from a
strategic perspective and improving our already strong financial
position. See our release on February 17, 2015.
As of December 31, 2014, we had approximately $63.4 million of debt
outstanding under our credit facility with Royal Bank of Canada and
other lenders. The credit facility has a borrowing base of $275 million,
which was reaffirmed on October 28, 2014 and through May 1, 2015.
2014 Year End Reserves
As previously disclosed in our February 17, 2015 operations update,
proved reserves at December 31, 2014, as estimated by William M. Cobb &
Associates, Inc. and Netherland, Sewell & Associates, Inc., Contango’s
independent petroleum engineering firms, in accordance with reserve
reporting guidelines mandated by the Securities and Exchange Commission
(“SEC”), were 275.2 Bcfe, a 12% decrease over our proved reserves as of
December 31, 2013, consisting of 179.7 billion cubic feet of natural
gas, 8.4 million barrels of crude oil, and 7.5 million barrels of
natural gas liquids, with a present value of proved reserves discounted
at 10% (“PV-10”) of $796.9 million. Exclusive of an approximate 22.4
Bcfe negative revision of proved developed producing reserves at our
Eugene Island 11 field, reserves would have been approximately 5% lower
than the prior year reserves, mainly attributable to normal production
decline and limited reserve adds during the latter half of 2014 due to a
reduction in drilling activity. As of December 31, 2014, 65% of our
proved reserves were natural gas and 76% were proved developed. These
estimates do not include net reserves of approximately 70.2 Bcfe (PV-10
of approximately $100.6 million) attributable to our 37% equity
ownership investment in Exaro Energy III LLC ("Exaro") as of December
31, 2014.
The following table summarizes Contango’s total proved reserves as of
December 31, 2014:
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Present Value
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OIL
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NGL
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Gas
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Total
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Discounted
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Category
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(MBbl)
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(MBbl)
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(Mmcf)
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(Mmcfe)
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at 10% ($000)
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Developed
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4,114
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5,637
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150,235
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208,734
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657,989
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Undeveloped
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4,301
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1,872
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29,416
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66,459
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138,882
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Total Proved
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8,415
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7,509
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179,651
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275,193
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796,871
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Selected Financial and Operating Data
The following table reflects certain comparative financial and operating
data for the three and twelve month periods ended December 31, 2014 and
2013:
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Three Months Ended
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Year Ended
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December 31,
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December 31,
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2014
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2013
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%
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2014
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2013 (1)
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%
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Offshore Volumes Sold:
|
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Oil and condensate (Mbbls)
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|
57
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|
|
76
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-25
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%
|
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|
|
269
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331
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-19
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%
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Natural gas (Mmcf)
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|
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5,140
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|
|
5,010
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|
3
|
%
|
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19,442
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18,994
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2
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%
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Natural gas liquids (Mbbls)
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132
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|
155
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-15
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%
|
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571
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584
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-2
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%
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Natural gas equivalents (Mmcfe)
|
|
|
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6,273
|
|
|
|
6,396
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-2
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%
|
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24,474
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24,489
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0
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%
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Onshore Volumes Sold:
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Oil and condensate (Mbbls)
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214
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258
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-17
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%
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1,132
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258
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|
340
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%
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Natural gas (Mmcf)
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1,536
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|
|
|
1,630
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|
-6
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%
|
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|
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6,433
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|
|
|
1,630
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|
|
295
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%
|
Natural gas liquids (Mbbls)
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|
|
113
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|
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|
93
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|
22
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%
|
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437
|
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93
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|
371
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%
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Natural gas equivalents (Mmcfe)
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3,498
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|
|
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3,736
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-6
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%
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15,849
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3,731
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325
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%
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Total Volumes Sold:
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Oil and condensate (Mbbls)
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271
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334
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-19
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%
|
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1,401
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589
