EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (hereinafter called this “Agreement”) is entered
into effective as of October 5, 1998 (the “Effective Date”), by and between
MARINER ENERGY, INC. (hereinafter called “Company”) and C. Ken Burgess
(hereinafter called “Employee”).

     WHEREAS, Company desires to employ Employee upon the terms and conditions
set forth herein; and

     WHEREAS, Employee desires to be employed by Company upon the terms and
conditions set forth herein;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto agree as follows:

     1.     Employment.

Company hereby employs Employee as an employee of Company to perform such duties
and responsibilities and act in such capacity as may from time to time be
determined by Company. The place of employment shall be at such place or places
as Company may designate. If Company elects to utilize Employee’s services
outside the metropolitan area of the City of Houston, Texas, Employee’s
relocation expenses and allowances will be paid in accordance with Company’s
relocation policy. Employee hereby accepts such employment, and agrees to serve
Company faithfully, diligently and in a good and workmanlike manner.

     2.     Term.

The term of employment shall be for a term of two (2) years beginning on the
Effective Date, subject, however, to the provisions of paragraph 3.

      3.     Extension and Termination.

3.1 If either Employee or Company elects to terminate this Agreement at the end
of the term stated in paragraph 2, or at the end of any extended term hereof as
hereinafter provided, notice of the election to terminate shall be given to the
other party no later than three (3) months before the end of this Agreement. If
no notice is given by either party, the term, or extended term, of this
Agreement shall be deemed to have been extended for an additional three (3)
months.

3.2 In the event Company elects to terminate this Agreement as provided in
paragraph 3.1 above:

3.2.1 Company shall pay to Employee his salary and other benefits provided
elsewhere in this Agreement for Employee’s services rendered to Company
hereunder through the end of such term or extended term.

3.2.2 Company shall pay to Employee, on or before the last day of his employment
hereunder, a lump sum cash payment equal to three (3) months’ salary at
Employee’s monthly rate for the month immediately preceding the month in which
Company elects to terminate this Agreement.

3.2.3 Company shall pay to Employee, on or before the last day of his employment
hereunder, a lump sum cash payment for all (a) vacation time carried forward
from a previous year in accordance with paragraph 8, and (b) all earned and
unused vacation time for the then current year. Earned vacation time shall, for
the purpose of this paragraph, be calculated by dividing the number of days in
the calendar year which have transpired by 365, and then multiplying the result
by the number of vacation days to which Employee is entitled for that year
pursuant to paragraph 8.

3.3 In the event Employee elects to terminate this Agreement as provided in
paragraph 3.1 above:

3.3.1 Employee agrees to serve to the end of the term, or extended term hereof,
unless waived by Company.

3.3.2 The provisions of paragraphs 3.2.1 and 3.2.3 shall be applicable, but
Employee shall not be entitled to the payment provided for in paragraph 3.2.2.

3.4 Company may at its option consent to a request by Employee to terminate this
Agreement at a time other than that stated in paragraph 2, as extended, in which
case the date requested by Employee and agreed to by Company will be the end of
the term of this Agreement and the provisions of paragraph 3.3 shall be
applicable.

3.5 Company may terminate this Agreement for “Cause” (as hereinafter defined in
this paragraph 3.5) upon written notice of such termination to Employee by
Company. Any termination of this Agreement by Company for Cause shall be
effective thirty (30) days after written notice of termination for Cause is
given by Company to Employee. If Company terminates this Agreement for Cause,
Company shall have no liability or obligation to Employee thereafter under this
Agreement except for the payment of his salary and other benefits through the
month of discharge, prorated in the case of salary for the month of discharge on
a daily basis to the date of termination. As used in this Agreement, the term
“Cause” means (a) Employee is found guilty of, admits in writing facts amounting
to, or is held civilly liable for fraud, embezzlement or dishonesty, (b)
Employee is convicted of a felony involving a crime of moral turpitude or any
other felony if the Board of Directors of the Company in good faith determines
that the continued employment of the Employee would be materially detrimental to
the Company (in any case which felony through lapse of time or otherwise is not
subject to appeal), (c) Employee knowingly discloses trade secrets or
confidential Company matters to unauthorized persons, (d) Employee willfully
breaches or habitually neglects any duties he is required to perform under the
terms of this Agreement and any such breach or neglect is not cured within
thirty (30) days after Company has provided Employee with written notice of such
breach or neglect, (e) Employee materially breaches any of the other material
terms of this Agreement and any such breach is not cured within thirty (30) days
after the Company has provided Employee with written notice of such breach, and
(f) the occurrence of an action or finding described in paragraph 15, except as
otherwise provided in paragraph 15. The waiver by Company of a breach of any
provision of this Agreement by Employee shall not operate or be construed as a
waiver of any subsequent breach by Employee.

