Contango Oil ups borrowing base, draws on facility for asset purchase

By Wendy Van Sickle

Columbus, Ohio, Nov. 4 – Contango Oil & Gas Co. entered into an amendment to its credit agreement with JPMorgan Chase Bank, NA as administrative agent, increasing its borrowing base to $145 million, according to a press release issued Monday.

The amendment also added banks to the bank group.

The company drew down on the credit facility to fund a portion of the consideration of its acquisition of assets and liabilities, including approximately 315,000 net acres located in the Stack, Anadarko and Cherokee operating districts in Oklahoma from White Star Petroleum, LLC and certain of its affiliates for a total price of $132.5 million.

Following adjustment for the results of operations and other estimated customary closing adjustments, the Contango paid a total cash consideration of $95.8 million, including a previously funded cash deposit of $12.5 million.

The company also used proceeds of a private placement of series B contingent convertible preferred stock to help fund the acquisition.

Houston-based Contango is an oil and natural gas exploration company.

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