Contango Oil & Gas Company announced today that its Mary Rose #3 well in Louisiana state waters at State Lease No. 19266 has been successfully completed and production tested at a rate of approximately 38 million cubic feet equivalent per day (Mmcfe/d). The Company’s net revenue interest in Mary Rose #3 is approximately 35%, inclusive of its investment in Republic Exploration LLC.

The Mary Rose #3 and Mary Rose #1 wells are both expected to begin producing this spring to a platform currently being set at Eugene Island 11. The pipeline from this platform to an offshore processing and onshore transit pipeline has been laid. The platform and pipeline have been designed with a capacity of 300 million cubic feet per day (“Mmcf/d”) and 6,000 barrels of oil per day (“Bbls/d”). We have just spudded the Mary Rose #2 well and expect to spud the Mary Rose #4 well before the end of April 2008.

The Company’s three Dutch wells are currently producing at a combined 8/8ths rate of approximately 80.0 million cubic feet equivalent per day (“Mmcfe/d”) (approximately 27.0 Mmcfe/d net to Contango). Our production has been constrained for much of February and to date in March due to onshore processing facility expansion construction.

The Company’s recent wildcat well at High Island A198 was determined to be a dry hole, at a cost of approximately $4.0 million. The well has been plugged and abandoned.

Kenneth R. Peak, the Company’s Chairman and Chief Executive Officer, said, “We continue to make progress in bringing our Dutch and Mary Rose discoveries to their anticipated gross flow rate of 350 – 400 Mmcfe/d, or approximately 130 – 150 Mmcfe/d net to Contango, sometime this summer. We also expect to be successful in closing a $100 million like-kind exchange acquisition of additional Dutch and Mary Rose working interests.”

Tags: Contango Oil & Gas Company