The Risk of Backing into a Speculative Position

You can choose a ready guide in some celestial voice If you choose not to decide, you still have made a choice You can choose from phantom fears and kindness that can kill I will choose a path that’s clear

Contango Provides Updated Perspective on Gulf of Mexico Situation

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.

Contango ORE: An Intelligent Gold and Rare Earth Speculation?

Despite our best efforts as value investors to avoid anything that may resemble speculation, sometimes unique circumstances can arise that force us to replace typical passive behavior with an active choice. Such a scenario will soon face shareholders of Contango Oil & Gas who will receive one share of Contango ORE (CORE) for each ten shares of Contango in a spin-off scheduled for December. Contango has attracted a following among value investors and has been capably managed by Chairman and CEO Kenneth Peak since the company’s founding in 1999. Is CORE an intelligent speculation? Read this article for our thoughts.

Contango Announces $85 million Capex Budget for Fiscal 2011

In a press release today, Contango Oil & Gas Company announced an updated capital expenditure budget of $85 million for the fiscal year ending June 30, 2011. The company plans to drill four wildcat exploration wells in the Gulf of Mexico at a cost of approximately $15 million each. In addition, fifteen on-shore wells will be drilled at a cost of approximately $1.5 million each as part of the company’s Patara joint venture agreement. Successful discoveries could result in additional increases to the capex budget. Read this article for more details.

Contango Oil & Gas CEO Comments on ‘Gulf of Mexico in Chaos’

In a presentation released today, Contango Oil & Gas Company CEO Ken Peak provides more details regarding his view of the situation unfolding in the Gulf of Mexico. We have commented on Contango Oil & Gas in the past and believe that Mr. Peak provides some of the most useful commentary on oil and gas economics in the Gulf of Mexico. Recently, Contango announced new production and signaled an intent to return cash to shareholders through a special dividend or continued share repurchases. Read this article for more details on Mr. Peak’s presentation.

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