Mariner Doubles Earnings for 2006

Mariner Energy , Inc. on Thursday announced its full-year 2006 results.

Mariner reported net income of $121.5 million, or $1.58 per share (fully diluted). This represents a 200% increase over net income of $40.5 million, or $1.20 per share (fully diluted) reported in 2005. Cash from operations was $497 million for the year 2006, up 231% from 2005. For the fourth quarter 2006, Mariner reported net income of $43.2 million compared to $4.9 million for the fourth quarter 2005. Earnings per share (fully diluted) for the fourth quarter 2006 was $0.50 compared to $0.14 per share (fully diluted) in the fourth quarter 2005. Comparability of Mariner's fourth quarter and full year 2006 financial results was affected significantly by Mariner's March 2, 2006 acquisition of Forest Oil Corporation's Gulf of Mexico operations.

As previously reported, Mariner ended 2006 with estimated proved reserves of 716 billion cubic feet equivalents of natural gas (Bcfe), compared to 338 Bcfe at year end 2005. This represents a 112% increase in reserves year-over- year due primarily to the Forest acquisition. Mariner's year-end reserves were fully engineered by the independent engineering firm of Ryder Scott Company.

NET PRODUCTION AND PRICING

For the full year 2006, Mariner reported net production of 80.5 Bcfe, compared to 29.1 Bcfe for 2005. This represents a 177% increase year-over-year due largely to 10 months of net production contributed from Mariner's Gulf of Mexico acquisition. Total natural gas net production during 2006 was 56.1 billion cubic feet (Bcf) at an average realized price of $7.37 per million cubic feet (Mcf), compared to 18.4 Bcf for 2005 at an average realized price of $6.66/Mcf. Total oil net production was 4.1 million barrels (Bbls) at an average realized price of $59.70/Bbl, compared to 1.8 million Bbls for the full year 2005 at average realized price of $41.23/Bbl. Average realized prices reflect settlements during the period under Mariner's hedging program.

For the fourth quarter, Mariner reported net production of 26.0 Bcfe, compared to 6.6 Bcfe for the fourth quarter 2005, an increase of 294%. Total natural gas net production was 16.8 Bcf at an average realized price of $7.64/Mcf, compared to 6.6 Bcf for the fourth quarter 2005 at an average realized price of $7.12/Mcf. Total oil net production was 1.54 million Bbls at an average realized price of $59.91/Bbl, compared to 0.5 million Bbls for the fourth quarter 2005 at an average realized price of $44.50/Bbl.

Commencing with the fourth quarter 2006, Mariner began classifying revenue associated with liquids and plant products as oil revenue instead of natural gas revenue. This reclassification resulted in an increase of $16.1 million in oil revenue during the quarter ($10.48/Bbl), offset by a corresponding decrease in natural gas revenue ($0.95/Mcf).

REVENUES

For the full year 2006, Mariner generated total natural gas revenues of $412.9 million, compared to $122.3 million for full year 2005. Total oil revenues for full year 2006 were $243.3 million, compared to full year 2005 total oil revenues of $73.8 million. Total oil and gas revenues increased 235% to $656.2 million in 2006, compared to total oil and gas revenues of $196.1 million in 2005. This increase was due primarily to Mariner's Gulf of Mexico acquisition, the recommencement of production that was shut-in after the 2005 hurricane season, and an increase in realized prices (including the effects of hedging) to $8.15/Mcfe in 2006 from $6.74/Mcfe in 2005.

Fourth quarter 2006 total natural gas revenues were $127.9 million, compared to $27.4 million for fourth quarter 2005. Total oil revenues for fourth quarter 2006 were $92.3 million, compared to $20.3 million for the fourth quarter 2005. Total combined oil and gas revenues for fourth quarter 2006 were $220.2 million, compared to $47.6 million for fourth quarter 2005, an increase of 362%.

OPERATING AND GENERAL & ADMINISTRATIVE EXPENSES (ON A PER-UNIT BASIS)

Lease Operating Expenses -- Lease operating expenses ("LOE") for the full year increased 33% to $1.14/Mcfe in 2006 from $0.86/Mcfe in 2005. LOE increased slightly to $1.11/Mcfe in the fourth quarter 2006 from $1.09/Mcfe in fourth quarter 2005. Notwithstanding production growth during the period, LOE increased due in large part to inflation in oilfield service costs, particularly offshore, and increases in power and water disposal costs in West Texas.

Severance and Ad Valorem Taxes -- Severance and ad valorem taxes for the full year decreased to $0.11/Mcfe in 2006 from $0.17/Mcfe in 2005. Severance and ad valorem taxes decreased to $0.13/Mcfe in the fourth quarter 2006 from $0.39/Mcfe in fourth quarter 2005. The quarterly and full year decreases were primarily attributable to offshore production volume increases, which more than offset an increase in severance taxes associated with increased production from Mariner's West Texas properties.

General & Administrative Expenses -- General and administrative ("G&A") expenses for the full year decreased to $0.42/Mcfe in 2006 from $1.27/Mcfe in 2005, a decrease of 67%. This decrease is due primarily to stock compensation expense of $10.2 million in 2006 versus $25.7 million in 2005, partially offset by increases in salaries and professional services during 2006. G&A expenses decreased to $0.30/Mcfe in the fourth quarter 2006 from $0.34/Mcfe in the fourth quarter 2005.

RESERVE REPLACEMENT RATE

Mariner's reserve replacement rates reported above were calculated by dividing total reserve changes for the period 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.

Mariner Energy, Inc. is an independent oil and gas exploration, development and production company headquartered in Houston, Texas, with principal operations in the Gulf of Mexico and West Texas.

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