1. Organization and Business Contango Oil &amp; Gas Company (collectively with its subsidiaries, Contango or the Company) is a Houston, Texas based, independent oil and natural gas company. The Companys business is to maximize production and cash flow from its offshore properties in the shallow waters of the Gulf of Mexico (GOM) and onshore Texas and Wyoming properties and use that cash flow to explore, develop, exploit, increase production from and acquire crude oil and natural gas properties across the United States. On June 14, 2019, following approval by the Companys stockholders at the 2019 annual meeting of stockholders, the Company changed its state of incorporation from the State of Delaware to the State of Texas and increased the Companys number of authorized shares of common stock from 50 million to 100 million. In September 2019, the Company entered into a purchase agreement with Will Energy Corporation (Will Energy) and a purchase agreement with White Star Petroleum, LLC and certain of its affiliates (collectively, White Star) to purchase certain producing assets and undeveloped acreage, primarily in Oklahoma. These transactions closed subsequent to September 30, 2019. See Note 3  Acquisitions and Dispositions for more information. Also in September 2019, the Company entered into a new revolving credit agreement with JPMorgan Chase Bank and other lenders (the Credit Agreement). In connection with the entry into the Credit Agreement, the Company repaid all obligations and terminated its previous credit agreement with Royal Bank of Canada, which had an October 1, 2019 maturity. The new revolving credit agreement was amended on November 1, 2019, in conjunction with the closing of the Will Energy and White Star acquisitions on October 25 and November 1, 2019, respectively, to add two additional lenders and increase the borrowing base thereunder to $145 million. See Note 10  Long-Term Debt for more information. The following table lists the Companys primary producing areas as of September 30, 2019: Location Formation Gulf of Mexico Offshore Louisiana - water depths less than 300 feet Southern Delaware Basin, Pecos County, Texas Wolfcamp A and B Madison and Grimes counties, Texas Woodbine (Upper Lewisville) Zavala and Dimmit counties, Texas Buda / Eagle Ford / Georgetown San Augustine County, Texas Haynesville shale, Mid Bossier shale and James Lime formations Other Texas Gulf Coast Conventional and smaller unconventional formations Weston County, Wyoming Muddy Sandstone Sublette County, Wyoming Jonah Field (1) (1) Through a 37% equity investment in Exaro Energy III LLC (Exaro). Production associated with this investment is not included in the Companys reported production results for all periods shown in this report. Since 2016, the Company has been focused on the development of its Southern Delaware Basin acreage in Pecos County, Texas , which is expected to continue to generate positive returns in the current price environment. As of September 30, 2019, the Company was producing from fourteen wells over its approximate 17,400 gross operated (8,400 total net) acre position in this West Texas area, prospective for the Wolfcamp A, Wolfcamp B and Second Bone Spring formations. In October 2019, the Company brought two more West Texas wells online and finished completing another West Texas well, which is expected to begin producing in mid-November 2019. Additionally, the Company is currently preparing to begin completion operations on a drilled but uncompleted well which it acquired in connection with the White Star acquisition. See Note 3  Acquisitions and Dispositions for more information. The Company currently plans to limit its near-term drilling program expenditures, in West Texas and other areas, to only those necessary to fulfill leasehold commitments, preserve core acreage and, where determined appropriate to do so, expand its presence in those existing areas, or to add production and cash flow at attractive rates of return. The Company will continue to make balance sheet strength a priority in 2019 and will continue to identify opportunities for cost reductions and operating efficiencies in all areas of its operations, while also searching for new resource acquisition opportunities. Acquisition efforts will be focused on areas in which the Company can leverage its geological and operational experience and expertise to exploit identified drilling opportunities and where it can develop an inventory of additional drilling prospects that the Company believes will enable it to economically grow production and add reserves. On September 12, 2019, the Company completed an underwritten public offering (the Public Offering) of 51,447,368 shares of its common stock (of which 5,524,498 was reissued treasury shares) for net proceeds of approximately $46.2 million, after deducting the underwriting discount and fees and expenses. Net proceeds from the Series A Private Placement (defined below) and Public Offering were used to fund the cash portion of the purchase price for the Will Energy acquisition and to reduce borrowings under the Companys revolving credit facility then in effect. In conjunction with the Public Offering, also on September 12, 2019, the Company entered into a purchase agreement with affiliates of John C. Goff, a director and significant shareholder of the Company, to issue and sell in a private placement (the Series A Private Placement) 789,474 shares of Series A contingent convertible preferred stock, which resulted in net proceeds of approximately $7.5 million. On November 1, 2019, the Company completed a private placement of 1,102,838 shares of Series B contingent convertible preferred stock, which resulted in net proceeds of approximately $21 million (the Series B Private Placement). Net proceeds from the Series B Private Placement were used to fund a portion of the purchase price and related transaction expenses for the White Star acquisition. Each of the series A and series B preferred shares are a new class of equity interests that rank equal to the common shares with respect to dividend rights and rights upon liquidation. The preferred shares will be entitled to vote on an as-converted basis on all matters submitted to a vote of the Companys stockholders, with voting rights of the series A preferred shares equal to 19.99% of the common shares outstanding prior to the closing of the Public Offering and the series B preferred shares voting on an as-converted basis. Each series A preferred share and series B preferred share will then automatically convert into the number of common shares the purchaser would have received if the purchaser had purchased such common shares in the Public Offering and Series B Private Placement, respectively, for the same gross proceeds (the Conversion) and, upon the Conversion, the outstanding preferred shares will be cancelled. As of November 1, 2019, the Company has obtained approval of, or written agreements to approve, such increase in the number of authorized shares, and the issuance of the common shares underlying the series A preferred shares, from holders of a majority of the voting power of its capital stock, and will complete that process as soon as practicably possible.