Mariner Energy Reports 2008 First-Quarter Earnings Results and Operational Highlights

Mariner Energy Reports 2008 First-Quarter Earnings Results and Operational
Highlights
- Net income up 89% and fully-diluted earnings per share up 82% compared with
first quarter 2007

HOUSTON, May 6 /PRNewswire-FirstCall/ -- Mariner Energy, Inc. (NYSE: ME)
today reported record quarterly revenues, income and production for the
three-month period ended March 31, 2008. Net income for the 2008 first
quarter was $72.1 million, an increase of 89% compared with the same period of
2007. Fully-diluted earnings per share (EPS) were $0.82, up 82% from
$0.45 fully-diluted EPS reported for the first quarter 2007. Other financial
and operational highlights for the 2008 first quarter include:
-- Average daily production increased to 344 million cubic feet of natural
gas equivalent per day (MMcfe/d), up 22% compared with the same period
of 2007.
-- Total revenues increased 49% to $315.9 million, up from the
$211.6 million reported for first quarter a year ago.
-- Net cash provided by operations for the first quarter 2008 increased
39% to $214.2 million, up from $153.6 million for the first quarter
2007.
-- Mariner completed several significant transactions and projects,
including the previously-disclosed acquisition in January of an
indirect subsidiary of StatoilHydro ASA owning substantially all of its
Gulf of Mexico shelf properties, the start-up in February of production
from the Bass Lite and Northwest Nansen fields in the deepwater Gulf of
Mexico, and purchase in February of additional working interests in the
Mariner-operated Spraberry Aldwell Unit in West Texas, which
complements the year-end 2007 West Texas acquisition. The company also
was the apparent high bidder on 19 blocks in the U.S. Minerals
Management Service's Central Gulf of Mexico lease sale held during
March. One block has already been awarded.

"We are clearly pleased with the performance for the quarter. Our strategy
of balanced growth is working well, with solid contributions from each of our
core areas. Consistent with our objective of focused and efficient growth, we
completed transactions and projects that we believe will generate near-term
and long-term shareholder value. We believe we are on track to deliver
excellent results in 2008," said Scott D. Josey, Chairman, Chief Executive and
President of Mariner Energy.
FIRST QUARTER 2008 RESULTS
First quarter 2008 net income was $72.1 million, compared with
$38.2 million for the same period in 2007. Basic and fully-diluted EPS for
the first quarter 2008 were $0.83 and $0.82, respectively, up from the
$0.45 basic and fully-diluted EPS reported for the first quarter of 2007.
Mariner's net production during the first quarter 2008 was 31.3 billion
cubic feet of natural gas equivalent (Bcfe), compared with 25.4 Bcfe for the
first quarter 2007. Net natural gas production for the first quarter 2008 was
21.0 billion cubic feet (Bcf), a 20% increase compared with the 17.5 Bcf
reported for the first quarter 2007. Net oil production for the first quarter
2008 was up 29% to 1.35 million barrels (MMBbls), compared with 1.05 MMBbls
for the same period in 2007. Net natural gas liquids (NGL) production for the
first quarter 2008 was 0.38 MMBbls, a 36% increase compared with the
0.28 MMBbls reported for the first quarter 2007.
For the first quarter 2008, Mariner's average realized natural gas price
was $8.57 per thousand cubic feet (Mcf), compared with $8.04 per Mcf for the
same period in 2007. Mariner's average realized oil price was $84.16 per
barrel (Bbl) for the first quarter 2008, compared with $57.76 per Bbl for the
same period in 2007. The first quarter 2008 average realized NGL price was
$55.65 per Bbl, compared with $33.04 per Bbl for the first quarter 2007.
Average realized prices reflect settlements during the period under Mariner's
hedging program.
Mariner provides additional information regarding its hedging activities
in quarterly and annual reports filed with the Securities and Exchange
Commission.

