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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 8, 2007
CONTANGO OIL & GAS COMPANY
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 001-16317 95-4079863
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3700 BUFFALO SPEEDWAY, SUITE 960
HOUSTON, TEXAS 77098
(Address of principal executive offices)
(713) 960-1901
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
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ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On February 8, 2007, Contango Oil & Gas Company (AMEX:MCF) announced
financial results for the three and six months ended December 31, 2006.
The Company reported a net loss attributable to common stock for the
three months ended December 31, 2006 of approximately $2.5 million, or $0.16 per
basic and diluted share, which included a loss on the sale of Contango
Operators, Inc.'s ("COI's") 25% working interest in the Grand Isle 72 well
("Liberty"). COI is a wholly-owned subsidiary of the Company. This compares to a
net loss attributable to common stock for the three months ended December 31,
2005 of $0.4 million, or $0.03 per basic and diluted share.
The net loss attributable to Contango common stock for the six months
ended December 31, 2006 was $2.9 million, or $0.19 per basic and diluted share,
which included a loss on the sale of COI's 25% working interest in the Grand
Isle 72 well, compared to a net loss attributable to common stock for the six
months ended December 31, 2005 of $0.3 million, or $0.02 per basic and diluted
share.
Attached as Exhibit 99.1 is the press release that was issued on
February 8, 2007. The press release defines EBITDAX and reconciles EBITDAX to
loss from continuing operations. On February 9, 2007 we filed our Form 10-Q for
the period ended December 31, 2006 with the Securities and Exchange Commission
with an enhanced definition of EBITDAX. Additionally, we reconciled EBITDAX to
loss from continuing operations before other income and income taxes. The
enhanced definition of EBITDAX is as follows:
EBITDAX represents earnings before interest, income taxes,
depreciation, depletion and amortization, impairment expenses,
exploration expenses, gain (loss) from hedging activities and sales of
assets and certain other non-cash items. We have reported EBITDAX
because we believe EBITDAX is a measure commonly reported and widely
used by investors as an indicator of a company's ability to internally
fund exploration and development activities and incur and service debt.
We believe EBITDAX assists investors in comparing the Company's
financial indicators with those of peer companies that follow the full
cost method of accounting. EBITDAX is not a calculation based on U.S.
generally accepted accounting principles and should not be considered
an alternative to net income (loss) in measuring our performance or
used as an exclusive measure of cash flow because it does not consider
the impact of working capital growth, capital expenditures, debt
principal reductions, exploration costs and other sources and uses of
cash, which are disclosed in our statements of cash flows. Investors
should carefully consider the specific items included in our
computation of EBITDAX. In addition, investors are cautioned that
EBITDAX as reported by us may not be comparable in all instances to
EBITDAX as reported by other companies. EBITDAX amounts may not be
fully available for management's discretionary use, due to requirements
to conserve funds for capital expenditures, debt service, exploration
costs, preferred stock dividends and other commitments.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit No. Description of Document
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99.1 Press release dated February 8, 2007
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONTANGO OIL & GAS COMPANY
Date: February 13, 2007 By: /s/ KENNETH R. PEAK
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Kenneth R. Peak
Chairman and Chief Executive Officer
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