- Filing of certain prospectuses and communications in connection with business combination transactions (425)
April 15 2010 - 2:57PM
Edgar (US Regulatory)
Filed by Apache Corporation
Pursuant to Rule 425 of the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Mariner Energy, Inc.
Commission File No. 1-32747
Strategic Step into Deepwater
April 15, 2010
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This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval. Apache Corporation ("Apache") will file with the Securities and Exchange
Commission ("SEC") a registration statement on Form S-4 that will include a proxy statement of Mariner Energy, Inc.
("Mariner") that also constitutes a prospectus of Apache. A definitive proxy statement/prospectus will be mailed to
stockholders of Mariner. Apache and Mariner also plan to file other documents with the SEC regarding the proposed
transaction. INVESTORS AND SECURITY HOLDERS OF MARINER ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION. Such documents are not currently available. Investors and security holders will be able to
obtain the documents (when available) free of charge at the SEC's web site, www.sec.gov. Copies of the documents
filed with the SEC by Apache will be available free of charge on Apache's website at www.apachecorp.com under the
tab "Investors" or by contacting Apache's Investor Relations Department at 713-296-6000. Copies of the documents
filed with the SEC by Mariner will be available free of charge on Mariner's website at www.mariner-energy.com under
the tab "Investor Information" or by contacting Mariner's Investor Relations Department at 713-954-5558. You may
also read and copy any reports, statements and other information filed with the SEC at the SEC public reference room at
100 F Street N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at (800)732-0330 or visit the SEC's website
for further information on its public reference room.
Apache, Mariner, their respective directors and certain of their executive officers may be deemed to be participants in
the solicitation of proxies from the stockholders of Mariner in connection with the proposed transaction. Information
about the directors and executive officers of Mariner is set forth in its proxy statement for its 2010 annual meeting of
stockholders, which was filed with the SEC on April 1, 2010. Information about the directors and executive officers of
Apache is set forth in its proxy statement for its 2010 annual meeting of stockholders, which was filed with the SEC on
March 31, 2010. Other information regarding the participants in the proxy solicitation and a description of their direct
and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other
relevant materials to be filed with the SEC when they become available.
Cautionary Statement
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Statements in this document include "forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The opinions, forecasts,
projections, future plans or other statements other than statements of historical fact, are forward-looking statements.
We can give no assurance that such expectations will prove to have been correct. Actual results could differ materially
as a result of a variety of risks and uncertainties, including: the timing to consummate the proposed agreement; the risk
that a condition to closing of the proposed agreement may not be satisfied; the risk that a regulatory approval that may
be required for the proposed agreement is not obtained or is obtained subject to conditions that are not anticipated;
negative effects from the pendency of the merger; our ability to achieve the synergies and value creation contemplated
by the proposed agreement; our ability to promptly and effectively integrate the merged businesses; and the diversion
of management time on agreement-related issues. Other factors that could materially affect actual results are
discussed in Apache's and Mariner's most recent 10-Ks as well as each company's other filings with the SEC available at
the SEC's website at www.sec.gov. Actual results may differ materially from those expected, estimated or projected.
Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly
update or revise any of them in light of new information, future events or otherwise.
References to quantities of oil or natural gas may include amounts that Apache or Mariner believe will ultimately be
produced, but that are not yet classified as "proved reserves" under SEC definitions.
Cautionary Statement
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$26.22 per Mariner share:
0.17043 APA shares (tax-free exchange)
$7.80 in cash
Mariner shareholders can elect to receive stock or cash (or
combination of) subject to proration to 70% stock, 30% cash
Transaction value: $3.93 billion
Includes net debt of $1.24 billion
Expected closing in Q3 2010. Principal conditions:
Mariner shareholder approval
Regulatory clearance
Transaction Terms
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Apache including Devon and Mariner
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* January 2010 net production.
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Deepwater: new growth platform
Right time, right entry: critical mass, deep experience
Leverage Apache's resources and reach
Permian oil and GOM shelf: exploitation value creation
Excellent fit with core operating areas
Strong cash flow, drilling inventory, upsides
New ventures: fit onshore focus on unlocking new plays
All portfolio components fit our strategy and strengths
Deep resource potential, opportunity set
Supports balance: more North America growth, more U.S. oil
Cultural fit tested through joint experience
First merger since Phoenix Res. (new growth platform - Egypt)
Important Step for Apache
6
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Mariner: Portfolio Profile
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Region Region ProductionJan-2010 MBOE/D P1 Reserves YE 2009 MMBOE Unbooked Potential MMBOE Highlights
GOM Deepwater 23.1 27.0 1,466.0 36 successful DW projects to dateLucius, Heidelberg: 200+MM BBL each1.3BN BOE of prospective resources evaluated by DeGolyer+MacNaughton
GOM Shelf 21.6 52.5 380.3 Historically underworked assetsStrong cash flow and returns profile
Permian Oil 9.2 85.8 203.3 Material, long-lived oil position with running room of 2,000+ new locationsUpsides from de-risking plays: Spraberry, Wolfcamp, Wolfberry
New Onshore Plays 3.6 15.9 TBD 200K net acres acquired during last year in new plays across onshore U.S.Includes 54K net Niobrara acres
Total 57.5 181.2 2,049.6
*All Mariner proved and most Mariner probable reserve figures fully engineered by Ryder Scott.
