1071993--9/13/2010--CONTANGO_OIL_&_GAS_CO

related topics
{gas, price, oil}
{personnel, key, retain}
{cost, regulation, environmental}
{acquisition, growth, future}
{loss, insurance, financial}
{operation, natural, condition}
{cost, contract, operation}
{operation, international, foreign}
{provision, law, control}
{stock, price, share}
We have no ability to control the prices that we receive for natural gas and oil. Natural gas and oil prices fluctuate widely, and a substantial or extended decline in natural gas and oil prices would adversely affect our revenues, profitability and growth and could have a material adverse effect on the business, the results of operations and financial condition of the Company. We depend on the services of our Chairman and Chief Executive 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 and high temperature 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. The interests of an operator may 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 of our reserves. The Company s reserves and revenues are 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. Production activities in the Gulf of Mexico increase our susceptibility to pollution and natural resource damage. 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. Our operations in the Gulf of Mexico could be adversely affected by changes in laws and regulations which are expected to occur as a result of the Deepwater Horizon Incident. We do not 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. The risks and challenges inherent in mineral exploration are quite different from our natural gas and oil exploration and we have no mineral expertise. 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. Our common stock is thinly traded.

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