3.6 In the event Company terminates this Agreement or discharges Employee other
than as provided in paragraphs 3.1, 3.4 or 3.5 above, Employee shall be entitled
to receive on the date of such termination or discharge:

3.6.1 A lump sum cash payment equal to Employee’s salary, at Employee’s monthly
rate for the month immediately preceding the month in which such termination or
discharge occurs, for the unexpired portion of the term or extended term hereof
then in effect.

3.6.2 The payments and other benefits provided for in paragraphs 3.2.2 and 3.2.3
hereof.

3.7 In the event Employee terminates this Agreement for “Good Reason” (as
defined in paragraph 3.9), and prior to such termination Employee has not
terminated this Agreement under paragraph 3.1 hereof, Employee shall be entitled
to receive from Company on the date of such termination:

3.7.1 A lump sum cash payment equal to Employee’s salary, at Employee’s monthly
rate in effect at the effective time of such termination (but prior to giving
effect to any reduction therein which precipitated such termination), for the
unexpired portion of the term or extended term hereof then in effect.

3.7.2 A lump sum cash payment equal to three (3) months’ salary, at Employee’s
rate in effect at the time of such termination (but prior to giving effect to
any reduction therein which precipitated such termination).

3.7.3 The payments and other benefits provided for in paragraph 3.2.3.

3.8 Any termination of this Agreement by Employee for Good Reason shall be
effective thirty (30) days after written notice of termination for Good Reason
is given by Employee to Company

3.9 As used in this Agreement, the term “Good Reason” means any one or more of
the following events has occurred:

3.9.1 Any (a) reduction in Employee’s monthly salary as established in paragraph
5 (including subsequent increases), or (b) reduction in, or failure to allow or
continue Employee’s participation in, any employee benefit plan or program
(except when such benefit plan or program is replaced with another benefit plan,
program or arrangement that provides Employee, in the aggregate, with reasonably
comparable benefits) in which Employee is participating or is eligible to
participate prior to such reduction or failure (other than as a result of the
expiration of such plan or program), and any such reduction, discontinuance or
failure is not cured within thirty (30) days after Employee has provided Company
with written notice of such reduction or failure; or

3.9.2 A breach of any material provision of this Agreement by Company (other
than any breach described in paragraph 3.9.1) which is not cured within thirty
(30) days after Employee has provided Company with written notice of such
breach.

      4.      Confidential Information.

4.1 Employee agrees that he will, during the term of this Agreement, and for a
period of four (4) years from the date of termination of his employment
hereunder, keep secret and confidential and not disclose to any party not a
party to this Agreement, land or lease data, geological or geophysical data,
well data or any other information which he may receive as a result of the
performance of his duties hereunder, except when disclosure is necessary for the
performance of his duties to Company hereunder. This paragraph shall not apply
to information that is in the public domain through no action of Employee.

4.2 Upon termination of this employment hereunder, Employee shall promptly
deliver to Company all written information and documents (whether confidential
or not), and all copies thereof, relating to Company’s business and activities
and which are in the possession of or under the control of Employee.

      5.      Salary.

As compensation for his services rendered to Company hereunder, Company shall
pay to Employee a salary at the rate of $11,250.00 per month. Employee’s salary
may be reviewed at such times as may be determined by Company, and Company may
at its discretion increase this salary. Employee’s salary shall be paid in two
equal monthly installments, payable on the fifteenth and last days of each month
(or on the first business day of Company thereafter if any such payment date is
not a business day of Company), subject to any and all necessary withholdings
and deductions.

      6.      Automobile Allowance.

Company agrees to pay an automobile allowance of $250.00 dollars per month to
Employee. In addition to such monthly allowance, Company shall pay, in
accordance with Company policy, for all gasoline, insurance and maintenance
required for use of the automobile.

      7.      Business Expenses.

Employee is authorized to incur reasonable business expenses in accordance with
Company’s policies as may be established from time to time for promoting the
business of Company, including expenditures for entertainment and travel.
Company shall reimburse Employee from time to time for all such business
expenses in accordance with those policies adopted by Company which include, but
are not limited to, the requirement that Employee timely present to Company:

7.1 The amount of the expenditure;

7.2 The time, place and description of the expense;

7.3 The business reason for the expenditure and business benefit derived or
expected to be derived therefrom; and

7.4 The name and occupation of the person or persons entertained to establish
the business relationship with Company.

With respect to any reimbursable business expense contemplated above exceeding
twenty-five dollars ($25.00), Employee will furnish documentary evidence of such
expense to Company.

      8.      Vacation.

Employee shall be entitled to an annual vacation leave of twenty (20) days per
calendar year at full pay. The timing and use of such vacation days shall be
requested by Employee and approved by Company in accordance with its policy. Up
to five (5) days of vacation leave may be carried over from one calendar year to
the next calendar year. Employee shall not be entitled to receive payment in
lieu of unused vacation time except as otherwise provided herein. With prior
approval, vacation may be deferred if business matters keep Employee from taking
his normal vacation.

