MCF - Contango Oil & Gas: Strong Commodity Prices Are Good For Existing Assets But A Hindrance For Cheap Acquisitions
- Contango's value is estimated at close to $4 per share in a mid-$60s oil environment.
- It appears less overvalued than it was a couple of months ago since commodity prices have improved significantly, while its share price hasn't increased much.
- Mid-$60s oil allows it to extract a lot of value out of its PDP assets and makes acquisitions like Project Silvertip look extremely good.
- Strong commodity prices also reduce Contango's ability to find cheap acquisitions though as the number of distressed/bankruptcy asset sales will decline significantly.
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Contango Oil & Gas: Strong Commodity Prices Are Good For Existing Assets But A Hindrance For Cheap Acquisitions