##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 001-16317
 CONTANGO OIL & GAS COMPANY
  DELAWARE
    
    95-4079863(State or other jurisdiction of
    
    (IRS Employer Identification No.)incorporation or organization)
 3700 BUFFALO SPEEDWAY, SUITE 960
HOUSTON, TEXAS 77098
 (713) 960-1901
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o
 Yes o No þ




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##### 



CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008
 TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1. Consolidated Financial StatementsConsolidated Balance Sheets as of September 30, 2008 and June 30, 2008
    
    
    3Consolidated Statements of Operations for the three months ended
September 30, 2008 and 2007
    
    
    5Consolidated Statements of Cash Flows for the three months ended
September 30, 2008 and 2007
    
    
    6Consolidated Statement of Shareholders Equity for the three months ended
September 30, 2008 and 2007
    
    
    7Notes to the Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    14Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    37Item 4. Controls and Procedures
    
    
    37PART II  OTHER INFORMATIONItem 1A. Risk Factors
    
    
    38Item 5. Other Information
    
    
    38Item 6.
Exhibits
    
    
    39Exhibit 23.1Exhibit 31.1Exhibit 32.1
  All references in this Form 10-Q to the Company, Contango, we, us or our are to
Contango Oil & Gas Company and its wholly-owned Subsidiaries. Unless otherwise noted, all
information in this Form 10-Q relating to natural gas and oil reserves and the estimated future net
cash flows attributable to those reserves are based on estimates prepared by independent engineers
and are net to our interest.
  2




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CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 ASSETS
 September 30,
    
    
    June 30,2008
    
    
    2008(Unaudited)CURRENT ASSETS:Cash and cash equivalents
    
    $
    121,847,841
    
    
    $
    59,884,574Inventory tubulars
    
    
    334,797
    
    
    
    334,797Accounts receivable:Trade receivables
    
    
    13,361,527
    
    
    
    72,343,761Advances to affiliates
    
    
    5,192,685
    
    
    
    5,754,516Joint interest billings receivable
    
    
    4,754,109
    
    
    
    18,019,847Prepaid capital costs
    
    
    1,264,278
    
    
    
    1,264,278Other
    
    
    1,199,996
    
    
    
    1,147,345Total current assets
    
    
    147,955,233
    
    
    
    158,749,118PROPERTY AND EQUIPMENT:Natural gas and oil properties, successful efforts method of accounting:Proved properties
    
    
    463,161,396
    
    
    
    442,630,193Unproved properties
    
    
    7,915,297
    
    
    
    7,591,447Furniture and equipment
    
    
    281,125
    
    
    
    278,737Accumulated depreciation, depletion and amortization
    
    
    (19,609,763
    )
    
    
    (13,134,511
    )Total property and equipment, net
    
    
    451,748,055
    
    
    
    437,365,866OTHER ASSETS:Cash and other assets held by affiliates
    
    
    4,018,679
    
    
    
    3,299,002Other
    
    
    195,819
    
    
    
    559,764Total other assets
    
    
    4,214,498
    
    
    
    3,858,766TOTAL ASSETS
    
    $
    603,917,786
    
    
    $
    599,973,750
   3




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##### Table of Contents



CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 LIABILITIES AND SHAREHOLDERS EQUITY
 September 30,
    
    
    June 30,2008
    
    
    2008(Unaudited)CURRENT LIABILITIES:Accounts payable
    
    $
    13,307,712
    
    
    $
    22,990,887Royalties and working interests payable
    
    
    47,475,908
    
    
    
    66,606,414Accrued liabilities
    
    
    2,151,718
    
    
    
    10,334,008Joint interest advances
    
    
    5,599,408
    
    
    
    15,666,389Accrued exploration and development
    
    
    21,471,013
    
    
    
    3,082,399Advances from affiliates
    
    
    
    
    
    
    2,965,022Payable to purchaser
    
    
    7,732,115
    
    
    
    Debt of affiliates
    
    
    3,344,519
    
    
    
    3,261,177Income tax payable
    
    
    17,117,668
    
    
    
    3,463,176Other current liabilities
    
    
    2,487,376
    
    
    
    466,232Total current liabilities
    
    
    120,687,437
    
    
    
    128,835,704LONG-TERM DEBT
    
    
    
    
    
    
    15,000,000DEFERRED TAX LIABILITY
    
    
    114,320,315
    
    
    
    112,189,684ASSET RETIREMENT OBLIGATION
    
    
    1,991,609
    
    
    
    1,949,881SHAREHOLDERS EQUITY:Common stock, $0.04 par value, 50,000,000 shares authorized,
19,609,246 shares issued and 16,880,792 outstanding at September 30, 2008,
19,404,746 shares issued and 16,819,746 outstanding at June 30, 2008
    
    
    784,369
    
    
    
    776,189Additional paid-in capital
    
    
    74,928,760
    
    
    
    73,030,926Treasury stock at cost (2,728,454 shares at September 30, 2008;
2,585,000 shares at June 30, 2008)
    
    
    (14,750,342
    )
    
    
    (6,843,900
    )Retained earnings
    
    
    305,955,638
    
    
    
    275,035,266Total shareholders equity
    
    
    366,918,425
    
    
    
    341,998,481TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    603,917,786
    
    
    $
    599,973,750
   4




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CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three Months EndedSeptember 30,2008
    
    
    2007REVENUES:Natural gas, oil and liquids sales
    
    $
    72,720,807
    
    
    $
    9,095,743Total revenues
    
    
    72,720,807
    
    
    
    9,095,743EXPENSES:Operating expenses
    
    
    4,538,362
    
    
    
    723,846Exploration expenses
    
    
    8,092,139
    
    
    
    101,636Depreciation, depletion and amortization
    
    
    6,897,414
    
    
    
    600,240Impairment of natural gas and oil properties
    
    
    68,766
    
    
    
