##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 1-32747
 
 MARINER ENERGY, INC.
 (Exact name of registrant as specified in its charter)
 
 Delaware
    
    86-0460233(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)
 One BriarLake Plaza, Suite 2000
2000 West Sam Houston Parkway South
Houston, Texas 77042  (Address of principal executive offices and zip code)
 (713) 954-5500  (Registrants telephone number, including area code)
 þ o
  o o þ
 o þ




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##### 



TABLE OF CONTENTS
 PART IItem 1.
    
    Condensed Consolidated Unaudited Financial StatementsItem 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3.
    
    Quantitative and Qualitative Disclosures About Market RiskItem 4.
    
    Controls and ProceduresPART IIItem 1A.
    
    Risk FactorsItem 2.
    
    Unregistered Sales of Equity Securities and Use of ProceedsItem 5.
    
    Other InformationItem 6.
    
    ExhibitsSignaturesIndex to ExhibitsCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
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PART I
 
 Item 1.
Condensed Consolidated Unaudited Financial Statements
 MARINER ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2006
    
    
    2005Current Assets:Cash and cash equivalents
    
    $
    5,656
    
    
    $
    4,556Receivables, net of allowances of $190 at June 30,
2006 and $500 at December 31, 2005, respectively
    
    
    124,806
    
    
    
    84,109Insurance receivables
    
    
    61,798
    
    
    
    4,542Prepaid seismic
    
    
    16,327
    
    
    
    6,542Prepaid expenses and other
    
    
    28,509
    
    
    
    15,666Deferred tax asset
    
    
    10,215
    
    
    
    26,017Total current assets
    
    
    247,311
    
    
    
    141,432Property and Equipment:Oil and gas properties, full cost method: Proved
    
    
    1,901,992
    
    
    
    574,725Unproved, not subject to amortization
    
    
    211,260
    
    
    
    40,176Total
    
    
    2,113,252
    
    
    
    614,901Other property and equipment
    
    
    13,598
    
    
    
    11,048Accumulated depreciation, depletion and amortization
    
    
    (213,241
    )
    
    
    (110,006
    )Total property and equipment, net
    
    
    1,913,609
    
    
    
    515,943Goodwill
    
    
    261,472
    
    
    
    Other Assets, Net of Amortization
    
    
    34,716
    
    
    
    8,161TOTAL ASSETS
    
    $
    2,457,108
    
    
    $
    665,536Current Liabilities:Accounts payable
    
    $
    57,674
    
    
    $
    37,530Accrued liabilities
    
    
    275,414
    
    
    
    123,689Accrued interest
    
    
    4,828
    
    
    
    614Derivative liability
    
    
    21,400
    
    
    
    42,173Total current liabilities
    
    
    359,316
    
    
    
    204,006Long-Term Liabilities:Abandonment liability
    
    
    188,764
    
    
    
    38,176Deferred income tax
    
    
    252,562
    
    
    
    25,886Derivative liability
    
    
    4,262
    
    
    
    21,632Long term debt, revolving credit facility
    
    
    157,000
    
    
    
    152,000Long term debt, senior unsecured notes
    
    
    300,000
    
    
    
    Note payable
    
    
    
    
    
    
    4,000Other long-term liabilities
    
    
    11,000
    
    
    
    6,500Total long-term liabilities
    
    
    913,588
    
    
    
    248,194Commitments and Contingencies (see Note 8)Stockholders Equity:Common stock, $.0001 par value; 180,000,000 shares
authorized, 86,243,379 shares issued and
outstanding at June 30, 2006; 70,000,000 shares
authorized, 35,615,400 shares issued and
outstanding at December 31, 2005
    
    
    9
    
    
    
    4Preferred stock, $.0001 par value; 20,000,000
shares authorized, no shares issued and outstanding
at June 30, 2006 and December 31, 2005
    
    
    
    
    
    
    Additional paid-in-capital
    
    
    1,055,412
    
    
    
    160,705Accumulated other comprehensive loss
    
    
    (7,151
    )
    
    
    (41,473
    )Accumulated retained earnings
    
    
    135,934
    
    
    
    94,100Total stockholders equity
    
    
    1,184,204
    
    
    
    213,336TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    2,457,108
    
    
    $
    665,536
 The accompanying notes are an integral part of these consolidated financial statements
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MARINER ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three-months Ended
    
    
    Six-months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenues:Oil sales
    
    $
    56,256
    
    
    $
    19,351
    
    
    $
    87,726
    
    
    $
    38,435Gas sales
    
    
    110,475
    
    
    
    32,224
    
    
    
    158,576
    
    
    
    67,090Other revenues
    
    
    936
    
    
    
    201
    
    
    
    1,623
    
    
    
    2,058Total revenues
    
    
    167,667
    
    
    
    51,776
    
    
    
    247,925
    
    
    
    107,583Costs and Expenses:Lease operating expense
    
    
    24,384
    
    
    
    7,035
    
    
    
    37,567
    
    
    
    13,194Transportation expense
    
    
    1,548
    
    
    
    511
    
    
    
    2,277
    
    
    
    1,501General and administrative expense
    
    
    6,964
    
    
    
    10,235
    
    
    
    17,473
    
    
    
    15,400Depreciation, depletion and amortization
    
    
    76,982
    
    
    
    15,925
    
    
    
    109,806
    
    
    
    31,054Total costs and expenses
    
    
    109,878
    
    
    
    33,706
    
    
    
    167,123
    
    
    
    61,149OPERATING INCOME
    
    
    57,789
    
    
    
    18,070
    
    
    
