Contango Oil & Gas Co.

Contango Oil & Gas Co., Houston, (AMEX: MCF) has retained Merrill Lynch & Co. to obtain proposals for the sale of the Dutch and Mary Rose discoveries in the Gulf of Mexico. Contango holds 47.05% working interest in Dutch (38.12% net revenue interest) and 53.21% average working interest in Mary Rose (39% average net revenue interest). Estimated proved reserves in each discovery are now 254 billion cubic feet equivalent (280 billion proved plus probable). The company is drilling Mary Rose #2 well and expects to be at logging point by late April to mid-May. A second rig has arrived and spudded Mary Rose #4. Contango chairman and chief executive Kenneth R. Peak says, "If Contango obtains an acceptable proposal to acquire its Dutch and Mary Rose discoveries, we would likely structure the disposition through the sale of Contango by its shareholders with the simultaneous spin-off of the remaining Contango assets to our shareholders in a new company, Contango Energy Co. This structure would allow Contango shareholders to have an interest in any future exploration efforts at our other Gulf of Mexico leases." Contact Peak, 713-960-1901.