    General and administrative expenses
    
    
    1,926,087
    
    
    
    1,342,461Total expenses
    
    
    21,522,768
    
    
    
    2,768,183NET INCOME FROM CONTINUING OPERATIONS
BEFORE OTHER INCOME AND INCOME TAXES
    
    
    51,198,039
    
    
    
    6,327,560OTHER INCOME (EXPENSE):Interest expense (net of interest capitalized)
    
    
    (296,157
    )
    
    
    (829,860
    )Interest income
    
    
    424,152
    
    
    
    364,314Other income
    
    
    
    
    
    
    2,191,164NET INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES
    
    
    51,326,034
    
    
    
    8,053,178Provision for income taxes
    
    
    (20,405,662
    )
    
    
    (2,813,761
    )NET INCOME FROM CONTINUING OPERATIONS
    
    
    30,920,372
    
    
    
    5,239,417DISCONTINUED OPERATIONS (NOTE 8)Discontinued operations, net of income taxes
    
    
    
    
    
    
    932,053NET INCOME
    
    
    30,920,372
    
    
    
    6,171,470Preferred stock dividends
    
    
    
    
    
    
    450,000NET INCOME ATTRIBUTABLE TO COMMON STOCK
    
    $
    30,920,372
    
    
    $
    5,721,470NET INCOME PER SHARE:BasicContinuing operations
    
    $
    1.83
    
    
    $
    0.30Discontinued operations
    
    
    
    
    
    
    0.06Total
    
    $
    1.83
    
    
    $
    0.36DilutedContinuing operations
    
    $
    1.80
    
    
    $
    0.29Discontinued operations
    
    
    
    
    
    
    0.06Total
    
    $
    1.80
    
    
    $
    0.35WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:Basic
    
    
    16,857,198
    
    
    
    15,991,762Diluted
    
    
    17,211,298
    
    
    
    16,419,956
   5




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CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months EndedSeptember 30,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net income from continuing operations
    
    $
    30,920,372
    
    
    $
    5,239,417Plus income from discontinued operations, net of income taxes
    
    
    
    
    
    
    932,053Net income
    
    
    30,920,372
    
    
    
    6,171,470Adjustments to reconcile net income to net cash provided by operating activities:Depreciation, depletion and amortization
    
    
    6,897,414
    
    
    
    2,869,527Impairment of natural gas and oil properties
    
    
    68,766
    
    
    
    Exploration expenditures
    
    
    7,972,904
    
    
    
    316,392Deferred income taxes
    
    
    19,492,311
    
    
    
    3,119,467Tax benefit from exercise/cancellation of stock options
    
    
    (120,540
    )
    
    
    (60,848
    )Stock-based compensation
    
    
    363,679
    
    
    
    396,508Changes in operating assets and liabilities:Decrease (increase) in accounts receivable and other
    
    
    60,105,834
    
    
    
    (4,251,545
    )Increase in prepaid insurance
    
    
    (170,107
    )
    
    
    (399,346
    )Increase in interest receivable
    
    
    
    
    
    
    (250,000
    )Increase (decrease) in accounts payable and advances from joint owners
    
    
    (19,750,156
    )
    
    
    24,825,056Decrease in other accrued liabilities
    
    
    (18,638,479
    )
    
    
    (244,919
    )Increase (decrease) in income taxes payable
    
    
    (3,586,569
    )
    
    
    2,727,732Other
    
    
    
    
    
    
    (25,940
    )Net cash provided by operating activities
    
    
    83,555,429
    
    
    
    35,193,554CASH FLOWS FROM INVESTING ACTIVITIES:Natural gas and oil exploration and development expenditures
    
    
    (2,258,629
    )
    
    
    (41,075,249
    )Sale of short-term investments
    
    
    
    
    
    
    2,200,576Retirements (additions) to furniture and equipment
    
    
    32,826
    
    
    
    (9,102
    )Investment in Contango Venture Capital Corporation
    
    
    
    
    
    
    1,715,605Net cash used in investing activities
    
    
    (2,225,803
    )
    
    
    (37,168,170
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repayments under credit facility
    
    
    (15,000,000
    )
    
    
    Borrowings by affiliates
    
    
    
    
    
    
    4,697,050Preferred stock dividends
    
    
    
    
    
    
    (450,000
    )Tax benefit from exercise of stock options
    
    
    120,540
    
    
    
    60,848Purchase of common stock
    
    
    (5,908,694
    )
    
    
    Proceeds from exercised options, warrants and others
    
    
    1,421,795
    
    
    
    393,650Net cash provided by (used in) financing activities
    
    
    (19,366,359
    )
    
    
    4,701,548NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    61,963,267
    
    
    
    2,726,932CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    59,884,574
    
    
    
    6,177,618CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    121,847,841
    
    
    $
    8,904,550SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for taxes
    
    $
    4,500,000
    
    
    $
    Cash paid for interest
    
    $
    212,816
    
    
    $
    1,065,694
   6




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CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENT
OF SHAREHOLDERS EQUITY
                                            (Unaudited)
 TotalCommon Stock
    
    
    Paid-in
    
    
    Treasury
    
    
    Retained
    
    
    ShareholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Stock
    
    
    Earnings
    
    
    EquityBalance at June 30, 2008
    
    
    16,819,746
    
    
    $
    776,189
    
    
    $
    73,030,926
    
    
    $
    (6,843,900
    )
    
    $
    275,035,266
    
    
    $
    341,998,481Exercise of stock options
    
    
    204,500
    
    
    
    8,180
    
    
    
    1,413,615
    
    
    
    
    
    
    
    
    
    
    $
    1,421,795Tax benefit of
exercising stock options
    
    
    
    
    
    
    
    
    
    
    120,540
    
    
    
    
    
    
    
    
    
    
    $
    120,540Issuance of restricted
common stock
    
    
    
    
    
    
    
    
    
