Mariner Exits 2Q with 'Strong Cash Flow, Excellent Liquidity'
Mariner Energy reported second quarter 2009 operating and financial results. The company reported net income of $17.2 million for the three-month period ended June 30, 2009, with fully diluted earnings per share (EPS) of $0.19. For the same period in the prior year, Mariner reported net income of $123.4 million with fully diluted EPS of $1.39.
Highlights for the second quarter 2009 include:
- Production commenced from the Geauxpher field on Garden Banks Block 462 less than a year from discovery with initial gross production rates of approximately 115 million cubic feet of natural gas equivalent per day (MMcfe/d). The field, which is located in water depths of 2,700 feet, is currently producing approximately 105 MMcfe/d.
- Success at Mariner's Deadwood exploration play in West Texas with the evaluation of results from initial production tests and the addition of 2,000 net acres to the company's position in the Permian Basin.
- Mariner raised net proceeds of approximately $446 million through concurrent equity and debt offerings to improve the company's liquidity and reduce its overall leverage.
- Mariner collected payment on approximately $50 million of insurance claims relating to hurricane damage and anticipates additional collections in the second half of the year.
- In the first six months of 2009, Mariner generated more than $280 million in operating cash flow (please see end of this release for prior year data and reconciliation of this non-GAAP measure).
- Owing to positive results in the company's liquidity, improvement in oil prices, and reductions in service costs, Mariner recently increased its 2009 capital program by approximately $50 million predominantly to fund, oily, long-life projects in the Permian Basin.
"During the second quarter we increased production from first quarter 2009 and proactively fortified our balance sheet. We are in the enviable position of strong cash flow and excellent liquidity, enabling us to weather events outside our control and capitalize on opportunities that may develop in this challenging environment," said Scott D. Josey, Mariner's Chairman, Chief Executive Officer and President.
SECOND QUARTER 2009 RESULTS
For the three-month period ended June 30, 2009, Mariner reported net income of $17.2 million, or $0.19 per basic and fully-diluted share. This compares with net income of $123.4 million and basic and fully-diluted earnings per share of $1.40 and $1.39, respectively, for the same three-month period in the prior year. The lower year-over-year results are due primarily to lower commodity prices and decreased production volumes.
Net production for second quarter 2009 was 32.9 billion cubic feet of natural gas equivalent (Bcfe), compared with 36.4 Bcfe for second quarter 2008. Total natural gas net production for second quarter 2009 was 23.8 billion cubic feet (Bcf), compared with 24.4 Bcf for the same period in the prior year. Total net oil production for second quarter 2009 was 1.2 million barrels (MMBbls), compared with 1.5 MMBbls for the same period in 2008. Natural gas liquids (NGL) net production for second quarter 2009 was 0.3 MMBbls, compared with 0.5 MMBbls for second quarter 2008.
For second quarter 2009, Mariner's average realized natural gas price was $5.98 per thousand cubic feet (Mcf) compared with $10.27 per Mcf for the same period in 2008. Mariner's average realized oil price was $66.91 per barrel (Bbl) for second quarter 2009, compared with $96.24 per Bbl for second quarter 2008. The average realized NGL price was $24.68 per Bbl for second quarter 2009, compared with $64.69 per Bbl for the same period in 2008. Average realized prices reflect settlements during the period under Mariner's hedging program.
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