Mariner Energy, Inc. (NYSE: ME) today reported fiscal
fourth-quarter and full-year 2009 financial and operating results.
For the three months ended December 31, 2009, the company reported
net income of $83.3 million or $0.83 per basic and $0.82 per
diluted share, compared with a loss of $648.9 million or $7.41 per
basic and diluted share for the same period in the prior year. For
the full year ended December 31, 2009, the company reported a net
loss of $319.4 million ($3.34 per basic and diluted share). This
compares to a net loss of $388.7 million ($4.44 per basic and
diluted share) for 2008. Excluding a non-recurring, non-cash gain
and certain non-cash charges, the company's adjusted net income for
fourth quarter 2009 was $21.0 million or $0.22 per basic and
diluted share, and for full-year 2009 adjusted net income was $92.2
million or $0.96 per basic and diluted share. Operating cash flow
was $531.1 million for 2009. See the notes below for reconciliation
of non-GAAP measures adjusted net income and operating cash flow.
Highlights for 2009 and first quarter 2010 to date include:
-- First quarter 2010 discoveries at Mandy, a deepwater oil field on
Mississippi Canyon Block 199, and on South Pass 75, a gas field on the
shelf, as well as the previously announced success at the Lucius
sidetrack well on Keathley Canyon Block 875.
-- A 2009 drilling success rate of 63% (10 for 16) offshore, including
the Heidelberg and Lucius oil fields in the deepwater Gulf of Mexico
and the discovery and appraisal onshore of a new oil field at Deadwood
in the Permian Basin.
-- Expanding into a new core area in the Gulf Coast with the acquisition
of producing properties located principally in South Texas.
-- Building a new leasehold position in unconventional resource plays,
including approximately 43,000 net acres in Wyoming, North Dakota
and Arkansas principally targeting low-entry-cost oil opportunities.
-- A 12% increase in 2009 year-end estimated proved reserves to 1.087
trillion cubic feet of natural gas equivalent (Tcfe), a reserve
replacement rate from all sources of 190% at a cost of $3.24 per
thousand cubic feet equivalent (Mcfe) (see related notes below), and
a year-over-year production increase of 7% to 126.5 billion cubic feet
of natural gas equivalent (Bcfe).
"Mariner Energy continues to create and build value, our primary
focus. Consistent with our business plan, we expanded onshore into
new areas, conventional and unconventional, that should provide
predictable and repeatable results going forward, while tapping the
significant upside potential in our offshore exploration portfolio,
principally in the deepwater. We've had another successful year
with the drillbit in all areas and realized continued success in
the prolific deepwater subsalt play. For the sixth year in a row,
we increased our estimated proved oil and gas reserves, which now
approach 1.1 Tcfe, a milestone for our company. The increase
occurred without a material increase in the percentage of our
proved undeveloped reserves. Our proved reserves do not yet reflect
any contribution from a number of our deepwater discoveries,
including the significant Heidelberg and Lucius discoveries as well
as Bushwood, Wide Berth and Dalmatian and include only relatively
small amounts from Balboa, Smoothie and the Deadwood field in the
Permian Basin. These unbooked projects should significantly enhance
reserves and production in future years. More than half of our
proved reserves now are onshore. Additionally, almost half of our
proved reserves are oil and liquids; and we have evolved into an
oil company, especially when the unbooked discoveries, comprised
largely of oil and liquids, are considered. Our excellent
operational success in 2009 and early 2010 again validates our
balanced business model," said Scott D. Josey, Mariner's Chairman,
Chief Executive Officer and President.
NON-CASH GAIN AND CHARGES
The company's results for fourth-quarter and full-year 2009
reflect a non-recurring, non-cash gain of $107.3 million
attributable to the December 31, 2009 acquisition of the
subsidiaries and operations of Edge Petroleum Corporation. Based on
lower average commodity prices for 2009, Mariner recorded full cost
ceiling test impairments of its proved oil and gas properties in
the amount of $754.3 million for full-year 2009 and $49.6 million
for fourth quarter 2009. The company also recorded a non-recurring,
non-cash charge of $12.0 million at year-end 2009 related to a
contingent OIL withdrawal premium. Stock compensation expense of
$25.4 million was recorded for the full-year 2009, which includes
$7.1 million for the fourth-quarter. These items are detailed below
in the reconciliation of adjusted net income, a non-GAAP
measure.
