About Contango Oil & Gas

Contango Oil & Gas Company operates as an independent oil and natural gas company. As of December 31, 2020, the company was producing from 18 wells over its approximate 16,200 gross (7,500 net) acre position in West Texas, prospective for the Wolfcamp A, Wolfcamp B and Second Bone Spring formations. As of December 31, 2020, the company’s proved reserves were approximately 34.2 million barrels of oil or other liquid hydrocarbons equivalent (MMBoe), consisting of 13.0 million barrels (MMBbl) of oil and condensate, 84.5 billion cubic feet (Bcf) of natural gas, and 7.2 MMBbl of natural gas liquids (NGLs). Properties As of December 31, 2020, the company’s properties were located in various regions, such as Offshore Gulf of Mexico (GOM), Central Oklahoma, Western Anadarko, West Texas, and Other Onshore. Offshore Gulf of Mexico As of December 31, 2020, the company’s offshore assets consisted of seven company-operated wells in the shallow waters of the GOM off of the coast of Louisiana. Dutch and Mary Rose Field The company operates five producing wells located in federal waters at Eugene Island 10 (Dutch), and two producing wells located in adjacent Louisiana state waters (Mary Rose). All Dutch and Mary Rose wells flow to a company-owned and operated production platform at Eugene Island 11. Gulf of Mexico Exploratory Prospects In 2019, the company entered into a Joint Development Agreement with Juneau Oil & Gas, LLC (Juneau), which provides the company the right to acquire an interest in up to six of Juneau’s prospects located in the Gulf of Mexico. The first such prospect acquired by the company was the Iron Flea prospect located in the Grand Isle Block 45 Area in the shallow waters off of the Louisiana coastline, which was determined to be unsuccessful in June 2020. The company is evaluating for future testing a number of exploratory prospects included in the Joint Development Agreement, including the Boss Hogg prospect located in the Eugene Island 298 Area in the shallow waters off of the Louisiana coastline. Central Oklahoma The company owns producing properties in the Will Energy (Will Energy Corporation) acquisition and White Star (White Star Petroleum, LLC and certain of its affiliates) acquisition that are located in the Central Oklahoma region; and are primarily in the Woodford, Meramec, Mississippian, Chester, Oswego and Hunton formations. In December 2019, the company completed and brought on production a Garfield County, Oklahoma well, which the company acquired in connection with the White Star acquisition. As of December 31, 2020, the Central Oklahoma region included approximately 629,100 gross (257,700 net) acres, proved reserves of 15.4 MMBoe (54% oil/liquids) and 674 gross (342.3 net) producing wells. Western Anadarko The company owns producing properties in the Will Energy Acquisition and White Star Acquisition that are located in the Western Anadarko region; and are primarily in the Chester, Tonkawa, Morrow, Marmaton, Cottage Grove, Red Fork and Cleveland formations. As of December 31, 2020, the Western Anadarko region included approximately 274,600 gross (144,500 net) acres, proved reserves of 4.9 MMBoe (47% oil/liquids) and 400 gross (196.9 net) producing wells. Th company operated 50% of its Western Anadarko producing properties as of December 31, 2020. West Texas Southern Delaware Basin The company and its 50% non-operated working interest partner in the Southern Delaware Basin own approximately 16,200 gross acres (7,500 net acres to the company). As of December 31, 2020, the company had net proved reserves of 8.3 MMBoe (87% oil, 96% total liquids) in its West Texas region. The company has 68 gross (27.5 net) potential drilling locations in the Wolfcamp A and B areas of its acreage, substantially all of which can accommodate 10,000 foot laterals that could provide a basis for future development and reserve growth in a more favorable and stable oil price environment. Included in the 68 gross locations are 32 proved undeveloped locations and 36 unbooked locations. As of December 31, 2020, the company had 13 wells producing from Wolfcamp A and five wells producing from Wolfcamp B, which produced at an average rate of approximately 1,000 barrels of oil equivalents (Boe) per day during the year ended December 31, 2020. Other Onshore The company’s Other Onshore region is consisted of various smaller non-core producing areas in Texas, Louisiana, Wyoming and Mississippi. As of December 31, 2020, the company’s estimated net proved reserves for the properties in this region are 1.4 MMBoe. Texas The company’s Southeast Texas area includes approximately 19,500 gross (11,700 net) acres in Madison and Grimes counties, with the potential for a multi-year inventory of drilling locations encompassing the Woodbine, Eagle Ford Shale and/or Georgetown/Buda formations in an improved oil price environment. The company had proved reserves of 0.7 MMBoe (73% oil/liquids) and 37 gross (20.0 net) producing wells in Southeast Texas as of December 31, 2020. The company’s South Texas area includes properties in Dimmitt and Zavala counties, which include approximately 16,100 gross (6,600 net) acres that to be prospective for the Buda, Georgetown and Eagle Ford Shale plays in an improved price environment. The company’s South Texas area also includes approximately 14,300 gross (7,300 net) acres located in conventional fields that produce primarily from the Wilcox, Frio, and Vicksburg sands. The