logo
Share SHARE
FONT-SIZE Plus   Neg

Contango Signs LLC Agreement To Form Exara Energy, To Fund Encana Program

Contango Oil and Gas Company (MCF: Quote) said Monday it has entered into a Limited Liability Company Agreement, or LLC Agreement, to form Exaro Energy III LLC.

According to the agreement, Contango will invest up to $82.5 million in Exaro over the next five years together with other parties for an aggregate commitment of $182.5 million. It expects to fund almost $41.3 million in April.

Contango holds about 45 percent stake in Exaro. This is subject to terms allowing another party to acquire up to $15 million of the company's commitment which may decrease the company's stake in Exaro to about 34 percent.

The other prominent members of Exaro include Sageview Capital LP and Exaro II Jonah, a wholly owned subsidiary of Exaro Energy II LLC and an affliate of Jeffries Capital Partners.

Exaro has entered into an Earning and Development Agreement with Encana Oil & Gas Inc. to provide funding of up to $380 million, including the $182.5 million investment, to continue the development drilling program in a defined area of Encana's Jonah field asset.

Upon the total investment, Exaro will earn 32.5 percent of Encana's working interest in a defined joint venture area that comprises about 5,760 gross acres.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Quick Facts

Editors Pick
Software giant Microsoft Corp. said Monday after the markets closed that its second quarter profit fell 11% from last year, hurt mainly by integration and restructuring costs as well as higher income tax expenses even as revenue increased 8% due to strong sales of its gadgets and cloud-based products. English-made Cadbury chocolates will no longer be available in the United States, the result of a settlement between Hershey and a New Jersey-based import company. Beloved treats such as the Cadbury Creme Egg will only be sold in the U.S. using American chocolate, angering those who say the creamier... Gas prices are set to climb again after a long time due to rising wholesale prices. According to Lundberg Survey, while the national average price of gas fell 13 cents in the past two weeks to $2.07 a gallon, it could soon rise due to increased costs of crude oil in the past 10 days.
comments powered by Disqus
Follow RTT