Mariner to spend $660M on 2010 capital projects

AP News
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Posted: Dec 16, 2009 4:28 PM

Mariner Energy Inc. said Wednesday it plans to boost capital spending in 2010 and raise production from 2009 levels.

The independent oil and gas exploration company intends to spend $660 million on capital projects. That's comparable with a 2009 estimated budget of $580 million to $600 million, according to a company spokesman. He added that separately, Mariner spent an additional $215 million in acquisition expenditures in 2009.

Two-thirds of the 2010 funding will go toward development and exploitation, with the remaining budget applied to exploration projects.

Mariner said it plans to increase onshore, deepwater and shelf drilling activity. Onshore, the company will focus on developing its Permian Basin assets. Deepwater, Mariner plans to drill more wells at the Lucius and Heidelberg discoveries, as well as explore other subsalt prospects and develop its Balboa and Wide Berth discoveries.

The company expects to fund up to 80 percent of the budget from internally generated cash flow.

Mariner's CEO Scott Josey estimated 2010 production in the range of 130 billion to 140 billion cubic feet equivalent. In its third-quarter report in November, Josey predicted 2009 full-year production between 128 Bcfe and 130 Bcfe.

"We believe that our program is setting the stage for further increases in 2011," he said.

Shares of Mariner fell $1.37, or nearly 11 percent, to close at $11.47.