FOURTH QUARTER 2009 RESULTS
For fourth quarter 2009, Mariner reported net income of $83.3
million, or $0.83 per basic and $0.82 per diluted share, which
reflects the non-cash gain and charges noted above. This compares
with a net loss of $648.9 million or $7.41 per basic and diluted
share for the same three-month period in the prior year. Adjusted
net income, which excludes the non-cash gain and charges, was $21.0
million for fourth quarter 2009, or $0.22 per share (see
reconciliation of this non-GAAP measure below).
Net production for fourth quarter 2009 was 30.8 Bcfe, compared
with 23.5 Bcfe for fourth quarter 2008. Total natural gas
production net to Mariner for fourth quarter 2009 was 20.8 billion
cubic feet (Bcf), compared with 16.1 Bcf for the same period in the
prior year. Total oil net production for fourth quarter 2009 was
1.2 million barrels (MMBbls), compared with 1.0 MMBbls for the same
period in 2008. Natural gas liquids net production for fourth
quarter 2009 was 0.4 MMBbls, compared with 0.3 MMBbls for fourth
quarter 2008. Mariner has begun posting its estimated monthly
production volumes on its website (www.mariner-energy.com) on the
last business day of the month following the applicable reporting
period. The first such report, disclosing January 2010 estimated
production, was posted on February 26, 2010.
For fourth quarter 2009, Mariner's average realized natural gas
price was $6.08 per thousand cubic feet (Mcf) compared with $7.44
per Mcf for the same period in 2008. Mariner's average realized oil
price was $77.96 per barrel (Bbl) for fourth quarter 2009, compared
with $65.29 per Bbl for fourth quarter 2008. These average realized
prices reflect settlements during the period under Mariner's
hedging program. The average realized NGL price was $41.49 per Bbl
for fourth quarter 2009, compared with $26.63 per Bbl for the same
period in 2008.
FULL-YEAR 2009 RESULTS
For the year ended December 31, 2009, Mariner reported a net
loss of $319.4 million, which equates to a loss of $3.34 per basic
and diluted share. For 2008, Mariner reported a net loss of $388.7
million, or $4.44 per basic and diluted share. Adjusted net income,
which excludes the non-cash gain and charges noted above, was $92.2
million for 2009 or $0.96 per basic and diluted share (see
reconciliation of this non-GAAP measure below).
For the full-year 2009, Mariner reported net production of 126.5
Bcfe, up from 118.4 Bcfe reported in 2008. Daily production
averaged more than 347.0 million cubic feet of natural gas
equivalent (MMcfe), a record for Mariner. Total natural gas net
production during 2009 was 90.8 Bcf at an average realized price of
$6.08 per Mcf, compared with 79.8 Bcf for 2008 at an average
realized price of $9.31 per Mcf. Total oil net production for 2009
was 4.5 MMBbls at an average realized price of $70.59 per Bbl,
compared to 4.9 MMBbls during 2008 at an average realized price of
$86.02 per Bbl. These average realized prices reflect settlements
during the period under Mariner's hedging program. Total NGL net
production during 2009 was 1.5 MMBbls at an average realized price
of $33.10, compared to 1.6 MMBbls at an average realized price of
$55.02 per Bbl for the prior year.
Operating cash flow was $531.1 million for the full 2009 fiscal
year, compared with $885.9 million in 2008 (see reconciliation of
this non-GAAP measure below).
CAPITAL EXPENDITURES
Mariner's capital expenditures for the fourth-quarter and
full-year 2009 are summarized in the table below.
Fourth Full-
Quarter Year
2009 2009
--------- ---------
(In thousands)
Exploration $ 39,006 $ 204,805
Development
Gulf of Mexico - Deepwater $ 2,170 $ 67,538
Gulf of Mexico - Shelf 31,153 179,973
Permian Basin 22,621 59,323
Acquisitions $ 239,517 $ 236,661
Corporate expenditures and other $ 696 $ 38,462
--------- ---------
Total Capital Expenditures $ 335,163 $ 786,762
========= =========
OPERATIONAL UPDATE
Offshore
Mariner was successful in 10 of its 16 offshore wells drilled in
2009. Mariner drilled five offshore wells in fourth quarter 2009,
four of which were successful:
Working Water Depth
Well Name Operator Interest (Ft) Location
-------- --------- ------------ ----------------------
Green Canyon 490#1
(Wide Berth) Mariner 56.25% 3,700 Conventional Deepwater
South Marsh
Island 10 #4 Mariner 100% 70 Conventional Shelf
Keathley Canyon
875#1 (Lucius) Anadarko 16.67% 7,100 Deepwater Subsalt
Viosca Knoll
917#1ST2
(Swordfish) Noble 15% 4,370 Conventional Deepwater
The unsuccessful well during the fourth quarter was South Marsh
Island 150 D1ST1.
