Contango Terminates Data Room Process and Announces Share Repurchase Program

HOUSTON--(Business Wire)--
Contango Oil & Gas Company (AMEX:MCF) announced today that it has
terminated the data room process for companies potentially interested
in acquiring our Dutch and Mary Rose fields in the Gulf of Mexico. As
a result, the Company will continue to develop and operate its Dutch
and Mary Rose fields and continue to drill and explore in the Gulf of
Mexico as Contango Oil & Gas Company.

The Company also announced that its Board of Directors has
approved the implementation of a $100 million share repurchase
program, effective immediately. The shares will be purchased in the
open market from time to time by the Company or through privately
negotiated transactions. The repurchases will be made subject to
market conditions and certain volume, pricing and timing restrictions
to minimize the impact of the repurchases upon the market. Repurchased
shares of common stock will become authorized but unissued shares, and
may be issued in the future for general corporate and other purposes.

Kenneth R. Peak, Contango's Chairman and Chief Executive Officer,
said, "The sharp fall off in near-term natural gas prices from nearly
$14.00 per Mmbtu to approximately $7.00 per Mmbtu has greatly
diminished our interest in exploring the sale of our Dutch and Mary
Rose assets. Further, the decline in our stock price presents us, we
believe, with an opportunity to purchase our proved developed reserves
and growth potential at attractive prices. I personally will not be a
seller in this share repurchase program."

Mr. Peak continued, "We will be spending the weekend and early
next week inspecting our offshore facilities for damage. Our initial
survey indicates little to no damage, but we will be unable to ramp up
production until full electrical power is restored to our on-shore gas
processing facilities."

Contango is a Houston-based, independent natural gas and oil
company. The Company's core business is to explore, develop, produce
and acquire natural gas and oil properties primarily offshore in the
Gulf of Mexico. Additional information can be found on our web page at
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.

Contango Oil & Gas Company, Houston
Kenneth R. Peak, 713-960-1901
www.contango.com

Copyright Business Wire 2008