FORM 10-K CONTANGO OIL & GAS COMPANY

CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued)
15. Related Party Transactions
Effective September 1, 2008, COI purchased an interest in an existing offshore lease from Juneau
Exploration, L.P. (“JEX”) for $600,000.
On September 8, 2008, the Company purchased 21,754 shares of common stock from a member of its
board of directors for approximately $1.3 million, or $60.81 per share, which represented the closing price of the
Company’s common stock on that date.
During the fiscal year ended June 30, 2007, REX executed the REX Demand Note which was non-recourse
to Contango. Under the terms of the REX Demand Note, REX could borrow up to $50.0 million at a per annum rate
of 11.5% for the first advance, and a per annum rate of LIBOR plus 6.0% for each additional advance. As of April
1, 2008, REX had borrowed the entire $50.0 million available under the REX Demand Note. The Company was not
a party to or guarantor of the REX Demand Note. On April 3, 2008, the members of REX entered into the REX
LLC Agreement, effective as of April 1, 2008, to, among other things, distribute REX’s interest in Dutch and Mary
Rose to the individual members of REX or their designees. In connection with this distribution, REX repaid in full
all amounts owing by REX under the REX Demand Note, and all security interests and other liens granted in favor
of such private investment firm as security for the obligations under the REX Demand Note were released and
terminated. As a result of our proportionate consolidation of REX, the Company’s portion of such repayment was
approximately $22.5 million. For the fiscal year ended June 30, 2008, the Company’s proportionate share of such
interest expense was approximately $1.3 million.
During the fiscal year ended June 30, 2007, the Company executed a series of promissory notes with
Trulite (the “Trulite Notes”), whereby Trulite borrowed funds from the Company, agreeing to pay all accrued and
unpaid interest on the various due dates. On November 25, 2007, the Company entered into a subscription
agreement with Trulite pursuant to which both parties agreed to convert the aggregate principal balance of all five
outstanding promissory notes and all accrued but unpaid interest thereon into shares of Trulite common stock. The
Company converted $1,255,000 of principal and $101,540 of interest into 2,024,687 shares of Trulite common
stock. For the fiscal year ended June 30, 2008, the Company earned approximately $58,000 in interest income from
the five Trulite Notes. As discussed in Note 6 - Sale of Properties - Other, the Company sold its interest in Trulite
effective March 2008.
On February 13, 2008, the Company’s board of directors approved the purchase of an aggregate of 99,333
stock options from three officers of the Company and one member of its board of directors for approximately $5.9
million, in the aggregate. The board also approved the purchase of 10,000 shares of common stock from one
member of its board of directors for approximately $0.7 million. All purchases were completed during the three
months ended March 31, 2008. The Company does not have a program to repurchase shares of our common stock.
On March 31, 2006, COE executed a Promissory Note (the “COE Note”) to the Company to finance its
share of development costs in Grand Isle 72, in the aggregate principal amount of up to $2.8 million. The COE Note
is payable upon demand and bears interest at a per annum rate of 10%. The COE Note has been amended from time
to time and on April 24, 2007, the aggregate principal amount of the COE Note was increased to $5.0 million. As of
June 30, 2009, the outstanding principal balance under the COE Note was $4.3 million. For the fiscal year ended
June 30, 2009, the amount of interest income was approximately $0.5 million.
16. Share Repurchase Program
In September 2008, the Company’s board of directors approved a $100 million share repurchase program.
All shares are purchased in the open market from time to time by the Company or through privately negotiated
transactions. The purchases will be made subject to market conditions and certain volume, pricing and timing
restrictions to minimize the impact of the purchases upon the market. Repurchased shares of common stock become
authorized but unissued shares, and may be issued in the future for general corporate and other purposes. As of
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