Subsequent to the end of fourth quarter 2009, Mariner drilled
five wells, all of which were successful:
Working Water Depth
Well Name Operator Interest (Ft) Location
-------- -------- ----------- ----------------------
Keathley Canyon
875#1ST1 (Lucius) Anadarko 16.67% 7,100 Deepwater Subsalt
Mississippi
Canyon 199#1
(Mandy) LLOG 35% 2,500 Conventional Deepwater
Mississippi Canyon
199#2 (Mandy) LLOG 35% 2,500 Conventional Deepwater
South Pass 75
A6ST1 Apache 28.8% 356 Conventional Shelf
South Pass 75 A11
ST2 Apache 28.8% 356 Conventional Shelf
Mariner currently has three rigs working in the Gulf of
Mexico.
Onshore
In fourth quarter 2009, Mariner drilled 25 wells in the Permian
Basin, of which 21 were successful. The non-commercial wells were
shallow gas targets drilled at the company's Homestake prospect in
Edwards County, Texas. Mariner currently has six rigs working on
its Permian Basin properties. The company participated in 51
onshore wells in 2009.
CONFERENCE CALL TO DISCUSS RESULTS
A conference call has been scheduled for 10:30 a.m. Eastern Time
(9:30 a.m. Central Time) on Monday, March 1, 2010, to discuss
fiscal 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) 202-0886
Callers from International locations: +1 (617) 213-8841
The conference passcode for both numbers is 8460 0122.
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. Speakers may refer to
data in the company's latest investor presentation, which is
accessible on the company's website under "Investor Information,"
then clicking "Webcasts and Presentations."
A telephonic replay of the call will be available through March
11, 2010 by dialing (888) 286-8010 or (617) 801-6888, pass code
7201 1598. An archive of the webcast will be available shortly
after the call on Mariner's website through March 31, 2010.
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, Gulf Coast
and Gulf of Mexico. For more information about Mariner, visit the
company's website at www.mariner-energy.com.
MARINER ENERGY, INC.
SELECTED OPERATING DATA
(Unaudited)
Net Production, Realized Prices and Operating
Costs
Three Months Twelve Months
Ended Ended
December 31, December 31,
2009 2008 2009 2008
------ ------- ------- -------
Net production:
Natural gas (Bcf) 20.8 16.1 90.8 79.8
Oil (MMBbls) 1.2 1.0 4.5 4.9
Natural gas liquids (MMBbls) 0.4 0.3 1.5 1.6
Total production (Bcfe) 30.8 23.5 126.5 118.4
Realized prices (net of hedging):
Natural gas ($/Mcf) $ 6.08 $ 7.44 $ 6.08 $ 9.31
Oil ($/Bbl) 77.96 65.29 70.59 86.02
Natural gas liquids ($/Bbl) 41.49 26.63 33.10 55.02
Operating costs per Mcfe:
Lease operating expense $ 2.72 $ 2.73 $ 1.97 $ 1.96
Severance and ad valorem taxes 0.09 0.15 0.11 0.15
Transportation expense 0.16 0.16 0.15 0.13
General and administrative expense 0.73 1.03 0.63 0.51
Depreciation, depletion and amortization 3.18 3.91 3.16 3.95
Other expense (0.12) 0.09 0.07 0.03
Estimated Proved Reserves
As of the Year As of the Year
Ended Ended
December 31, 2009 December 31, 2008
----------------- -----------------
Estimated proved natural gas, oil and
natural gas liquids reserves:
Natural gas (Bcf) 571.4 558.0
Oil (MMBbls) 52.5 43.8
Natural gas liquids (MMBbls) 33.5 25.5
----------------- -----------------
Total estimated proved reserves
(Bcfe) 1,087.1 973.9
----------------- -----------------
Total proved developed reserves
(Bcfe) 716.4 677.7
----------------- -----------------
MARINER ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Revenues:
Natural gas sales $ 126,512 $ 119,665 $ 552,259 $ 742,370
Oil sales 94,855 63,721 315,642 419,878
Natural gas liquids sales 18,523 7,136 48,921 85,715
Other revenues 399 46,746 26,119 52,544
---------- ---------- ---------- ----------
Total revenues 240,289 237,268 942,941 1,300,507
Cost and Expenses:
Lease operating expense 83,633 64,304 249,449 231,645
Severance and ad valorem
taxes 2,742 3,505 14,410 18,191
Transportation expense 4,867 3,708 18,494 14,996
General and
administrative expense 22,505 24,333 79,960 60,613
