Contango Reports Earnings and Announces Reelection of Board and Award of Gulf of Mexico Lease Blocks.Energy Editors/Business Editors HOUSTON--(BUSINESS WIRE)--Nov. 10, 2003 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. ) reported net income attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to common stock for the three months ended Sept. 30, 2003 of $2.9 million, or $0.31 per basic share and $0.25 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. share, compared to net income attributable to common stock for the three months ended Sept. 30, 2002 of $216,900, or $0.02 per basic and diluted share. Natural gas and oil sales for the three months ended Sept. 30, 2003 were $8.3 million. Natural gas and oil sales for the three months ended Sept. 30, 2002 were $7.1 million. EBITDAX Earnings Before Interest, Taxes, Depreciation, Depletion, Amortization, and Exploration Expenses - EBITDAX An indicator of a company's financial performance calculated as: was $8.0 million for the three months ended Sept. 30, 2003, up from EBITDAX for the three months ended Sept. 30, 2002 of $5.6 million. Contango also announced that at its Annual Meeting of Stockholders held on Nov. 7, 2003 Kenneth R. Peak, Jay D. Brehmer, Joseph S. Compofelice and Darrell There are many well-known people named Darrell, including: In sports:
Adj. 1. one-year - completing its life cycle within a year; "a border of annual flowering plants" annual phytology, botany - the branch of biology that studies plants term. Contango further announced that the Minerals Management Service ("MMS (Multimedia Messaging Service) An enhanced transmission service that enables graphics, video clips and sound files to be transmitted via cellphones. Developed as part of the 3GPP project, MMS phones are generally backward compatible with SMS and EMS. ") has awarded the Company's 67% owned affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. , Contango Offshore Exploration LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("COE See common operating environment. "), the following four lease blocks offered in the Western 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 Lease Sale #187 held Aug. 20, 2003 in New Orleans New Orleans (ôr`lēənz –lənz, ôrlēnz`), city (2006 pop. 187,525), coextensive with Orleans parish, SE La., between the Mississippi River and Lake Pontchartrain, 107 mi (172 km) by water from the river mouth; founded :
Block COE's WI Total Bid
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High Island A16 100% $279,500
East Breaks 283 100% 295,900
East Breaks 369 100% 231,700
East Breaks 370 100% 507,100
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$1,314,200
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Kenneth R. Peak, Contango's chairman and chief executive officer, said, "We have five 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. exploration programs ongoing in south Texas and expect two of our deep shelf prospects in the Gulf of Mexico to spud prior to calendar year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. . In addition, our LNG LNG (liquefied natural gas): see under natural gas. investment continues to progress favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. . The East Breaks lease blocks, which were just awarded, represent our entry into the deep water Gulf of Mexico exploration region. Our current production is averaging approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 16,000 MMBtued, or about $1.5 million per month of EBITDAX at today's prices. Our bank line stands at $14.6 million, with unused availability of $7.5 million." Contango is a Houston-based, independent natural gas and oil company. The Company explores, develops, produces and acquires natural gas and oil properties primarily onshore in the Gulf Coast and offshore in the Gulf of Mexico. Contango also owns a 10% partnership interest in a proposed LNG terminal in Freeport, Texas Freeport is a city in Brazoria County, Texas within the Houston–Sugar Land–Baytown Metropolitan Area and is situated in Southeast Texas. As of the 2000 U.S. Census, the city population was 12,708 and is about sixteen miles away from Angleton. . Additional information can be found on our Web page at www.mcfx.biz biz n. Informal Business. biz Noun Informal business Noun 1. . 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
(Unaudited)
Three Months Ended
September 30,
-----------------------
2003 2002
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REVENUES:
Natural gas and oil sales $8,252,504 $7,017,493
Gain from hedging activities 82,242 6,644
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Total revenues 8,334,746 7,024,137
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EXPENSES:
Operating expenses 1,652,229 1,059,771
Exploration expenses 1,356,113 2,539,932
Depreciation, depletion and amortization 1,793,836 2,388,759
General and administrative expenses 377,107 413,342
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Total expenses 5,179,285 6,401,804
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INCOME FROM OPERATIONS 3,155,461 622,333
Interest expense (164,410) (184,320)
Interest income 14,416 11,262
Gain on sale of marketable securities 645,299 -
Gain on sale of assets and other 1,054,605 36,150
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INCOME BEFORE INCOME TAXES 4,705,371 485,425
Provision for income taxes (1,646,880) (118,557)
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NET INCOME 3,058,491 366,868
Preferred stock dividends 150,000 150,000
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NET INCOME ATTRIBUTABLE TO COMMON STOCK $2,908,491 $216,868
=========== ===========
NET INCOME PER SHARE:
Basic $0.31 $0.02
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Diluted $0.25 $0.02
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 9,298,650 9,043,282
=========== ===========
Diluted 12,425,936 9,820,496
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CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
PRODUCTION, PRICES, OPERATING EXPENSES, EBITDAX AND OTHER
Three Months Ended
September 30,
-----------------------
2003 2002
----------- -----------
Production:
Natural gas (thousand cubic feet) 1,362,851 1,713,068
Oil and condensate (barrel) 35,606 38,247
Total (thousand cubic feet equivalent) 1,576,487 1,942,550
Natural gas (thousand cubic feet per day) 14,814 18,620
Oil and condensate (barrels per day) 387 416
Total (thousand cubic feet equivalent per
day) 17,136 21,116
Average sales price:
Natural gas (per thousand cubic feet) $5.29 $3.49
Oil and condensate (per barrel) $29.23 $27.07
Total (per thousand cubic feet equivalent) $5.23 $3.61
Selected data per Mcfe:
Production and severance taxes $0.37 $0.25
Lease operating expenses $0.67 $0.30
General and administrative expenses $0.24 $0.21
Depreciation, depletion and amortization of
natural gas and oil properties $1.12 $1.21
EBITDAX (1) $8,005,314 $5,587,174
(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. 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.
A reconciliation of EBITDAX to income from operations for the periods indicated is presented below.
Three Months Ended
September 30,
-----------------------
2003 2002
----------- -----------
Income from operations $3,155,461 $622,333
Exploration expenses 1,356,113 2,539,932
Depreciation, depletion and amortization 1,793,836 2,388,759
Gain on sale of marketable securities 645,299 -
Gain on sale of assets and other 1,054,605 36,150
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EBITDAX $8,005,314 $5,587,174
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