Contango Brings Crimson Into Fold In $390 Million Stock Merger

Closed on merger to create a combined independent oil and gas company.

Contango Oil & Gas Co. (NYSE MKT: MCF) and Crimson Exploration Inc. (NasdaqGM: CXPO) announced Oct. 2 that they have closed their merger, creating a combined independent oil and gas company with a balanced offshore Gulf of Mexico and onshore Texas production profile.

The merger was first announced April 30. Based on Contango's closing stock price on April 29, the transaction’s aggregate value was $390 million based on the assumed issuance of approximately 3.9 million shares of Contango common stock and the assumption by Contango of approximately $244 million of Crimson’s long-term debt.

Under the terms of the merger, Crimson is now a wholly-owned subsidiary of Contango, which will issue about 3.9 million shares of its common stock in exchange for all of Crimson's outstanding capital stock.

Joseph J. Romano, chairman of Contango’s board, said the new combined company will have a pre-tax SEC PV10 proved reserve value of about $1 billion, excellent cash flow. The company holds $110 million of debt and 19.1 million shares of common stock outstanding after closing.

Allan D. Keel, president and CEO of Contango, said the combined company’s strong financial profile and cash flow positions it to aggressively pursue Crimson's high quality portfolio of onshore resource positions in various plays, complemented by an appropriate dedication of capital to Contango's potentially high impact exploratory Gulf of Mexico prospects.

“Our teams have been busy orchestrating the combination of these two excellent organizations and believe that it will be an exciting period going forward,” Keel said.

Effective October 2, 2013, trading in Crimson common stock has been discontinued. Crimson stockholders will exchange their shares for Contango’s. Contango and Crimson stockholders voted to approve the transaction.