Mariner Energy to Purchase Edge Petroleum's Operations
December 15 2009 - 7:00AM
Marketwired
Mariner Energy, Inc. (NYSE: ME) announced today that it has agreed
to purchase the subsidiaries and operations of Edge Petroleum
Corporation in a transaction valued at approximately $215 million
after anticipated purchase price adjustments. Mariner expects the
transaction to close by December 31, 2009, with an effective date
of June 30, 2009. The transaction has been approved by the
bankruptcy court in which Edge's Chapter 11 case is pending,
subject to any appeals. Mariner will utilize its revolving credit
facility to fund the acquisition.
Transaction and asset highlights include:
-- Edge reported year-end 2008 estimated proved reserves of 124 billion
cubic feet of natural gas equivalent (Bcfe), all fully engineered by
independent reservoir evaluation consultants, approximately 90% by Ryder
Scott Company, L.P. Mariner estimates that at December 31, 2009, the
properties include approximately 106 Bcfe in estimated proved reserves, 70%
of which are developed (72% gas, 28% liquids).
-- More than 80% of the reserves are located in South Texas, establishing
a new core area for Mariner. Approximately 45% of the reserves are based
in the Flores/Bloomberg field in Starr County.
-- Third quarter 2009 daily production from the assets averaged
approximately 29 million cubic feet of natural gas equivalent.
-- The assets also include nearly 70,000 net undeveloped acres, primarily
in Texas and New Mexico.
-- Mariner structured the transaction to preserve certain tax attributes
of the Edge subsidiaries, including the tax basis of the assets acquired
and net operating losses. Mariner estimates the potential value of these
tax attributes to be approximately $95 million.
"Consistent with our stated strategy of expanding our onshore
presence, the Edge transaction establishes a new core area for the
company. Based on year-end 2008 results, the combination results in
more than half of Mariner's proved reserves being onshore. The
economic metrics of the transaction are compelling, potentially
further enhanced by the preservation of the tax attributes. We
expect the assets to generate excess cash flow while self-funding
future development costs. We look forward to welcoming the Edge
personnel to our company," said Scott D. Josey, Chairman, Chief
Executive Officer and President of Mariner.
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 deepwater and shelf. 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.
Estimated reserves are related to hydrocarbon prices. Actual future
prices may vary significantly from prices used in preparation of
the reserve estimates. Therefore, volumes of reserves actually
recovered may differ significantly from such estimates. 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
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, 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.
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