Houston-based Contango Oil & Gas Company and Tulsa's Mid-Con Energy Partners LP announced Monday that they have entered into an agreement to combine in an all-stock transaction.
Under the terms of the merger agreement, Mid-Con unit-holders will receive 1.75 shares of Contango common stock for each Mid-Con common unit owned, representing a 5% premium based on a 15-day volume weighted average price. This exchange ratio implies an enterprise value for the combined entity in excess of $400 million, based on Friday’s closing price.
Upon completion of the merger and closing of the concurrently announced private placement of Contango common stock, Contango shareholders will own about 87% of the combined company, and Mid-Con unit-holders will own roughly 13% of the combined company on a fully diluted basis.
The transaction is expected to close in late 2020 or early 2021. The combined company will be headquartered in Fort Worth, Texas, but will continue to maintain a presence in the Houston and Oklahoma markets.