MCF - Contango Oil & Gas inks agreement to acquire Oily low decline assets in Big Horn Permian and Powder River Basins

Contango Oil & Gas (MCF) enters into an asset purchase agreement to acquire Oily via a bank owned liquidation of assets.The acquisition of PDP heavy reserves for $58M in cash, subject to customary purchase price adjustments, representing more than a 50% discount to producing reserve value.Adds significant volumes of low-decline liquids production requiring minimal maintenance capital.Pro forma for the Mid-Con Energy merger and this acquisition, MCF's net producing oil annual decline rate to drop to ~11% during 2021.Pro forma for the Mid-Con Energy merger, these assets are expected to increase Contango's reserve value by ~36%.Unlevered payback period on these assets estimated to be 2.7 years at 11/27/20 strip.The transaction is expected to close Dec. 31, 2020, and the effective date of the transaction will be Aug. 1, 2020.

For further details see:

Contango Oil & Gas inks agreement to acquire Oily, low decline assets in Big Horn, Permian, and Powder River Basins