      9.      Insurance.

Employee shall be eligible for participation in such insurance programs as
Company shall institute from time to time covering medical and dental expenses
and such life and accidental death and dismemberment insurance programs as
Company shall institute from time to time. Payment of premiums for such
coverages shall be in accordance with Company policy covering all employees as
may be established from time to time by Company. Employee shall also be eligible
for participation in such retirement, pension, deferred compensation and other
benefit programs the Company shall initiate from time to time.

     10.     Outside Activities.

During the term or extended term of this Agreement, Employee shall devote all of
his working time, energy and talents to the due discharge and performance of his
duties hereunder, at the direction and subject to the control of Company, and
shall perform such services and duties as shall reasonably be required from him
from time to time by Company. Employee agrees that he will not knowingly become
involved in a conflict of interest with Company or its subsidiaries, or upon
discovery thereof, allow such a conflict to continue. Moreover, Employee agrees
to provide Company a statement of all other directorships Employee holds, with a
brief description of the business activities of each organization. This
statement shall be provided on or before December 31 of each year. If, in the
opinion of Company, a conflict of interest exists between Company (and its
affiliates) and the organization in which the Employee holds a directorship,
Company can require Employee to resign the outside directorship.

    11.      Right to Invest.

Nothing in this Agreement is intended or shall be construed to limit Employee’s
right (i) to engage in passive personal investments, including, but not limited
to, holding as an investment not more than five percent (5%) of any class of the
issued and outstanding and publicly traded (on a recognized national or regional
securities exchange or in the over-the-counter market) capital stock or other
securities of any corporation or other entity that conducts activities that
compete with the business of Company or any affiliate of Company; or (ii) to
invest, individually or with others, in oil and gas prospects, subject, however,
in the case of oil and gas prospects to the following conditions:

11.1 Company must have first had the right and opportunity to purchase all of
the interest in any prospect made available to Employee, even if this would
preclude Employee’s participation.

11.2 Company must have made known its election either to participate in less
than the full interest made available to Employee and have no desire to acquire
an additional interest, or declined to participate at all in the prospect. If
Company elects to participate in less than the full interest made available to
Employee, Employee may invest in the portion of such interest not acquired by
Company.

11.3 Employee must purchase his interest in the oil and gas prospect on terms
which are no more favorable than those made available to Company.

      12.    Disability During Employment.

If Employee shall become unable to perform his duties by reason of disability,
he shall be entitled to receive, in addition to any insurance benefits he may
receive, all of his salary for the first one (1) month of his disability, and
one-half (½) of his salary for the next three (3) months of disability. Periods
of disability shall not be cumulative so long as they are separated by at least
ninety (90) days of continuous service.

The term “disability” shall mean disability which, in the opinion of a doctor
satisfactory to Company, renders Employee unable to perform his duties hereunder
as evidenced by such doctor’s certificate. The date disability commences shall
be the date Employee first absents himself from work during a continuous period
of disability.

      13.    Merger or Acquisition.

In the event Company should be acquired by or merged into another company, by
signature of Company’s authorized representatives, Company hereby agrees that
this Employment Agreement shall be binding upon Company, its successors and
assigns, and shall be disclosed to any party considering merger with, or
acquisition of, Company.

      14.    Arbitration.

14.1 If a dispute arises out of or related to this Agreement and the dispute
cannot be settled through direct discussions, Company and Employee agree that
they shall first endeavor to settle the dispute in an amicable fashion. If such
efforts fail to resolve the dispute, the dispute shall, except as otherwise
provided in paragraph 18, be resolved as follows:

