abce certificate
Tuesday, 07 October, 2008, 14:40 GMT | more prices >>

Contango deepens Lousiana shelf stakes



By Upstream staff 

Houston-based Contango Oil & Gas boosted its stakes in the Dutch and Mary Rose prospects off Louisiana for $200 million and also announced plans to sell its remaining Fayetteville shale assets.

Contango said it had bought a further 8.33% working interest in the Dutch prospect on Eugene Island Block 10, taking its stake in the project to 42.88% and boosting its net revenue interest to 34.30%.

The company said it had upped its slice in five Lousiana state leases comprising the Mary Rose prospect by 9.11% to 48.65%, increasing its net revenue interest to 35.68%. The figures include Contango’s indirect stake in the project through its Republic Exploration subsidiary, it said.

The company said it had paid the $200 million to three companies involved in the deal.

Contango said the deal covered estimated proved reserves of about 29 billion cubic feet equivalent, boosting its net reserves at both prospects to about 152 Bcfe.

Contango is drilling a second well at Mary Rose and hopes to tap output from four wells on the prospect via a production platform and pipeline by mid-summer, the company’s chief executive, Kenneth Peak, said.

The company said separately today that it had agred to sell the "eastern core" of its Fayetteville Shale properties in Arkansas for about $128 million. The lands comprise about 11,200 acres.

In total, Contango and its partners will dispose of about 20,000 acres in the area for an aggregate $236 million, it said.

The sale is expected to close this month and is effective from 1 December.

Peak said the company expected to earn a total of $328 million from the sale and the recent disposal of Contango's western Fayetteville Shale assets.


Friday, 04 January, 2008, 17:33 GMT  | last updated: Friday, 04 January, 2008, 21:54 GMT

e-mail this article to a colleague


to email:  from:
comments: