These oil and gas firms from Houston and Tulsa are merging, and moving to Fort Worth
See full Fort Worth Star-Telegram article by Gordon Dickson here.
Two oil and gas exploration and production companies are merging to form a single entity that will be based in Fort Worth.
Houston’s Contango Oil & Gas Co. and Tulsa’s Mid-Con Energy Partners LP announced the merger this week. The all-stock deal is expected to close later this year or in early 2021.
Contango has about 200 employees, most of them doing field work at oil and gas exploration sites in Texas, Oklahoma and Wyoming. Mid-Con also has operations in Oklahoma and Wyoming.
The merger is the latest example of oil and gas companies looking for ways to consolidate and find efficiencies, to ride out a dramatic downturn in the industry that is likely to continue for several more years.
“Our focus is on aquisition, versus organic development,” Wilkie Colyer, Contango chief executive officer, said in a phone interview. “Our view is the entire market really needs to consolidate. Our goal is to be the consolidator of oil and gas assets, to run them more efficiently at the bottom of the cycle.”
The company likely will be located in the Waggoner Building in downtown Fort Worth, Colyer said, although most of the company’s jobs will be held outside the downtown area.
Under terms of the agreement, Mid-Con stock holders will receive 1.75 shares of Contango common stock for each Mid-Con common unit owned. That exchange ratio implies an enterprise value for the combined entity of about $400 million, officials said.
Existing Contango shareholders will hold 87% of the new company and Mid-Con investors will have 13% of the firm.
“We are pleased to be able to provide our unit holders with the opportunity to transition at an attractive exchange ratio to ownership of shares in a larger, better capitalized company that is well positioned for future growth,” Bob Boulware, Mid-Con board chairman, said in a statement.
In 2018, Fort Worth real estate investor John Goff and his family holdings invested more than $19 million in Contango, making him the company’s largest share holder. Goff also is chairman of Crescent Real Estate, which owns, manages or is developing about $10 billion in assets in the Dallas-Fort Worth area.