14.1.1 Except as provided in paragraph 14.1.2 below, any and all claims,
demands, cause of action, disputes, controversies, and other matters in question
arising out of or relating to this Agreement, any provision hereof, the alleged
breach thereof, or in any way relating to the subject matter of this Agreement,
involving Company, Employee, and/or their respective representatives, even
though some or all of such claims allegedly are extra contractual in nature,
whether such claims sound in contract, tort, or otherwise, at law or in equity,
under state or federal law, whether provided by statute or the common law, for
damages or any other relief, shall be resolved by binding arbitration pursuant
to the Federal Arbitration Act in accordance with the Commercial Arbitration
Rules then in effect with the American Arbitration Association (the “AAA”). The
arbitration proceeding shall be conducted in Houston, Texas. The arbitration may
be initiated by either party by providing to the other a written notice of
arbitration specifying the claims, and the parties shall thereafter endeavor to
agree on an arbitrator. If within thirty (30) days of the notice of initiation
of the arbitration procedure, the parties are unable to agree on an arbitrator,
the party requesting arbitration shall file a request with the AAA that the
Houston, Texas office of the AAA provide a list of potential arbitrators to both
parties. The parties shall thereafter have sixty (60) days to select an
arbitrator from such list, with such selection to be by mutual agreement. If the
parties fail to select an arbitrator within such time by mutual agreement, then
either party may request that the Chief Judge of the U.S. District Court for the
Southern District of Texas appoint an arbitrator, and any such appointment shall
be binding. The arbitrator, utilizing the Commercial Arbitration Rules of the
American Arbitration Association, shall within 120 days of his or her selection,
resolve all disputes between the parties. There shall be no transcript of the
hearings before the arbitrator. The arbitrator’s decision shall be in writing,
but shall be as brief as possible. The arbitrator shall not assign the reasons
for his or her decision. The arbitrator’s decision shall be final and
non-appealable to the maximum extent permitted by law. Judgment upon any award
rendered in any such arbitration proceeding may be entered by any federal or
state court having jurisdiction. This agreement to arbitrate shall be
enforceable in either federal or state court. The enforcement of this agreement
to arbitrate and all procedural aspects of this agreement to arbitrate,
including but not limited to, the construction and interpretation of this
agreement to arbitrate, the issues subject to arbitration (i.e., arbitrability),
the scope of the arbitrable issues, allegations of waiver, delay or defenses to
arbitrability, and the rules governing the conduct of the arbitration, shall be
governed by and construed pursuant to the Federal Arbitration Act and shall be
decided by the arbitrator. In deciding the substance of any such claims, the
arbitrator shall apply the substantive laws of the State of Texas (excluding
Texas choice-of-law principles that might call for the application of some other
State’s law); provided, however, it is expressly agreed that the arbitrator
shall have no authority to award treble, exemplary, or punitive damages under
any circumstances regardless of whether such damages may be available under
Texas law, the parties hereby waiving their right, if any, to recover treble,
exemplary, or punitive damages in connection with any such claims.

14.1.2 the agreement to arbitrate contained in paragraph 14.1.1 above, in the
event that either party wishes to seek a temporary restraining order, a
preliminary or temporary injunction, or other injunctive relief in connection
with any or all such claims, demands, cause of action, disputes, controversies,
and other matters in question arising out of or relating to this Agreement, any
provision hereof, the alleged breach thereof, or in any way relating to the
subject matter of this Agreement, involving Company, Employee, and/or their
respective representatives, including disputes arising out of a breach or
alleged breach of paragraph 4, even though some or all of such claims allegedly
are extra-contractual in nature, whether such claims sound in contract, tort, or
otherwise, at law or in equity, under state or federal law, whether provided by
statute or the common law, for damages or any other relief, each party shall
have the right to pursue such injunctive relief in court, rather than by
arbitration. The parties agree that such action for a temporary restraining
order, a preliminary or temporary injunction, or other injunctive relief will be
brought in the State or federal courts residing in Houston, Harris County,
Texas.

14.2 The Company shall pay all costs and expenses of Company and Employee
(including, but not limited to, attorneys’ fees, the fees of the arbitrator and
the AAA and any other related costs) for any arbitration proceeding or legal
action; provided, however, that if in any such arbitration proceeding or legal
action, the arbitrator or court, respectively, determines that Employee has
prosecuted or defended any issue in such proceeding or action in bad faith, the
arbitrator or court, respectively, may allocate the portion of such costs and
expenses relating to such issue between the parties in any other manner deemed
fair, equitable and reasonable by the arbitrator or court, respectively.

      15.    Foreign Corrupt Practices Act.

Employee shall at all times comply with the United States Foreign Corrupt
Practices Act, generally codified in 15 USC 78 (FCPA), as the FCPA may hereafter
be amended, and/or its successor statutes. If Employee pleads guilty to or nolo
contendere or admits civil or criminal liability under the FCPA, or if a court
finds that Employee committed an action resulting in any Company entity having
civil or criminal liability or responsibility under the FCPA with knowledge of
the activities giving rise to such liability or knowledge of facts from which
Employee should have reasonably inferred the activities giving rise to liability
had occurred or were likely to occur, such action or finding shall constitute
Cause for termination by Company under paragraph 3.3 of this Agreement unless
Company’s Board of Directors determines that the actions found to be in
violation of the FCPA were taken in good faith and in compliance with all
applicable policies of Company.

      16.    Survival.

The provisions of paragraphs 4 and 20 shall survive any termination of the
employment relationship and/or of this Agreement for the periods stated therein.
The provisions of paragraph 14 relating to arbitration shall survive any
termination of the employment relationship between Employee and Company and the
termination of this Agreement. Amounts, compensation, rights and benefits which
Employee is entitled to receive or have accrued to Employee under this Agreement
or under any plan, program, arrangement, agreement or policy of or with Company
or any of its affiliates before, at or subsequent to the termination of the
employment relationship between Employee and Company or the termination of this
Agreement shall not be superseded and shall survive any such termination.