    
    78,375
    
    
    
    
    
    
    
    
    
    
    $
    78,375Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,920,372
    
    
    $
    30,920,372Treasury shares at cost
    
    
    (143,454
    )
    
    
    
    
    
    
    
    
    
    
    (7,906,442
    )
    
    
    
    
    
    $
    (7,906,442
    )Expense of stock options
    
    
    
    
    
    
    
    
    
    
    285,304
    
    
    
    
    
    
    
    
    
    
    $
    285,304Balance at September 30,
2008
    
    
    16,880,792
    
    
    $
    784,369
    
    
    $
    74,928,760
    
    
    $
    (14,750,342
    )
    
    $
    305,955,638
    
    
    $
    366,918,425
   7




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CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Unaudited)
 1. Basis of Presentation
  2. Summary of Significant Accounting Policies
  Successful Efforts Method of Accounting.
   Cash Equivalents.
 Principles of Consolidation.
  8




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CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)
   Recent Accounting Pronouncements.
 Present Fairly in Conformity With
Generally Accepted Accounting Principles. .
    9




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CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)
 Stock-Based Compensation.
  3. Natural Gas and Oil Exploration and Production Risk
   4. Customer Concentration Credit Risk
   10




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CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)
 5. Net Income per Common Share
  Three Months EndedSeptember 30, 2008WeightedAverage
    
    
    PerIncome
    
    
    Shares
    
    
    ShareIncome from continuing operations, including preferred dividends
    
    $
    30,920,372
    
    
    
    16,857,198
    
    
    $
    1.83Basic Earnings per Share:Net income attributable to common stock
    
    $
    30,920,372
    
    
    
    16,857,198
    
    
    $
    1.83Effect of Potential Dilutive Securities:Stock options
    
    
    
    
    
    
    352,030Restricted shares
    
    
    
    
    
    
    2,070Income from continuing operations
    
    $
    30,920,372
    
    
    
    17,211,298
    
    
    $
    1.80Diluted Earnings per Share:Net income, attributable to common stock
    
    $
    30,920,372
    
    
    
    17,211,298
    
    
    $
    1.80
 Three Months EndedSeptember 30, 2007WeightedAverage
    
    
    PerIncome
    
    
    Shares
    
    
    ShareIncome from continuing operations, including preferred dividends
    
    $
    4,789,417
    
    
    
    15,991,762
    
    
    $
    0.30Discontinued operations, net of income taxes
    
    $
    932,053
    
    
    
    15,991,762
    
    
    $
    0.06Basic Earnings per Share:Net income attributable to common stock
    
    $
    5,721,470
    
    
    
    15,991,762
    
    
    $
    0.36Effect of Potential Dilutive Securities:Stock options
    
    
    
    
    
    
    428,194Series E preferred stock
    
    
    
    (a)
    
    
    
    (a)Income from continuing operations
    
    $
    4,789,417
    
    
    
    16,419,956
    
    
    $
    0.29Discontinued operations, net of income taxes
    
    $
    932,053
    
    
    
    16,419,956
    
    
    $
    0.06Diluted Earnings per Share:Net income, attributable to common stock
    
    $
    5,721,470
    
    
    
    16,419,956
    
    
    $
    0.35
 (a)
    
    Anti-dilutive  11




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##### Table of Contents



CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)
 6. Long-Term Debt
  7. Other Income
  8. Sale of Properties  Discontinued Operations
    Operating Results:
 Three Months EndedSeptember 30,2007Revenues
    
    $
    5,032,271Operating expenses
    
    
    (950,799
    )Depletion expenses
    
    
    (2,269,287
    )Exploration expenses
    
    
    (309,753
    )Loss on sale of discontinued operations
    
    
    (68,505
    )Gain before income taxes
    
    
    1,433,927Provision for income taxes
    
    
    (501,874
    )Gain from discontinued operations, net of income taxes
    
    $
    932,053
  12




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##### Table of Contents



CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)
 9. Related Party Transactions
    10. Subsequent Events
    13




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Available Information
  
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Cautionary Statement about Forward-Looking Statements
  
    
    Our financial position
    
    Business strategy, including outsourcing
    
    Meeting our forecasts and budgets
    
    Anticipated capital expenditures
    
    Drilling of wells
    
    Natural gas and oil production and reserves
    
    Timing and amount of future discoveries (if any) and production of
natural gas and oil
    
    Operating costs and other expenses
    
    Cash flow and anticipated liquidity
    
    Prospect development
    
    Property acquisitions and sales
  
    
    Low and/or declining prices for natural gas and oil
    
    Natural gas and oil price volatility
    
    Operational constraints, start-up delays and production shut-ins at
both operated and non-operated production platforms, pipelines and gas processing
facilities
    
    The risks associated with acting as the operator in drilling deep high
pressure wells in the Gulf of Mexico
    
    The risks associated with exploration, including cost overruns and the
drilling of non-economic wells or dry holes, especially in prospects in which the
Company has made a large capital commitment relative to the size of the Companys
capitalization structure
    
    The timing and successful drilling and completion of natural gas and
oil wells
    
    Availability of capital and the ability to repay indebtedness when due
    
    Availability of rigs and other operating equipment
    
    Ability to raise capital to fund capital expenditures
    
    Timely and full receipt of sale proceeds from the sale of our
production
    
    The ability to find, acquire, market, develop and produce new natural
gas and oil properties
  14




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##### Table of Contents




    
    Interest rate volatility
    
    Uncertainties in the estimation of proved reserves and in the
projection of future rates of production and timing of development expenditures
    
    Operating hazards attendant to the natural gas and oil business
    
    Downhole drilling and completion risks that are generally not
recoverable from third parties or insurance
    
    Potential mechanical failure or under-performance of significant wells,
production facilities, processing plants or pipeline mishaps
    
