2008-09-02-2008-01-04-2008-01-04

Acquired additional 8.33% WI offshore Eugene Island 10 Dutch discovery to 42.88% (34.30% net) and 9.11% in 5 Mary Rose leases to 48.65% (35.68% net) gaining 29 Bcfe proved, 2P 38.2 Bcfe.

Contango Oil & Gas Co., Houston, (Amex: MCF) has acquired additional working interests offshore Louisiana from Houston-based companies CGM LP, Olympic Energy Partners LLC, and Juneau Exploration LP for $200 million. The assets include an additional 8.33% working interest (6.667% net revenue interest) in the Eugene Island 10 Dutch discovery and an additional average 9.11% working interest (6.667% net revenue interest) in five Mary Rose discovery leases, all in state waters. Estimated proved reserves are 29 billion cubic feet equivalent and 38.2 billion proved plus probable. The purchase increases Contango's working interest in Dutch to 42.88% (34.30% net) and in Mary Rose to 48.65% average (35.68% net), including its ownership interest in Republic Exploration LLC, Magnolia, Texas. Total proved reserves now owned in the prospects are 152 billion cubic feet equivalent and 200 billion proved plus probable. The effective date is Jan. 1. The assets qualify as a like-kind exchange with the proceeds received from Contango's recent $200-million sale of its Arkansas Fayetteville shale properties to Petrohawk Energy Corp., Houston (NYSE: HK). Contango chairman and chief executive Kenneth R. Peak says, "This acquisition…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." Contango operates primarily offshore in the Gulf of Mexico. The Eugene Island 10 discoveries are the winner of Oil and Gas Investor's 2007 Excellence Award for Best Discovery.