FORM 10-K CONTANGO OIL & GAS COMPANY

CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued)
Holders of common stock and holders of Series E preferred stock vote as one class for the election of
directors and most other matters. Upon any liquidation or dissolution of the Company, the holders of common stock
are entitled to receive a pro rata share of all of the assets remaining available for distribution to shareholders after
settlement of all liabilities and liquidating preferences of preferred stockholders.
During the quarter ended March 31, 2008, four Series E preferred stockholders voluntarily elected to
convert a total of 2,400 shares of Series E preferred stock to 315,786 shares of our common stock. The converted
shares of Series E preferred stock had a face value of $12.0 million. During the quarter ended June 30, 2008, the
final three Series E preferred stockholders voluntarily elected to convert a total of 3,600 shares of Series E preferred
stock to 473,682 shares of our common stock. The converted shares of Series E preferred stock had a face value of
$18.0 million.
11. Income Taxes
Actual income tax expense (benefit) from continuing operations differs from income tax expense (benefit)
from continuing operations computed by applying the U.S. federal statutory corporate rate of 35 percent to pretax
income (loss) as follows:
Year Ended June 30,
2009 2008 2007
Provision (benefit) at statutory tax rate…………………………… $ 32,482,689 35.0% $ 47,205,069 35.0% $ (539,099) (35.0)%
State income tax provision, net of federal benefit………………… 4,120,324 4.44% 1,526,658 1.13% - -
Permanent differences …………………………………………… 343,468 0.37% 2,393,765 1.78% 13,604 0.9%
Other……………………………………………………………… - - 524,930 0.39% 62,926 4.09%
Income tax provision (benefit)…………………………………… $ 36,946,481 39.81% $ 51,650,422 38.30% $ (462,569) (30.03)%
The provision (benefit) for income taxes for the periods indicated are comprised of the following:
Year Ended June 30,
2009 2008 2007
Current:
Federal………………………………………………… $ 31,224,546 $ 25,364,147 $ (1,155,387)
State…………………………………………………… 6,947,472 - -
Total………………………………………………… $ 38,172,018 $ 25,364,147 $ (1,155,387)
Deferred:
Federal………………………………………………… $ (617,027) $ 23,937,570 $ 692,818
State…………………………………………………… (608,510) 2,348,705 -
Total………………………………………………… $ (1,225,537) $ 26,286,275 $ 692,818
Total:
Federal………………………………………………… $ 30,607,519 $ 49,301,717 $ (462,569)
State…………………………………………………… 6,338,962 2,348,705 -
Total………………………………………………… $ 36,946,481 $ 51,650,422 $ (462,569)
DB2/21043537.7 F-18