US shale company Contango boosted by acquisitions

US energy company Contango Oil & Gas on August 11 attributed gains in production sales to new acquisitions, adding that its performance was better than expected.

Contango is a US shale player with assets across much of the Great Plains and in the US south. It recently paid $67mn in cash for assets in the Wind River basin of Wyoming, which as of July had a net production rate of around 78mn ft³-equivalent/day.

Advertisement: The National Gas Company of Trinidad and Tobago Limited (NGC) NGC’s HSSE strategy is reflective and supportive of the organisational vision to become a leader in the global energy business. ngc.co.tt

Contango said its production sales during the second quarter marked a 50% increase from its Q2 2020 levels, gains it attributed to recent acquisitions. Production sales also exceeded its guidance for the quarter.

In its report for the second quarter, the company said it resumed a “conservative” drilling campaign in parts of the Permian basin in New Mexico and Texas.

While its Wyoming assets are not major producers, the Permian basin is one of the more lucrative among the US primary shale reservoirs. Federal estimates forecast a 1% gain in oil production and a 0.2% gain in natural production from July levels this month.

Contango reported total revenues for Q2 2021 at $83.6mn, compared to $17.8mn for Q2 2020, a gain attributed to higher commodity prices and acquisitions. Adjusted Ebitdax was $31.1mn, compared with $7mn during the same period last year.