    Weather
    
    Availability and cost of material and equipment
    
    Delays in anticipated start-up dates
    
    Actions or inactions of third-party operators of our properties
    
    Actions or inactions of third-party operators of pipelines or
processing facilities
    
    The ability to find and retain skilled personnel
    
    Strength and financial resources of competitors
    
    Federal and state regulatory developments and approvals
    
    Environmental risks
    
    Worldwide economic conditions
    
    The ability to construct and operate offshore infrastructure, including
pipeline and production facilities
    
    Drilling and operating costs, production rates and ultimate reserve
recoveries in our Eugene Island 10 (Dutch) and State of Louisiana (Mary Rose)
acreage.
  Overview
  Our Strategy
  Funding exploration prospects generated by Juneau Exploration, L.P., our alliance partner
 Using our limited capital availability to increase our reward/risk potential on selective
prospects.
  15




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Operating in the Gulf of Mexico.
 Sale of proved properties.
 Controlling general and administrative and geological and geophysical costs
 Structuring transactions to share risk
 Structuring incentives to drive behavior
 Exploration Alliance with JEX
  Offshore Gulf of Mexico Exploration Joint Ventures
   Impact of Hurricanes Gustav and Ike
   16




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Republic Exploration LLC
   Contango Offshore Exploration LLC
   Contango Operators, Inc
     17




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Contango
    
    
    NRIWell
    
    8/8ths DHC
    
    
    DHC WI
    
    
    (inclusive of REX and COE)Ship Shoal 263
    
    $
    20 million
    
    
    
    100.00
    %
    
    
    72.78
    %Eugene Island 56  West
    
    $
    12 million
    
    

    
    100.00
    %
    
    
    59.45
    %Eugene Island 56  East (1)
    
    $
    12 million
    
    

    
    100.00
    %
    
    
    59.45
    %$
    44 million
 (1)
    
    May not be drilled if Eugene Island 56  West is a dry hole  Contango Resources Company
  Current Activities
  rd
    18




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Offshore Properties
 Producing Properties.
 Area/Block
    
    WI
    
    
    NRI
    
    
    Status
    
    
    NotesContango Resources Company:Eugene Island 10 #1 (Dutch #1)
    
    
    47.05
    %
    
    
    38.1
    %
    
    Shut-inEugene Island 10 #2 (Dutch #2)
    
    
    47.05
    %
    
    
    38.1
    %
    
    Shut-inEugene Island 10 #3 (Dutch #3)
    
    
    47.05
    %
    
    
    38.1
    %
    
    Shut-inS-L 18640 #1 (Mary Rose #1)
    
    
    53.21
    %
    
    
    40.5
    %
    
    ProducingS-L 19266 #1 (Mary Rose #2)
    
    
    53.21
    %
    
    
    38.7
    %
    
    ProducingS-L 19266 #2 (Mary Rose #3)
    
    
    53.21
    %
    
    
    38.7
    %
    
    ProducingS-L 18860 #1 (Mary Rose #4)
    
    
    34.58
    %
    
    
    25.5
    %
    
    ProducingRepublic Exploration LLCEugene Island 113B
    
    
    0.0
    %
    
    
    3.3
    %
    
    Shut-in
    
    Farmed outWest Delta 36
    
    
    25.0
    %
    
    
    20.0
    %
    
    Shut-in
    
    Farmed outContango Offshore Exploration LLC:Grand Isle 72
    
    
    50.0
    %
    
    
    40.0
    %
    
    ProducingShip Shoal 358, A-3 well
    
    
    10.0
    %
    
    
    7.7
    %
    
    Shut-in
  19




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##### Table of Contents



Leases.
 Area/Block
    
    WI
    
    
    Lease Date
    
    
    Expiration Date
    
    
    Status
    
    
    NotesContango Resources Company:S-L 19266 #3 (Eloise North #1)
    
