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Apr 1, 2003 12:00 PM

Contango Oil & Gas Co has exercised its option with Cheniere Energy Inc to acquire a 10% interest in Freeport LNG Development LP, a limited partnership formed to develop an LNG receiving terminal in Freeport TX. Contango ultimately will pay Cheniere a total price of $2.33 million, of which $750,000 already has been invested.

Kenneth R Peak, chairman and chief executive officer of Contango, said, “Our production is currently averaging 17,000 MMbtu and 350 barrels of oil per day. We are drilling two prospects onshore in south Texas and one offshore prospect in the Gulf of Mexico. We have three more onshore prospects and an additional offshore prospect, which we expect to spud over the next several months.

“Our net revenues for the production months of January and February will be received in mid-March and mid-April, respectively,” Peak said, “and are expected to be $2.5 million to $3.0 million for each month. Our net revenues for the production month of March, which we will receive in mid-May, are expected to be $3.5 million.”