I noticed oil leaking "behind" the oil filter and looked at the Mercury service manual and it shows a gasket behind the plate that the oil filter screws onto. looks like two bolts and a stud fasten it to the engine.
estimated time and cost to replace the oil filter bypass gasket on 1995 Mercury Cougar
between 1 to 1.5 hrs plus the part,i'm guessing 100-150 bucks.
ck estimator on this site