      17.    Certain Additional Payments by Company.

17.1 Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment or distribution by Company or any of its
affiliates to or for the benefit of Employee, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (any such payments or distributions being individually referred to
herein as a “Payment,” and any two or more of such payments or distributions
being referred to herein as “Payments”), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”) (such excise tax, together with any interest thereon, any penalties,
additions to tax, or additional amounts with respect to such excise tax, and any
interest in respect of such penalties, additions to tax or additional amounts,
being collectively referred herein to as the “Excise Tax”), then Employee shall
be entitled to receive an additional payment or payments (individually referred
to herein as a “Gross-Up Payment” and any two or more of such additional
payments being referred to herein as “Gross-Up Payments”) in an amount such that
after payment by Employee of all taxes (as defined in paragraph 17.11) imposed
upon the Gross-Up Payment, Employee retains an amount of such Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.

17.2 Subject to the provisions of paragraph 17.3 through 17.11, any
determination (individually, a “Determination”) required to be made under this
paragraph 17, including whether a Gross-Up Payment is required and the amount of
such Gross-Up Payment, shall initially be made, at Company’s expense, by
nationally recognized tax counsel mutually acceptable to Company and Employee
(“Tax Counsel”). Tax Counsel shall provide detailed supporting legal
authorities, calculations, and documentation both to Company and Employee within
15 business days of the termination of Employee’s employment, if applicable, or
such other time or times as is reasonably requested by Company or Employee. If
Tax Counsel makes the initial Determination that no Excise Tax is payable by
Employee with respect to a Payment or Payments, it shall furnish Employee with
an opinion reasonably acceptable to Employee that no Excise Tax will be imposed
with respect to any such Payment or Payments. Employee shall have the right to
dispute any Determination (a “Dispute”) within 15 business days after delivery
of Tax Counsel’s opinion with respect to such Determination. The Gross-Up
Payment, if any, as determined pursuant to such Determination shall be paid by
Company to Employee within five business days of Employee’s receipt of such
Determination. The existence of a Dispute shall not in any way affect Employee’s
right to receive the Gross-Up Payment in accordance with such Determination. If
there is no Dispute, such Determination shall be binding, final and conclusive
upon Company and Employee, subject in all respects, however, to the provisions
of paragraph 17.3 through 17.11 below. As a result of the uncertainty in the
application of Sections 4999 and 280G of the Code, it is possible that Gross-Up
Payments (or portions thereof) which will not have been made by Company should
have been made (“Underpayment”), and if upon any reasonable written request from
Employee or Company to Tax Counsel, or upon Tax Counsel’s own initiative, Tax
Counsel, at Company’s expense, thereafter determines that Employee is required
to make a payment of any Excise Tax or any additional Excise Tax, as the case
may be, Tax Counsel shall, at Company’s expense, determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by Company to Employee.

17.3 Company shall defend, hold harmless, and indemnify Employee on a fully
grossed-up after tax basis from and against any and all claims, losses,
liabilities, obligations, damages, impositions, assessments, demands,
judgements, settlements, costs and expenses (including reasonable attorneys’,
accountants’, and experts’ fees and expenses) with respect to any tax liability
of Employee resulting from any Final Determination (as defined in paragraph
17.10) that any Payment is subject to the Excise Tax.

17.4 If a party hereto receives any written or oral communication with respect
to any question, adjustment, assessment or pending or threatened audit,
examination, investigation or administrative, court or other proceeding which,
if pursued successfully, could result in or give rise to a claim by Employee
against Company under this paragraph 17 (“Claim”), including, but not limited
to, a claim for indemnification of Employee by Company under paragraph 17.3,
then such party shall promptly notify the other party hereto in writing of such
Claim (“Tax Claim Notice”).

17.5 If a Claim is asserted against Employee (“Employee Claim”), Employee shall
take or cause to be taken such action in connection with contesting such
Employee Claim as Company shall reasonably request in writing from time to time,
including the retention of counsel and experts as are reasonably designated by
Company (it being understood and agreed by the parties hereto that the terms of
any such retention shall expressly provide that Company shall be solely
responsible for the payment of any and all fees and disbursements of such
counsel and any experts) and the execution of powers of attorney, provided that:

17.5.1 within 30 calendar days after Company receives or delivers, as the case
may be, the Tax Claim Notice relating to such Employee Claim (or such earlier
date that any payment of the taxes claimed is due from Employee, but in no event
sooner than five calendar days after Company receives or delivers such Tax Claim
Notice), Company shall have notified Employee in writing (“Election Notice”)
that Company does not dispute its obligations (including, but not limited to,
its indemnity obligations) under this Agreement and that Company elects to
contest, and to control the defense or prosecution of, such Employee Claim at
Company’s sole risk and sole cost and expense; and