*All Mariner proved and most Mariner probable reserve figures fully engineered by Ryder Scott.
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WA-356-P:
Julimar-
Brunello
Project
Apache's Deepwater Experience
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EGYPT
West Med Deep Block 4 discoveries in 2002: 2P reserves 2 TCFAverage water depth: 3.0 K FTAPA-operated, 100% successExchanged for Permian assets
AUSTRALIA
Van Gogh-ConistonDiscovery 2000/2003, onstream 2010/2013Water depth: 1.2-1.4 K FT52.5% APA (operator)Van Gogh: 60.0 MB/D (gross)
GULF OF MEXICO
Geauxpher, Bushwood, Winter, Ewing Bank 998, MandyGeauxpher (GB 462):Discovery 2008, onstream 2009Water depth: 2.8 K FTMariner 60% (op.), APA 40%115 MMCF/D (gross)
Note: Geauxpher production based on initial production rate.
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Advances in seismic & facilities technologies
Plays and development models de-risked
Project lead times reduced
Exploitation opportunities for maturing assets
Evolution of Apache's experience and resources
Deepwater: The right time
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Narrow Azimuth, Time
Wide Azimuth, RTM Depth
Image source: Courtesy of CGGVeritas Services (U.S.) Inc., Houston, Texas.
Narrow Azimuth, Depth
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Leases Expiring 2009-2014
Deepwater: Upcoming Block Turnover
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Mariner's Deepwater Portfolio
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Mariner Producing Properties
Mariner Development Projects
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Deepwater Track Record
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Source: MMS and Offshore Magazine completed project lists. Participation based on MMS lease records in period between discovery and first production.
Track record of companies acquired attributed to acquirer (e.g. BP includes Devon, Anadarko includes KerrMcGee, ENI includes Dominion).
(CHART)
GOM DW projects by company
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Mariner: 36 Deepwater Projects
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Field Name Block Water Depth (ft) First Production
Shasta GC 136 1,040 Nov-95
Dulcimer GB 367 1,123 Apr-99
Black Widow EW 966 1,840 Oct-00
King Kong GC 472 3,817 Feb-02
Yosemite GC 516 4,004* Apr-02
Aconcagua MC 305 7,050 Oct-02
Falcon EB 579 3,454 Mar-03
Tomahawk EB 623 3,517* Mar-03
Zia MC 496 1,734* Jun-03
Harrier EB 759 4,114 Jan-04
Ochre MC 66 1,144 Jan-04
Devils Tower MC 773 5,342 May-04
Raptor EB 668 3,710 Jun-04
Front Runner GC 338 3,325 Dec-04
Front Runner South GC 339 3,422* Mar-05
Quatrain GC 382 3,484* Apr-05
Medusa MC 582 2,513* Jun-05
Baccarat GC 178 1,404 Aug-05
Field Name Block Water Depth (ft) First Production
Swordfish VK 961 4,750 Nov-05
Rigel MC 296 5,227 Mar-06
Seventeen Hands MC 299 5,881 Mar-06
Lorien GC 199 2,260* Apr-06
Constitution GC 679 5,001 Jun-06
Black Widow North EW 921 1,700 2006
Pluto MC 718 2,700 2006
Cottonwood GB 244 2,089 Feb-07
Spiderman DC 621 8,082 Sep-07
Q MC 961 7,926 Oct-07
San Jacinto DC 618 7,805 Oct-07
Lost Ark EB 421 2,754 Dec-07
Bass Lite AT 426 6,623 Feb-08
Nansen EB 602 3,500 Feb-08
Daniel Boone GC 646 4,230 Aug-08
Geauxpher GB 462 2,784 May-09
Thunder Hawk MC 734 5,724 Jul-09
Viosca Knoll 821 VK 821 1,030 Oct-09
* Average water depth in lease block.