    
    36.90
    %
    
    Feb 07
    
    Feb 12
    
    CompletingS-L 19261
    
    
    53.21
    %
    
    Feb 07
    
    Feb 12S-L 19396
    
    
    53.21
    %
    
    Jun 07
    
    Jun 12Eugene Island 11
    
    
    53.21
    %
    
    Dec 07
    
    
    (1)Contango Operators, Inc.:Grand Isle 63
    
    
    25.00
    %
    
    May-04
    
    May-09Grand Isle 73
    
    
    25.00
    %
    
    May-04
    
    May-09West Delta 43
    
    
    35.00
    %
    
    May-04
    
    May-09
    
    Dry HoleShip Shoal 14
    
    
    50.00
    %
    
    May-06
    
    May-11Ship Shoal 25
    
    
    50.00
    %
    
    May-06
    
    May-11South Marsh Island 57
    
    
    50.00
    %
    
    May-06
    
    May-11South Marsh Island 59
    
    
    50.00
    %
    
    May-06
    
    May-11South Marsh Island 75
    
    
    50.00
    %
    
    May-06
    
    May-11South Marsh Island 282
    
    
    50.00
    %
    
    May-06
    
    May-11Ship Shoal 263
    
    
    25.00
    %
    
    Jan-06
    
    Jan-11Grand Isle 70
    
    
    3.65
    %
    
    Jun-06
    
    Jun-11West Delta 77
    
    
    50.00
    %
    
    Jun-06
    
    Jun-11
    
    Dry HoleVermilion 194
    
    
    50.00
    %
    
    Jul-06
    
    Jul-11Republic Exploration LLCSouth Timbalier 191
    
    
    50.00
    %
    
    May-04
    
    May-09Vermilion 36
    
    
    100.00
    %
    
    May-04
    
    May-09Vermilion 109
    
    
    100.00
    %
    
    May-04
    
    May-09Vermilion 134
    
    
    100.00
    %
    
    May-04
    
    May-09West Cameron 179
    
    
    100.00
    %
    
    May-04
    
    May-09West Cameron 185
    
    
    100.00
    %
    
    May-04
    
    May-09West Cameron 200
    
    
    100.00
    %
    
    May-04
    
    May-09West Delta 18
    
    
    100.00
    %
    
    May-04
    
    May-09West Delta 33
    
    
    100.00
    %
    
    May-04
    
    May-09West Delta 34
    
    
    100.00
    %
    
    May-04
    
    May-09West Delta 43
    
    
    30.00
    %
    
    May-04
    
    May-09
    
    Dry HoleShip Shoal 220
    
    
    50.00
    %
    
    Jun-04
    
    Jun-09South Timbalier 240
    
    
    50.00
    %
    
    Jun-04
    
    Jun-09West Cameron 133
    
    
    100.00
    %
    
    Jun-04
    
    Jun-09West Cameron 80
    
    
    100.00
    %
    
    Jun-04
    
    Jun-09West Cameron 167
    
    
    100.00
    %
    
    Jun-04
    
    Jun-09Eugene Island 76
    
    
    0.00
    %
    
    Jul-04
    
    Jul-09
    
    Depleted
    
    Farmed outVermilion 130
    
    
    100.00
    %
    
    Jul-04
    
    Jul-09West Cameron 107
    
    
    100.00
    %
    
    May-05
    
    May-10Eugene Island 168
    
    
    50.00
    %
    
    Jun-05
    
    Jun-10Vermilion 73
    
    
    0.00
    %
    
    Jul-05
    
    Jul-10
    
    Dry Hole
    
    Farmed outHigh Island A243
    
    
    75.00
    %
    
    Jan-06
    
    Jan-11
  20




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##### Table of Contents



Area/Block
    
    WI
    
    
    Lease Date
    
    
    Expiration Date
    
    
    Status
    
    
    NotesRepublic Exploration LLC (continued)South Marsh Island 57
    
    
    50.00
    %
    
    May-06
    
    May-11South Marsh Island 59
    
    
    50.00
    %
    
    May-06
    
    May-11South Marsh Island 75
    
    
    50.00
    %
    
    May-06
    
    May-11South Marsh Island 282
    
    
    50.00
    %
    
    May-06
    
    May-11Ship Shoal 14
    
    
    50.00
    %
    
    May-06
    
    May-11Ship Shoal 25
    
    
    50.00
    %
    
    May-06
    
    May-11West Delta 77
    
    
    50.00
    %
    
    Jun-06
    
    Jun-11
    
    Dry HoleVermilion 154
    
    
    
    (2)
    
    Jul-06
    
    Jul-11
    
    
    (3)
    
    
    Farmed outVermilion 194
    
    
    50.00
    %
    
    Jul-06
    
    Jul-11High Island A196
    
    
    100.00
    %
    
    Nov-06
    
    Nov-11High Island A197
    
    
    100.00
    %
    
    Nov-06
    
    Nov-11High Island A198
    
    
    100.00
    %
    
    Nov-06
    
    Nov-11
    
    Dry HoleHigh Island 263
    
    
    100.00
    %
    
    Jan-08
    
    Jan-13High Island A38
    
    
    100.00
    %
    
    Jan-08
    
    Jan-13Eugene Island 56
    
    
    100.00
    %
    
    Jul-08
    
    Jul-13Contango Offshore Exploration LLC:East Breaks 283
    
    
    100.00
    %
    
    Dec-03
    
    Dec-11East Breaks 369
    
    
    0.00
    %
    
    Dec-03
    
    Dec-08
    
    Dry Hole
    
    Farmed outEast Breaks 370
    
    
    0.00
    %
    
    Dec-03
    
    Dec-08
    
    
    (3)
    
    
    Farmed outHigh Island A16
    
    
    100.00
    %
    
    Dec-03
    
    Dec-08South Timbalier 191
    
    
    50.00
    %
    
    May-04
    
    May-09Grand Isle 63
    
    
    50.00
    %
    
    May-04
    
    May-09Grand Isle 73
    
    
    50.00
    %
    
    May-04
    
    May-09Ship Shoal 220
    
    
    50.00
    %
    
    Jun-04
    
    Jun-09South Timbalier 240
    
    
    50.00
    %
    
    Jun-04
    
    Jun-09Viosca Knoll 118
    
    
    50.00
    %
    
    Jun-04
    
    Jun-09Vermilion 154
    
    
    (2
    )
    
    Jul-04
    
    Jul-09
    
    
     (3)
    
    
    Farmed outViosca Knoll 475
    
    
    100.00
    %
    
    May-05
    
    May-10Eugene Island 168
    
    
    50.00
    %
    
    Jun-05
    
    Jun-10East Breaks 366
    
    
    100.00
    %
    
    Nov-05
    
    Nov-15East Breaks 410
    
    
    100.00
    %
    
    Nov-05
    
    Nov-15East Breaks 167
    
    
    75.00
    %
    
    Dec-05
    
    Dec-10High Island A311
    
    
    75.00
    %
    
    Dec-05
    
    Dec-10East Breaks 166
    
    
    75.00
    %
    
    Jan-06
    
    Jan-11High Island A342
    
    
    75.00
    %
    
    Jan-06
    
    Jan-11Ship Shoal 263
    
    
    75.00
    %
    
    Jan-06
    
    Jan-11Viosca Knoll 383
    
    
    100.00
    %
    
    Jan-06
    
    Jan-11Grand Isle 70
    
    
    45.10
    %
    
    Jun-06
    
    Jun-11Viosca Knoll 119
    
    
    50.00
    %
    
    Jun-06
    
    Jun-11
 (1)
    
    Held by Right-of-Use-and-Easement(2)
    
    REX and COE will split a 25% back-in WI after payout(3)
    
    Not drilled. Lease is in the process of being assigned back to the Company  21




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##### Table of Contents



Application of Critical Accounting Policies and Managements Estimates
  Successful Efforts Method of Accounting.
 Reserve Estimates.
  22




