Contango Announces New Hedge Positions and Withdraws Property Sale.Business/Energy Editors HOUSTON--(BUSINESS WIRE)--Dec. 12, 2002 Contango Contango When the futures price is above the expected future spot price. Consequently, the price will decline to the spot price before the delivery date. Notes: This is the opposite of backwardation. Oil & Gas Company (AMEX AMEX See: American Stock Exchange :MCF MCF malignant catarrhal fever. ) said today that it has purchased $4.00 per MMBtu natural gas puts covering 10 MMBtu per day for the period of January 2003 through December 2003 at a cost of $0.29 per MMBtu. In addition, the Company entered into a natural gas swap agreement covering 8 MMBtu per day at $4.62 per MMBtu for the period of January 2003 through March 2003. The Company further announced that it was no longer considering the sale of its South Texas Exploration Program ("STEP") producing properties in Jim Hogg James Stephen "Jim" Hogg (March 24, 1851 – March 3, 1906) Born near Rusk, Texas, Hogg was a Texas lawyer and statesman, and the Texas-born Governor of Texas. Hogg is often remembered for naming his daughter Ima Hogg, an odd name which derived from a poem written by James' and Brooks Counties Brooks County is the name of several counties in the United States:
Kenneth R. Peak, chairman and chief executive officer, said, "The purchase of the $4.00 puts provides a floor against declines in natural gas prices on approximately 65% of our anticipated calendar year 2003 natural gas production. The benefit of having puts in place is that Contango retains the entire benefit of increases in natural gas prices. In addition, the swaps assure Contango a price of $4.62 per MMBtu on approximately 45% of its natural gas production for the period of January 2003 through March 2003." Mr. Peak continued, "Our current net production is approximately 18 MMBtud of natural gas and 300 barrels of oil per day. At today's prices and production levels, cash flow is approximately $2.0 million per month. Our cash flow, given the recent hedging transactions, is expected to continue at approximately $1.5 to $2.0 million per month through our fiscal year ending June 30, 2003." Contango is an independent natural gas and oil company that explores for, develops, produces and sells natural gas and crude oil. Contango's exploration and production efforts are currently focused onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. on the Gulf Coast and offshore in the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east . This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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. |
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