Contango Oil & Gas Co. said Tuesday that the previously announced sale of its 10-percent limited partnership interest in Freeport LNG Development LP to Turbo LNG LLC, an affiliate of Osaka Gas Co., Ltd., closed on February 5, 2008. The Company received a total of $68.0 million.
The Company used $20.3 million of the proceeds to pay off its debt with the Royal Bank of Scotland, including principal, interest and fees. Another $20.0 million was used to pay off its debt with a private investment firm. The remaining $27.7 million will be used for working capital.
Kenneth R. Peak, Contango’s Chairman and Chief Executive Officer, said, “We have over $150 million of cash on hand and $60 million of available borrowing capacity. As stated previously, our plans are to invest $109 million of our cash in a like-kind exchange for producing oil and gas assets.”
Contango is a Houston-based, independent natural gas and oil company. The Company’s core business is to explore, develop, produce and acquire natural gas and oil properties primarily offshore in the Gulf of Mexico. The Company also holds investments in companies focused on commercializing environmentally preferred energy technologies.
