Mariner Energy has entered into an agreement with Shell to purchase Shell's 50 percent working interest in the King Kong prospect in the deepwater Gulf of Mexico. The prospect is located in Green Canyon blocks 472, 473 and 517 in approximately 3,900 feet of water. Mariner purchased Shell's interest for an undisclosed amount and will become operator of the development. Agip Petroleum, as a successor to British Borneo, owns the remaining 50 percent interest. Mariner plans to develop gas reserves from two separate reservoirs discovered by three exploration wells that were previously drilled in the project. The initial development plan calls for completing a previously drilled well and drilling an additional development well, with both subsea wells tied back 16 miles to the Allegheny mini-TLP operated by Agip. Mariner also plans to drill its "Yosemite" exploration prospect located adjacent to King Kong in Green Canyon Block 516 before the end of the year. If successful, Mariner expects Yosemite to be jointly developed with King Kong. Mariner anticipates production from the project to commence by December 31, 2001.

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