Depreciation, depletion
and amortization 98,095 92,095 399,400 467,265
Full cost ceiling test
impairment 49,594 575,607 754,325 575,607
Goodwill impairment - 295,598 - 295,598
Other property impairment - 15,252 - 15,252
Other miscellaneous
expense (3,654) 2,087 8,306 3,052
---------- ---------- ---------- ----------
Total costs and
expenses 257,782 1,076,489 1,524,344 1,682,219
---------- ---------- ---------- ----------
OPERATING LOSS (17,493) (839,221) (581,403) (381,712)
Other Income/(Expenses):
Interest income 56 386 499 1,362
Interest expense, net of
capitalized amounts (19,058) (2,757) (70,134) (56,398)
Gain on acquisition 107,259 - 107,259 -
---------- ---------- ---------- ----------
Income (loss) before taxes 70,764 (841,592) (543,779) (436,748)
Benefit for income taxes 12,510 192,672 224,370 48,223
---------- ---------- ---------- ----------
Net income (loss) 83,274 (648,920) (319,409) (388,525)
Less: net income
attributable to
non-controlling
interest - - - (188)
---------- ---------- ---------- ----------
Net Income (Loss)
Attributable to Mariner $ 83,274 $ (648,920) $ (319,409) $ (388,713)
========== ========== ========== ==========
Earnings per share:
Net income (loss) per
Share - basic $ 0.83 $ (7.41) $ (3.34) $ (4.44)
Net income (loss) per
Share - diluted $ 0.82 $ (7.41) $ (3.34) $ (4.44)
Weighted average shares
Outstanding - basic 100,826 87,623 95,607 87,491
Weighted average shares
Outstanding - diluted 101,406 87,623 95,607 87,491
MARINER ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31, December 31,
2009 2008
----------- -----------
Current Assets
Cash and cash equivalents $ 8,919 $ 3,251
Receivables, net of allowances 148,725 219,920
Insurance receivables 8,452 13,123
Derivative financial instruments 2,239 121,929
Intangible assets 22,615 2,353
Prepaid expenses and other 11,667 14,377
Deferred income tax 9,704 -
----------- -----------
Total current assets 212,321 374,953
Property and equipment:
Proved oil and gas properties, full cost
method 5,117,273 4,448,146
Unproved properties, not subject to
amortization 292,237 201,121
----------- -----------
Total oil and gas properties 5,409,510 4,649,267
Other property and equipment 55,695 53,115
Accumulated depreciation, depletion and
amortization:
Proved oil and gas properties (2,884,411) (1,767,028)
Other properties (8,235) (5,477)
----------- -----------
Total accumulated depreciation,
depletion and amortization (2,892,646) (1,772,505)
----------- -----------
Total property and equipment, net 2,572,559 2,929,877
Insurance receivables - 22,132
Derivative financial instruments 902 -
Deferred income tax 12,491 -
Other Assets, net of amortization 68,932 65,831
----------- -----------
TOTAL ASSETS $ 2,867,205 $ 3,392,793
=========== ===========
Current Liabilities
Accounts payable $ 3,579 $ 3,837
Accrued liabilities 137,206 107,815
Accrued capital costs 140,941 195,833
Deferred income tax - 23,148
Abandonment liability 54,915 82,364
Accrued interest 8,262 12,567
Derivative financial instruments 27,708 -
----------- -----------
Total current liabilities 372,611 425,564
Long-Term Liabilities
Abandonment liability 362,972 325,880
Deferred income tax - 319,766
Derivative financial instruments 15,017 -
Long-term debt 1,194,850 1,170,000
Other long-term liabilities 38,800 31,263
----------- -----------
Total long-term liabilities $ 1,611,639 $ 1,846,909
Stockholders' Equity
Common stock, $.0001 par value; 180,000,000
shares authorized; 101,806,825 shares issued
and outstanding at December 31, 2009;
180,000,000 shares authorized, 88,846,073
shares issued and outstanding at December 31,
2008 10 9
Additional paid-in capital 1,257,526 1,071,347
Accumulated other comprehensive (loss)
income (25,955) 78,181
Accumulated deficit (348,626) (29,217)
----------- -----------
Total stockholders' equity 882,955 1,120,320
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,867,205 $ 3,392,793
=========== ===========
MARINER ENERGY, INC.