    80,802
    
    
    
    46,434Interest:Income
    
    
    136
    
    
    
    47
    
    
    
    249
    
    
    
    561Expense, net of amounts capitalized
    
    
    (8,663
    )
    
    
    (1,735
    )
    
    
    (14,668
    )
    
    
    (3,567
    )Income before taxes
    
    
    49,262
    
    
    
    16,382
    
    
    
    66,383
    
    
    
    43,428Provision for income taxes
    
    
    (18,557
    )
    
    
    (5,537
    )
    
    
    (24,549
    )
    
    
    (14,808
    )NET INCOME
    
    $
    30,705
    
    
    $
    10,845
    
    
    $
    41,834
    
    
    $
    28,620Earnings per share:Net income per sharebasic
    
    $
    0.36
    
    
    $
    0.33
    
    
    $
    0.62
    
    
    $
    0.90Net income per sharediluted
    
    $
    0.36
    
    
    $
    0.32
    
    
    $
    0.62
    
    
    $
    0.89Weighted average shares outstandingbasic
    
    
    84,720,331
    
    
    
    33,348,130
    
    
    
    67,244,331
    
    
    
    31,975,754Weighted average shares outstandingdiluted
    
    
    85,027,561
    
    
    
    33,822,079
    
    
    
    67,829,117
    
    
    
    32,241,159
 The accompanying notes are an integral part of these consolidated financial statements
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MARINER ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Six-monthsEnded June 30,2006
    
    
    2005Operating Activities:Net income
    
    $
    41,834
    
    
    $
    28,620Adjustments to reconcile net income to net cash provided by operating activities:Deferred income tax
    
    
    24,549
    
    
    
    20,325Depreciation, depletion and amortization
    
    
    111,851
    
    
    
    31,626Stock compensation expense
    
    
    7,891
    
    
    
    9,496Net realized loss on derivative contracts acquired
    
    
    3,548
    
    
    
    Changes in operating assets and liabilities:Receivables
    
    
    13,382
    
    
    
    (17,825
    )Insurance receivable
    
    
    (42,128
    )
    
    
    Prepaid expenses and other
    
    
    (1,134
    )
    
    
    (249
    )Other assets
    
    
    (5,150
    )
    
    
    Accounts payable and accrued liabilities
    
    
    (58,548
    )
    
    
    685Net cash provided by operating activities
    
    
    96,095
    
    
    
    72,678Investing Activities:Additions to properties and equipment
    
    
    (185,997
    )
    
    
    (98,724
    )Proceeds from property conveyances
    
    
    2,012
    
    
    
    18Purchase price adjustment
    
    
    (20,808
    )
    
    
    Net cash investing activities
    
    
    (204,793
    )
    
    
    (98,706
    )Financing Activities:Repayment of term note
    
    
    (4,000
    )
    
    
    (6,000
    )Credit facility borrowings (repayments), net
    
    
    5,000
    
    
    
    (10,000
    )Debt and working capital acquired from Forest Energy Resources, Inc.
    
    
    (176,200
    )
    
    
    Proceeds from note offering
    
    
    300,000
    
    
    
    Deferred offering costs
    
    
    (12,129
    )
    
    
    Net realized loss on derivative contracts acquired
    
    
    (3,548
    )
    
    
    Proceeds from private equity offering
    
    
    
    
    
    
    44,659Capital contribution from affiliates
    
    
    
    
    
    
    2,879Proceeds from exercise of stock options
    
    
    675
    
    
    
    Net cash provided by financing activities
    
    
    109,798
    
    
    
    31,538Increase in Cash and Cash Equivalents
    
    
    1,100
    
    
    
    5,510Cash and Cash Equivalents at Beginning of Period
    
    
    4,556
    
    
    
    2,541Cash and Cash Equivalents at End of Period
    
    $
    5,656
    
    
    $
    8,051
 The accompanying notes are an integral part of these consolidated financial statements
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MARINER ENERGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
 1. Summary of Significant Accounting Policies
 Operations
 Interim Financial Statements
 Use of Estimates
 Principles of Consolidation
 Reclassifications
 Income
Tax Provision
 Recent Accounting Pronouncements
 Accounting for Uncertainty in Income
Taxes. Accounting for Income Taxes,
 6




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2. Related Party Transactions
 Organization and Ownership of the Company
   3. Acquisitions
 Forest Gulf of Mexico Operations
  Business
Combinations Goodwill and Other Intangible Assets.
 7




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(In millions)Oil and natural gas properties
    
    $
    1,211.4Abandonment liabilities
    
    
    (165.2
    )Long-term debt
    
    
    (176.2
    )Fair value of oil and natural gas derivatives
    
    
    (17.5
    )Deferred tax liability
    
    
    (199.4
    )Other assets and liabilities
    
    
    (24.5
    )Goodwill
    
    
    261.4Net Assets Acquired
    
    $
    890.0
  Goodwill
and Other Intangible Assets,
  Sources
    
    UsesMariner Energy, Inc. and Mariner Energy Resources, Inc. bank loan proceeds
    
    $
    180.2
    
    
    $
    Refinancing of assumed debt
    
    
    
    
    
    
    176.2Acquisition costs and other expenses
    
    
    
    
    
    
    4.0
   Payable to Forest
 Pro Forma Financial Information
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Three-months Ended June 30.
    
