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, with regional offices in Oklahoma City and Stillwater, Oklahoma. 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, Oklahoma, Louisiana and Wyoming properties and use that cash flow to explore, develop, exploit and acquire oil and natural gas properties across the United States. The following table lists the Companys primary producing areas as of March 31, 2020: Location Formation Gulf of Mexico Offshore Louisiana - water depths less than 300 feet Mid-continent Region of Oklahoma Mississippian, Woodford, Oswego, Cottage Grove, Chester and Red Fork 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 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 equity investment is not included in the Companys reported production results for all periods shown in this report. From the Companys initial entry into the Southern Delaware Basin in 2016 and through mid-2019, the Company was focused on the development of its Southern Delaware Basin acreage in Pecos County, Texas . In January 2020, the Company brought one West Texas well online but suspended further drilling in the area in response to the dramatic decline in oil prices during the quarter. As of March 31, 2020, the Company was producing from eighteen wells over its approximate 17,200 gross operated (8,000 company net) acre position in this West Texas area, prospective for the Wolfcamp A, Wolfcamp B and Second Bone Spring formations. During the fourth quarter of 2019, the Company closed on the acquisitions of certain producing assets and undeveloped acreage of Will Energy Corporation (Will Energy) and White Star Petroleum, LLC and certain of its affiliates (collectively, White Star) and established an additional core strategic area, primarily located in the Central Oklahoma and Western Anadarko basins. These acquisitions were transformative, as production from these acquisitions represented 74% of the Companys total net production for the first quarter of 2020. During the fourth quarter of 2019, the Company also entered into a Joint Development Agreement with Juneau Oil &amp; Gas, LLC (Juneau), which provides the Company the right to acquire an interest in up to six of Juneaus exploratory prospects located in the Gulf of Mexico. The first such exploratory prospect acquired by the Company was the Iron Flea prospect located in the Grand Isle Block 45 Area in the shallow waters off of the Louisiana coastline. The Iron Flea prospect was spud in late May 2020. On June 12, 2020, the target drilling depth was reached, and the prospect was determined unsuccessful. No further evaluation of that prospect is anticipated. As of March 31, 2020, t he Company paid approximately $7.2 million in costs associated with the drilling of the Iron Flea prospect, of which $7.1 million was escrowed for the benefit of the turnkey drilling and is currently included in the Companys consolidated balance sheet in Deposits and other. These costs will be expensed as exploration expense in the second quarter of 2020. Impact of the COVID-19 Pandemic A novel strain of the coronavirus ("COVID-19") surfaced in late 2019 and has spread around the world, including to the United States. In March 2020, the World Health Organization declared COVID-19 a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The COVID-19 pandemic has significantly affected the global economy, disrupted global supply chains and created significant volatility in the financial markets. In addition, the COVID-19 pandemic has resulted in travel restrictions, business closures and other restrictions that have disrupted the demand for oil throughout the world and, when combined with the oil supply increase attributable to the battle for market share among the Organization of Petroleum Exporting Countries (OPEC), Russia and other oil producing nations, resulted in oil prices declining significantly beginning in late February 2020. The length of this demand disruption is unknown, and there is significant uncertainty regarding the long-term impact to global oil demand, which is negatively impacting the Company's results of operations and planned 2020 capital activities. Due to the extreme volatility in oil prices, the Company has suspended any further plans for onshore drilling in 2020.