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##### Table of Contents



Impairment of Natural Gas and Oil Properties.
 Stock-Based Compensation.
  23




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##### Table of Contents



MD&A Summary Data
  Three Months EndedSeptember 30,2008
    
    
    2007
    
    
    Change($000)Revenues:Natural gas, oil and NGL sales
    
    $
    72,721
    
    
    $
    9,096
    
    
    
    699
    %Total revenues
    
    $
    72,721
    
    
    $
    9,096
    
    
    
    699
    %Production:Natural gas (million cubic feet)
    
    
    4,859
    
    
    
    1,269
    
    
    
    283
    %Oil and condensate (thousand barrels)
    
    
    117
    
    
    
    37
    
    
    
    216
    %Natural gas liquids (thousand gallons)
    
    
    704
    
    
    
    379
    
    
    
    86
    %Total (million cubic feet equivalent)
    
    
    5,662
    
    
    
    1,545
    
    
    
    266
    %Natural gas (million cubic feet per day)
    
    
    52.8
    
    
    
    13.8
    
    
    
    283
    %Oil and condensate (thousand barrels per day)
    
    
    1.3
    
    
    
    0.4
    
    
    
    225
    %Natural gas liquids (thousand gallons per day)
    
    
    7.7
    
    
    
    4.1
    
    
    
    86
    %Total (million cubic feet equivalent per day)
    
    
    61.7
    
    
    
    16.8
    
    
    
    267
    %Average Sales Price:Natural gas (per thousand cubic feet)
    
    $
    11.60
    
    
    $
    5.60
    
    
    
    107
    %Oil and condensate (per barrel)
    
    $
    126.16
    
    
    $
    54.37
    
    
    
    132
    %Natural gas liquids (per gallon)
    
    $
    2.18
    
    
    $
    1.15
    
    
    
    90
    %Operating expenses
    
    $
    4,538
    
    
    $
    724
    
    
    
    527
    %Exploration expenses
    
    $
    8,092
    
    
    $
    102
    
    
    
    7833
    %Depreciation, depletion and amortization
    
    $
    6,897
    
    
    $
    600
    
    
    
    1050
    %Impairment of natural gas and oil properties
    
    $
    69
    
    
    $
    
    
    
    
    100
    %General and administrative expenses
    
    $
    1,926
    
    
    $
    1,342
    
    
    
    44
    %Interest expense, net of interest capitalized
    
    $
    296
    
    
    $
    830
    
    
    
    -64
    %Interest income
    
    $
    424
    
    
    $
    364
    
    
    
    16
    %Other income
    
    $
    
    
    
    $
    2,191
    
    
    
    -100
    %
 Three Months Ended September 30, 2008 Compared to Three Months Ended September 30, 2007
 Natural Gas, Oil and Natural Gas Liquids (NGL) Sales.
  24




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##### Table of Contents



Natural Gas, Oil and NGL Production and Average Sales Prices.
 Operating Expenses.
 Exploration Expense.
 Depreciation, Depletion and Amortization.
 Impairment of Natural Gas and Oil Properties.
 General and Administrative Expenses.
    25




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##### Table of Contents



Interest Expense.
 Interest Income.
 Other Income.
 Production, Prices, Operating Expenses, and Other
 Three Months EndedSeptember 30,2008
    
    
    2007(Dollar amounts in 000s,except per Mcfe amounts)Production Data:Natural gas (million cubic feet)
    
    
    4,859
    
    
    
    1,269Oil and condensate (thousand barrels)
    
    
    117
    
    
    
    37Natural gas liquids (thousand gallons)
    
    
    704
    
    
    
    379Total (million cubic feet equivalent)
    
    
    5,662
    
    
    
    1,545Natural gas (million cubic feet per day)
    
    
    52.8
    
    
    
    13.8Oil and condensate (thousand barrels per day)
    
    
    1.3
    
    
    
    0.4Natural gas liquids (thousand gallons per day)
    
    
    7.7
    
    
    
    4.1Total (million cubic feet equivalent per day)
    
    
    61.7
    
    
    
    16.8Average Sales Price:Natural gas (per thousand cubic feet)
    
    $
    11.60
    
    
    $
    5.60Oil and condensate (per barrel)
    
    $
    126.16
    
    
    $
    54.37Natural gas liquids (per gallon)
    
    $
    2.18
    
    
    $
    1.15Selected data per Mcfe:Lease operating expenses (including severence taxes)
    
    $
    0.80
    
    
    $
    0.47General and administrative expenses
    
    $
    0.34
    
    
    $
    0.87Depreciation, depletion and amortization of
natural gas and oil properties
    
    $
    1.13
    
    
    $
    0.30
 Capital Resources and Liquidity
 Cash From Operating Activities.
  26




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##### Table of Contents



Cash From Investing Activities.
 Cash From Financing Activities.
 Capital Budget.
      27




---



##### Table of Contents



Natural Gas and Oil Reserves
   ProvedReserves as ofSeptember 30, 2008Natural Gas (MMcf)
    
    
    288,954Oil, Condensate and Natural Gas Liquids (MBbls)
    
    
    12,821Total proved reserves (Mmcfe)
    
    
    365,880Pre-tax net present value, SEC guidelines ($000)
    
    $
    1,779,057
   Share Repurchase Program
   Credit Facility
   28




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##### Table of Contents



Risk Factors
 In addition to the other information set forth elsewhere in this Form 10-Q and in our annual
report on Form 10-K , you should carefully consider the following factors when evaluating the
Company. An investment in the Company is subject to risks inherent in our business. The trading
price of the shares of the Company is affected by the performance of our business relative to,
among other things, competition, market conditions and general economic and industry conditions.
The value of an investment in the Company may decrease, resulting in a loss. The risk factors
listed below are not all inclusive.
 We have no ability to control the prices that we receive for natural gas and oil. Natural gas and
oil prices fluctuate widely, and a substantial or extended decline in natural gas and oil prices
would adversely affect our
revenues, profitability and growth and could have a material adverse effect on the business, the
results of operations and financial condition of the Company.
  