    Six-months Ended June 30.2006
    
    2005
    
    2006
    
    2005(In thousands, except per share amounts)
    
    (In thousands, except per share amounts)Pro Forma:Revenue
    
    $
    167,667
    
    
    $
    165,265
    
    
    $
    315,407
    
    
    $
    341,915Net income available to common stockholders
    
    $
    30,705
    
    
    $
    26,326
    
    
    $
    56,233
    
    
    $
    56,308Basic earnings per share
    
    $
    0.36
    
    
    $
    0.32
    
    
    $
    0.67
    
    
    $
    0.68Diluted earnings per share
    
    $
    0.36
    
    
    $
    0.32
    
    
    $
    0.66
    
    
    $
    0.68
 4. Long-Term Debt
 Secured Bank Credit Facility
  Amendments of Secured Bank Credit Facility
   
    
    maintain a ratio of consolidated current assets plus the unused borrowing base to
consolidated current liabilities of not less than 1.0 to 1.0; and
    
    maintain a ratio of total debt to EBITDA of not more than 2.5 to 1.0.
   9




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Private Offering of Senior Unsecured Notes due 2013
     
   
    
    make investments;
    
    incur additional indebtedness or issue preferred stock;
    
    create certain liens;
    
    sell assets;
    
    enter into agreements that restrict dividends or other payments from its subsidiaries to itself;
    
    consolidate, merge or transfer all or substantially all of its assets;
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
    
    engage in transactions with affiliates;
    
    pay dividends or make other distributions on capital stock or subordinated indebtedness; and
    
    create unrestricted subsidiaries.
  
    
    file a registration statement within 180 days after the closing date of the offering
enabling holders of Notes to exchange the privately placed Notes offered in this offering
for publicly registered Notes with substantially identical terms;
    
    use its reasonable best efforts to cause the registration statement to become effective
within 270 days after the closing date of the offering and to complete the exchange offer
within 360 days after the closing of the offering; and
    
    file a shelf registration statement for the resale of the Notes if it cannot effect an
exchange offer within the time periods listed above and in other circumstances.
   JEDI Term Promissory Note
 Cash Interest Expense
 Bank Debt Issuance Costs
 5. Oil and Gas Properties
   11




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6. Accrual for Future Abandonment Costs
   (In millions)Abandonment liability as of December 31, 2005 (1)
    
    $
    49.5Liabilities Incurred
    
    
    17.3Claims Settled
    
    
    (12.1
    )Accretion Expense
    
    
    6.6Revisions to previous estimates
    
    
    5.3Liabilities incurred from assets acquired (2)
    
    
    165.2Abandonment Liability as of June 30, 2006 (3)
    
    $
    231.8
 
 (1)
    
    Includes $11.4 million classified as a current accrued liability at December 31, 2005.(2)
    
    Represents the fair value of the asset retirement obligation acquired through the Forest
Transaction.(3)
    
    Includes $43.1 million classified as a current accrued liability at June 30, 2006. 7. Stockholders Equity
 Increase in Number of Shares Outstanding
 Equity Participation Plan
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Amended and Restated Stock Incentive Plan
   Rollover Options
 Share-Based Payment
  2006
    
    
    2005Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    PriceOutstanding at beginning of period: January 1,
    
    
    809,000
    
    
    $
    14.02
    
    
    
    
    
    
    $
    Granted
    
    
    156,626
    (1)
    
    
    8.31
    
    
    
    788,560
    (3)
    
    
    14.00Exercised
    
    
    (48,200
    )
    
    
    14.00
    
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    (51,418
    )(1)(2)
    
    
    11.59
    
    
    
    
    
    
    
    
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2006
    
    
    2005Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    PriceOutstanding at end of period: June 30,
    
    
    866,008
    
    
    $
    13.77
    
    
    
    788,560
    
    
    
    14.00Outstanding exercisable at end of period: June 30,
    
    
    362,470
    
    
    
    
    
    
    
    
    
    
    
    Available for future grant as options or restricted stock
    
    
    4,949,855
    
    
    
    
    
    
    
    1,211,440
    
    
    
    
 
 (1)
    
    The options exercisable for an aggregate 156,626 shares were the Rollover Options granted
pursuant to the Forest Transaction merger agreement. Rollover Options exercisable for an
aggregate 42,418 shares were forfeited due to terminations of employment with Mariner Energy
Resources, Inc., but are not indicative of a historical forfeiture rate.(2)
    
    In-the-money options exercisable for an aggregate 9,000 shares issued to two directors of the
Company were cancelled on March 31, 2006 and replaced by restricted stock grants.(3)
    
    The option grants were made under Mariners Stock Incentive Plan.  Options Outstanding
    
    Options ExercisableWeightedAverage
    
    Weighted
    
    
    
    
    
    WeightedRemaining
    
    Average
    
    
    
    
    
    AverageRange of Exercise
    
    Number
    
    Contractual
    
    Exercise
    
    Number
    
    ExercisePrices
    
    Outstanding
    
    Life (Years)
    
    Price
    
    Exercisable
    
    Price$8.81  $17.00
    
    
    866,008
    
    
    
    8.0
    
    
    $
    13.77
    
    
    
    362,470
    
    
    $
    14.00
  Options Outstanding
    
    Options ExercisableWeightedAverage
    
    Weighted
    
    
    
    WeightedRemaining
    
    Average
    
    
    
    AverageNumber
    
    Contractual
    
    Exercise
    
    Number
    
    ExerciseRange of Exercise Prices
    
    Outstanding
    
    Life (Years)
    
    Price
    
    Exercisable
    
    Price$ 14.00
    
    
    788,560
    
    
    
    9.7
    
    
    $
    14.00
    
    
    
    
    
  For the three months ended June 30,2006:Amended andRestated StockIncentive PlanOptions
    
