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Mariner Energy Announces $431 Million 2009 Capital Budget and Operational Guidance With 20% Production Growth Target

Posted on: Wednesday, 17 December 2008, 18:57 CST

HOUSTON, Dec. 17 /PRNewswire-FirstCall/ -- Mariner Energy, Inc. (NYSE: ME) today announced that its Board of Directors has approved a 2009 capital budget for exploration and development expenditures of $431 million, approximately 70% less than estimated 2008 total capital expenditures. For the Gulf of Mexico, the budget includes the start-up of production at new fields and a diverse exploration program testing several high-potential prospects. Capital spending in the Permian Basin will focus on the delineation of recent discoveries and a modest continuation of infill development drilling activities. The budget, which is based on oil and natural gas prices of $55/bbl and $6/MMbtu, respectively, may be adjusted based upon exploration success and changes in commodity prices and industry costs.

Scott D. Josey, Chairman, Chief Executive Officer, and President of Mariner Energy said, "Despite a major reduction in our capital program and a challenging operating environment, we believe it is extraordinary that we expect to deliver production growth of approximately 20% and generate significant excess cash flow. Since we operate most of our properties and have minimal leasehold commitments in 2009, we have discretion over most of our capital spending for the year. Given current market conditions, we have elected to conserve capital, without sacrificing growth. I believe the company is well positioned to capitalize on opportunities that may materialize."

2009 Guidance

Mariner's performance guidance for 2009 is listed below. Factors that could materially affect the company's actual results are noted in the forward-looking statements section of this release.

Production: Mariner estimates that its full-year 2009 production will range from 135 Bcfe (billion cubic feet of natural gas equivalents) to 150 Bcfe.

Capital Expenditures: Mariner's 2009 capital program includes approximately 14 wells offshore (12 exploration and 2 development) and 30 wells onshore. The program is summarized in the table below. These amounts exclude hurricane-related expenses that the company plans to submit for insurance reimbursement and acquisitions.

Full-year 2009 CAPEX plan ($millions) Exploration Gulf of Mexico - Deepwater 104.0 Gulf of Mexico - Shelf 67.5 Geologic & Geophysical/Leasehold/Rentals 23.6 Development Gulf of Mexico - Deepwater 63.6 Gulf of Mexico - Shelf 112.0 Permian Basin 31.9 Capitalized Items 28.0 TOTAL CAPITAL EXPENDITURES 430.6

Cost Structure: Mariner expects its full-year 2009 unit costs to fall within the following ranges:

$ per Mcfe Lease Operating Expense (including workovers) 1.60 - 1.70 Severance and Ad Valorem Taxes 0.11 - 0.16 Transportation Expense 0.11 - 0.15 Depreciation, Depletion & Amortization 3.90 - 4.20 (including asset retirement obligation expense) Net General and Administrative Expense 0.25 - 0.35 Stock Compensation Expense 0.18 - 0.22

Conference call to discuss the program

A conference call has been scheduled for 11 a.m. Eastern Time (10 a.m. Central Time) on Thursday, December 18, to discuss the 2009 capital expense budget and guidance. To participate in the call, please dial (866) 804-6924 at least 10 minutes prior to the scheduled start time. International callers can dial (857) 350-1670. The conference pass code for both numbers is 94949775. The call also will be webcast live over the internet and can be accessed through the Investor Relations' Webcasts and Presentations section of Mariner's website at http://www.mariner-energy.com.

A telephonic replay of the call will be available through December 25, 2008 by dialing (888) 286-8010, pass code 4487 4695. International calls can dial 617-801-6888. An archive of the call will be available shortly after the call through January 31, 2009 on Mariner's website.

About Mariner Energy, Inc.

Mariner Energy is an independent oil and gas exploration, development, and production company headquartered in Houston, Texas, with principal operations in the Permian Basin and the Gulf of Mexico. For more information about Mariner, visit the company's website at www.mariner-energy.com.

Important Information Concerning Forward-looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, that address activities that Mariner assumes, plans, expects, believes, projects, estimates or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Our forward-looking statements generally are accompanied by words such as "may", "will", "estimate", "project", "predict", "believe", "expect", "anticipate", "potential", "plan", "goal" or other words that convey the uncertainty of future events or outcomes. Forward-looking statements in this press release are based on Mariner's current belief based on currently available information as to the outcome and timing of future events and assumptions that Mariner believes are reasonable. Mariner does not undertake to update its guidance, estimates or other forward-looking statements as conditions change or additional information becomes available. Mariner cautions that its forward-looking statements are subject to all of the risks and uncertainties normally incident to the exploration for and development, production and sale of oil and natural gas. These risks include, but are not limited to, price volatility, capital availability, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating future oil and gas production or reserves, and other risks described in the Annual Report on Form 10-K for the fiscal year ended December 31, 2007, and other documents filed by Mariner with the Securities and Exchange Commission (SEC). Any of these factors could cause Mariner's actual results and plans to differ materially from those in the forward-looking statements. Investors are urged to read the Annual Report on Form 10-K for the year ended December 31, 2007 and other documents filed by Mariner with the SEC.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities of Mariner.

SOURCE Mariner Energy, Inc.

Source: PR Newswire

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