Related Party Transactions

3 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Juneau Exploration L.P. In April 2012, the Company announced that Mr. Brad Juneau, the sole manager of the general partner of Juneau Exploration, L.P. ("JEX") , had joined the Company’s board of directors and that the Company had entered into an advisory agreement with JEX (the "Advisory Agreement"), whereby in addition to generating and evaluating offshore and onshore exploration prospects for the Company, JEX will direct Contango’s staff on operational matters including drilling, completions and production. Pursuant to the Advisory Agreement, JEX will be paid an annual fee of $2.0 million. In August 2012, the Company's Chairman and Chief Executive Officer, Mr. Kenneth R. Peak, took a six month leave of absence, and the Board of Directors of the Company appointed Mr. Juneau as President and Acting Chief Executive Officer of the Company. Mr. Peak remains the Company's Chairman.

JEX has historically participated with the Company in the drilling and development of certain prospects through participation agreements and joint operating agreements, which specify each participant’s working interest ("WI"), net revenue interest ("NRI"), and describe when such interests are earned, as well as allocate an overriding royalty interest ("ORRI") of up to 3.33% to benefit the employees of JEX, excluding Mr. Juneau, except where otherwise noted.

Republic Exploration LLC. In his capacity as sole manager of the general partner of JEX, Mr. Juneau also controls the activities of REX, an entity owned 34.4% by JEX, 32.3% by Contango, and 33.3% by a third party which contributed other assets to REX. REX generates and evaluates offshore exploration prospects and has historically participated with the Company in the drilling and development of certain prospects through participation agreements and joint operating agreements, which specify each participant’s working interest, net revenue interest, and describe when such interests are earned, as well as allocate an overriding royalty interest ("ORRI") of up to 3.33% to benefit the employees of JEX. The Company proportionately consolidates the results of REX in its consolidated financial statements.

As of September 30, 2012, Contango, JEX, REX and JEX employees owned the following interests in the Company's offshore wells.

	Contango				JEX				REX				JEX Employees
	WI		NRI		WI		NRI		WI		NRI		ORRI
Dutch #1 - #5	47.05	%	38.12	%	1.61	%	1.29	%	—	%	—	%	2.02%
Mary Rose #1	53.21	%	40.45	%	2.01	%	1.51	%	—	%	—	%	2.79%
Mary Rose #2 - #3	53.21	%	38.67	%	2.01	%	1.44	%	—	%	—	%	2.79%
Mary Rose #4	34.58	%	25.49	%	1.31	%	0.95	%	—	%	—	%	1.82%
Mary Rose #5	37.80	%	27.88	%	1.43	%	1.04	%	—	%	—	%	1.54%
Ship Shoal 263	100.00	%	80.00	%	—	%	—	%	—	%	—	%	3.33%
Vermilion 170	83.20	%	64.83	%	4.30	%	3.35	%	12.50	%	9.74	%	3.33%

Below is a summary of payments received from (paid to) JEX and REX in the ordinary course of business in our capacity as operator of the wells and platforms for the periods indicated. The Company made and received similar types of payments with other well owners (in thousands):

	Three months ended September 30,
	2012						2011
	JEX			REX			JEX			REX
Revenue payments as well owners	$	(1,133	)	$	(849	)	$	(1,283	)	$	(30	)
Joint interest billing receipts	220			91			247			1,082

Below is a summary of payments received from (paid to) JEX and REX as a result of specific transactions between the Company, JEX and REX. While these payments are in the ordinary course of business, the Company did not have similar transactions with other well owners (in thousands):

	Three months ended September 30,
	2012					2011
	JEX			REX		JEX			REX
Reimbursement of certain costs	$	(146	)	$	—	$	(5	)	$	(10	)
Prospect fees	—			—		(250		)	—
Payments under advisory agreement dated April 1, 2012	(667		)	—		—			—
REX distribution to members	—			323		—			—

As of September 30, 2012 and June 30, 2012, the Company's consolidated balance sheets included the following balances (in thousands):

	September 30, 2012						June 30, 2012
	JEX			REX			JEX			REX
Accounts receivable:
Trade receivables	$	6		$	1		$	20		$	18
Joint interest billings	151			142			158			92
Accounts payable:
Royalties and revenue payable	(722		)	(515		)	(813		)	(682		)
Joint interest billings	(257		)	—			—			—

In addition to the above, the Company paid Mr. Brad Juneau $28,000 during the three months ended September 30, 2012 for his services as a director of the Company.