HOUSTON, Aug. 6 /PRNewswire-FirstCall/ -- Mariner Energy, Inc.
(NYSE:ME) today reported second quarter 2009 operating and
financial results. The company reported net income of $17.2 million
for the three-month period ended June 30, 2009, with fully diluted
earnings per share (EPS) of $0.19. For the same period in the prior
year, Mariner reported net income of $123.4 million with fully
diluted EPS of $1.39. Highlights for the second quarter 2009
include: -- Production commenced from the Geauxpher field on Garden
Banks Block 462 less than a year from discovery with initial gross
production rates of approximately 115 million cubic feet of natural
gas equivalent per day (MMcfe/d). The field, which is located in
water depths of 2,700 feet, is currently producing approximately
105 MMcfe/d. -- Success at Mariner's Deadwood exploration play in
West Texas with the evaluation of results from initial production
tests and the addition of 2,000 net acres to the company's position
in the Permian Basin. -- Mariner raised net proceeds of
approximately $446 million through concurrent equity and debt
offerings to improve the company's liquidity and reduce its overall
leverage. -- Mariner collected payment on approximately $50 million
of insurance claims relating to hurricane damage and anticipates
additional collections in the second half of the year. -- In the
first six months of 2009, Mariner generated more than $280 million
in operating cash flow (please see end of this release for prior
year data and reconciliation of this non-GAAP measure). -- Owing to
positive results in the company's liquidity, improvement in oil
prices, and reductions in service costs, Mariner recently increased
its 2009 capital program by approximately $50 million predominantly
to fund, oily, long-life projects in the Permian Basin. "During the
second quarter we increased production from first quarter 2009 and
proactively fortified our balance sheet. We are in the enviable
position of strong cash flow and excellent liquidity, enabling us
to weather events outside our control and capitalize on
opportunities that may develop in this challenging environment,"
said Scott D. Josey, Mariner's Chairman, Chief Executive Officer
and President. SECOND QUARTER 2009 RESULTS For the three-month
period ended June 30, 2009, Mariner reported net income of $17.2
million, or $0.19 per basic and fully-diluted share. This compares
with net income of $123.4 million and basic and fully-diluted
earnings per share of $1.40 and $1.39, respectively, for the same
three-month period in the prior year. The lower year-over-year
results are due primarily to lower commodity prices and decreased
production volumes. Net production for second quarter 2009 was 32.9
billion cubic feet of natural gas equivalent (Bcfe), compared with
36.4 Bcfe for second quarter 2008. Total natural gas net production
for second quarter 2009 was 23.8 billion cubic feet (Bcf), compared
with 24.4 Bcf for the same period in the prior year. Total net oil
production for second quarter 2009 was 1.2 million barrels
(MMBbls), compared with 1.5 MMBbls for the same period in 2008.
Natural gas liquids (NGL) net production for second quarter 2009
was 0.3 MMBbls, compared with 0.5 MMBbls for second quarter 2008.
For second quarter 2009, Mariner's average realized natural gas
price was $5.98 per thousand cubic feet (Mcf) compared with $10.27
per Mcf for the same period in 2008. Mariner's average realized oil
price was $66.91 per barrel (Bbl) for second quarter 2009, compared
with $96.24 per Bbl for second quarter 2008. The average realized
NGL price was $24.68 per Bbl for second quarter 2009, compared with
$64.69 per Bbl for the same period in 2008. Average realized prices
reflect settlements during the period under Mariner's hedging
program. OPERATIONAL UPDATE Offshore Mariner drilled three offshore
wells in the second quarter 2009, one of which was successful:
Water Working Depth Well Name Operator Interest (Ft) Location
--------- -------- -------- ---- -------- Vermillion 380 A16 ST 2
Mariner 100.0% 340 Conventional Shelf Unsuccessful wells during the
second quarter included Mariner's Cordage deep shelf prospect (West
Cameron 207) and a non-operated well at South Timbalier 316A4.
