subject: Mariner Energy Inc. Valuation Report, June 2010 - Strategic and Operational Analysis [print this page] Mariner Energy IncMariner Energy Inc. Valuation Report, June 2010 - Strategic and Operational Analysis
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Mariner Energy Inc. Valuation Report, June 2010 - Strategic and Operational Analysis
Robust Prospect Inventory Will Drive Future Growth
Huge Exploration Inventory:
Mariner Energy Inc (Mariner) has a huge inventory potential for future exploration and development activities. The company has a net un-risked exploration inventory of around 4.4 Tcfe and 2.2 Tcfe in the deepwater and shelf of the Gulf of Mexico, respectively. Additionally, it has over 3,000 unproved drilling locations in the Permian Basin and several low risk exploitation opportunities in the shelf. This inventory and potential drilling locations are expected to fuel its organic growth and simultaneously reduce its dependence on M&A activities. However, GlobalData expects that the company will try to acquire certain onshore assets in the Permian Basin to counterbalance its growing Gulf of Mexico (GoM) exposure.
Creating a diversified portfolio:
Mariner's current portfolio is highly tilted towards natural gas production and its Gulf of Mexico assets. Almost 86% of the company's total production was from the Gulf of Mexico in 2009. Additionally, 72% of the company's total production is natural gas. Thus due to its concentration on the GoM and its dependence on natural gas Mariner is now planning to diversify its energy portfolio by expanding its onshore exposure, which will also increase its crude oil production in the coming years. The company has increased its development activities in the Permian Basin and other onshore regions to expand its onshore production. In line with its objective to expand its oil asset base, the company has been exploring unconventional oil resources in the US and Canada. Currently, Mariner has around 43,000 net acres of unconventional assets.
Substantial Discoveries in 2009:
Mariner's exploration activities have been extremely successful, with the company making several discoveries during the past year. The year began with Mariner announcing three discoveries: Heidelberg and Bushwood, which are deepwater discoveries and Smoothie, a deep shelf discovery. In Q3 2009 Mariner discovered Wide Berth in the deepwater Green Canyon 490 and South Marsh Island 10 in the GoM shelf. Lucius on Keathley Canyon block 875 was Mariner's second subsalt deepwater discovery made in December 2009. Finally, in Q1 2010 the company announced another two discoveries. These were Mandy, a deepwater oil field in Mississippi Canyon block 199 and South Pass 75, a gas field on the shelf. Apart from these Gulf of Mexico discoveries, the company also discovered a new oil field at Deadwood in the Permian Basin during H1 2009. The Deadwood field has over 3,000 gross feet of conventional and unconventional reservoir columns and an estimated ultimate recovery of 150 Mboe.
2010 Production:
GlobalData anticipates Mariner's 2010 production to increase to 22.3 MMboe, a growth of around 5.7% over its 2009 production. For more details, please vist http://www.reportreserve.com/reportdet.php?company=GlobalData&reportid=10257