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|
138
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%
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Natural gas (Mmcf)
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6,676
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|
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6,640
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1
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%
|
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25,875
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20,624
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|
25
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%
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Natural gas liquids (Mbbls)
|
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245
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|
|
|
248
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-1
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%
|
|
|
|
1,008
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|
677
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|
49
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%
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Natural gas equivalents (Mmcfe)
|
|
|
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9,771
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10,132
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-4
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%
|
|
|
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40,323
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28,220
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43
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%
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Daily Sales Volumes:
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Oil and condensate (Mbbls)
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2.9
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3.6
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-19
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%
|
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|
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3.8
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|
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3.6
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|
6
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%
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Natural gas (Mmcf)
|
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|
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72.6
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|
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72.2
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|
1
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%
|
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|
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70.9
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69.7
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2
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%
|
Natural gas liquids (Mbbls)
|
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|
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2.7
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2.7
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0
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%
|
|
|
|
2.8
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|
|
2.6
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|
8
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%
|
Natural gas equivalents (Mmcfe)
|
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|
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106.2
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|
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110.2
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-4
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%
|
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|
|
110.5
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107.8
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2
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%
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Average sales prices:
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Oil and condensate (per Bbl)
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|
$
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70.71
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$
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|
94.78
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-25
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%
|
|
$
|
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92.98
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$
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|
101.21
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|
-8
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%
|
Natural gas (per Mcf)
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|
$
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|
3.77
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$
|
|
3.91
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-4
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%
|
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$
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4.36
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$
|
|
3.84
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14
|
%
|
Natural gas liquids (per Bbl)
|
|
$
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24.26
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$
|
|
37.40
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-35
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%
|
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$
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33.27
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$
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|
37.26
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-11
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%
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Total (per Mcfe)
|
|
$
|
|
5.14
|
|
$
|
|
6.60
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-22
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%
|
|
$
|
|
6.86
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$
|
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5.82
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18
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%
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(1) Results for the twelve months ended December 31, 2013 include nine
months (January-September) of Contango prior to the Merger with Crimson,
and three months (October-December) of post-merger Contango.
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Three Months Ended
|
|
Year Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2014
|
|
2013
|
|
%
|
|
2014
|
|
2013 (1)
|
|
%
|
Offshore Selected Costs ($ per Mcfe):
|
|
|
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|
|
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|
|
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|
|
|
Lease Operating Expenses (2) |
|
$
|
0.55
|
|
$
|
0.59
|
|
-7
|
%
|
|
$
|
0.55
|
|
$
|
1.12
|
|
|
-51
|
%
|
Production and ad valorem taxes
|
|
$
|
0.10
|
|
$
|
0.08
|
|
25
|
%
|
|
$
|
0.10
|
|
$
|
0.12
|
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|
-17
|
%
|
Depreciation and depletion expense
|
|
$
|
2.39
|
|
$
|
1.74
|
|
37
|
%
|
|
$
|
2.01
|
|
$
|
1.77
|
|
|
14
|
%
|
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|
|
|
|
|
|
|
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|
|
|
Onshore Selected Costs ($ per Mcfe):
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Operating Expenses (2) |
|
$
|
1.45
|
|
$
|
1.27
|
|
14
|
%
|
|
$
|
1.41
|
|
$
|
1.27
|
|
|
11
|
%
|
Production and ad valorem taxes
|
|
$
|
0.46
|
|
$
|
0.46
|
|
0
|
%
|
|
$
|
0.57
|
|
$
|
0.46
|
|
|
24
|
%
|
Depreciation and depletion expense
|
|
$
|
7.51
|
|
$
|
5.95
|
|
26
|
%
|
|
$
|
6.74
|
|
$
|
5.95
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Selected Costs ($ per Mcfe):
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Operating Expenses (2) |
|
$
|
0.88
|
|
$
|
0.84
|
|
5
|
%
|
|
$
|
0.89
|
|
$
|
1.14
|
|
|
-22
|
%
|
Production and ad valorem taxes
|
|
$
|
0.23
|
|
$
|
0.22
|
|
5
|
%
|
|
$
|
0.28
|
|
$
|
0.16
|
|
|
75
|
%
|
Depreciation and depletion expense
|
|
$
|
4.22
|
|
$
|
3.29
|
|
28
|
%
|
|
$
|
3.87
|
|
$
|
2.32
|
|
|
67
|
%
|
General and administrative expense (cash)
|
|
$
|
0.65
|
|
$
|
1.16
|
|
-44
|
%
|
|
$
|
0.73
|
|
$
|
0.83
|
|
|
-12
|
%
|
Interest expense
|
|
$
|
0.06
|
|
$
|
0.12
|
|
-50
|
%
|
|
$
|
0.07
|
|
$
|
0.04
|
|
|
75
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDAX (3) (thousands)
|
|
$
|
34,808
|
|
$
|
44,431
|
|
|
|
$
|
197,275
|
|
$
|
113,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding (thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
19,016
|
|
|
19,007
|
|
|
|
|
19,059
|
|
|
16,156
|
|
|
|
Diluted
|
|
|
19,016
|
|
|
19,015
|
|
|
|
|
19,059
|
|
|
16,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Results for the twelve months ended December 31, 2013 include nine
months (January-September) of Contango prior to the Merger with Crimson,
and three months (October-December) of post-merger Contango.