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Deepwater Development Inventory
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Project Location W.I. Onstream MBOE/D (8/8th)
Balboa EB 597 50.0% 4Q 2010 5.3
Mandy MC 199 35.0% 2Q 2011 6.0
Dalmatian DC 48 12.5% 2H 2011 8.3
Wide Berth GC 490 56.3% 4Q 2011 10.8
Lucius KC 875 16.7% 2013-2014 TBD
Heidelberg GC 859 12.5% 2013-2014 TBD
Bushwood GB 463 30.0% 2015 8.3
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Lucius (KC 875)
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2009 discovery (16.67% WI)
200+ net feet of oil pay in
discovery well
600+ net feet of pay in January
2010 appraisal well
Subsalt discovery:
Thick Lower Pliocene and Upper
Miocene sands with excellent
reservoir quality
Operator (APC) estimate:
200+ MM BBL of oil
Additional appraisal in 2010
In March 2010, built 25-block
interest in the area with 25%+ WI
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2009 discovery (12.5% WI)
200+ net feet of oil pay
Subsalt discovery:
Thick Middle Miocene
sands with excellent
reservoir quality
Operator (APC) estimate:
200+ MM BBL of oil
Now drilling appraisal well
Significant block position
and prospects in area:
Lyell (2010 spud)
Owls Nest
Alexandrite
Fuji/Springs
Heidelberg (GC 859)
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Deepwater Exploration Inventory
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2010 Candidates 2011 Candidates 2012+ Candidates
Heidelberg Lwr Mio (GC 903) Boonville (GC 618) Frosa (GB 904)
Lucius II (KC 874/875) Eagle Nest (GB 289) Lucius Wilcox (KC 875)
Springs Deep (GC 505) Owls Nest (GC 861) Atrip (GB 373)
Maverick (GB 869) King Kong Deep (GC 473) Mandy Deep (MC 199)
Croc (DC 4) Lyell (GC 550) Alexandrite (GC 771)
Clinton (MC 796) Salt Branch (GC 363) Fastrill (KC 119)
LaSalle II (EB 558) Springs Shallow (GC 505) Santa Rita (GC 246)
Covelite (MC 493) Bluto (DC 714) Calcite (AT 333)
Flounder (DC 969) Owls Creek (GC 816)
OCS 213 Awards (27 prospects)
1.4BN BOE of potential in current inventory (50 prospects)*
1.3BN BOE evaluated by DeGolyer & MacNaughton (Pg 31%)
* Does not include 27 prospects in OCS 213 leases.
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GOM Shelf Properties
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Historically underworked assets
Strong cash flow and returns profile
Value creation through APA's proven Shelf exploitation model
367MM BOE* in current drilling inventory
* Unbooked potential resources.
PROPERTY LEGEND
Devon
Apache
Mariner
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Permian Basin Oil
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Long-lived oil position with running room: 2,000+ drilling locations
125K net acres primarily in areas of peer drilling focus (PXD)
Upsides from de-risking plays: Spraberry, Wolfcamp, Wolfberry
(CHART)
Mariner: Permian Region
Production (net MBOE/D)
+33%
+23%
+11% (6-months)
Apache
Mariner
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New Ventures
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200K net acres across a portfolio of new onshore plays
Includes 54K net Niobrara acres
Fits APA's focus on unlocking new plays: Horn River, Granite Wash
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Financial Highlights
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Note: Transaction includes $0.7BN of projected goodwill.
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Capital Structure (12/31/10)
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Pro Forma *
Equity ($BN) 21.1
Debt ($BN) 6.6
Debt / Cap (GAAP) 23.7%
Cash ($BN) 1.0
Shares Outstanding (MM) 357
* Including Devon acquisition and Mariner.
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Pro Forma Production
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(CHART)
(CHART)
Geographical Mix
(Jan 2010)
Commodity Mix
(Jan 2010)
International
Gas
20%
North
American Gas
31%
Total
Oil + Liquids
49%
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Mariner Hedges
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Current production:
15,650 B/D oil, 240 MMCF/D gas, and 7,100 B/D NGLs
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Peer Statistics
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(CHART)
Peer group includes APC, CHK, DVN, ECA, EOG , HES, MRO, MUR, NBL, NFX, OXY and XTO
2009 Production
Reserves (2009YE)
MBOE/D
BN BOE
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Peer Statistics
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2009 Cash Flow
Peer group includes APC, CHK, DVN, ECA, EOG , HES, MRO, MUR, NBL, NFX, OXY and XTO
$BN
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Deepwater: new growth platform
Right time, right entry: critical mass, deep experience
Leverage Apache's resources and reach
Permian oil and GOM shelf: exploitation value creation
Excellent fit with core operating areas
Strong cash flow, drilling inventory, upsides
New ventures: fit onshore focus on unlocking new plays
All portfolio components fit our strategy and strengths
Deep resource potential, opportunity set
Supports balance: more North America growth, more U.S. oil
Cultural fit tested through joint experience
First merger since Phoenix Res. (new growth platform - Egypt)
Important Step for Apache
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