Contango Oil & Gas Co. recently agreed to acquire a bundle of oily, low decline assets at what Contango CEO Wilkie S. Colyer described as an “attractive valuation.”
The Fort Worth, Texas-based company will pay $58 million in cash for the acquisition of PDP heavy reserves located in in the Big Horn, Permian and Powder River basins made via a bank-owned liquidation of assets. The transaction represents more than a 50% discount to producing reserve value, according to a company release from Nov. 30.
“This opportunity became actionable as a result of our proprietary pipeline of assets owned by non-natural owners, and our hope is that, as in this case, sellers view us as a solution provider as much as they do a counterparty in looking for a new home for stranded assets,” Coyler said in a statement.
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