    Rollover OptionsExpected Life (years)
    
    
    7.0
    
    
    
    5.0Risk Free Interest Rate
    
    
    5.03
    %
    
    
    4.95
    %Expected Volatility
    
    
    33
    %
    
    
    33
    %Dividend Yield
    
    
    0.0
    %
    
    
    0.0
    %
 For the six months ended June 30, 2006:Amended andRestated StockIncentive PlanOptions
    
    Rollover OptionsExpected Life (years)
    
    
    5.0
    
    
    
    4.3Risk Free Interest Rate
    
    
    4.89
    %
    
    
    4.93
    %Expected Volatility
    
    
    35
    %
    
    
    35
    %Dividend Yield
    
    
    0.0
    %
    
    
    0.0
    %
  14




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StockIncentivePlanExpected Life (years)
    
    
    3.0Risk Free Interest Rate
    
    
    3.8
    %Expected Volatility
    
    
    38
    %Dividend Yield
    
    
    0.0
    %
   Restricted Shares under theAmended and Restated StockIncentive PlanJune 30,2006
    
    
    2005Total nonvested shares at beginning of period: January 1
    
    
    
    
    
    
    Shares granted
    
    
    762,483
    
    
    
    Share vested
    
    
    
    
    
    
    Shares forfeited
    
    
    (12,338
    )
    
    
    Total nonvested shares at end of period: June 30
    
    
    750,145
    
    
    
    Total vested shares at end of period: June 30
    
    
    
    
    
    
    Available for future grant as options or restricted stock
    
    
    4,949,855Average Fair Value of Shares Granted During the Period
    
    $
    19.53
    
    
    $
    
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Restricted Shares under theEquity Participation PlanJune 30,2006
    
    
    2005Total nonvested shares at beginning of period: January 1
    
    
    2,267,270
    
    
    
    Shares granted
    
    
    
    
    
    
    2,267,270Share vested
    
    
    (2,267,270
    )
    
    
    Shares forfeited
    
    
    
    
    
    
    Total nonvested shares at end of period: June 30
    
    
    0
    
    
    
    2,267,270Total vested shares at end of period: June 30
    
    
    2,267,270
    
    
    
    Available for future grant
under Equity Participation Plan
    
    
    
    
    
    
    Average Fair Value of Shares Granted During the Period
    
    
    
    
    
    $
    14.00
 Private Equity Placement.
 8. Commitments And Contingencies
 Minimum Future Lease Payments
 2007
    
    $
    1.42008
    
    
    1.32009
    
    
    1.02010
    
    
    1.32011 and thereafter
    
    
    2.3
 Hedging Program
   16




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June 30,2006 Fair ValueFixed Price Swaps
    
    Quantity
    
    
    Fixed Price
    
    
    Gain/(Loss)(In millions)Crude Oil (Bbls)July 1December 31, 2006
    
    
    862,960
    
    
    $
    72.41
    
    
    $
    (2.6
    )Natural Gas (MMbtus)July 1December 31, 2006
    
    
    9,752,000
    
    
    
    6.92
    
    
    
    (0.2
    )January 1March 31, 2007
    
    
    3,690,010
    
    
    
    9.30
    
    
    
    (4.0
    )Total
    
    
    
    
    
    
    
    
    
    $
    (6.8
    )
  June 30,2006 Fair ValueCostless Collars
    
    Quantity
    
    
    Floor
    
    
    Cap
    
    
    Gain/(Loss)(In millions)Crude Oil (Bbls)July 1December 31, 2006
    
    
    126,960
    
    
    $
    32.65
    
    
    $
    41.52
    
    
    $
    (4.2
    )January 1December 31, 2007
    
    
    1,533,775
    
    
    
    59.13
    
    
    
    82.85
    
    
    
    (7.3
    )January 1December 31, 2008
    
    
    1,080,020
    
    
    
    61.63
    
    
    
    86.80
    
    
    
    (0.2
    )Natural Gas (MMbtus)July 1December 31, 2006
    
    
    3,703,920
    
    
    
    5.78
    
    
    
    7.85
    
    
    
    (1.8
    )January 1December 31, 2007
    
    
    14,106,750
    
    
    
    6.87
    
    
    
    11.82
    
    
    
    (9.0
    )January 1December 31, 2008
    
    
    12,347,000
    
    
    
    7.83
    
    
    
    14.60
    
    
    
    3.6Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (18.9
    )
 17




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##### Table of Contents



Other Commitments
 MMS Appeal
  Insurance Matters
    18




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##### Table of Contents



Litigation
 Letter of Credit
 9. Net Income per Share
  For the three-month period ended
    
    
    For the six-month period endedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In Thousands, except per share data)
    
    
    (In Thousands, except per share data)Numerator:Net Income
    
    $
    30,705
    
    
    $
    10,845
    
    
    $
    41,834
    
    
    $
    28,620Denominator:Weighted average shares outstanding
    
    
    84,720
    
    
    
    33,348
    
    
    
    67,244
    
    
    
    31,976Add dilutive securities
    
    
    308
    
    
    
    474
    
    
    
    585
    
    
    
    265Total weighted average shares outstanding and dilutive securities
    
    
    85,028
    
    
    
    33,822
    
    
    
    67,829
    
    
    
    32,241Earnings per sharebasic:
    
    $
    0.36
    
    
    $
    0.33
    
    
    $
    0.62
    
    
    $
    0.90Earnings per sharediluted:
    
