Contango Ducks on Stock Offering

Contango Oil & Gas Company (NYSE:MCF) reported a common stock offering Friday morning.

The Houston-based petroleum company priced a public offering of approximately 44.7 million shares of its common stock for total gross proceeds (before the underwriting discount and estimated expenses) of $42.5 million.

The underwriters have a 30-day option to purchase up to an additional approximately 6.7 million shares of common stock from the Company. The offering is expected to close on September 17 – this coming Tuesday -- subject to customary closing conditions.

Contango is an independent oil and natural gas company whose business is to maximize production and cash flow from its offshore properties in the shallow waters of the Gulf of Mexico and onshore properties in Texas and Wyoming and to use that cash flow to explore, develop, exploit, increase production from and acquire crude oil and natural gas properties in West Texas, the Texas Gulf Coast and the Rocky Mountain regions of the United States.

Total gross proceeds of $50 million from the public offering are expected to be used to fund the cash portion of the purchase price for the previously announced pending acquisition of certain oil and gas properties from Will Energy Corporation, due at closing, and for related transaction expenses.

If that deal doesn’t go ahead, MCF plans to use the proceeds from the offering for general corporate purposes, including funding future potential acquisitions or a portion of its 2019 capital program.

Shares in Contango dipped eight cents to 92 cents