Contango Oil & Gas Company Announces Results for the Fiscal Year Ended June 30, 2002.Business/Energy Editors HOUSTON--(BUSINESS WIRE)--Sept. 9, 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. ) announced net income attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to common stock for the fiscal year ended June June: see month. 30, 2002 of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $6.0 million, or $0.55 per basic common share and $0.48 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. common share. Natural gas and oil sales for the fiscal year ended June 30, 2002 were approximately $23.9 million. After reflecting a gain from hedging activities of approximately $5.0 million, total revenues for the fiscal year ended June 30, 2002 were approximately $28.9 million. For the fiscal year ended June 30, 2001, Contango reported net income attributable to common stock of approximately $7.3 million, or $0.64 per basic common share and $0.54 per diluted common share. After reflecting a loss from hedging activities of approximately $557,700, total revenues for the fiscal year ended June 30, 2001 were approximately $24.0 million. Natural gas and oil sales for the quarter ended June 30, 2002 were approximately $8.0 million, compared to approximately $7.7 million for the quarter ended June 30, 2001. Total revenues for the quarter ended June 30, 2002 included a hedging gain of approximately $871,000 and totaled approximately $8.9 million. For the quarter ended June 30, 2001, total revenues included a hedging gain of approximately $1.1 million and totaled approximately $8.9 million. Net income attributable to common stock for the quarter ended June 30, 2002 was approximately $1.2 million, compared to approximately $2.4 million for the quarter ended June 30, 2001. Contango also announced that its fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. total proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. , as estimated by the Company's independent reservoir reservoir (rĕz`əvôr, -vwär), storage tank or wholly or partly artificial lake for storing water. Building an embankment or dam to preserve a supply of water for irrigation is an ancient practice; India and Egypt have many old and engineers, totaled approximately 24.4 billion cubic feet of natural gas and approximately 590,300 barrels of oil. The present value of estimated future cash flows before income taxes as of June 30, 2002, using the spot prices as of June 28, 2002 of $3.24 per MMbtu of natural gas and $26.86 per barrel of oil, adjusted for basis and Btu factor and discounted at 10% per annum Per annum Yearly. , was approximately $53.3 million. Proved producing reserves represented 99% of total proved reserves. Kenneth R. Peak, chairman and chief executive officer, said, "We had an excellent fourth quarter and fiscal year. Our production in fiscal year 2002 averaged 22.2 MMcfed versus 11.8 MMcfed in fiscal year 2001. Prices averaged $3.03 per Mcfe in fiscal year 2002, compared to $5.71 per Mcfe in fiscal year 2001. Our E&P capital expenditures for the fiscal year were approximately $31.5 million, resulting in our adding 17.9 Bcfe at a cost of $1.57 per Mmbtue. We also invested $1.6 million in our Magnolia Magnolia, city, United States Magnolia (măgnō`lyə), city (1990 pop. 11,151), seat of Columbia co., SW Ark.; inc. 1855. Its oil industry has been important since 1938. Offshore Exploration subsidiary. In addition, we repurchased approximately 2.6 million shares of our common stock at a cost of approximately $6.2 million, reducing our shares outstanding to 9,043,282. Our current production is averaging about 17 MMcfd of natural gas and 300 barrels of oil per day, with resulting monthly cash flow of $1.5 to $2.0 million per month. Our bank debt stands at $17.2 million versus current availability of $22.8 million, which together with our monthly cash flow leaves us with sufficient liquidity to fund near term capital expenditures." Mr. Peak added, "We anticipate funding between $2-$3 million on 3-D seismic over the next several months. The majority of this spending will be for a 3-D seismic shoot in south Texas, which depending on the results may lead to drilling activity in the January January: see month. through March 2003 time frame. Additionally, we expect to have more drilling activity before year end 2002 on prospects owned by our Republic Exploration and Magnolia Offshore Exploration subsidiaries, including a follow-up follow-up, n the process of monitoring the progress of a patient after a period of active treatment. follow-up subsequent. follow-up plan to a previous discovery offshore Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. . While we have only
drilled one 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. well since February February: see month. 2002, we continue to actively screen opportunities. We intend to remain deliberate Willful; purposeful; determined after thoughtful evaluation of all relevant factors; dispassionate. To act with a particular intent, which is derived from a careful consideration of factors that influence the choice to be made. about prospect selection and acquisition opportunities." 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 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 Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the , 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.
CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended June 30,
2002 2001
------------ ------------
REVENUES:
Natural gas and
oil sales $23,901,995 $24,548,723
Gain (loss) from hedging
activities 5,016,173 (557,654)
------------ ------------
Total revenues 28,918,168 23,991,069
------------ ------------
EXPENSES:
Operating expenses 3,904,541 2,631,905
Exploration expenses 2,694,425 4,167,427
Depreciation, depletion
and amortization 8,593,635 4,023,672
Impairment of natural
gas and oil properties 527,150 300,466
General and administrative
expense 2,901,566 2,356,421
------------ ------------
Total expenses 18,621,317 13,479,891
------------ ------------
INCOME FROM OPERATIONS 10,296,851 10,511,178
Interest expense (285,159) (8,674)
Interest income 194,905 414,403
Gain on sale of assets 373,539 --
------------ ------------
INCOME BEFORE INCOME TAXES 10,580,136 10,916,907
Provision for income taxes 4,003,154 3,179,248
------------ ------------
NET INCOME 6,576,982 7,737,659
Preferred stock dividends 600,000 475,205
------------ ------------
NET INCOME ATTRIBUTABLE
TO COMMON STOCK $5,976,982 $7,262,454
============ ============
NET INCOME PER SHARE:
Basic $0.55 $0.64
============ ============
Diluted $0.48 $0.54
============ ============
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 10,841,665 11,287,098
============ ============
Diluted 13,711,597 14,381,124
============ ============
CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
OPERATING AND FINANCIAL STATISTICS
Year Ended June 30,
2002 2001
--------- ---------
Production:
Natural gas (thousand
cubic feet) 6,981,909 3,570,026
Oil and condensate (barrels) 186,274 122,093
Total (thousand cubic
feet equivalent) 8,099,553 4,302,584
Natural gas (thousand cubic
feet per day) 19,129 9,781
Oil and condensate (barrels
per day) 510 335
Total (thousand cubic feet
equivalent per day) 22,189 11,791
Average sales price:
Natural gas (thousand cubic
feet) $2.94 $5.92
Oil and condensate (barrels) $21.44 $27.95
Total (thousand cubic feet
equivalent) $3.03 $5.71
Operating expenses (per
thousand cubic feet
equivalent):
Production and severance
taxes $0.20 $0.39
Lease operating expense
(before taxes) $0.28 $0.22
Other expenses (per thousand
cubic feet equivalent):
Depreciation, depletion
and amortization of
natural gas and oil
properties $1.05 $0.92
General and administrative
expense $0.36 $0.55
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