-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qc+O2GzuYujZFS0TBY6g9eQ9fkfkz8Jqxi8JzVPnAeDsa1FjNdnBzVzeKEQSQ/Oy 1CmDj/CD+hdDhIbtiKgOlw== 0001157523-05-008162.txt : 20050916 0001157523-05-008162.hdr.sgml : 20050916 20050915173758 ACCESSION NUMBER: 0001157523-05-008162 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050913 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050916 DATE AS OF CHANGE: 20050915 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONTANGO OIL & GAS CO CENTRAL INDEX KEY: 0001071993 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 954079863 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16317 FILM NUMBER: 051087410 BUSINESS ADDRESS: STREET 1: 3700 BUFFALO SPEEDWAY SUITE 960 CITY: HOUSTON STATE: TX ZIP: 77098 BUSINESS PHONE: 7139601901 MAIL ADDRESS: STREET 1: 3700 BUFFALO SPEEDWAY SUITE 960 CITY: HOUSTON STATE: TX ZIP: 77098 FORMER COMPANY: FORMER CONFORMED NAME: MGPX VENTURES INC DATE OF NAME CHANGE: 19981013 8-K 1 a4974245.txt CONTANGO OIL & GAS COMPANY 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) September 13, 2005 CONTANGO OIL & GAS COMPANY (Exact Name of Registrant as Specified in Its Charter) DELAWARE 001-16317 95-4079863 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 3700 BUFFALO SPEEDWAY, SUITE 960 HOUSTON, TEXAS 77098 (Address of principal executive offices) (713) 960-1901 (Registrant's telephone number, including area code) N/A (Former name or former address, if changed since last report) ================================================================================ ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On September 13, 2005, the Company announced financial results for the year ended June 30, 2005. Contango Oil & Gas Company (AMEX:MCF) reported net income attributable to common stock for the year ended June 30, 2005 of $12.0 million, or $0.92 per basic and diluted share, compared to net income attributable to common stock for the year ended June 30, 2004 of $7.1 million, or $0.68 per basic and diluted share. Natural gas and oil sales from continuing and discontinued operations for the year ended June 30, 2005 were $16.3 million, down from $27.6 million for the year ended June 30, 2004. The decrease in revenue was primarily the result of the sale of our south Texas natural gas and oil interests for $50 million, completed in December 2004. EBITDAX was $28.5 million for the year ended June 30, 2005, down from EBITDAX for the year ended June 30, 2004 of $29.0 million. For the three months ended June 30, 2005, Contango had a net loss attributable to common stock of $1.4 million, or $0.16 per basic and diluted share, compared to a net loss attributable to common stock for the three months ended June 30, 2004 of $1.1 million, or $0.09 per basic and diluted share. Natural gas and oil sales from continuing and discontinued operations for the three months ended June 30, 2005 were $1.3 million, down from $6.8 million for the three months ended June 30, 2004. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits The following is a list of exhibits filed as part of this Form 8-K. Where so indicated by footnote, exhibits, which were previously filed, are incorporated by reference. Exhibit No. Description of Document - ----------- ---------------------------------------------------------------- 99.1 Press release dated September 13, 2005. -2- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CONTANGO OIL & GAS COMPANY Date: September 15, 2005 By: /s/ KENNETH R. PEAK ------------------------------------ Kenneth R. Peak Chairman and Chief Executive Officer -3- EX-99.1 2 a4974245ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Contango Announces Results of Operations for the Fiscal Year Ended June 30, 2005 HOUSTON--(BUSINESS WIRE)--Sept. 13, 2005--Contango Oil & Gas Company (AMEX:MCF) reported net income attributable to common stock for the year ended June 30, 2005 of $12.0 million, or $0.92 per basic and diluted share, compared to net income attributable to common stock for the year ended June 30, 2004 of $7.1 million, or $0.68 per basic and diluted share. Natural gas and oil sales from continuing and discontinued operations for the year ended June 30, 2005 were $16.3 million, down from $27.6 million for the year ended June 30, 2004. The decrease in revenue was primarily the result of the sale of our south Texas natural gas and oil interests for $50 million, completed in December 2004. EBITDAX was $28.5 million for the year ended June 30, 2005, down from EBITDAX for the year ended June 30, 2004 of $29.0 million. For the three months ended June 30, 2005 Contango had a net loss attributable to common stock of $1.4 million, or $0.16 per basic and diluted share, compared to a net loss attributable to common stock for the three months ended June 30, 2004 of $1.1 million, or $0.09 per basic and diluted share. Natural gas and oil sales from continuing and discontinued operations for the three months ended June 30, 2005 were $1.3 million, down from $6.8 million for the three months ended June 30, 2004. Kenneth R. Peak, Contango's