Subsequent to the end of second quarter 2009, Mariner drilled two
wells, one of which was successful: Water Working Depth Well Name
Operator Interest (Ft) Location --------- -------- -------- ----
-------- Vermillion 380 A3 ST1 Mariner 100.0% 340 Conventional
Shelf Mariner's Arden prospect (Garden Banks 949) reached its
target depth after quarter end and was determined to be
unsuccessful. Onshore In the second quarter of 2009, Mariner
drilled seven wells in the Permian Basin, all of which were
successful. As of August 1, 2009, one rig was operating on
Mariner's Permian Basin properties. CONFERENCE CALL TO DISCUSS
RESULTS A conference call has been scheduled for 11:00 a.m. Eastern
Time (10:00 a.m. Central Time) on Friday, August 7, 2009, to
discuss second quarter 2009 financial and operating results. To
participate in the call, please dial one of the numbers listed
below at least 10 minutes prior to the scheduled start time:
Callers from the United States and Canada: +1 (866) 804-6929
Callers from International locations: +1 (857) 350-1675. The
conference passcode for both numbers is 6009 5145. The call also
will be webcast live over the Internet and can be accessed through
the Investor Information section of Mariner's website at
http://www.mariner-energy.com/. A telephonic replay of the call
will be available through August 17, 2009 by dialing (888) 286-8010
or (617) 801-6888, pass code 4318 3816. An archive of the webcast
will be available shortly after the call on Mariner's website
through September 30, 2009. About Mariner Energy, Inc. Mariner
Energy, Inc. 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, please visit its website at
http://www.mariner-energy.com/. MARINER ENERGY, INC. SELECTED
OPERATIONAL RESULTS (1) (Unaudited) Net Production, Realized
Pricing and Operating Costs Three Months Ended June 30, 2009 2008
---- ---- Net production: Natural gas (Bcf) 23.8 24.4 Oil (MMBbls)
1.2 1.5 Natural gas liquids (MMBbls) 0.3 0.5 Total production
(Bcfe) 32.9 36.4 Realized prices (net of hedging): Natural gas
($/Mcf) $5.98 $10.27 Oil ($/Bbl) 66.91 96.24 Natural gas liquids
($/Bbl) 24.68 64.69 Operating costs per Mcfe: Lease operating
expense $1.43 $1.55 Severance and ad valorem taxes 0.11 0.14
Transportation expense 0.14 0.12 General and administrative expense
0.64 0.37 Depreciation, depletion and amortization 3.05 3.88 (1)
Certain prior year amounts have been reclassified to conform to
current year presentation. MARINER ENERGY, INC. COMPARATIVE
CONSOLIDATED FINANCIAL STATEMENTS OF OPERATIONS (1) (In thousands,
except per share data) (Unaudited) Three Months Ended June 30, 2009
2008 ---- ---- Revenues: Natural gas sales $142,363 $250,278 Oil
sales 78,954 144,556 Natural gas liquids sales 8,193 33,057 Other
revenues 2,460 1,561 Total revenues 231,970 429,452 Cost and
Expenses: Lease operating expense 47,092 56,427 Severance and ad
valorem taxes 3,730 5,263 Transportation expense 4,575 4,204
General and administrative expense 21,122 13,615 Depreciation,
depletion and amortization 100,282 141,454 Full cost ceiling test
impairment - - Other miscellaneous expense 2,758 303 Total costs
and expenses 179,559 221,266 OPERATING INCOME 52,411 208,186
Interest: Income 302 281 Expense, net of capitalized amounts
(16,972) (17,563) ------- ------- Income before taxes 35,741
190,904 Provision for income taxes (18,528) (67,416) -------
------- Net income $17,213 $123,488 Less: net loss attributable to
noncontrolling interest - (98) NET INCOME ATTRIBUTABLE TO MARINER
ENERGY, INC. $17,213 $123,390 Earnings per share: Net income per
share - basic $0.19 $1.40 Net income per share - diluted $0.19
$1.39 Weighted average shares outstanding - basic 91,820 87,984
Weighted average shares outstanding - diluted 92,174 88,828 (1)
Certain prior year amounts have been reclassified to conform to
current year presentation. MARINER ENERGY, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
(Unaudited) June 30, December 31, 2009 2008 ---- ---- Current
Assets Cash and cash equivalents $33,648 $3,209 Receivables, net of
allowances 157,009 219,920 Insurance receivables 25,826 13,123
Derivative financial instruments 70,849 121,929 Intangible assets
1,333 2,334 Prepaid expenses and other 25,535 14,438 ----------
---------- Total current assets 314,200 374,953 Property and
Equipment Proved oil and gas properties, full-cost method 4,719,635
