1071993--8/29/2008--CONTANGO_OIL_&_GAS

related topics

{gas, price, oil}

{personnel, key, retain}

{cost, regulation, environmental}

{acquisition, growth, future}

{loss, insurance, financial}

{cost, contract, operation}

{provision, law, control}

We depend on the services of our chairman, chief executive officer and chief financial officer, and implementation of our business plan could be seriously harmed if we lost his services. We are highly dependent on the technical services provided by JEX and could be seriously harmed if JEX terminated its services with us or became otherwise unavailable. Our ability to successfully execute our business plan is dependent on our ability to obtain adequate financing. We frequently obtain capital through the sale of our producing properties. We assume additional risk as Operator in drilling high pressure wells in the Gulf of Mexico. We rely on third-party operators to operate and maintain some of our production pipelines and processing facilities and as a result we have limited control over the operations of such facilities and the interests of an operator may even differ from our interests. Repeated production shut-ins can possibly damage our well bores. Concentrating our capital investment in the Gulf of Mexico increases our exposure to risk. Natural gas and oil reserves are depleting assets and the failure to replace our reserves would adversely affect our production and cash flows. Reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions could materially affect the quantities and present values of our reserves. The Company s revenue activities are significantly concentrated in one field. We rely on the accuracy of the estimates in the reservoir engineering reports provided to us by our outside engineers. Exploration is a high risk activity, and our participation in drilling activities may not be successful. The natural gas and oil business involves many operating risks that can cause substantial losses. Not hedging our production may result in losses. Our ability to market our natural gas and oil may be impaired by capacity constraints and equipment malfunctions on the platforms, gathering systems, pipelines and gas plants that transport and process our natural gas and oil. We may not have title to our leased interests and if any lease is later rendered invalid, we may not be able to proceed with our exploration and development of the lease site. Competition in the natural gas and oil industry is intense, and we are smaller and have a more limited operating history than many of our competitors. We are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility of doing business. We cannot control the activities on properties we do not operate. We are highly dependent on our management team, JEX, exploration partners and third-party consultants and any failure to retain the services of such parties could adversely affect our ability to effectively manage our overall operations or successfully execute current or future business strategies. Acquisition prospects are difficult to assess and may pose additional risks to our operations. Anti-takeover provisions of our certificate of incorporation, bylaws and Delaware law could adversely effect a potential acquisition by third-parties that may ultimately be in the financial interests of our stockholders.

Full 10-K form ▸

1071993--8/29/2008--CONTANGO_OIL_&_GAS_CO