Chairman and Chief Executive Officer, said, "Fiscal-year 2005 was a productive year for us. We sold the majority of our south Texas natural gas and oil properties in December, paid-off all of our bank debt, greatly increased our liquidity, and positioned ourselves strategically by making substantial capital commitments to our Fayetteville Shale prospect area and our two offshore exploration prospects, Eugene Island 10 ("Dutch") and Grand Isle 72 ("Liberty"). We currently have production of approximately 1,860 Mcfe/d and approximately $29 million in cash, cash equivalents, and short-term investments." Mr. Peak continued, "Since its inception in 1999, Contango has primarily been a company focused on south Texas exploration and the generation of offshore prospects that were subsequently sold on a promoted basis to the industry. In the future, we will be a company focused on developing our Fayetteville Shale play in Arkansas, operating certain of our offshore prospects, maintaining our 10% limited partnership interest in our Freeport LNG project, and maturing our investments in alternative energy." CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended June 30, -------------------------------------- 2005 2004 2003 ------------ ------------ ------------ REVENUES: Natural gas and oil sales $4,330,440 $194,983 $228,062 Gain (loss) from hedging activities - 58,171 (5,708,958) ------------ ------------ ------------ Total revenues 4,330,440 253,154 (5,480,896) ------------ ------------ ------------ EXPENSES: Operating expenses 506,943 142,809 112,326 Exploration expenses 6,607,049 8,847,533 12,640,878 Depreciation, depletion and amortization 1,232,624 40,817 26,773 Impairment of natural gas and oil properties 236,537 42,995 181,610 General and administrative expense 3,570,957 2,695,592 2,063,503 ------------ ------------ ------------ Total expenses 12,154,110 11,769,746 15,025,090 ------------ ------------ ------------ LOSS FROM CONTINUING OPERATIONS BEFORE OTHER INCOME AND INCOME TAXES (7,823,670) (11,516,592) (20,505,986) OTHER INCOME: Interest expense (71,506) (362,127) (710,587) Interest income 431,803 38,182 30,359 Gain on sale of marketable securities - 710,322 451,500 Gain on sale of assets and other 705,147 6,187,740 39,230 ------------ ------------ ------------ LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (6,758,226) (4,942,475) (20,695,484) Benefit for income taxes 2,350,257 1,788,359 7,243,419 ------------ ------------ ------------ LOSS FROM CONTINUING OPERATIONS (4,407,969) (3,154,116) (13,452,065) DISCONTINUED OPERATIONS: Discontinued operations, net of income taxes 16,825,905 10,854,465 9,116,040 ------------ ------------ ------------ NET INCOME (LOSS) 12,417,936 7,700,349 (4,336,025) Preferred stock dividends 420,000 620,000 600,000 ------------ ------------ ------------ NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK $11,997,936 $7,080,349 $(4,936,025) ============ ============ ============ NET INCOME (LOSS) PER SHARE: Basic Continuing operations $(0.37) $(0.36) $(1.54) Discontinued operations 1.29 1.04 1.00 ------------ ------------ ------------ Total $0.92 $0.68 $(0.54) ============ ============ ============ Diluted Continuing operations $(0.37) $(0.36) $(1.54) Discontinued operations 1.29 1.04 1.00 ------------ ------------ ------------ Total $0.92 $0.68 $(0.54) ============ ============ ============ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic 13,089,332 10,484,078 9,129,169 ============ ============ ============ Diluted 13,089,332 10,484,078 9,129,169 ============ ============ ============ The summarized financial results for discontinued operations for each of the periods ended June 30, are as follows: Operating Results: Twelve Months Ended June 30, -------------------------------------- 2005 2004 2003 ------------ ------------ ------------ Revenues $11,936,266 $27,434,831 $33,691,064 Operating expenses (728,283) (3,745,376) (5,624,128) Depreciation expenses (1,583,358) (6,948,611) (8,761,021) Exploration expenses (26,911) (1,025,631) (5,281,238) Gain on sale of discontinued operations 16,288,294 983,964 - ------------ ------------ ------------ Gain before income taxes $25,886,008 $16,699,177 $14,024,677 Provision for income taxes (9,060,103) (5,844,712) (4,908,637) ------------ ------------ ------------ Gain from discontinued operations, net of income taxes $16,825,905 $10,854,465 $9,116,040 ============ ============ ============ A reconciliation of EBITDAX to income (loss) from operations and operating results for discontinued operations for the periods indicated is presented below. Year ended June 30, ---------------------------------------------- 2005 2004 2003 2002 2001 -------- --------- --------- -------- -------- ($000) Income (loss) from continuing operations $(7,824) $(11,517) $(20,506) $1,353 $(3,213) Exploration expenses 6,607 8,847 12,641 477 389 Depreciation, depletion and amortization 1,233 41 27 217 298 Impairment of natural gas and oil properties 237 43 181 198 300 Gain on sale of marketable securities - 710 452 - - Gain on sale