17.5.2 Company shall have advanced to Employee on an interest-free basis, the
total amount of the tax claimed in order for Employee, at Company’s request, to
pay or cause to be paid the tax claimed, file a claim for refund of such tax
and, subject to the provisions of the last sentence of paragraph 17.7, sue for a
refund of such tax if such claim for refund is disallowed by the appropriate
taxing authority (it being understood and agreed by the parties hereto that
Company shall only be entitled to sue for a refund and Company shall not be
entitled to initiate any proceeding in, for example, United States Tax Court)
and shall indemnify and hold Employee harmless, on a fully grossed-up after tax
basis, from any tax imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and

17.5.3 Company shall reimburse Employee for any and all costs and expenses
resulting from any such request by Company and shall indemnify and hold Employee
harmless, on fully grossed-up after-tax basis, from any tax imposed as a result
of such reimbursement.

17.6 Subject to the provisions of paragraph 17.5 hereof, Company shall have the
right to defend or prosecute, at the sole cost, expense and risk of Company,
such Employee Claim by all appropriate proceedings, which proceedings shall be
defended or prosecuted diligently by Company to a Final Determination; provided,
however, that (i) Company shall not, without Employee’s prior written consent,
enter into any compromise or settlement of such Employee Claim that would
adversely affect Employee, (ii) any request from Company to Employee regarding
any extension of the statute of limitations relating to assessment, payment, or
collection of taxes for the taxable year of Employee with respect to which the
contested issues involved in, and amount of, the Employee Claim relate is
limited solely to such contested issues and amount, and (iii) Company’s control
of any contest or proceeding shall be limited to issues with respect to the
Employee Claim and Employee shall be entitled to settle or contest, in his sole
and absolute discretion, any other issue raised by the Internal Revenue Service
or any other taxing authority. So long as Company is diligently defending or
prosecuting such Employee Claim, Employee shall provide or cause to be provided
to Company any information reasonably requested by Company that relates to such
Employee Claim, and shall otherwise cooperate with Company and its
representatives in good faith in order to contest effectively such Employee
Claim. Company shall keep Employee informed of all developments and events
relating to any such Employee Claim (including, without limitation, providing to
Employee copies of all written materials pertaining to any such Employee Claim),
and Employee or his authorized representatives shall be entitled, at Employee’s
expense, to participate in all conferences, meetings and proceedings relating to
any such Employee Claim.

17.7 If, after actual receipt by Employee of an amount of a tax claimed
(pursuant to an Employee Claim) that has been advanced by Company pursuant to
paragraph 17.5.2 hereof, the extent of the liability of Company hereunder with
respect to such tax claimed has been established by a Final Determination,
Employee shall promptly pay or cause to be paid to Company any refund actually
received by, or actually credited to, Employee with respect to such tax
(together with any interest paid or credited thereon by the taxing authority and
any recovery of legal fees from such taxing authority related thereto), except
to the extent that any amounts are then due and payable by Company to Employee,
whether under the provisions of this Agreement or otherwise. If, after the
receipt by Employee of an amount advanced by Company pursuant to paragraph
17.5.2, a determination is made by the Internal Revenue Service or other
appropriate taxing authority that Employee shall not be entitled to any refund
with respect to such tax claimed and Company does not notify Employee in writing
of its intent to contest such denial of refund prior to the expiration of 30
days after such determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of any Gross-Up Payments and other payments required
to be paid hereunder.

17.8 With respect to any Employee Claim, if Company fails to deliver an Election
Notice to Employee within the period provided in paragraph 17.5.1 hereof or,
after delivery of such Election Notice, Company fails to comply with the
provisions of paragraph 17.5.2, 17.5.3 or 17.6 hereof, then Employee shall at
any time thereafter have the right (but not the obligation), at his election and
in his sole and absolute discretion, to defend or prosecute, at the sole cost,
expense and risk of Company, such Employee Claim. Employee shall have full
control of such defense or prosecution and such proceedings, including any
settlement or compromise thereof. If requested by Employee, Company shall
cooperate, and shall cause its affiliates to cooperate, in good faith with
Employee and his authorized representatives in order to contest effectively such
Employee Claim. Company may attend, but not participate in or control, any
defense, prosecution, settlement or compromise of any Employee Claim controlled
by Employee pursuant to this paragraph 17.8 and shall bear its own costs and
expenses with respect thereto. In the case of any Employee Claim that is
defended or prosecuted by Employee, Employee shall, from time to time, be
entitled to current payment, on a fully grossed-up after tax basis, from Company
with respect to costs and expenses incurred by Employee in connection with such
defense or prosecution.

