Contango Oil & Gas Co.

Contango Oil & Gas Co., Houston, (Amex: MCF) has retained Merrill Lynch & Co. to review strategic alternatives including the possible sale or merger of the company. Contango assets include a 70% working interest in approximately 45,300 net acres in the Fayetteville shale in Pope, Van Buren, Conway, Faulkner, Cleburne and White counties, Arkansas, with 144 horizontal- drilling sites. Other onshore properties are in Texas, Alabama and Louisiana, including approximately 5,800 net acres in the Barnett shale in Jeff Davis and Reeves counties, Texas. Contango also has interests in 70 offshore Gulf of Mexico leases. Proved reserves as of June 30 are 84.9 million cubic feet equivalent. Production is 7.4 million cubic feet equivalent per day. Other assets include a 10% interest in a Freeport, Texas, liquified natural gas partnership. Contact Kenneth R. Peak, 713-960- 1901.