company’s estimated net proved reserves in this area were 1.3 MMBoe (44% oil/liquids) with 39 gross (17.6 net) producing wells, as of December 31, 2020. The company’s East Texas area includes approximately 5,900 gross (3,600 net) acres primarily in San Augustine County, with proved reserves of 0.2 MMBoe (26% oil/liquids) and 8 gross (4.7 net) wells producing in the Haynesville, Mid-Bossier and/or James Lime formations. Louisiana As of December 31, 2020, the estimated proved reserves for the company’s Louisiana properties were 0.5 MMBoe (56% oil/liquids) primarily related to the properties that the company acquired in the Will Energy Acquisition. Wyoming As of December 31, 2020, the company’s Wyoming area included approximately 33,200 gross (23,000 net) net acres with estimated proved reserves of 0.1 MMBoe (91% oil). Mississippi As of December 31, 2020, the company held approximately 1,300 gross (300 net) mostly undeveloped acres in Mississippi. Onshore Investments Jonah Field – Sublette County, Wyoming The company’s wholly-owned subsidiary, Contaro Company (Contaro), owns a 37% ownership interest in Exaro Energy III, LLC (Exaro). As of December 31, 2020, Exaro had 645 wells on production over its 5,760 gross acres (1,040 net acres), with a working interest between 14.6% and 32.5%. These wells were producing at a rate of approximately 2.5 thousand barrels of oil or other liquid hydrocarbons equivalent (MBoe) per day (MBoe/d), net to the company, during the three months ended December 31, 2020. As of December 31, 2020, reserves attributable to the company’s investment in Exaro were 2.6 MMBoe. Strategy The company’s long-term business strategy includes pursuing accretive, opportunistic acquisitions that meet its short-term and long-term strategic and financial objectives; and continuing to develop the oil and natural gas liquids resource potential that exists in numerous formations within its various oil/liquids weighted resource plays, and where possible, to expand its presence in those plays. During 2021, the company intends to continue to minimize its drilling program and pursue additional ‘fee for service’ opportunities similar to the terminated Management Services Agreement entered into with Mid-Con Energy Partners, LP (Mid-Con), as well as pursue growth through the acquisition of proved developed producing-heavy assets. Governmental Regulations and Industry Matters The gas gathering facilities that the company owns meet the traditional tests the Federal Energy Regulatory Commission (FERC) has used to establish a pipeline system's status as a non-jurisdictional gatherer. With regard to physical purchases and sales of natural gas and other energy commodities, and any related hedging activities that the company undertakes, the company is thus required to observe anti-market manipulation laws and related regulations enforced by FERC and/or the Commodity Futures Trading Commission (CFTC). Sales prices of oil, condensate and gas liquids by the company are not regulated and are made at market prices. The company’s sales of these commodities are, however, subject to laws and to regulations issued by the Federal Trade Commission (the ‘FTC’) prohibiting manipulative or fraudulent conduct in the wholesale petroleum market. The company generates wastes that are subject to the federal Resource Conservation and Recovery Act, as amended (the ‘RCRA’), and comparable state statutes. The Underground Injection Well Program under the federal Safe Drinking Water Act, as amended requires that the company obtains permits from the U.S. Environmental Protection Agency or analogous state agencies for the company’s disposal wells, establishes minimum standards for injection well operations, restricts the types and quantities that may be injected, and prohibits the migration of fluid containing any contaminants into underground sources of drinking water. The company is subject to the requirements of the federal Occupational Safety and Health Act, as amended, and comparable state statutes, whose purpose is to protect the health and safety of workers. In addition, the U.S. Occupational Safety and Health Administration hazard communication standard, the U.S. Environmental Protection Agency community right-to-know regulations under Title III of the federal Superfund Amendment and Reauthorization Act and comparable state statutes require that information be maintained concerning hazardous materials used or produced in the company’s operations and that this information be provided to employees, state and local government authorities and citizens. Whereas the federal Bureau of Land Management administers oil and natural gas leases held by the company on federal onshore lands, the BOEM administers the oil and natural gas leases held by the company on federal offshore tracts on the federal Outer Continental Shelf. Additionally, in the support of the company’s Gulf of Mexico operations, the company has established a Regional Oil Spill Response Plan, which has been approved by the Bureau of Safety and Environmental Enforcement (BSEE). The company has also contracted with O’Brien’s Response Management (O’Brien’s), who maintains an incident command center on 24 hour alert in Houston, Texas. The company has developed and implemented a Safety and Environmental Management System (SEMS) to address oil and natural gas operations in the OCS, as required by the BSEE. History Contango Oil & Gas Company was founded in 1986. The company was incorporated in 2019.