Contango to Sell 10% Interest in Freeport LNG

Contango Oil & Gas has entered into a definitive agreement with an Asian utility company to sell its 10% limited partnership interest in Freeport LNG Development for approximately $68 million.

The sale is subject to the purchaser’s board approval and customary closing conditions and adjustments. Freeport is engaged in developing a liquefied natural gas receiving and gasification terminal on Quintana Island, near Freeport, Texas, US.

Contango owns the 10% limited partnership interest in Freeport through its wholly owned subsidiary, Contango Sundance. The sale is part of Contango’s previously announced review of strategic alternatives to enhance shareholder value.

Kenneth Peak, chairman and CEO of Contango, said: “Contango will use the proceeds from this sale to prepay the outstanding $20 million term loan from the Royal Bank of Scotland, with the remaining funds available for working capital.”