(2) LOE includes transportation and workover expenses.
(3) Adjusted EBITDAX is a non-GAAP financial measure. See below for
reconciliation to net income (loss).
|
CONTANGO OIL & GAS COMPANY
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2014
|
|
2013
|
ASSETS
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
—
|
|
$
|
—
|
Accounts receivable, net
|
|
|
25,309
|
|
|
60,613
|
Other current assets
|
|
|
5,731
|
|
|
5,504
|
Net property and equipment
|
|
|
748,623
|
|
|
791,023
|
Investments in affiliates and other non-current assets
|
|
|
63,752
|
|
|
53,164
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
843,415
|
|
$
|
910,304
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
92,892
|
|
|
96,833
|
Other current liabilities
|
|
|
4,123
|
|
|
2,446
|
Long-term debt
|
|
|
63,359
|
|
|
90,000
|
Deferred tax liability
|
|
|
93,952
|
|
|
105,956
|
Asset retirement obligations
|
|
|
21,623
|
|
|
22,019
|
Total shareholders’ equity
|
|
|
567,466
|
|
|
593,050
|
|
|
|
|
|
|
|
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY
|
|
$
|
843,415
|
|
$
|
910,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTANGO OIL & GAS COMPANY
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013 (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and condensate sales
|
|
$
|
19,136
|
|
$
|
31,655
|
|
$
|
130,238
|
|
$
|
59,608
|
Natural gas sales
|
|
|
25,148
|
|
|
25,973
|
|
|
112,695
|
|
|
79,289
|
Natural gas liquids sales
|
|
|
5,946
|
|
|
9,275
|
|
|
33,525
|
|
|
25,224
|
Total revenues
|
|
|
50,230
|
|
|
66,903
|
|
|
276,458
|
|
|
164,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
10,810
|
|
|
10,761
|
|
|
47,236
|
|
|
36,784
|
Exploration expenses
|
|
|
316
|
|
|
1,642
|
|
|
33,387
|
|
|
1,811
|
Depreciation, depletion and amortization
|
|
|
41,264
|
|
|
33,284
|
|
|
156,117
|
|
|
65,529
|
Impairment and abandonment of oil and gas properties
|
|
|
24,434
|
|
|
-
|
|
|
47,693
|
|
|
776
|
General and administrative expenses
|
|
|
7,560
|
|
|
14,891
|
|
|
34,045
|
|
|
26,512
|
Total expenses
|
|
|
84,384
|
|
|
60,578
|
|
|
318,478
|
|
|
131,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from investment in affiliates (net of income taxes)
|
|
|
2,536
|
|
|
907
|
|
|
6,923
|
|
|
2,310
|
Interest expense
|
|
|
(581)
|
|
|
(1,197)
|
|
|
(2,658)
|
|
|
(1,171)
|
Gain (loss) on derivatives, net
|
|
|
1,335
|
|
|
(1,132)
|
|
|
(153)
|
|
|
(1,132)
|
Other income (loss)
|
|
|
272
|
|
|
6,323
|
|
|
124
|
|
|
31,785
|
Total other income (expense)
|
|
|
3,562
|
|
|
4,901
|
|
|
4,236
|
|
|
31,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) BEFORE INCOME TAXES
|
|
|
(30,592)
|
|
|
11,226
|
|
|
(37,784)
|
|
|
64,501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (provision)
|
|
|
10,666
|
|
|
(4,830)
|
|
|
15,910
|
|
|
(23,139)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
|
|
$
|
(19,926)
|
|
$
|
6,396
|
|
$
|
(21,874)
|
|
$
|
41,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Results for the twelve months ended December 31, 2013 include nine
months (January-September) of Contango prior to the Merger with Crimson,
and three months (October-December) of post-merger Contango.