SELECTED CASH FLOW INFORMATION (1)
(in thousands)
(unaudited)
12 Months Ended December 31,
----------------------------
2009 2008
------------- -------------
Operating cash flow (2) $ 531,149 $ 885,887
Changes in operating assets and liabilities 46,518 (23,870)
------------- -------------
Net cash provided by operating activities $ 577,667 $ 862,017
============= =============
Net cash used in investing activities $ (747,108) $ (1,264,784)
============= =============
Net cash provided by financing activities $ 175,109 $ 387,429
============= =============
Increase (Decrease) in cash and cash
equivalents $ 5,668 $ (15,338)
============= =============
(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
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. Estimated reserves are related to
hydrocarbon prices. Hydrocarbon prices used in estimating reserves
may vary significantly from actual future prices. 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 Mariner's
latest Annual Report on Form 10-K 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 of
Mariner to differ materially from those in the forward-looking
statements. Investors are urged to read Mariner's latest Annual
Report on Form 10-K and other documents filed by Mariner with the
SEC.
"Proved" oil and gas reserves are those that can be estimated
with reasonable certainty to be economically and legally producible
under existing economic conditions, operating methods and
government regulations. "Probable," "possible" and "non-proved"
reserves, reserve "potential" or "upside" or other descriptions of
volumes of reserves potentially recoverable involve estimates that
by their nature are more speculative than estimates of proved
reserves and accordingly are subject to substantially greater risk
of actually being realized by Mariner. The SEC generally does not
permit a company's filings with the SEC to include estimates of oil
or gas resources other than reserves, and any estimated values of
such resources, due to concern that resources other than reserves
are too speculative and may be misleading.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy any securities of Mariner.
Note on reserve replacement rate: Mariner's reserve replacement
rate reported above was calculated by dividing total estimated
proved reserve changes for the period from all sources, including
acquisitions and divestitures, by production for the same period.
The method Mariner uses to calculate its reserve replacement rate
may differ from methods used by other companies to compute similar
measures. As a result, its reserve replacement rate may not be
comparable to similar measures provided by other companies.
2009 net additions, revisions, conversions, purchases,
sales: 239.8 Bcfe
2009 production: 126.5 Bcfe
2009 proved reserves adds/2009 production: 189.6%
Note on reserve replacement cost: Reserve replacement cost is
calculated by dividing hydrocarbon development, exploration and
acquisition capital expenditures (including capitalized internal
costs and excluding hurricane expenditures net of insurance
recoveries and non-cash changes to asset retirement obligations)
for the period by net estimated proved reserve additions for the
period from all sources, including acquisitions and divestitures.
Mariner's calculation of reserve replacement cost includes costs
and reserve additions related to the purchase of proved reserves.
The method Mariner uses to calculate its reserve replacement cost
may differ significantly from methods used by other companies to
compute similar measures. As a result, its reserve replacement cost
may not be comparable to similar measures provided by other
companies. Mariner believes that providing a measure of reserve
replacement cost is useful in evaluating the cost, on a per-Mcfe
basis, to add proved reserves. However, this measure is provided in
addition to, and not as an alternative for, and should be read in
conjunction with, the information contained in our financial
statements prepared in accordance with generally accepted
accounting principles. Due to various factors, including timing
differences in the addition of proved reserves and the related
costs to develop those reserves, reserve replacement costs do not
necessarily reflect precisely the costs associated with particular
reserves. As a result of various factors that could materially
affect the timing and amounts of future increases in reserves and
the timing and amounts of future costs, the company cannot assure
you that its future reserve replacement costs will not differ
materially from those presented.