OPERATIONAL UPDATE

Offshore
Mariner drilled five offshore wells during first quarter of 2008. Four of
the five were successful:

Water
Working Depth
Well Name Operator Interest (Ft) Location
Eugene Island 342 C16BP1 Mariner 50 % 287 Conventional Shelf
Vermilion 380 A20 Mariner 100 % 340 Conventional Shelf
Vermilion 380 A20ST1 Mariner 100 % 340 Conventional Shelf
South Marsh 76 F-1 Mariner 100 % 138 Conventional Shelf

Subsequent to the first quarter, Mariner has drilled two successful
offshore wells:

Water
Working Depth
Well Name Operator Interest (Ft) Location
West Cameron 110 #19 Mariner 50 % 41 Conventional Shelf
Viosca Knoll 821 #1 Mariner 30 % 1,108 Deepwater

Mariner is currently drilling three wells.

Water
Working Depth
Well Name Operator Interest (Ft) Location
South Marsh 76 F-2 Mariner 100 % 138 Conventional Shelf
Eugene Island 342 C17 Mariner 50 % 287 Conventional Shelf
Garden Banks 462 #1 Mariner 60 % 2,820 Deepwater

Onshore
In the first quarter of 2008, Mariner drilled 36 wells in West Texas, all
of which were successful.
CONFERENCE CALL TO DISCUSS RESULTS
A conference call has been scheduled for 11:00 a.m. Eastern Time
(10:00 a.m. Central Time) on Wednesday, May 7, 2008, to discuss first quarter
2008 financial and operating results. To participate in the call, please dial
(866) 362-4832 at least 10 minutes prior to the scheduled start time.
International callers can dial (617) 597-5364. The conference pass code for
both numbers is 77864427. The call also will be webcast live over the
internet and can be accessed through the Investor Relations' Webcasts and
Presentations section of Mariner's website at http://www.mariner-energy.com.
A telephonic replay of the call will be available through May 17, 2008, by
dialing (888) 286-8010 or (617) 801-6888, pass code 37526232. An archive of
the webcast will be available shortly after the call through June 30, 2008, on
Mariner's website. IMPORTANT INFORMATION CONCERNING FORWARD-LOOKING
STATEMENTS AND CERTAIN
STATISTICS
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 are generally 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. The forward-looking statements provided in this
press release are based on the current belief of Mariner 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 as conditions change or as additional
information becomes available and there can be no assurance that any of the
guidance estimates can or will be achieved. 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, 2007, and other documents
filed by Mariner with the SEC. Any of these factors could cause the actual
results and plans of Mariner 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, 2007 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.
Reconciliation of Non-GAAP Measure: Operating Cash Flow
Operating cash flow (OCF) is not a financial or operating measure under
generally accepted accounting principles in the United States of America
(GAAP). The table below reconciles OCF to related GAAP information. Mariner
believes that OCF is a widely accepted financial indicator that provides
additional information about its ability to meet its future requirements for
debt service, capital expenditures and working capital, but OCF should not be
considered in isolation or as a substitute for net income, operating income,
net cash provided by operating activities or any other measure of financial
performance presented in accordance with GAAP or as a measure of a company's
profitability or liquidity.
Three Months Ended March 31,
2008 2007
(In Thousands)

Cash flow from operating activities (GAAP) $214,171 $153,629
Changes in assets and liabilities 25,843 5,026
Operating cash flow (non-GAAP) $240,014 $158,655

COMPARATIVE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007

MARINER ENERGY, INC.
SELECTED OPERATIONAL RESULTS (1)
(Unaudited)

Net Production, Realized Pricing and Operating Costs
Three Months Ended
March 31,
2008 2007
Net production:
Natural gas (Bcf) 21.0 17.5
Oil (MMBbls) 1.35 1.05
Natural gas liquids (MMBbls) 0.38 0.28
Total production (Bcfe) 31.3 25.4

Realized prices (net of hedging):
Natural gas ($/Mcf) $8.57 $8.04
Oil ($/Bbl) 84.16 57.76
Natural gas liquids ($/Bbl) 55.65 33.04

Operating costs per Mcfe:
Lease operating expense $1.43 $1.26
Severance and ad valorem taxes 0.15 0.12
Transportation expense 0.10 0.07
General and administrative expense 0.38 0.50
Depreciation, depletion and amortization 3.81 3.89

(1) Certain prior year amounts have been reclassified to conform to
current year presentation.

