Contango Restarts Production at Vermilion 170 Well (USA)

Contango Oil & Gas, a Houston-based, independent natural gas and oil company, announced today that the Company’s Vermilion 170 well in the U.S. Gulf of Mexico has resumed production and as of June 12, 2013, was producing approximately 9.7 million cubic feet equivalent per day (“Mmcfed”), net to Contango.

This well had been shut-in since late January 2013 for workover operations, which were recently successfully completed. The Company’s total offshore production is now approximately 66.9 Mmcfed.

Additionally, the Company has signed a contract to secure the Hercules 202 drilling rig to spud our South Timbalier 17 oil prospect in July 2013, at an estimated dry hole cost of $6.5 million, net to Contango. This prospect, located in State of Louisiana waters, was obtained from a third-party independent oil and gas company. Under the terms of the participation agreement, Contango will have a 75% working interest in this well.

Joseph J. Romano, the Company’s Chairman and Chief Executive Officer, said, “I am quite pleased to have the workover at Vermilion 170 behind us, and to begin drilling our first exploration well of the year at South Timbalier 17 in the next few weeks. Additionally, we are negotiating to secure a second drilling rig, the Spartan 202, to drill Ship Shoal 255, as soon as permitting is complete. We have budgeted a dry hole cost of approximately $22.5 million and expect to drill this well in late-2013.”

In addition to these two prospects, the Company previously announced that it was the apparent high bidder on three lease blocks from the Central Gulf of Mexico Lease Sale 227 held on March 20, 2013. The Company has now been awarded these three leases, representing two more prospects. The Company has paid the remainder of the $1.7 million bid on Eugene Island 23, Ship Shoal 52 and Ship Shoal 59. Our plan is to promptly begin the permit process to drill these new prospects in the second and third quarter of calendar 2014.

The Company is in the process of submitting exploration permits for four additional prospects awarded at the previous lease sale in June 2012, which increases our existing offshore inventory to eight prospects, while continuing to partner with Juneau Exploration LP for new offshore prospects via lease sales and/or farm-ins from third parties.

Romano continued, “We are also making progress with our merger plans and are very excited about accelerating the drilling of Crimson Exploration’s significant inventory of well-defined prospects. The next several years will be very exciting for Contango as we blend Crimson’s quality plays with our offshore prospects. We presently have cash and future cash flows to aggressively develop a significant inventory of excellent opportunities to create shareholder value. The Company is also considering opportunities to significantly reduce the Crimson debt to be assumed through the merger. We presently have approximately $90 million in cash and no existing debt.”

The Company has submitted its Registration Statement on Form S-4 to the U.S. Securities and Exchange Commission and is awaiting their decision on whether to review the document.