Contango Announces Plan to Repurchase Shares under Existing Share Repurchase Program

Contango Oil & Gas Company (NYSE MKT: MCF) announced today that its Board of Directors has decided to resume the repurchase of its common shares under the Company’s 2011 Share Repurchase Program (the “Program”). The Board’s decision to resume the repurchase of shares is based on its belief that the current market price reflects a significant discount to the estimated inherent value of the Company’s stock and represents an excellent investment opportunity for its shareholders. Shares may be purchased through open market or privately negotiated purchases in accordance with the provisions of the Program, the Company’s insider trading policy, applicable securities laws, and other legal requirements. Repurchased shares of common stock will become authorized but unissued shares, and may be reissued in the future for general corporate and other purposes. The Program was approved and originally implemented in September 2011, with a total of $50.0 million authorized for the repurchase of shares. As of the date of this release, $39.2 million remains available for share repurchases under the Program.

The Company and the members of its bank group have recently amended provisions of the Company’s credit agreement to provide the authority, subject to certain limitations, to repurchase shares up to the remaining availability under the Program. Shares will be repurchased with internally generated cash flow and the utilization of borrowings under the Company’s revolving credit facility.

Allan D. Keel, President and Chief Executive Officer of the Company, commented: “The recent softness in the stock market for upstream equity securities, including Contango’s, has created an opportunity for us to prudently acquire a portion of our outstanding shares at a very attractive valuation. We believe our stock to be undervalued by the market, so we feel it is an excellent opportunity to invest in our own shares while continuing to maintain a conservative balance sheet.”

Contango Oil & Gas Company is a Houston, Texas based, independent energy company engaged in the exploration, development, exploitation, production and acquisition of natural gas and crude oil properties offshore in the shallow waters of the Gulf of Mexico and in the onshore Gulf Coast regions of the United States and Rocky Mountains. Additional information is available on the Company's website at http://www.contango.com.

This press release contains forward-looking statements regarding Contango that are intended to be covered by the safe harbor "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995, based on Contango’s current expectations and includes statements regarding acquisitions and divestitures, estimates of future production, future results of operations, quality and nature of the asset base, the assumptions upon which estimates are based and other expectations, beliefs, plans, objectives, assumptions, strategies or statements about future events or performance (often, but not always, using words such as "expects", “projects”, "anticipates", "plans", "estimates", "potential", "possible", "probable", or "intends", or stating that certain actions, events or results "may", "will", "should", or "could" be taken, occur or be achieved). Statements concerning oil and gas reserves also may be deemed to be forward looking statements in that they reflect estimates based on certain assumptions that the resources involved can be economically exploited. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those, reflected in the statements. These risks include, but are not limited to: the risks of the oil and gas industry (for example, operational risks in exploring for, developing and producing crude oil and natural gas; risks and uncertainties involving geology of oil and gas deposits; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to future production, costs and expenses; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; health, safety and environmental risks and risks related to weather such as hurricanes and other natural disasters); uncertainties as to the availability and cost of financing; fluctuations in oil and gas prices; risks associated with derivative positions; inability to realize expected value from acquisitions, inability of our management team to execute its plans to meet its goals, shortages of drilling equipment, oil field personnel and services, unavailability of gathering systems, pipelines and processing facilities and the possibility that government policies may change or governmental approvals may be delayed or withheld. Additional information on these and other factors which could affect Contango’s operations or financial results are included in Contango’s other reports on file with the Securities and Exchange Commission. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from the projections in the forward-looking statements. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Contango does not assume any obligation to update forward-looking statements should circumstances or management's estimates or opinions change. Initial production rates are subject to decline over time and should not be regarded as reflective of sustained production levels.