Contango Oil & Gas Company (NYSEMKT:MCF) has announced its public common stock offering of 5 million shares whose total gross amount is $50 million.
This means that the shares will bring in $50 million before underwriting discounts and other expenses are included. The underwriters have a 30-day window to purchase an extra 750,000 shares in the common stock category from the firm. The proceeds collected from the offer will be used to service Contango’s recently announced acquisition of the Southern Delaware Basin acreage which is currently underdeveloped. The proceeds will also be used to offset the drilling costs that will be associated with the development carried out after the purchase.
The company will also use part of the revenue from the offering to repay some of its outstanding debt under its credit facility. This will ensure that the credit facilities remain accessible to the firm. Contango is also planning to pump the proceeds into general corporate purposes in case the acquisition does not go through as planned. However, the Texas-based energy company has high hopes for the acquisition. Seaport Global Securities, SunTrust Robinson Humphrey, and RBC Capital Markets will jointly manage the offering. Customary closing conditions dictate that the offering should close on July 27.
Contango will make the offering available through a base prospectus as well as a prospectus supplement. It will also be available through copies that can be obtained through Securities and Exchange Commission website. Those who are interested in purchasing the common stock can also communicate with representatives of the company so that they can request the prospectus supplement and the base prospectus from the underwriters.
A press release from the company also warned the stock should not be acquired by any means other than the stipulated means and they are only available in the mentioned jurisdiction. The shares will be offered to the buyers that present the correct registration statements that were previously filed with the Securities and Exchange Commission.
