Mariner Energy Announces $660 Million 2010 Capital Budget
December 16 2009 - 12:14AM
Marketwired
Mariner Energy, Inc. (NYSE: ME) announced today a 2010 capital
budget of approximately $660 million, which assumes closing the
acquisition from Edge Petroleum Corporation of its assets and
operations by year-end 2009.
Mariner's 2010 CAPEX plan ($ millions)
Development/
Area Exploration Exploitation Total
============ ============ ============
Onshore, including Unconventional $ 20 $ 175 $ 195
============ ============ ============
Deepwater $ 106 $ 146 $ 252
============ ============ ============
Shelf $ 44 $ 118 $ 162
============ ============ ============
Capitalized Interest, G&A, Other - - $ 51
============ ============ ============
TOTAL CAPITAL EXPENDITURES $ 170 $ 439 $ 660
============ ============ ============
Budget Highlights:
-- Onshore: Increased drilling to more fully develop the company's
Permian Basin assets, including the Deadwood oil field in Glasscock County
and the Scottish Rites Hospital field in Reagan County. Mariner expects to
operate 8 - 10 rigs in the Permian in 2010 and to commence development of
the South Texas properties upon closing of the Edge Petroleum transaction.
Mariner expects to participate in 140 - 170 onshore wells and test several
unconventional play concepts during 2010.
-- Deepwater: Program includes delineation wells at the Lucius and
Heidelberg deepwater discoveries, exploration of two other deepwater
subsalt prospects, 4 - 6 conventional amplitude wells, and development of
Balboa and Wide Berth discoveries.
-- Shelf: Drilling of 6 - 8 moderate risk conventional shelf wells and
pursuit of more than 30 recompletion opportunities are planned.
The budget is based on oil and natural gas prices averaging $75
per barrel and $5.50 per million British thermal units (MMBtu),
respectively, and may be adjusted based upon exploration success
and changes in commodity prices and industry conditions. It
excludes the costs of hurricane-related repairs and anticipated
insurance reimbursements. The company expects to fund 75-80% of its
budget from internally generated cashflow.
Cost Structure: Mariner expects its full-year 2010 unit costs to
fall within the following ranges:
$ per Mcfe
===========
Lease Operating Expense (including workovers) 1.75 - 2.00
===========
Severance and Ad Valorem Taxes 0.13 - 0.16
===========
Transportation Expense 0.14 - 0.16
===========
Depreciation, Depletion & Amortization
(including asset retirement obligation expense) 3.10 - 3.40
===========
Net General and Administrative Expense 0.35 - 0.45
===========
Stock Compensation Expense (non-cash) 0.16 - 0.24
===========
Scott D. Josey, Chairman, Chief Executive Officer, and President
of Mariner Energy, said: "Our 2010 capital program is designed to
accomplish five primary objectives. First, we will accelerate
drilling of our large portfolio of long-lived, oily Permian
properties, much of the production benefit from which is expected
to be realized in 2011. Second, we will delineate the significant
deepwater discoveries we have made with Anadarko. Third, we will
target several high-impact prospects in the deepwater. Fourth, we
will develop deepwater discoveries at Balboa and Wide Berth, which
should come online in the third quarter 2010 and first quarter
2011, respectively. Fifth, we will continue to build our
unconventional resource portfolio and test several ideas. We expect
our production for 2010 to range from 130 - 140 Bcfe, and we
believe that our program is setting the stage for further increases
in 2011."
Conference call to discuss the program
A conference call has been scheduled for 10 a.m. Eastern Time (9
a.m. Central Time) on Wednesday, December 16, to discuss the 2010
capital budget and other updates. To participate in the call,
please dial (800) 638-5439 at least 10 minutes prior to the
scheduled start time. International callers can dial (617)
614-3945. The conference pass code for both numbers is 5406 0916.
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 26, 2009 by dialing (888) 286-8010, pass code 8370 1354.
International callers can dial 617-801-6888. An archive of the call
will be available shortly after the call through January 31, 2010
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.
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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