2007 2008 2009
----------- ----------- -----------
(in millions)
Capital costs related to property
acq, expl, and devel 788.6 1,344.1 784.2
Hurricane expenditures, net of
insurance recoveries (12.3) (60.1) (6.6)
Proceeds from divestitures 4.1 - -
----------- ----------- -----------
Capital expenditures before
divestitures ($MM) (1) 780.4 1,284.0 777.6
Reserve additions (Bcfe) 222.6 256.7 239.8
Reserve Replacement Cost/Mcfe $ 3.51 $ 5.00 $ 3.24
Rolling 3-year capital expenditures 2,842.0
Rolling 3-year reserve additions 719.1
Rolling 3-year Reserve Replacement
Cost/Mcfe $ 3.95
(1) Unaudited
Reconciliation of Non-GAAP Measure: Adjusted Net Income
Mariner Energy's reported net income and earnings per share for
the fiscal fourth quarter and full-year 2009 includes a
non-recurring, non-cash gain and non-cash charges. Mariner's
management believes that it is common among investment analysts to
consider earnings excluding the effects of these items when
evaluating the company's operating results. These items and their
effects on reported earnings for the fiscal fourth quarter and
full-year 2009 are listed below.
-- A non-recurring gain attributable to the December 31, 2009 acquisition
of the subsidiaries and operations of Edge Petroleum Corporation
positively impacting net income. The $107.3 million non-taxable gain
equates to $1.12 for the year and $1.06 for fourth-quarter contribution
to basic and diluted earnings per share (EPS).
-- Ceiling test impairments in the fourth-quarter and full-year 2009
negatively impacted net income. For the full-year 2009, the ceiling
test impairment was $754.3 million ($494.5 million after tax), for a
$5.17 after-tax loss per basic and diluted share. For fourth-quarter
2009, the ceiling test impairment was $49.6 million ($32.5 million
after tax), for a $0.32 loss per basic and diluted share.
-- A non-cash charge for a contingent withdrawal premium related to
Mariner's participation in the OIL insurance mutual negatively impacted
net income. The additional premium was $12.0 million charge ($7.9
million after-tax) or a loss per basic and diluted share of $0.08 for
the fourth-quarter and full-year 2009.
-- Non-cash stock compensation expense in the fourth-quarter and full-year
2009 negatively impacted net income. For the full-year 2009, the
expense was $25.4 million ($16.5 million after tax), which equates to
$0.17 loss per basic and diluted share. For fourth quarter 2009, this
charge was $7.1 million ($4.6 million after tax) for a loss per basic
and diluted share of $0.05.
Excluding the items above, Mariner would have reported earnings
for the fourth quarter 2009 of $21.0 million or $0.22 per basic and
diluted share. Fiscal 2009's full year net income and basic and
diluted EPS would have been $92.2 million and $0.96, respectively.
Adjusted net income should not be considered in isolation or as a
substitute for net income or another measure of financial
performance presented in accordance with GAAP. This is further
outlined in the table below.
MARINER ENERGY, INC.
RECONCILIATION OF ADJUSTED NET INCOME
(in millions, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, 2009 December 31, 2009
After-Tax After-Tax
Impact (1) EPS (2) Impact (1) EPS (3)
Net income (loss) $ 83.3 $ 0.83 $ (319.4) $ (3.34)
Gain on acquisition (107.3) (1.06) (107.3) (1.12)
Ceiling test impairment 32.5 0.32 494.5 5.17
Contingent OIL premium
charges 7.9 0.08 7.9 0.08
Stock compensation
expense 4.6 0.05 16.5 0.17
Adjusted net income
(non-GAAP) $ 21.0 $ 0.22 $ 92.2 $ 0.96
(1) Calculated using Mariner's effective tax rate
(2) Denotes basic earnings per share. In fourth-quarter 2009 Mariner
reported $0.82 diluted earnings per share.
(3) Denotes basic and diluted earnings per share.
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.
12 Months Ended
December 31,
2009 2008
-------- --------
(in thousands)
(Unaudited)
Net cash provided by operating activities $ 577,667 $ 862,017
Less: Changes in operating assets and liabilities 46,518 (23,870)
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Operating cash flow (non-GAAP) $ 531,149 $ 885,887
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Mariner Energy Inc. (NYSE:ME)
Historical Stock Chart
From May 2024 to Jun 2024
Mariner Energy Inc. (NYSE:ME)
Historical Stock Chart
From Jun 2023 to Jun 2024