    
    The domestic and foreign supply of natural gas and oil.
    
    Overall economic conditions.
    
    The level of consumer product demand.
    
    Adverse weather conditions and natural disasters.
    
    The price and availability of competitive fuels such as heating oil and
coal.
    
    Political conditions in the Middle East and other natural gas and oil
producing regions.
    
    The level of LNG imports.
    
    Domestic and foreign governmental regulations.
    
    Potential price controls and special taxes.
    
    Access to pipelines and gas processing plants.
  We depend on the services of our chairman, chief executive officer and chief financial officer, and
implementation of our business plan could be seriously harmed if we lost his services.
  We are highly dependent on the technical services provided by JEX and could be seriously harmed if
JEX terminated its services with us or became otherwise unavailable.
   29




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##### Table of Contents



Our ability to successfully execute our business plan is dependent on our ability to obtain
adequate financing.
   
    
    Our financial condition.
    
    The prevailing market price of natural gas and oil.
    
    The type of projects in which we are engaging.
    
    The lead time required to bring any discoveries to production.
 We frequently obtain capital through the sale of our producing properties.
  We assume additional risk as Operator in drilling high pressure wells in the Gulf of Mexico.
    30




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##### Table of Contents



We rely on third-party operators to operate and maintain some of our production pipelines and
processing facilities and, as a result, we have limited control over the operations of such
facilities. The interests of an operator may even differ from our interests.
  Repeated production shut-ins can possibly damage our well bores.
  Concentrating our capital investment in the Gulf of Mexico increases our exposure to risk.
  Natural gas and oil reserves are depleting assets and the failure to replace our reserves would
adversely affect our production and cash flows.
   31




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##### Table of Contents



Reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material
inaccuracies in these reserve estimates or underlying assumptions could materially affect the
quantities and present values of our reserves.
     The Companys revenue activities are significantly concentrated in one field.
  We rely on the accuracy of the estimates in the reservoir engineering reports provided to us by our
outside engineers.
   32




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##### Table of Contents



Exploration is a high risk activity, and our participation in drilling activities may not be
successful.
  
    
    Unexpected drilling conditions.
    
    Blowouts, fires or explosions with resultant injury, death or
environmental damage.
    
    Pressure or irregularities in formations.
    
    Equipment failures or accidents.
    
    Tropical storms, hurricanes and other adverse weather conditions.
    
    Compliance with governmental requirements and laws, present and future.
    
    Shortages or delays in the availability of drilling rigs and the
delivery of equipment.
    
    Our turnkey drilling contracts reverting to a day rate contract which
would significantly increase the cost and risk to the Company.
    
    Problems at third-party operated platforms, pipelines and gas
processing facilities over which we have no control.
   The natural gas and oil business involves many operating risks that can cause substantial losses.
  
    
    Blowouts, fires and explosions.
    
    Surface cratering.
    
    Uncontrollable flows of underground natural gas, oil or formation
water.
    
    Natural disasters.
    
    Pipe and cement failures.
    
    Casing collapses.
    
    Stuck drilling and service tools.
    
    Abnormal pressure formations.
    
    Environmental hazards such as natural gas leaks, oil spills, pipeline
ruptures or discharges of toxic gases.
    
    Capacity constraints, equipment malfunctions and other problems at
third-party operated platforms, pipelines and gas processing plants over which we
have no control.
    
    Repeated shut-ins of our well bores could significantly damage our well
bores.
  
    
    Injury or loss of life.
    
    Reservoir damage.
    
    Severe damage to and destruction of property or equipment.
    
    Pollution and other environmental damage.
    
    Clean-up responsibilities.
    
    Regulatory investigations and penalties.
    
    Suspension of our operations or repairs necessary to resume operations.
  33




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##### Table of Contents



Not hedging our production may result in losses.
  Our ability to market our natural gas and oil may be impaired by capacity constraints and equipment
malfunctions on the platforms, gathering systems, pipelines and gas plants that transport and
process our natural gas and oil.
  We may not have title to our leased interests and if any lease is later rendered invalid, we may
not be able to proceed with our exploration and development of the lease site.
   34




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##### Table of Contents



Competition in the natural gas and oil industry is intense, and we are smaller and have a more
limited operating history than many of our competitors.
  We are subject to complex laws and regulations, including environmental regulations that can
adversely affect the cost, manner or feasibility of doing business.
  
    
    Require that we obtain permits before commencing drilling.
    
    Restrict the substances that can be released into the environment in
connection with drilling and production activities.
    
    Limit or prohibit drilling activities on protected areas, such as
wetlands or wilderness areas.
    
    Require remedial measures to mitigate pollution from former operations,
such as plugging abandoned wells.
  We cannot control the activities on properties we do not operate.
  
    
    Timing and amount of capital expenditures.
    
    The operators expertise and financial resources.
    
    Approval of other participants in drilling wells.
    
    Selection of technology.
  35




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##### Table of Contents



We are highly dependent on our management team, JEX, exploration partners and third-party
consultants and any failure to retain the services of such parties could adversely affect our
ability to effectively manage our overall operations or successfully execute current or future
business strategies.
  Acquisition prospects are difficult to assess and may pose additional risks to our operations.
  
    
    Recoverable reserves.
    
    Exploration potential.
    
    Future natural gas and oil prices.
    
    Operating costs.
    
    Potential environmental and other liabilities and other factors.
    
    Permitting and other environmental authorizations required for our
operations.
   
    
    Problems integrating the purchased operations, personnel or
technologies.
    
    Unanticipated costs.
    
    Diversion of resources and management attention from our exploration
business.
    
    Entry into regions or markets in which we have limited or no prior
experience.
    