of assets and other 705 6,188 39 374 - -------- --------- --------- -------- -------- EBITDAX from continuing operations 958 4,312 (7,166) 2,619 (2,226) Income from discontinued operations before taxes 25,886 16,699 14,025 8,944 13,724 Exploration expenses 27 1,026 5,281 2,217 3,778 Depreciation, depletion and amortization 1,583 6,949 8,761 8,377 3,726 Impairment of natural gas and oil properties - - - 329 - -------- --------- --------- -------- -------- EBITDAX (1) $28,454 $28,986 $20,901 $22,486 $19,002 ======== ========= ========= ======== ======== (1) EBITDAX represents earnings before interest, income taxes, depreciation, depletion and amortization, impairment expenses, exploration expenses, including gain (loss) from hedging activities, and sale of assets and other. We have reported EBITDAX because we believe EBITDAX is a measure commonly reported and widely used by investors as an indicator of a company's operating performance and ability to incur and service debt. We believe EBITDAX assists investors in comparing a company's performance on a consistent basis without regard to depreciation, depletion and amortization, impairment of natural gas and oil properties and exploration expenses, which can vary significantly depending upon accounting methods. EBITDAX is not a calculation based on U.S. generally accepted accounting principles and should not be considered an alternative to net income (loss) in measuring our performance or used as an exclusive measure of cash flow because it does not consider the impact of working capital growth, capital expenditures, debt principal reductions and other sources and uses of cash, which are disclosed in our statements of cash flows. Investors should carefully consider the specific items included in our computation of EBITDAX. While we have disclosed our EBITDAX to permit a more complete comparative analysis of our operating performance and debt servicing ability relative to other companies, investors should be cautioned that EBITDAX as reported by us may not be comparable in all instances to EBITDAX as reported by other companies. EBITDAX amounts may not be fully available for management's discretionary use, due to requirements to conserve funds for capital expenditures, debt service, preferred stock dividends and other commitments. Production, Prices, Operating Expenses, and Other Year Ended June 30, --------------------------------------------- 2005 2004 2003 2002 2001 -------- -------- --------- -------- -------- Production Data: Natural gas (million cubic feet) 2,124 4,329 6,016 6,982 3,570 Oil and condensate (thousand barrels) 51 99 139 186 122 Total (million cubic feet equivalent) 2,430 4,923 6,850 8,098 4,302 Natural gas (thousand cubic feet per day) 5,820 11,827 16,483 19,129 9,781 Oil and condensate (barrels per day) 139 272 380 510 335 Total (thousand cubic feet equivalent per day) 6,654 13,459 18,763 22,189 11,791 Average sales price: Natural gas (per thousand cubic feet) $6.53 $5.65 $5.00 $2.94 $5.92 Oil and condensate (per barrel) $48.13 $31.99 $27.90 $21.44 $27.95 Selected data per Mcfe: Production and severance taxes $(0.25) $0.16 $0.35 $0.20 $0.39 Lease operating expenses $0.76 $0.63 $0.48 $0.28 $0.22 General and administrative expenses $1.47 $0.55 $0.30 $0.36 $0.55 Depreciation, depletion and amortization of natural gas and oil properties $1.13 $1.39 $1.24 $1.05 $0.92 Proved Reserve Data: Total proved reserves (Mmcfe) 1,373 17,422 23,592 27,939 18,144 Pre-tax net present value (SEC at 10%) $7,081 $59,767 $69,627 $53,349 $42,626 Contango is a Houston-based, independent natural gas and oil company. The Company's core business is to explore, develop, produce and acquire natural gas and oil properties primarily offshore in the Gulf of Mexico and onshore along the Gulf Coast. As a recent addition to our business, we will begin acting as an operator on certain offshore prospects through our wholly-owned subsidiary, Contango Operators, Inc. ("COI"). The Company also owns a 10% interest in a limited partnership formed to develop an LNG receiving terminal in Freeport, Texas, and holds investments in the alternative energy venture capital market with a focus on environmentally preferred energy technologies. Additional information can be found on our web page at www.contango.com. This press release contains forward-looking statements that involve risks and uncertainties, and actual events or results may differ materially from Contango's expectations. The statements reflect Contango's current views with respect to future events that involve risks and uncertainties, including those related to successful negotiations with other parties, oil and gas exploration risks, price volatility, production levels, closing of transactions, capital availability, operational and other risks, uncertainties and factors described from time to time in Contango's publicly available reports filed with the Securities and Exchange Commission. CONTACT: Contango Oil & Gas Company, Houston Kenneth R. Peak, 713-960-1901 www.contango.com -----END PRIVACY-ENHANCED MESSAGE-----