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Mariner Energy to Purchase Edge Petroleum's Operations

^{Published on 2009-12-15 04:13:06 - Market Wire}
 

HOUSTON, TX--(Marketwire - December 15, 2009) - Mariner Energy, Inc. (NYSE: [ ME ]) announced today that it has agreed to purchase the subsidiaries and operations of Edge Petroleum Corporation in a transaction valued at approximately $215 million after anticipated purchase price adjustments. Mariner expects the transaction to close by December 31, 2009, with an effective date of June 30, 2009. The transaction has been approved by the bankruptcy court in which Edge's Chapter 11 case is pending, subject to any appeals. Mariner will utilize its revolving credit facility to fund the acquisition.

Transaction and asset highlights include:

 -- Edge reported year-end 2008 estimated proved reserves of 124 billion cubic feet of natural gas equivalent (Bcfe), all fully engineered by independent reservoir evaluation consultants, approximately 90% by Ryder Scott Company, L.P. Mariner estimates that at December 31, 2009, the properties include approximately 106 Bcfe in estimated proved reserves, 70% of which are developed (72% gas, 28% liquids). -- More than 80% of the reserves are located in South Texas, establishing a new core area for Mariner. Approximately 45% of the reserves are based in the Flores/Bloomberg field in Starr County. -- Third quarter 2009 daily production from the assets averaged approximately 29 million cubic feet of natural gas equivalent. -- The assets also include nearly 70,000 net undeveloped acres, primarily in Texas and New Mexico. -- Mariner structured the transaction to preserve certain tax attributes of the Edge subsidiaries, including the tax basis of the assets acquired and net operating losses. Mariner estimates the potential value of these tax attributes to be approximately $95 million. 

"Consistent with our stated strategy of expanding our onshore presence, the Edge transaction establishes a new core area for the company. Based on year-end 2008 results, the combination results in more than half of Mariner's proved reserves being onshore. The economic metrics of the transaction are compelling, potentially further enhanced by the preservation of the tax attributes. We expect the assets to generate excess cash flow while self-funding future development costs. We look forward to welcoming the Edge personnel to our company," said Scott D. Josey, Chairman, Chief Executive Officer and President of Mariner.

About Mariner Energy, Inc.

Mariner Energy is an independent oil and gas exploration, development, and production company headquartered in Houston, Texas, with principal operations in the Permian Basin and the Gulf of Mexico deepwater and shelf. For more information about Mariner, visit the company's website at [ www.mariner-energy.com ].

Important Information Concerning Forward-looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, that address activities that Mariner assumes, plans, expects, believes, projects, estimates or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Our forward-looking statements generally are accompanied by words such as "may," "will," "estimate," "project," "predict," "believe," "expect," "anticipate," "potential," "plan," "goal" or other words that convey the uncertainty of future events or outcomes. Forward-looking statements in this press release are based on Mariner's current belief based on currently available information as to the outcome and timing of future events and assumptions that Mariner believes are reasonable. Mariner does not undertake to update its guidance, estimates or other forward-looking statements as conditions change or additional information becomes available. Estimated reserves are related to hydrocarbon prices. Actual future prices may vary significantly from prices used in preparation of the reserve estimates. Therefore, volumes of reserves actually recovered may differ significantly from such estimates. Mariner cautions that its forward-looking statements are subject to all of the risks and uncertainties normally incident to the exploration for and development, production and sale of oil and natural gas. These risks include, but are not limited to, price volatility or inflation, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating future oil and gas production or reserves, and other risks described in the Annual Report on Form 10-K for the fiscal year ended December 31, 2008, as amended, and other documents filed by Mariner with the Securities and Exchange Commission (SEC). Any of these factors could cause Mariner's actual results and plans to differ materially from those in the forward-looking statements. Investors are urged to read the Annual Report on Form 10-K for the year ended December 31, 2008, as amended, and other documents filed by Mariner with the SEC.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities of Mariner.