    Potential loss of key employees, particularly those of the acquired
organization.
 Anti-takeover provisions of our certificate of incorporation, bylaws and Delaware law could
adversely effect a potential acquisition by third-parties that may ultimately be in the financial
interests of our stockholders.
  
    
    Designate the terms of and issue new series of preferred stock.
    
    Limit the personal liability of directors.
    
    Limit the persons who may call special meetings of stockholders.
    
    Prohibit stockholder action by written consent.
    
    Establish advance notice requirements for nominations for election of
the board of directors and for proposing matters to be acted on by stockholders at
stockholder meetings.
    
    Require us to indemnify directors and officers to the fullest extent
permitted by applicable law.
    
    Impose restrictions on business combinations with some interested
parties.
  36




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##### Table of Contents



Our common stock is thinly traded.
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate and Credit Rating Risks.
  Commodity Risk
 
 Item 4. Controls and Procedures
    37




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1A. Risk Factors
  
 Item 5. Other Information
       38




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##### Table of Contents



Item 6. Exhibits
 (a) Exhibits:
  ExhibitNumber
    
    Description3.1
    
    
    Certificate of Incorporation of Contango Oil & Gas Company. (1)3.2
    
    
    Bylaws of Contango Oil & Gas Company. (1)3.3
    
    
    Agreement of Plan of Merger of Contango Oil & Gas Company, a Delaware corporation, and
Contango Oil & Gas Company, a Nevada corporation. (1)3.4
    
    
    Amendment to the Certificate of Incorporation of Contango Oil & Gas Company. (2)4.1
    
    
    Facsimile of common stock certificate of Contango Oil & Gas Company. (3)4.2
    
    
    Certificate of Designation of Series F Junior Preferred Stock of Contango Oil & Gas Company
dated September 30, 2008. (4)4.3
    
    
    Rights Agreement, dated as of September 30, 2008, between Contango Oil & Gas Company and
Computershare Trust Company, N.A., as Rights Agent. (4)10.1
    
    
    $50,000,000 Credit Agreement dated as of October 3, 2008 between Contango Oil
& Gas Company and Contango Resources Company, as Borrowers, Guaranty Bank, as administrative
agent and as issuing lender, and the lenders party thereto from time to time. (5)23.1
    
    
    Consent of William M. Cobb & Associates, Inc. 31.1
    
    
    Certification required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934. 32.1
    
    
    Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. 
 
 
    
    Filed herewith.1.
    
    Filed as an exhibit to the Companys report on Form 8-K, dated December 1, 2000, as
filed with the Securities and Exchange Commission on December 15, 2000.2.
    
    Filed as an exhibit to the Companys report on Form 10-QSB for the quarter ended
December 31, 2002, dated November 14, 2002, as filed with the Securities and Exchange
Commission.3.
    
    Filed as an exhibit to the Companys Form 10-SB Registration Statement, as filed with
the Securities and Exchange Commission on October 16, 1998.4.
    
    Filed as an exhibit to the Companys report on Form 8-K, dated September 30, 2008, as
filed with the Securities and Exchange Commission on October 1, 2008.5.
    
    Filed as an exhibit to the Companys report on Form 8-K, dated October 3, 2008, as
filed with the Securities and Exchange Commission on October 8, 2008.  39




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##### Table of Contents



SIGNATURES
  CONTANGO OIL & GAS COMPANYDate:  November 10, 2008
    By:
    /s/  KENNETH R. PEAKKenneth R. PeakChairman, Chief Executive Officer and
Chief Financial Officer
(Principal Executive and Financial Officer)Date:  November 10, 2008
    By:
    /s/  LESIA BAUTINALesia BautinaSenior Vice President and Controller
(Principal Accounting Officer)  40




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description3.1
    
    
    Certificate of Incorporation of Contango Oil & Gas Company. (1)3.2
    
    
    Bylaws of Contango Oil & Gas Company. (1)3.3
    
    
    Agreement of Plan of Merger of Contango Oil & Gas Company, a Delaware corporation, and
Contango Oil & Gas Company, a Nevada corporation. (1)3.4
    
    
    Amendment to the Certificate of Incorporation of Contango Oil & Gas Company. (2)4.1
    
    
    Facsimile of common stock certificate of Contango Oil & Gas Company. (3)4.2
    
    
    Certificate of Designation of Series F Junior Preferred Stock of Contango Oil & Gas Company
dated September 30, 2008. (4)4.3
    
    
    Rights Agreement, dated as of September 30, 2008, between Contango Oil & Gas Company and
Computershare Trust Company, N.A., as Rights Agent. (4)10.1
    
    
    $50,000,000 Credit Agreement dated as of October 3, 2008 between Contango Oil
& Gas Company and Contango Resources Company, as Borrowers, Guaranty Bank, as administrative
agent and as issuing lender, and the lenders party thereto from time to time. (5)23.1
    
    
    Consent of William M. Cobb & Associates, Inc. 31.1
    
    
    Certification required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934. 32.1
    
    
    Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. 
 
 
    
    Filed herewith.1.
    
    Filed as an exhibit to the Companys report on Form 8-K, dated December 1, 2000, as
filed with the Securities and Exchange Commission on December 15, 2000.2.
    
    Filed as an exhibit to the Companys report on Form 10-QSB for the quarter ended
December 31, 2002, dated November 14, 2002, as filed with the Securities and Exchange
Commission.3.
    
    Filed as an exhibit to the Companys Form 10-SB Registration Statement, as filed with
the Securities and Exchange Commission on October 16, 1998.4.
    
    Filed as an exhibit to the Companys report on Form 8-K, dated September 30, 2008, as
filed with the Securities and Exchange Commission on October 1, 2008.5.
    
    Filed as an exhibit to the Companys report on Form 8-K, dated October 3, 2008, as
filed with the Securities and Exchange Commission on October 8, 2008.  41