Contango Oil & Gas Affiliates Apparent High Bidders on Six Gulf of Mexico Lease Blocks.

Business/Energy Editors

HOUSTON--(BUSINESS WIRE)--March 22, 2002

Contango Oil & Gas Company (AMEX:MCF) announced today that two affiliated companies were the apparent high bidders on six blocks offered at the Central Gulf of Mexico Lease Sale #182 held March 20, 2002.

Contango's 33% owned affiliate, Republic Exploration LLC ("Republic"), was the apparent high bidder on three lease blocks with bids totaling $2,095,445 as follows:

           Block              Republic's WI       Total Bid
    ----------------------    -------------      ----------
    West Cameron 200              100%             $655,545
    Vermilion 73                  100%            1,313,300
    West Delta 36                 100%              126,600
                                                 ----------
                                                 $2,095,445
                                                 ==========

      Contango's 50% owned affiliate, Magnolia Offshore Exploration LLC
("Magnolia"), was also the apparent high bidder on three lease blocks
with bids totaling $530,260 as follows:

           Block              Magnolia's WI       Total Bid
    ----------------------    -------------      ----------
    Ship Shoal 155                100%             $154,500
    Viosca Knoll 75               100%              148,900
    Viosca Knoll 211              100%              226,860
                                                 ----------
                                                   $530,260
                                                 ==========

The bids are subject to approval by the U.S. Department of Interior's Minerals Management Service. If, and when, these blocks are awarded, Contango will own, both directly and indirectly through its Republic and Magnolia investments, interests in 13 federal and state Gulf of Mexico lease blocks offshore Texas and Louisiana.

Kenneth R. Peak, chairman and chief executive officer, said, "We are extremely pleased with this year's lease sale results and expect our offshore Gulf of Mexico exploration program to take on increasing importance in Contango's growth. Assuming these latest six blocks are awarded, Contango and Contango's affiliates will have purchased 14 offshore blocks in the last year and one-half. We expect production at Republic's first discovery, High Island 25L, to begin April 2002. Republic has a carried interest after payout in this well."

Mr. Peak further said, "Republic and Contango jointly own three prospects with impending activity, Grand Isle Blocks 24 and 28 and Eugene Island Block 110. Republic has a carried interest after payout in each of these wells. The first of these wells, Grand Isle 24, is expected to spud prior to month's end, and the remaining two are scheduled for drilling during the second quarter of 2002. In addition to its 33% equity interest in Republic, Contango separately owns a carried working interest after payout of 8.4% (6.8% net revenue interest) in each of these three prospects. Absent drilling or weather complications, we would expect to have logs on all three of these wells prior to our June 30, 2002 fiscal year end."

Contango is a Houston-based, independent natural gas and oil company. The company explores and acquires natural gas and oil properties primarily onshore in the Gulf Coast, offshore Gulf of Mexico and the Rocky Mountains. Additional information can be found on our Web page at www.contango-oandg.com.

This news release contains forward-looking statements within the meaning of the Securities Litigation Reform Act. The statements reflect the company's current views with respect to future events that involve risks and uncertainties including uncertainties 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 the company's publicly available SEC reports. In light of these risks and uncertainties, the forward-looking events described in this release might not occur.