Benjamin Graham "Individuals who cannot master their emotions are ill-suited to profit from the investment process."
Warren Buffett "Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it."
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Over the past several months, Contango Oil & Gas Company shareholders have received a steady stream of bad news. Read this article for an update on our investment thesis.
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This article presents an update to our in-depth profile of Contango published in September. The company’s stock price has remained under significant pressure due to a number of company specific factors that we discuss in this update.
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In this article, we discuss the investment merits of Contango Oil & Gas, a unique exploration and production company with a compelling risk/reward profile.
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Investors like to examine pricing anomalies, particularly related to commodities that could be viewed as substitutes but trade at radically different prices. One barrel of crude oil has approximately six times the energy content of one thousand cubic feet (mcf) of natural gas. One mcf of natural gas is approximately equivalent to one million BTUs (MBTU). Despite the energy equivalence, for a variety of reasons, the pricing relationship between oil and natural gas is almost never exactly six to one. Read this article for our analysis.
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In a presentation today, Contango Oil & Gas CEO Kenneth Peak stated that the economics of oil and gas exploration in shallow Gulf of Mexico waters have improved significantly compared to 2008 conditions due to a dramatic decrease in dayrates for the jackup rigs used in shallow waters that has more than offset moderate increases in administrative and insurance costs. Mr. Peak also spoke at length about the new permit process in place and Contango’s efforts to adapt to changing regulatory requirements. Read this article for more details.
