Mariner Reports Year-end Reserves, Operational Results

Mariner Energy, Inc. on Tuesday announced its 2006 year-end estimated proved reserves and operational results and issued guidance for 2007.

During 2006, Mariner completed the integration of the Gulf of Mexico assets acquired from Forest Oil Corporation (the "Forest Assets") in March and ended the year with estimated proved reserves of 716 billion cubic feet equivalents of natural gas (Bcfe), with total production for the year of 81 Bcfe (including only the period from March through December for the Forest Assets).

Chairman, CEO and President, Scott D. Josey said, "Closing the Forest acquisition was a key accomplishment for Mariner during 2006, and we begin 2007 with a large and diverse opportunity set in the Gulf of Mexico and West Texas that will provide for meaningful future growth."


Mariner's exploration and development capital expenditures for 2006 are estimated at $518.5 million, net of proceeds from dispositions of $33.8 million. Additionally, Mariner invested $70.9 million in acquisitions excluding the Forest transaction during the year and incurred $56.5 million in hurricane repairs for which Mariner expects to begin receiving insurance reimbursement during 2007.


Mariner ended its fiscal year on December 31, 2006 with estimated proved reserves of 716 Bcfe compared to 338 Bcfe at December 31, 2005, or a 112% increase from 2005. This change was largely attributable to the acquisition of 298 Bcfe of proved reserves included in the Forest Assets (306 Bcfe as of December 31, 2005, reduced by approximately 8 Bcfe of production in January and February 2006). Excluding the effects of the acquisition of the Forest Assets, Mariner had a reserve replacement rate of 199% at a cost of $3.67 per thousand cubic feet equivalents of natural gas (Mcfe). For a description of the calculations of reserve replacement rate and reserve replacement cost, please see the discussion below under the heading "Reserve Replacement Rate and Cost."

The following table sets forth a summary of our estimated net proved reserves by geographic area as of December 31, 2006. The estimates were prepared by Ryder Scott Company in accordance with Securities and Exchange Commission (SEC) guidelines. Proved reserve estimates do not include any value for probable or possible reserves which may exist, nor do they include any value for undeveloped acreage.

                     Estimated Proved Reserve Quantities
                           as of December 31, 2006

    Geographic Area            Oil       NGLs(1)     Natural Gas    Total
                             (MMBbl)     (MMBbl)        (Bcf)      (Bcfe)
    West Texas                16.4         13.6         77.8        257.3
    Gulf of Mexico
             6.5          0.2         90.1        130.0
    Gulf of Mexico Shelf(3)    9.2          2.4        258.8        328.2
     Total(4)                 32.0         16.1        426.7        715.5
    Proved Developed Reserves 17.4          9.4        247.8        408.7

    (1) Natural gas liquids in millions of barrels (MMBbl).

    (2) Deepwater refers to water depths greater than 1,300 feet (the
        approximate depth of deepwater designation for royalty purposes by the
        U.S. Minerals Management Service).

    (3) Shelf refers to water depths less than 1,300 feet and includes an
        insignificant amount of Gulf Coast onshore properties.

    (4) Columns may not sum due to rounding.




Mariner was successful in 18 of its 26 offshore wells drilled in 2006. Mariner drilled four offshore wells in the fourth quarter 2006, one of which was successful, the A1ST well located in South Marsh Island 18, a 100% Mariner-owned and operated well that commenced production in January 2007.

Year-to-date 2007, Mariner has drilled two conventional shelf wells, both of which were successful and are 100% Mariner-owned and operated - West Cameron 110 #12ST2 and South Marsh Island 150 #1.


In 2006, Mariner drilled a total of 164 wells in West Texas, a 78% increase over drilling activity in 2005. All of the wells were successful. In the fourth quarter of 2006, Mariner drilled 40 development wells in West Texas.

Year-to-date 2007, Mariner has completed 15 wells in West Texas with a 100% success rate and is currently drilling five wells.



Mariner estimates that its total production for 2007 will range from 105 to 115 Bcfe. This represents a 30 - 42% increase over 2006 total production of 81 Bcfe. This estimate is subject to the risk factors described below under the heading "Forward-Looking Statements."

Capital Expenditures

Mariner's capital expenditure budget for 2007 is $658 million, excluding an estimated $19 million for 2005 hurricane season repairs for which Mariner expects to begin receiving insurance reimbursement during 2007. Approximately one-third of the budget will be dedicated to exploration activities and two- thirds to development, including $157 million allocated to the Bass Lite and NW Nansen deepwater projects. Geographically, the budget will be allocated 45% to shelf, 43% to deepwater and 12% to West Texas projects.

Cost Structure

Mariner expects its 2007 expenses (on a $/Mcfe basis) to fall within the following ranges:

     Lease operating              $1.15 - $1.25
     Transportation               $0.14 - $0.18
     General and administrative   $0.19 - $0.23
     Depreciation, depletion
      and amortization
      (with asset retirement
      obligation)                 $4.10 - $4.25



Mariner's reserve replacement rate is 199%, calculated by dividing its total reserve changes for the period by its production for the same period. The proved reserves attributable to the Forest Assets were excluded from the calculation to reflect more accurately Mariner's ongoing operational performance.

Mariner's reserve replacement cost is $3.67 per Mcfe, calculated by dividing its development, exploitation, exploration and acquisition capital expenditures net of proceeds from divestitures for the period by its proved reserve additions and revisions for the period. The cost of the Forest Assets and the corresponding reserve additions were excluded from the calculation to reflect more accurately Mariner's ongoing reserve replacement cost.

The methods Mariner uses to calculate its reserve replacement rate and cost may differ from methods used by other companies to compute similar measures. As a result, its reserve replacement rate and 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 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 the company's 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 cost does not necessarily reflect precisely the cost associated with particular reserves. As a result of various factors that could affect materially the timing and amounts of future increases in reserves and the timing and amounts of future costs, Mariner's future reserve replacement cost may differ materially from that presented.

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

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