    $
    0.36
    
    
    $
    0.32
    
    
    $
    0.62
    
    
    $
    0.89
  19




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##### Table of Contents



10. Comprehensive Income
  Three months ended
    
    Six months endedJune 30,
    
    June 30,2006
    
    2005
    
    2006
    
    2005(in thousands)
    
    (in thousands)Net Income
    
    $
    30,705
    
    
    $
    10,845
    
    
    $
    41,834
    
    
    $
    28,620Other comprehensive income (loss)Derivative contracts settled and reclassified, net of tax
    
    
    1,072
    
    
    
    7,035
    
    
    
    8,926
    
    
    
    10,892Change in unrealized mark to market gains/(losses) arising
during period, net of tax
    
    
    16,554
    
    
    
    (2,704
    )
    
    
    25,396
    
    
    
    (29,626
    )Change in accumulated other comprehensive income (loss)
    
    
    17,626
    
    
    
    4,331
    
    
    
    34,322
    
    
    
    (18,734
    )Comprehensive income
    
    $
    48,331
    
    
    $
    15,176
    
    
    $
    76,156
    
    
    
    9,886
 11. Subsequent Events
  
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
   Overview
  20




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##### Table of Contents



Recent Developments
  Results of Operations
 Offshore
 Expected date ofWell Name
    
    Operator
    
    Working Interest
    
    Water Depth (Ft)
    
    Initial Production
    
    LocationNW Nansen (EB 602#12)
    
    Kerr-McGee
    
    33%
    
    3,507 feet
    
    2007
    
    Deep WaterNW Nansen (EB 558 - 2)
    
    Kerr-McGee
    
    50%
    
    3,475 feet
    
    2007
    
    Deep WaterKing of the Hill (HI 131)
    
    Woodside
    
    25%
    
    50 feet
    
    3rd Quarter 2006
    
    Deep ShelfCapricorn (HI 341  B2)
    
    Mariner
    
    60%
    
    240 feet
    
    3rd Quarter 2006
    
    Shelf
    Onshore 
 21




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##### Table of Contents



Three Months Ended June 30, 2006 Compared to Three Months Ended June 30, 2005 and the Six Months
Ended June 30, 2006 Compared to Six Months Ended June 30, 2005
 Operating and Financial Results for the Three Months Ended June 30, 2006 Compared to the Three
Months Ended June 30, 2005 and the Six Months Ended June 30, 2006 Compared to the Six Months Ended
June 30, 2005
 For the three-month period
    
    For the six-month periodended June 30,
    
    ended June 30,Summary Operating Information:
    
    2006
    
    2005
    
    2006
    
    2005(In thousands, except average sales prices and production volumes)Net Production:Oil (MBbls)
    
    
    923.2
    
    
    
    494.2
    
    
    
    1,524.9
    
    
    
    988.5Natural Gas (MMcf)
    
    
    15,754.3
    
    
    
    5,188.0
    
    
    
    22,667.7
    
    
    
    10,522.9Total (MMcfe)
    
    
    21,293.3
    
    
    
    8,153.2
    
    
    
    31,817.3
    
    
    
    16,454.0Average daily production (MMcfe/d)
    
    
    233.9
    
    
    
    89.6
    
    
    
    175.8
    
    
    
    90.9Average sales prices:Oil (per Bbl) (1)
    
    $
    60.94
    
    
    $
    38.86
    
    
    $
    57.53
    
    
    $
    38.88Natural gas (per Mcf) (1)
    
    
    7.01
    
    
    
    6.17
    
    
    
    7.00
    
    
    
    6.38Total natural gas equivalent ($/Mcfe) (1)
    
    
    7.83
    
    
    
    6.33
    
    
    
    7.74
    
    
    
    6.41Oil and gas revenues:Oil sales (1)
    
    $
    56,256
    
    
    $
    19,351
    
    
    $
    87,726
    
    
    $
    38,435Gas sales (1)
    
    
    110,475
    
    
    
    32,224
    
    
    
    158,576
    
    
    
    67,090Total oil and gas revenues (1)
    
    
    166,731
    
    
    
    51,575
    
    
    
    246,302
    
    
    
    105,525Other revenues
    
    
    936
    
    
    
    201
    
    
    
    1,623
    
    
    
    2,058Lease operating expenses
    
    
    24,384
    
    
    
    7,035
    
    
    
    37,567
    
    
    
    13,194Transportation expenses
    
    
    1,548
    
    
    
    511
    
    
    
    2,277
    
    
    
    1,501Depreciation, depletion and amortization
    
    
    76,982
    
    
    
    15,925
    
    
    
    109,806
    
    
    
    31,054General and administrative expenses
    
    
    6,964
    
    
    
    10,235
    
    
    
    17,473
    
    
    
    15,400Net interest expense
    
    
    8,527
    
    
    
    1,688
    
    
    
    14,419
    
    
    
    3,006Income before taxes
    
    
    49,262
    
    
    
    16,382
    
    
    
    66,383
    
    
    
    43,428Provision for income taxes
    
    
    18,557
    
    
    
    5,537
    
    
    
    24,549
    
    
    
    14,808Net Income
    
    
    30,705
    
    
    
    10,845
    
    
    
    41,834
    
    
    
    28,620
 
 (1)
    
    Includes the effects of hedging Production:
  Oil and gas revenues:
 22




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##### Table of Contents



Lease operating expenses
 Transportation expenses
 Depreciation, depletion, and amortization (DD&A) expense
 General and administrative (G&A) expenses
 23




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##### Table of Contents



Net interest expense
 Income before income taxes
 Provision for income taxes
 Liquidity and Capital Resources
 Cash Flows and Liquidity
 Secured Bank Credit Facility.
   Private Offering of Senior Unsecured Notes due 2013
 24




