Mariner Energy reported adjusted net income for first quarter 2009, which excludes a non-recurring gain and the non-cash charge for the ceiling test impairment, was $19.8 million, or $0.22 per share.
Highlights for the first quarter 2009 comprises:
— Operating cash flow was $143 million for first quarter 2009, compared with $239 million in the year-ago quarter
— Production raised 25% from fourth quarter 2008 to 29.5 billion cubic feet of gas equivalent (Bcfe) from 23.5 Bcfe
— Mariner Energy announced offshore exploration discoveries on two projects, comprising deepwater success at Green Canyon block 859 (Heidelberg) and on the shelf at South Marsh Island 150
— The company was the apparent high bidder on 12 blocks in Central Gulf of Mexico lease sale 208, with two of the deepwater blocks and one shelf block already granted
— Mariner Energy added above 4,200 net acres to its position in the Permian basin
“We are off to a good start for the year with growth initiatives underway in all of our core areas. Our production increased 25% over the preceding quarter as we have restored most of our production that was affected by Hurricane Ike. We expect our production to continue to ramp up during the year as new fields, including Geauxpher, Daniel Boone, Viosca Knoll 821, and South Marsh Island 150, are brought onstream.”
“Our deep shelf discovery at Smoothie commenced production on May 2, about four months from discovery. We also announced deepwater discoveries at Heidelberg and Bushwood, which are being appraised. We had another successful offshore lease sale, of which three leases have now been awarded. In the Permian Basin, we expanded our acreage position in our Deadwood prospect and continue to observe encouraging results from our delineation of this project,” said Scott D. Josey, Mariner’s chairman, chief executive officer and president.
Non-Recurring Gain and Non-Cash Charge
Mariner Energy’s results for first quarter 2009 reflect a non-recurring, after-tax gain of $10.7 million related to an arbitration award. Based on low natural gas prices at March 31, 2009, the company also recorded a full cost ceiling test impairment of its proved gas properties in the amount of $704.7 million.
First Quarter 2009 Results
For the first quarter of 2009, adjusted net income, which eliminates the non-recurring gain and non-cash charge, was $19.8 million for first quarter 2009, or $0.22 per basic and fully-diluted share. The lower year-over-year results are due mainly to lower commodity prices and to decrease production volumes as a result of Hurricane Ike.
Net production for first quarter 2009 was 29.5 Bcfe, compared with 31.3 Bcfe for year-ago quarter. Total natural gas net production for first quarter 2009 was 22.1 billion cubic feet (Bcf), compared with 21 Bcf in the eyar-ago quarter. Total net oil production for first quarter 2009 was one million barrels (MMBbls), compared with 1.4 MMBbls in the year-ago quarter. Natural gas liquids (NGL) net production for first quarter of 2009 was 0.3 MMBbls, compared with 0.4 MMBbls in the year-ago quarter.
For first quarter 2009, Mariner Energy’s average realized natural gas price was $6.95 per thousand cubic feet (Mcf) compared with $8.57 per Mcf in the year-ago quarter. The company’s average realized oil price was $62.81 per barrel (Bbl) for first quarter 2009, compared with $84.16 per Bbl in the year-ago quarter. The average realized NGL price was $23.70 per Bbl for first quarter 2009, compared with $55.65 per Bbl in the year-ago quarter. Average realized prices reflect settlements during the period under Mariner Energy’s hedging program.