17.9 In the case of any Employee Claim that is defended or prosecuted to a Final
Determination pursuant to the terms of this paragraph 17.9, Company shall pay,
on a fully grossed-up after tax basis, to Employee in immediately available
funds the full amount of any taxes arising or resulting from or incurred in
connection with such Employee Claim that have not theretofore been paid by
Company to Employee, together with the costs and expenses, on a fully grossed-up
after tax basis, incurred in connection therewith that have not theretofore been
paid by Company to Employee, within ten calendar days after such Final
Determination. In the case of any Employee Claim not covered by the preceding
sentence, Company shall pay, on a fully grossed-up after tax basis, to Employee
in immediately available funds the full amount of any taxes arising or resulting
from or incurred in connection with such Employee Claim at least ten calendar
days before the date payment of such taxes is due from Employee, except where
payment of such taxes is sooner required under the provisions of this paragraph
17.9, in which case payment of such taxes (and payment, on a fully grossed-up
after tax basis, of any costs and expenses required to be paid under this
paragraph 17.9 shall be made within the time and in the manner otherwise
provided in this paragraph 17.9.

17.10 For purposes of this Agreement, the term “Final Determination” shall mean
(A) a decision, judgment, decree or other order by a court or other tribunal
with appropriate jurisdiction, which has become final and non-appealable; (B) a
final and binding settlement or compromise with an administrative agency with
appropriate jurisdiction, including, but not limited to, a closing agreement
under Section 7121 of the Code; (C) any disallowance of a claim for refund or
credit in respect to an overpayment of tax unless a suit is filed on a timely
basis; or (D) any final disposition by reason of the expiration of all
applicable statutes of limitations.

17.11 For purposes of this Agreement, the terms “tax” and “taxes” mean any and
all taxes of any kind whatsoever (including, but not limited to, any and all
Excise Taxes, income taxes, and employment taxes), together with any interest
thereon, any penalties, additions to tax, or additional amounts with respect to
such taxes and any interest in respect of such penalties, additions to tax, or
additional amounts.

      18.    No Obligation to Mitigate.

Employee shall not be required to mitigate the amount of any payment or other
benefit required to be paid to Employee pursuant to this Agreement, whether by
seeking other employment or otherwise; nor shall the amount of any such payment
or other benefit be reduced on account of any compensation earned by Employee as
a result of employment by another person or entity.

      19.    Annual Bonus; Stock Options.

19.1 In addition to the salary provided for in paragraph 5.1 hereof (the “Base
Salary”), Employee shall be eligible to receive, for each calendar year or
portion thereof occurring during the term of this Agreement, an annual cash
bonus based on performance (the “Annual Bonus”) in an amount up to twenty-five
percent (25%) of the Base Salary for such calendar year or portion thereof (or
such greater percentage of such Base Salary as the Board of Directors or the
Committee may, in its discretion, determine) upon approval of such Annual Bonus
by the Board of Directors of Company (the “Board of Directors”) or a committee
of the Board of Directors designated by the Board of Directors (the
“Committee”). The amount of any such Annual Bonus shall be determined by the
Board of Directors or the Committee, as the case may be, in accordance with the
cash incentive compensation program of Company in effect with respect to such
determination. The Annual Bonus shall be paid to Employee, less such amounts as
shall be required to be deducted or withheld therefrom by applicable law and
regulations, at such time or times as is in accordance with the then prevailing
policy of Company relating to cash incentive compensation payments.

19.2 As of the Effective Date, Company shall, or shall cause Mariner Holdings
Inc. to, grant to Employee stock options for 2,469 shares of the common stock of
Mariner Holdings, Inc. (“Parent Common Stock”) pursuant to the Mariner Holdings
Inc. 1996 Stock Option Plan. To the fullest extent possible, the options granted
to Employee shall be incentive stock options, and otherwise shall be
non-qualified stock options. The terms, conditions and restrictions with regard
to such stock options shall be evidenced by an Incentive Stock Option Agreement
(as to qualified stock options) and a Nonstatutory Stock Option Agreement (as to
the nonqualified stock options), substantially in the forms attached hereto as
Exhibit A and Exhibit B, respectively, which are incorporated herein by
reference and their terms, conditions and restrictions shall be considered a
part of this Agreement.