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##### Table of Contents




    
    make investments;
    
    incur additional indebtedness or issue preferred stock;
    
    create certain liens;
    
    sell assets;
    
    enter into agreements that restrict dividends or other payments from its subsidiaries to itself;
    
    consolidate, merge or transfer all or substantially all of its assets;
    
    engage in transactions with affiliates;
    
    pay dividends or make other distributions on capital stock or subordinated indebtedness; and
    
    create unrestricted subsidiaries.
  25




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##### Table of Contents




    
    file a registration statement within 180 days after the closing date of the offering
enabling holders of Notes to exchange the privately placed Notes offered in this offering
for publicly registered Notes with substantially identical terms;
    
    use its reasonable best efforts to cause the registration statement to become effective
within 270 days after the closing date of the offering and to complete the exchange offer
within 360 days after the closing of the offering; and
    
    file a shelf registration statement for the resale of the Notes if it cannot effect an
exchange offer within the time periods listed above and in other circumstances.
   Cash Flows 
   Capital Expenditures 
 
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
 Market Risk 
 Commodity Prices and Related Hedging Activities 
  26




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##### Table of Contents



June 30,2006 Fair ValueFixed Price Swaps
    
    Quantity
    
    
    Fixed Price
    
    
    Gain/(Loss)(In millions)Crude Oil (Bbls)July 1December 31, 2006
    
    
    862,960
    
    
    $
    72.41
    
    
    $
    (2.6
    )Natural Gas (MMbtus)July 1December 31, 2006
    
    
    9,752,000
    
    
    
    6.92
    
    
    
    (0.2
    )January 1March 31, 2007
    
    
    3,690,010
    
    
    
    9.30
    
    
    
    (4.0
    )Total
    
    
    
    
    
    
    
    
    
    $
    (6.8
    )
  June 30,2006 Fair ValueCostless Collars
    
    Quantity
    
    
    Floor
    
    
    Cap
    
    
    Gain/(Loss)(In millions)Crude Oil (Bbls)July 1December 31, 2006
    
    
    126,960
    
    
    $
    32.65
    
    
    $
    41.52
    
    
    $
    (4.2
    )January 1December 31, 2007
    
    
    1,533,775
    
    
    
    59.13
    
    
    
    82.85
    
    
    
    (7.3
    )January 1December 31, 2008
    
    
    1,080,020
    
    
    
    61.63
    
    
    
    86.80
    
    
    
    (0.2
    )Natural Gas (MMbtus)July 1December 31, 2006
    
    
    3,703,920
    
    
    
    5.78
    
    
    
    7.85
    
    
    
    (1.8
    )January 1December 31, 2007
    
    
    14,106,750
    
    
    
    6.87
    
    
    
    11.82
    
    
    
    (9.0
    )January 1December 31, 2008
    
    
    12,347,000
    
    
    
    7.83
    
    
    
    14.60
    
    
    
    3.6Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (18.9
    )
  Interest Rate Market Risk 
 27




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##### Table of Contents



Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls Over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 Item 1A. Risk Factors.
   
    
    the volatility of oil and natural gas prices;
    
    discovery, estimation, development and replacement of oil and natural gas reserves;
    
    cash flow, liquidity and financial position;
    
    business strategy;
    
    amount, nature and timing of capital expenditures, including future development costs;
    
    availability and terms of capital;
    
    timing and amount of future production of oil and natural gas;
    
    availability of drilling and production equipment;
 28




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##### Table of Contents




    
    operating costs and other expenses;
    
    prospect development and property acquisitions;
    
    risks arising out of our hedging transactions;
    
    marketing of oil and natural gas;
    
    competition in the oil and natural gas industry;
    
    the impact of weather and the occurrence of natural disasters such as fires, floods and
other catastrophic events and natural disasters;
    
    governmental regulation of the oil and natural gas industry;
    
    environmental liabilities;
    
    developments in oil-producing and natural gas-producing countries;
    
    uninsured or underinsured losses in our oil and natural gas operations;
    
    risks related to our level of indebtedness;
    
    our merger with Forest Energy Resources, including strategic plans, expectations and
objectives for future operations, and the realization of expected benefits from the
transaction; and
    
    disruption from the merger with Forest Energy Resources making it more difficult to
manage our business.
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 Issuer Purchases of Equity Securities
 Maximum Number (orTotal Number of
    
    Approximate DollarShares
    
    Value) ofTotal
    
    
    
    
    
    (or Units)
    
    Shares (or Units)Number of
    
    Average
    
    Purchased as
    
    that May Yet BeShares (or
    
    Price Paid
    
    Part of Publicly
    
    Purchased Under theUnits)
    
    per Share
    
    Announced Plans or
    
    Plans orPeriod
    
    Purchased
    
    (or Unit)
    
    Programs
    
    ProgramsApril 1, 2006 to April 30, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    May 1, 2006 to May 31, 2006 (1)
    
    
    654,360
    
    
    $
    17.08
    
    
    
    
    
    
    
    June 1, 2006 to June 30, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    654,360
    
    
    $
    17.08
    
    
    
    
    
    
    
    
 
 (1)
    
    These shares were withheld upon the vesting of employee restricted stock grants in connection
with payment of required withholding taxes. 29




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##### Table of Contents



Item 5. Other Information.
 UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
    
 ForestEnergy
    
    
    
    
    
    
    MarinerMariner
    
    
    Resources,
    
    
    Merger
    
    
    Pro FormaHistorical(1)
    
    
    Inc.(2)
    
