Contango Oil & Gas Company (AMEX:MCF) entered into a definitive merger agreement to acquire Mid-Con Energy Partners, LP (NasdaqCM:MCEP) from Goff Capital, Inc. and others for $42.8 million on October 25, 2020. The consideration is paid in all stock. Under the terms of the deal, Contango will pay Mid-Con shareholders 1.75 shares of Contango stock for each Mid-Con common stock. Contango Oil & Gas Company issued 25.4 million shares to Mid-Con Energy Partners. Contango Oil & Gas Company to assume existing outstanding debt under Mid-Con Energy Partners revolving credit facility. Upon closing, Contango shareholders will own about 87% of the combined company while Mid-Con shareholders will own about 13%. Contango Oil & Gas Company announced to sell 26.451988 million shares of common stock in a private placement and it expects to receive gross proceeds from the equity capital raise of approximately $39.7 million, which it intends to use in connection to this merger and general corporate purposes, including repayment of debt outstanding under its revolving credit facility and future producing acquisitions. Contango Oil & Gas Company is the surviving entity in the merger.

Upon termination, Mid-Con would be required to pay Contango a termination fee of $1.5 million, together with an expense reimbursement up to $1.5 million under specified circumstances. Upon termination, Contango would be required to pay Mid-Con a termination fee of $1.5 million, together with an expense reimbursement up to $1.5 million under specified circumstances. Contango's senior management team will run the combined company, and Contango's board of directors will remain unchanged. The combined company will be headquartered at Fort Worth, but will continue to maintain a presence in both the Houston and Oklahoma markets.

The obligation of the parties to complete the Merger is subject to customary closing conditions, including, among others, the receipt of the required approvals from Contango's shareholders and Mid-Con's unitholders, the absence of any law, order or injunction of a court or governmental entity of competent jurisdiction prohibiting the consummation of the Merger, the shares of Contango Common Stock issuable in connection with the Merger having been approved for listing on the NYSE American Stock Exchange, subject to official notice of issuance and Contango's registration statement on Form S-4 having been declared effective by the U.S. Securities and Exchange Commission, NYSE American and regulatory approvals.

The transaction has been unanimously approved by the conflicts committee of the board of directors of Mid-Con and by the full board of directors of Mid-Con, and by the disinterested directors of the board of directors of Contango and by Board of Directors of the General Partner. Contango Board and Mid-Con Board to recommend approval of the Contango stock issuance by Contango's stockholders. Additionally, Contango shareholders beneficially owning 81.8 million shares of Contango Common Stock in the aggregate entered into a Voting and Support Agreement with Mid-Con and Contango, pursuant to which each such shareholder has agreed to vote its Contango Common Stock in favor of the matters to be submitted to Contango's shareholders in connection with the Merger. On December 18, 2019, Mid-Con unitholders beneficially owning 8.1 million Mid-Con Common Units in the aggregate have irrevocably agreed to deliver a written consent approving the merger agreement and the transactions contemplated thereby. Voting agreements have been signed by over 50% of holders on both sides of the transaction, including Goff Capital. The Mid-Con consent process will conclude on January 6, 2021. The transaction is expected to close in late 2020 or early 2021. As on December 21, 2020, Contango and Mid-Con expect the closing of the merger to occur on January 21, 2021. The transaction will be accretive to Contango's reserve base.

Intrepid Partners, LLC acted as fairness opinion provider and financial advisor and Tull R. Florey and Hillary H. Holmes of Gibson, Dunn & Crutcher LLP acted as legal advisor to Contango. Petrie Partners, LLC acted as fairness opinion provider and financial advisor and Robert B. Robbins, Jessica Lutrin and Colleen Lamarre of Pillsbury Winthrop Shaw Pittman, LLP acted as legal advisor to Mid-Con. Cody Carper and Sean Ewen of Willkie Farr & Gallagher LLP acted as legal advisors to Intrepid Partners. Intrepid will receive $1 million for rendering the opinion and $1.7 million for the advisory services, which becomes payable upon the consummation of the merger. Petrie Partners received a work fee of $100,000, an opinion fee of $1,000,000 upon the rendering of its fairness opinion to the Mid-Con conflicts committee, and also entitled to a transaction fee of $1,500,000.