      20.    Noncompetition Obligations.

20.1 As part of the consideration for the compensation and benefits to be paid
to Employee hereunder, and as an additional incentive for Company to enter into
this Agreement, Company and Employee agree to the non-competition obligations
hereunder. Employee will not, directly or indirectly for Employee or for others:

20.1.1 in any geographic area or market where Company or any of its subsidiaries
are conducting any business as of the date of termination of the employment
relationship or have during the previous twelve months conducted such business,
engage in any business competitive with any such business; or

20.1.2 in any geographic area or market where Employee knew Company contemplated
entering any business as of the date of termination of the employment
relationship, but only if Company had, as of such date, invested significant
resources toward entering into such business in such geographic area or market,
engage in any business competitive with any such business;

20.1.3 render advice or services to, or otherwise assist, any other person,
association, or entity who is engaged, directly or indirectly, in any business
competitive with Company’s business within the parameters described in
paragraphs 20.1.1 and 20.1.2 above with respect to such competitive business; or

20.1.4 induce any employee of Company or any of its subsidiaries to terminate
his or her employment with Company or its subsidiaries, or hire or assist in the
hiring of any such employee by any person, association, or entity not affiliated
with Company.

These non-competition obligations shall commence upon the date of execution of
this Agreement and extend until the earlier of (a) the expiration of the term of
this Agreement (or any extended term) or (b) six (6) months after termination of
the employment relationship; provided, however, that notwithstanding anything
contained in this paragraph 20 to the contrary, such obligations shall only
apply after the termination of employment if the termination of employment
results from termination for Cause by Company under paragraph 3.5 or voluntary
termination without Good Reason by Employee (it being understood and agreed that
termination of this Agreement by Employee under paragraph 3.1 shall not, for
purposes of this paragraph 20, constitute voluntary termination without Good
Reason by Employee).

20.2 Employee understands that the foregoing restrictions may limit Employee’s
ability to engage in certain businesses anywhere in the world during the period
provided for above, but acknowledges that Employee will receive sufficiently
high remuneration and other benefits under this Agreement to justify such
restriction. Employee acknowledges that money damages would not be sufficient
remedy for any breach of this Article by Employee, and Company shall be entitled
to enforce the provisions of this Agreement and/or to specific performances and
injunctive relief as remedies for such breach or any threatened breach. Such
remedies shall not be deemed the exclusive remedies for a breach of this
Article, but shall be in addition to all remedies available at law or in equity
to Company, including, without limitation, the recovery of damages from Employee
and Employee’s agents involved in such breach and remedies available to Company
pursuant to other agreements with Employee.

20.3 It is expressly understood and agreed that Company and Employee consider
the restrictions contained in this paragraph 20 to be reasonable and necessary.
Nevertheless, if any of the aforesaid restrictions are found by a court having
jurisdiction to be unreasonable, or overly broad as to geographic area or time,
or otherwise unenforceable, the parties intend for the restrictions therein set
forth to be modified by such courts so as to be reasonable and enforceable and,
as so modified by the court, to be fully enforced.

      21.    Miscellaneous.

21.1 This Agreement shall not be modified or amended except in writing and
signed by Company and Employee. This Agreement shall be binding upon the heirs,
administrators, or executors and the successors and assigns of each party to
this Agreement.

21.2 The rights and benefits of Employee under the Agreement are personal to him
and shall not be assigned or transferred without the prior written consent of
Company. Subject to the foregoing, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.

21.3 All titles or headings of sections or paragraphs or other divisions of this
Agreement are only for the convenience of the parties and shall not be construed
to have any effect or meaning with respect to the other content of such sections
or paragraphs or other divisions, such content being controlling as to the
agreement between the parties hereto.

21.4 This Agreement is made and will be performed under, and shall be governed
by and construed in accordance with, the law of the State of Texas.

21.5 EMPLOYEE AFFIRMS AND ATTESTS BY HIS SIGNATURE TO THIS AGREEMENT THAT HE HAS
READ THIS AGREEMENT BEFORE SIGNING IT AND THAT HE FULLY UNDERSTANDS ITS
PURPOSES, TERMS AND PROVISIONS, WHICH HE HEREBY EXPRESSLY ACKNOWLEDGED TO BE
REASONABLE IN ALL RESPECTS. EMPLOYEE FURTHER ACKNOWLEDGES RECEIPT OF ONE COPY OF
THIS AGREEMENT.

21.6 Notices contemplated under this Agreement shall be directed to the
following address:
If to Company:

          Mariner Energy, Inc.
          580 Westlake Boulevard, Suite 1300
          Houston, Texas 77079

          Attention: President and Chief Executive Officer

If to Employee:

          C. Ken Burgess
          18011 Widcombe Drive
          Houston, Texas 77084

Company and Employee may change the above addresses for notice purposes by
notifying the other in writing.

21.7 The Company may withhold from any amounts payable under this Agreement such
federal, state, or local taxes as shall be required to be withheld pursuant to
any applicable law or regulation.

Executed as of the Effective Date in duplicate originals at Houston, Texas.

Acknowledged by:W. Hunt Hodge
Vice President - Administration

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MARINER ENERGY, INC. By:

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Robert E. Henderson
President and
Chief Executive Officer

"COMPANY"

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C. Ken Burgess "EMPLOYEE"