Contango Oil & Gas Company Sells $5.0 Million Convertible Preferred to Aquila Energy Capital Corporation.Business/Energy Editors HOUSTON--(BUSINESS WIRE)--Sept. 27, 2000 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 (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :BTUX) announced today that Aquila Energy Capital Corporation purchased $5.0 million of its 8% Series B senior convertible cumulative preferred stock Cumulative preferred stock Preferred stock whose dividends accrue, should the issuer not make timely dividend payments. Related: Non-cumulative preferred stock. . These shares are convertible at $2.20 per share, or 2,272,727 common shares, representing approximately 7% of the Company's diluted shares. Jay D. Brehmer, director, capital & finance of Aquila Energy Capital Corporation, will join the board of directors of Contango. Kenneth R. Peak, president, stated, "This transaction brings the total equity the Company has raised since July 1, 1999 to approximately $18 million. We currently have approximately $7.0 million of cash and no bank or other debt. Our current net production is approximately 6.2 million cubic feet of natural gas and 290 barrels of oil per day. Based on our business model that assumes continuing exploration success, we expect operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. to be a meaningful source of funds during the current fiscal year. For the month of September 2000, we anticipate operating cash flow of around $1.0 million. Current plans and prospect identification call for the drilling of 15 to 20 onshore exploration and three to five offshore exploration wells during the current fiscal year. We anticipate that our capital expenditures for the fiscal year ending June 30, 2001 will be between $15 million to $25 million, including a $6.5 million investment in Republic Exploration, our minority-owned 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 exploration subsidiary. We believe that our cash on hand, together with anticipated cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses and possible bank borrowings, will be adequate to satisfy planned capital expenditures and expected overhead costs overhead costs see fixed costs. of approximately $1.0 million over the next twelve months." Contango is a Houston-based, development stage, independent natural gas and oil company. The Company explores and acquires oil and gas properties primarily in the onshore Gulf Coast and offshore Gulf of Mexico. 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 An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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 oil and gas exploration risks, price volatility, production levels, successful negotiations with other parties, 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. |
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