The old habits of wildcatters are hard to break. Once oil prices start to spike, gunning for acquisitions or production will inevitably lead to companies biting off more than they can chew. Again.
Living within cash flow is not the oil and gas industry’s strongest character trait.
Contango Oil & Gas Co. (NYSE MKT: MCF) plans to go the conservative route in 2017. Last year, its moves smacked of playing small ball—the basketball strategy of sacrificing height and strength for a lineup of agility, speed and flexibility.
Contango squeezed into the Permian Basin just that way. In July, the company ended a long hunt for a deal in the basin with the purchase of interests in about 5,000 net undeveloped acres. The company had been skimping on capex to make a move, reports by Seaport Global Securities suggest.