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Contango to Acquire White Star's Producing Oil & Gas Properties

Streetwise Reports, Streetwise Reports
0 Comments| October 4, 2019

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The deal and the assets are described in a ROTH Capital Partners report.


ROTH Capital Partners analyst John White reported that Contango Oil & Gas Co. (MCF:NYSE.MKT) agreed to acquire the assets of White Star Petroleum for $132.5 million.

The assets include production of 15,000 barrels of oil equivalent per day (15,000 boe/d) and 20 million barrels of oil equivalent of Proven Developed Producing reserves and 315,000 net acres in the STACK play, the general Anadarko Basin and the Cherokee Basin, in Oklahoma. The amount of total reserves was not disclosed.

White highlighted that this is a "very large acquisition" by Contango. Adding production from the White Star assets to Contango's existing production (5,482 boe/d) would result in estimated total production of about 21,800 boe/d.

It's unknown whether the oil and gas properties Contango is acquiring are nonconventional or conventional or a combination thereof, White noted but added that ROTH suspects all are conventional and mature. "Compared to predominately shale play metrics, the properties are being acquired on a very inexpensive valuation," he added. "Our coverage of predominately shale play companies recently traded at a median flowing boe/d of $36,084."

ROTH has a $1.45 per share target price on Contango, whose current share price is around $2.61. "Although the shares are at a level which fits ROTH's Sell rating definition, we rate the shares Neutral while we await more details on the recently announced acquisition," White explained.

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from ROTH Capital Partners, Contango Oil & Gas Company, Flash Note, September 27, 2019

Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

ROTH makes a market in shares of Contango Oil & Gas Company and as such, buys and sells from customers on a principal basis.

Shares of Contango Oil & Gas Company may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.

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