Contango Oil & Gas Company has purchased an additional 8.33% working interest and 6.667% net revenue interest in the Eugene Island 10, 'Dutch' discovery and an additional average 9.11% working interest and 6.667% net revenue interest in Mary Rose discovery from three different companies for $200 million.
The asset purchase increases its working interest in Dutch to 42.88% with a net revenue interest of 34.3% and increases the company’s average working interest in the five State of Louisiana leases (collectively, Mary Rose) to 48.65% with an average net revenue interest of 35.68%, inclusive of the company’s ownership interest in Republic Exploration.
The assets purchased qualify as a like-kind exchange with the proceeds received from the company’s recently announced $200 million sale of its western core Arkansas Fayetteville Shale properties. The estimated proved reserves purchased were 29 billion cubic feet equivalent (bcfe). The estimated proved plus probable reserves purchased were 38.2bcfe.
Kenneth Peak, chairman and CEO of Contango, said: This acquisition is an excellent fit for Contango as it immediately puts our Fayetteville Shale sale proceeds to work, and gives us increased upside to our ongoing Dutch and Mary Rose development and exploration program.