    
    Adjustments(3)
    
    
    CombinedRevenues
    
    $
    127,631
    
    
    $
    187,776
    
    
    
    
    
    
    $
    315,407Costs and ExpensesLease Operating Expenses
    
    
    19,345
    
    
    
    34,911
    
    
    
    
    
    
    
    54,256Transportation Expenses
    
    
    1,527
    
    
    
    905
    
    
    
    
    
    
    
    2,432G&A Expenses
    
    
    17,104
    
    
    
    
    
    
    
    
    (4)
    
    
    17,104DD&A
    
    
    46,768
    
    
    
    
    
    
    
    89,806
    (5)
    
    
    136,574Total Costs and Expenses
    
    
    84,744
    
    
    
    35,816
    
    
    
    89,806
    
    
    
    210,366Operating Income
    
    
    42,887
    
    
    
    151,960
    
    
    
    (89,806
    )
    
    
    105,041Interest:Income
    
    
    250
    
    
    
    
    
    
    
    
    
    
    
    250Expense
    
    
    (11,139
    )
    
    
    
    
    
    
    (5,616
    )(6)
    
    
    (16,755
    )Income before taxes
    
    
    31,998
    
    
    
    151,960
    
    
    
    (95,422
    )
    
    
    88,536Provision for income taxes
    
    
    (12,515
    )
    
    
    
    
    
    
    (19,788
    )(7)
    
    
    (32,303
    )Net Income
    
    $
    19,483
    
    
    $
    151,960
    
    
    $
    (115,210
    )
    
    $
    56,233Earnings per Share:Net income per share  basic
    
    $
    0.58
    
    
    
    
    
    
    
    
    
    
    $
    0.67Net income per share  diluted
    
    
    0.56
    
    
    
    
    
    
    
    
    
    
    
    0.66Weighted average shares outstanding  basic
    
    
    33,640,018
    
    
    
    
    
    
    
    50,637,010
    
    
    
    84,277,028Weighted average shares outstanding  diluted
    
    
    34,749,009
    
    
    
    
    
    
    
    50,637,010
    
    
    
    85,386,019
 
 (1)
    
    The Historical Mariner presented excludes the activity related to the Forest assets as the
merger was consummated on March 2, 2006. 30




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##### Table of Contents



(2)
    
    The Forest Gulf of Mexico operations historically have been operated as part of Forests
total oil and gas operations. No historical GAAP-basis financial statements exist for the
Forest Gulf of Mexico operations on a stand-alone basis; however, statements of revenues and
direct operating expenses are presented for the six-months ended June 30, 2006.(3)
    
    Transaction costs consisting of accounting, consulting and legal fees are anticipated to be
approximately $7.8 million. These costs are directly attributable to the transaction and have
been excluded from the pro forma financial statements as they represent material nonrecurring
charges.(4)
    
    The pro forma general and administrative expenses do not include costs associated with the
Forest Gulf of Mexico assets. Mariner believes the overhead costs associated with these
operations in 2006 will approximate $6.4 million, net of capitalized amounts.(5)
    
    To adjust depreciation, depletion and amortization expense to give effect to the acquisition
of the Forest Gulf of Mexico operations and their step-up in value using the unit of
production method under the full cost method of accounting.(6)
    
    To adjust interest expense to give effect to the financing activities in connection with the
organization of Forest Energy Resources, Inc. assuming an interest rate of 6.375% based on the
terms of the senior bank credit facility obtained by Forest Energy Resources, Inc. The
interest rates used reflect 30-day LIBOR plus 1.50%, or 6.375% as of June 30, 2006. A change
in interest rates of approximately 10% would result in a change in pro forma combined interest
of approximately $0.6 million at June 30, 2006.(7)
    
    To record income tax expense on the combined company results of operations based on a
statutory combined federal and state tax rate of 35%.
 
 Item 6. Exhibits
 Number
    
    Description2.1*
    
    Agreement and Plan of Merger, dated as of September 9, 2005, among Forest Oil Corporation, SML
Wellhead Corporation, Mariner Energy, Inc. and MEI Sub, Inc. (incorporated by reference to
Exhibit 2.1 to Mariners Registration Statement on Form S-4 (File No. 333-129096) filed on October
18, 2005).2.2*
    
    Letter Agreement, dated as of February 3, 2006, among Forest Oil Corporation, Forest Energy
Resources, Inc., Mariner Energy, Inc., and MEI Sub, Inc. amended the transaction agreements
(incorporated by reference to Exhibit 2.2 to Amendment No. 3 to Mariners Registration Statement
on Form S-4 (File No. 333-129096) filed on February 8, 2006).2.3*
    
    Letter Agreement, dated as of February 28, 2006, among Forest Oil Corporation, Forest Energy
Resources, Inc., Mariner Energy, Inc. and MEI Sub, Inc. amended the transaction agreements
(incorporated by reference to Exhibit 2.1 to Mariners Form 8-K filed on March 3, 2006).2.4*
    
    Letter Agreement, dated April 12, 2006, among Forest Oil Corporation, Mariner Energy Resources,
Inc. and Mariner Energy, Inc. amended the transaction agreements (incorporated by reference to
Exhibit 2.1 to Mariners Form 8-K filed on April 13, 2006).3.1*
    
    Second Amended and Restated Certificate of Incorporation of Mariner Energy, Inc., as amended
(incorporated by reference to Exhibit 3.1 to Mariners Registration Statement on Form S-8 (File
No.333-132800) filed on March 29, 2006).3.2*
    