COMPARATIVE CONSOLIDATED FINANCIAL STATEMENTS (1)
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(In thousands, except per share data)
(Unaudited)

Three Months Ended
March 31,
2008 2007
Revenues:
Natural gas $179,623 $140,532
Oil 113,614 60,451
Natural gas liquids 20,981 9,149
Other revenues 1,679 1,472
Total revenues 315,897 211,604
Cost and Expenses:
Lease operating expense 44,832 32,054
Severance and ad valorem taxes 4,610 2,990
Transportation expense 3,019 1,902
General and administrative expense 11,926 12,593
Depreciation, depletion and amortization 119,318 98,855
Other expense 537 168
Total costs and expenses 184,242 148,562
OPERATING INCOME 131,655 63,042

Other Income (Expense):
Interest income 326 291
Interest expense, net of capitalized amounts (18,571) (12,347)
Other income - 5,431
Income before taxes and minority interest 113,410 56,417
Provision for income taxes (41,194) (18,210)
Minority Interest Expense (90) -
NET INCOME $72,126 $38,207

Earnings per share:
Net income per share -- basic $0.83 $0.45
Net income per share -- diluted $0.82 $0.45

Weighted average shares outstanding -- basic 87,294 85,516
Weighted average shares outstanding -- diluted 88,013 85,705

(1) Certain prior year amounts have been reclassified to conform to
current year presentation.

MARINER ENERGY, INC.
BALANCE SHEET
(In Thousands)
(Unaudited)

March 31, December 31,
2008 2007
Current Assets
Cash and cash equivalents $3,872 $18,589
Receivables, net of allowances 208,415 157,774
Insurance receivables 26,683 26,683
Derivative financial instruments - 11,863
Intangible assets 9,319 17,209
Prepaid expenses and other 24,525 10,630
Deferred tax asset 51,015 6,232
Total current assets 323,829 248,980

Property and equipment (net) 2,835,477 2,420,194
Restricted cash - 5,000
Goodwill 295,598 295,598
Insurance receivables 56,924 56,924
Derivative financial instruments - 691
Other Assets, Net of Amortization 65,442 56,248
TOTAL ASSETS $3,577,270 $3,083,635

Current Liabilities
Accounts payable $13,894 $1,064
Accrued liabilities 105,531 96,936
Accrued capital costs 165,018 159,010
Abandonment liability 32,683 30,985
Accrued interest 20,840 7,726
Derivative financial instruments 132,546 19,468
Total current liabilities 470,512 315,189

Long-Term Liabilities
Abandonment liability 232,703 191,021
Deferred income tax 378,953 343,948
Derivative financial instruments 44,066 25,343
Long-term debt, bank credit facility 430,000 179,000
Long-term debt, senior unsecured notes 600,000 600,000
Other long-term liabilities 45,104 38,115
Total long-term liabilities 1,730,826 1,377,427

Minority Interest $91 $1

Stockholders' Equity
Common stock, $.0001 par value;
180,000,000 shares authorized; 9 9
87,810,265 shares issued and outstanding at
March 31, 2008; 180,000,000 shares authorized,
87,229,312 shares issued and outstanding
at December 31, 2007
Additional paid-in capital 1,057,039 1,054,089
Accumulated other comprehensive
income/(loss) (112,829) (22,576)
Accumulated retained earnings 431,622 359,496
Total stockholders' equity 1,375,841 1,391,018
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,577,270 $3,083,635

MARINER ENERGY, INC.
SELECTED CASH FLOW INFORMATION (1)
(In Thousands)
(Unaudited)

Three Months Ended March 31,
2008 2007

Operating cash flow (2) $240,014 $158,655
Changes in operating assets and liabilities (25,843) (5,026)
Net cash provided by operating activities $214,171 $153,629

Net cash used in investing activities $(480,213) $(116,942)

Net cash provided by (used in) financing
activities $251,325 $(39,955)

Decrease in cash and cash equivalents $(14,717) $(3,268)

(1) Certain prior year amounts have been reclassified to conform to
current year presentation.
(2) See above for reconciliation of this non-GAAP measure.

About Mariner Energy, Inc.
Mariner Energy, Inc. is an independent oil and gas exploration,
development and production company headquartered in Houston, Texas, with
principal operations in West Texas and the Gulf of Mexico. For more
information about Mariner, please visit its website at
http://www.mariner-energy.com.
SOURCE Mariner Energy, Inc.

Patrick Cassidy, Director, Investor Relations of Mariner Energy, Inc.,
+1-713-954-5558, ir@mariner-energy.com