Non-GAAP Financial Measures
EBITDAX represents net income (loss) before interest expense, taxes, and
depreciation, depletion and amortization, and oil & gas expenses.
Adjusted EBITDAX represents EBITDAX as further adjusted to reflect the
items set forth in the table below, all of which will be required in
determining our compliance with financial covenants under the RBC Credit
Facility.
We have included EBITDAX and Adjusted EBITDAX in this release to provide
investors with a supplemental measure of our operating performance and
information about the calculation of some of the financial covenants
that are contained in our credit agreements. We believe EBITDAX is an
important supplemental measure of operating performance because it
eliminates items that have less bearing on our operating performance and
so highlights trends in our core business that may not otherwise be
apparent when relying solely on GAAP financial measures. We also believe
that securities analysts, investors and other interested parties
frequently use EBITDAX in the evaluation of companies, many of which
present EBITDAX when reporting their results. Adjusted EBITDAX is a
material component of the covenants that are imposed on us by our credit
agreements. We are subject to financial covenant ratios that are
calculated by reference to Adjusted EBITDAX. Non-compliance with the
financial covenants contained in these credit agreements could result in
a default, an acceleration in the repayment of amounts outstanding and a
termination of lending commitments. Our management and external users of
our financial statements, such as investors, commercial banks, research
analysts and others, also use EBITDAX and Adjusted EBITDAX to assess:
-
the financial performance of our assets without regard to financing
methods, capital structure or historical cost basis;
-
the ability of our assets to generate cash sufficient to pay interest
costs and support our indebtedness;
-
our operating performance and return on capital as compared to those
of other companies in our industry, without regard to financing or
capital structure; and
-
the feasibility of acquisitions and capital expenditure projects and
the overall rates of return on alternative investment opportunities.
EBITDAX and Adjusted EBITDAX are not presentations made in accordance
with generally accepted accounting principles, or GAAP. As discussed
above, we believe that the presentation of EBITDAX and Adjusted EBITDAX
in this release is appropriate. However, when evaluating our results,
you should not consider EBITDAX and Adjusted EBITDAX in isolation of, or
as a substitute for, measures of our financial performance as determined
in accordance with GAAP, such as net income (loss). EBITDAX and Adjusted
EBITDAX have material limitations as performance measures because they
exclude items that are necessary elements of our costs and operations.
Because other companies may calculate EBITDAX and Adjusted EBITDAX
differently than we do, EBITDAX may not be, and Adjusted EBITDAX as
presented in this release is not, comparable to similarly-titled
measures reported by other companies.
The following table reconciles net income to EBITDAX and Adjusted
EBITDAX for the periods presented:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013 (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(19,926)
|
|
$
|
6,396
|
|
$
|
(21,874)
|
|
$
|
41,362
|
Interest expense
|
|
|
581
|
|
|
1,197
|
|
|
2,658
|
|
|
1,171
|
Income tax provision (benefit)
|
|
|
(10,666)
|
|
|
4,830
|
|
|
(15,910)
|
|
|
23,139
|
Depreciation, depletion and amortization
|
|
|
41,264
|
|
|
33,284
|
|
|
156,117
|
|
|
65,529
|
Exploration expenses
|
|
|
316
|
|
|
1,642
|
|
|
33,387
|
|
|
1,811
|
EBITDAX
|
|
$
|
11,569
|
|
$
|
47,349
|
|
$
|
154,378
|
|
$
|
133,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on derivative instruments
|
|
$
|
363
|
|
$
|
1,132
|
|
$
|
(1,131)
|
|
$
|
1,132
|
Non-cash equity-based compensation charges
|
|
|
1,182
|
|
|
3,180
|
|
|
4,515
|
|
|
3,180
|
Impairment of oil and gas properties
|
|
|
24,386
|
|
|
-
|
|
|
46,396
|
|
|
767
|
Loss (gain) on sale of assets and investment in affiliates
|
|
|
(2,692)
|
|
|
(7,230)
|
|
|
(6,883)
|
|
|
(24,598)
|
Adjusted EBITDAX
|
|
$
|
34,808
|
|
$
|
44,431
|
|
$
|
197,275
|
|
$
|
113,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Results for the twelve months ended December 31, 2013 include nine
months (January-September) of Contango prior to the Merger with Crimson,
and three months (October-December) of post-merger Contango.
