Mariner Tags 2010 Capital Budget at $660MM

Mariner Energy has unveiled a 2010 capital budget of approximately $660 million, which assumes closing the acquisition from Edge Petroleum Corporation of its assets and operations by year-end 2009.

Budget Highlights:

  • Onshore: Increased drilling to more fully develop the company's Permian Basin assets, including the Deadwood oil field in Glasscock County and the Scottish Rites Hospital field in Reagan County. Mariner expects to operate 8 - 10 rigs in the Permian in 2010 and to commence development of the South Texas properties upon closing of the Edge Petroleum transaction. Mariner expects to participate in 140 - 170 onshore wells and test several unconventional play concepts during 2010.
  • Deepwater: Program includes delineation wells at the Lucius and Heidelberg deepwater discoveries, exploration of two other deepwater subsalt prospects, 4 - 6 conventional amplitude wells, and development of Balboa and Wide Berth discoveries.
  • Shelf: Drilling of 6 - 8 moderate risk conventional shelf wells and pursuit of more than 30 recompletion opportunities are planned.

The budget is based on oil and natural gas prices averaging $75 per barrel and $5.50 per million British thermal units (MMBtu), respectively, and may be adjusted based upon exploration success and changes in commodity prices and industry conditions. It excludes the costs of hurricane-related repairs and anticipated insurance reimbursements. The company expects to fund 75-80% of its budget from internally generated cashflow.

Scott D. Josey, Chairman, Chief Executive Officer, and President of Mariner Energy, said, "Our 2010 capital program is designed to accomplish five primary objectives. First, we will accelerate drilling of our large portfolio of long-lived, oily Permian properties, much of the production benefit from which is expected to be realized in 2011. Second, we will delineate the significant deepwater discoveries we have made with Anadarko. Third, we will target several high-impact prospects in the deepwater. Fourth, we will develop deepwater discoveries at Balboa and Wide Berth, which should come online in the third quarter 2010 and first quarter 2011, respectively. Fifth, we will continue to build our unconventional resource portfolio and test several ideas. We expect our production for 2010 to range from 130 - 140 Bcfe, and we believe that our program is setting the stage for further increases in 2011."