2008-09-24-2007-12-28-2008-01-31

Acquired shallow-water GOM assets, gaining 52.4 Bcfe proved, production of 58.2 MMcfe/d.

Mariner Energy Inc., Houston, (NYSE: ME) has completed its acquisition of Gulf of Mexico shelf operations from StatoilHydro ASA, Stavenger, Norway, (NYSE: STO) for $243 million in cash. The assets represent the shallow-water Gulf of Mexico holdings of the former Spinnaker Exploration Co. Norway-based Norsk Hydro, prior to its merger with Statoil, paid US$2.6 billion for Spinnaker in 2005, including its large deepwater holdings. The assets acquired include estimated proved reserves of 52.4 billion cubic feet equivalent (95% developed) and probable reserves of 24.1 billion equivalent. Production is approximately 58.2 million cubic feet of gas equivalent per day producing from 32 wells (71% operated). The acquisition also includes gas-gathering systems comprised of 31 miles of pipelines generating cash flow of $5 million in the last 12 months and 256,000 net acres of undeveloped leasehold including 11 drill-ready exploration prospects with an estimated net risked reserve potential of 100 billion cubic feet equivalent. The deal was funded from Mariner's bank credit facility, which was amended to increase maximum credit to $1 billion. The purchase price includes reimbursement to StatoilHydro of $8 million of costs to drill the High Island 166 #5 well, which was expected to reach its objective depth prior to closing. The deal is valued at $29.28 barrels of oil equivalent based on 8.3 million barrels equivalent of proved reserves, and $25,313 barrels equivalent per day on production of 9,600 barrels equivalent per day, according to Merrill Lynch Petrie Divestiture Advisors. Mariner chief executive Scott D. Josey says, "The StatoilHydro transaction complements our existing shelf position and we believe upside exists through further cost efficiencies, conversion of probable reserves and drilling opportunities." StatoilHydro senior vice president of North American region Øivind Reinersten says, "StatoilHydro wishes to focus its strategy, operations, people and capital in the deepwater acreage where our technology and skills as the world's largest operator of deepwater fields are most advantageous to us. We will keep all deepwater leases that were associated with Spinnaker." Mariner operates in the Gulf of Mexico and West Texas. Calyon Securities reported this and other acquisitions boost its estimate of Mariner's 2008 production 15%.