4,448,146 Unproved properties, not subject to amortization 237,058
201,121 ---------- ---------- Total oil and gas properties
4,956,693 4,649,267 Other property and equipment 53,704 53,115
Accumulated depreciation, depletion and amortization: Proved oil
and gas properties (2,648,343) (1,767,028) Other property and
equipment (6,860) (5,477) Total accumulated depreciation, depletion
and amortization (2,655,203) (1,772,505) Total property and
equipment, net 2,355,194 2,929,877 Insurance receivables 5,082
22,132 Other Assets, net of amortization 65,409 65,831 ----------
---------- TOTAL ASSETS $2,739,885 $3,392,793 ========== ==========
Current Liabilities Accounts payable $3,925 $3,837 Accrued
liabilities 112,722 107,815 Accrued capital costs 131,174 195,833
Deferred income tax - 23,148 Abandonment liability 40,386 82,364
Accrued interest 12,873 12,567 Derivative financial instruments
3,599 - Deferred tax liability 28,625 - ---------- ---------- Total
current liabilities 333,304 425,564 Long-Term Liabilities
Abandonment liability 406,733 325,880 Deferred income tax 77,801
319,766 Derivative financial instruments 16,174 - Long-term debt
1,029,189 1,170,000 Other long-term liabilities 30,525 31,263
---------- ---------- Total long-term liabilities 1,560,422
1,846,909 Stockholders' Equity Common stock, $.0001 par value;
180,000,000 shares authorized; 101,848,191 shares issued and
outstanding at June 30, 2009; 180,000,000 shares authorized,
88,846,073 shares issued and outstanding at December 31, 2008 10 9
Additional paid-in capital 1,243,277 1,071,347 Accumulated other
comprehensive income 38,994 78,181 Accumulated deficit (436,122)
(29,217) ---------- ---------- Total stockholders' equity 846,159
1,120,320 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $2,739,885 $3,392,793 ========== ========== MARINER ENERGY,
INC. SELECTED CASH FLOW INFORMATION (1) (In Thousands) (Unaudited)
Six Months Ended June 30, 2009 2008 --------- --------- Operating
cash flow (2) $280,532 $576,851 Changes in operating assets and
liabilities 57,199 (25,371) --------- --------- Net cash provided
by operating activities $337,731 $551,480 ========= ========= Net
cash used in investing activities $(319,241) $(696,515) =========
========= Net cash provided by financing activities $11,949
$167,715 ========= ========= (Decrease) Increase in cash and cash
equivalents $30,439 $22,680 ========= ========= (1) Certain prior
year amounts have been reclassified to conform to current year
presentation. (2) See below for reconciliation of this non-GAAP
measure. IMPORTANT INFORMATION CONCERNING FORWARD-LOOKING
STATEMENTS AND CERTAIN STATISTICS 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 provided 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 as 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 or
inflation, 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, 2008, as amended, and other documents filed by Mariner with the
SEC. Any of these factors could cause Mariner's actual results and
plans of Mariner 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, 2008, as
amended, 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.
Reconciliation of Non-GAAP Measure: Operating Cash Flow Operating
cash flow (OCF) is not a financial or operating measure under
generally accepted accounting principles in the United States of
America (GAAP). The table below reconciles OCF to related GAAP
information. Mariner believes that OCF is a widely accepted
financial indicator that provides additional information about its
ability to meet its future requirements for debt service, capital
expenditures and working capital, but OCF should not be considered
in isolation or as a substitute for net income, operating income,
net cash provided by operating activities or any other measure of
financial performance presented in accordance with GAAP or as a
measure of a company's profitability or liquidity. Six Months Ended
June 31, 2009 2008 ---- ---- (In thousands) (Unaudited) Net cash
provided by operating activities $337,731 $551,480 Less: Changes in
operating assets and liabilities 57,199 (25,371) -------- --------
Operating cash flow (non-GAAP) $280,532 $576,851 ======== ========
DATASOURCE: Mariner Energy, Inc. CONTACT: Patrick Cassidy of
Mariner Energy, Inc., +1-713-954-5558, Web Site:
http://www.mariner-energy.com/
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