Guidance for First Quarter 2015
The Company is providing the following guidance for the first calendar
quarter of 2015.
|
|
|
|
|
|
|
|
|
|
|
First quarter 2015 production
|
|
95,000 – 105,000 Mcfe per day
|
|
|
|
|
|
|
|
|
|
|
|
LOE (including transportation and workovers)
|
|
$8.3 million – $8.8 million
|
|
|
|
|
|
|
|
|
|
|
|
Production and ad valorem taxes
|
|
4.7%
|
|
|
|
|
(% of Revenue)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash G&A
|
|
$7.3 million – $7.8 million
|
|
|
|
|
|
|
|
|
|
|
|
DD&A rate
|
|
$4.00 – $4.25
|
Teleconference Call
Contango management will hold a conference call to discuss the
information described in this press release on Tuesday, March 3, 2015 at
9:30am CST. Those interested in participating in the earnings conference
call may do so by calling the following phone number: 1-888-389-5997,
(International 1-719-325-2332) and entering the following participation
code: 7092162. A replay of the call will be available from Tuesday,
March 3, 2015 at 12:30pm CST through Tuesday, March 10, 2015 at 12:30pm
CDT by dialing toll free 1-888-203-1112, (International 1-719-457-0820)
and asking for replay ID code 7092162.
Contango Oil & Gas Company is a Houston, Texas based, independent energy
company engaged in the acquisition, exploration, development,
exploitation and production of crude oil and natural gas offshore in the
shallow waters of the Gulf of Mexico and in the onshore Texas Gulf Coast
and Rocky Mountain regions of the United States. Additional information
is available on the Company's website at http://contango.com.
This press release contains forward-looking statements regarding
Contango that are intended to be covered by the safe harbor
"forward-looking statements" provided by the Private Securities
Litigation Reform Act of 1995, based on Contango’s current expectations
and includes statements regarding acquisitions and divestitures,
estimates of future production, future results of operations, quality
and nature of the asset base, the assumptions upon which estimates are
based and other expectations, beliefs, plans, objectives, assumptions,
strategies or statements about future events or performance (often, but
not always, using words such as "expects," “projects,” "anticipates,"
"plans," "estimates," "potential," "possible," "probable," or "intends,"
or stating that certain actions, events or results "may," "will,"
"should," or "could" be taken, occur or be achieved). Statements
concerning oil and gas reserves also may be deemed to be forward-looking
statements in that they reflect estimates based on certain assumptions
that the resources involved can be economically exploited.
Forward-looking statements are based on current expectations, estimates
and projections that involve a number of risks and uncertainties, which
could cause actual results to differ materially from those, reflected in
the statements. These risks include, but are not limited to: the risks
of the oil and gas industry (for example, operational risks in exploring
for, developing and producing crude oil and natural gas; risks and
uncertainties involving geology of oil and gas deposits; the uncertainty
of reserve estimates; the uncertainty of estimates and projections
relating to future production, costs and expenses; potential delays or
changes in plans with respect to exploration or development projects or
capital expenditures; health, safety and environmental risks and risks
related to weather such as hurricanes and other natural disasters);
uncertainties as to the availability and cost of financing; fluctuations
in oil and gas prices; risks associated with derivative positions;
inability to realize expected value from acquisitions, inability of our
management team to execute its plans to meet its goals, shortages of
drilling equipment, oil field personnel and services, unavailability of
gathering systems, pipelines and processing facilities and the
possibility that government policies may change or governmental
approvals may be delayed or withheld. Additional information on these
and other factors which could affect Contango’s operations or financial
results are included in Contango’s 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 or developments may differ materially from the
projections in the forward-looking statements. Forward-looking
statements 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. Initial production rates are subject to
decline over time and should not be regarded as reflective of sustained
production levels.
|
|