    Fourth Amended and Restated Bylaws of Mariner Energy, Inc. (incorporated by reference to Exhibit
3.2 to Mariners Registration Statement on Form S-4 (File No. 333-129096) filed on October 18,
2005).4.1*
    
    Indenture, dated as of April 24, 2006, among Mariner Energy, Inc., the guarantors party thereto
and Wells Fargo Bank, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Mariners Form
8-K filed on April 25, 2006).4.2*
    
    Exchange and Registration Rights Agreement, dated as of April 24, 2006, among Mariner Energy,
Inc., the guarantors party thereto and the initial purchasers party thereto (incorporated by
reference to Exhibit 4.2 to Mariners Form 8-K filed on April 25, 2006).
 31




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##### Table of Contents



Number
    
    Description4.3*
    
    Amended and Restated Credit Agreement, dated as of March 2, 2006, among Mariner Energy, Inc. and
Mariner Energy Resources, Inc., as Borrowers, the Lenders party thereto from time to time, as
Lenders, and Union Bank of California, N.A., as Administrative Agent and as Issuing Lender
(incorporated by reference to Exhibit 4.1 to Mariners Form 8-K filed on March 3, 2006).4.4*
    
    Amendment No. 1 and Consent, dated as of April 7, 2006, among Mariner Energy, Inc. and Mariner
Energy Resources, Inc., as Borrowers, the Lenders party thereto, and Union Bank of California,
N.A., as Administrative Agent for such Lenders and as Issuing Lender for such Lenders
(incorporated by reference to Exhibit 4.1 to Mariners Form 8-K filed on April 13, 2006).4.5*
    
    Credit Agreement among Mariner Energy Inc., the Lenders party thereto and Union Bank of
California, N.A., dated as of March 2, 2004 (incorporated by reference to Exhibit 10.1 to
Mariners Registration Statement on Form S-4 (File No. 333-129096) filed on October 18, 2005).4.6*
    
    Amendment No. 1 and Assignment Agreement among Mariner Energy, Inc., Mariner Holdings, Inc.,
Mariner Energy LLC, the Lenders party thereto, and Union Bank of California, N.A., dated as of
July 14, 2004 (incorporated by reference to Exhibit 10.2 to Mariners Registration Statement
on Form S-4 (File No. 333-129096) filed on October 18, 2005).4.7*
    
    Waiver and Consent among Mariner Energy, Inc., Mariner Holdings, Inc., Mariner Energy LLC, the
Union Bank of California, N.A. and the Lenders party thereto, dated December 29, 2004
(incorporated by reference to Exhibit 10.3 to Mariners Registration Statement on Form S-4 (File
No. 333-129096) filed on October 18, 2005).4.8*
    
    Amendment No. 2 and Consent among Mariner Energy, Inc., Mariner Holdings, Inc., Mariner Energy
LLC, the Lenders party thereto, and Union Bank of California, N.A., dated as of February 7, 2005
(incorporated by reference to Exhibit 10.4 to Mariners Registration Statement on Form S-4
(File No. 333-129096) filed on October 18, 2005).4.9*
    
    Amendment No. 3 and Consent among Mariner Energy, Inc., Mariner LP LLC, Mariner Energy Texas LP,
the Lenders party thereto, and Union Bank of California, N.A., dated as of March 3, 2005
(incorporated by reference to Exhibit 10.5 to Mariners Registration Statement on Form S-4 (File
No. 333-129096) filed on October 18, 2005).4.10*
    
    Amendment No. 4 among Mariner Energy, Inc., Mariner LP LLC, Mariner Energy Texas LP, the Lenders
party thereto, and Union Bank of California, N.A., dated as of July 14, 2005 (incorporated by
reference to Exhibit 4.10 to Mariners Form 10-Q filed on May 12, 2006.)4.11*
    
    Amendment No. 5 among Mariner Energy, Inc., Mariner LP LLC, Mariner Energy Texas LP, the Lenders
party thereto, and Union Bank of California, N.A., dated as of August 5, 2005 (incorporated by
reference to Exhibit 4.11 to Mariners Form 10-Q filed on May 12, 2006.).10.1*
    
    Purchase Agreement, dated as of April 19, 2006, among Mariner Energy, Inc., Mariner LP LLC,
Mariner Energy Resources, Inc., Mariner Energy Texas LP and the initial purchasers party thereto
(incorporated by reference to Exhibit 10.1 to Mariners Form 8-K filed on April 25, 2006).10.2*
    
    Amendment to Employment Agreement by and between Mariner Energy, Inc. and Michiel C. van den Bold,
dated as of June 8, 2006 (incorporated by reference to Exhibit 10.1 to Mariners current report on
Form 8-K filed on June 9, 2006).10.3*
    
    Second Amended and Restated Employment Agreement by and among Mariner Energy, Inc., Mariner Energy
Resources, Inc. and Judd Hansen, dated June 8, 2006 (incorporated by reference to Exhibit 10.2 to
Mariners current report on Form 8-K filed on June 9, 2006).10.4*
    
    Amendment to Employment Agreement by and between Mariner Energy, Inc. and Teresa G. Bushman, dated
as of June 8, 2006 (incorporated by reference to Exhibit 10.3 to Mariners current report on Form
8-K filed on June 9, 2006).31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 32




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##### Table of Contents



Number
    
    Description32.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Incorporated by reference as indicated.  33




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##### Table of Contents



SIGNATURES
  Mariner Energy, Inc.By :
    
    /s/ Scott D. JoseyName: Scott D. JoseyTitle: Chairman of the Board,Chief Executive Officer and PresidentBy:
    
    /s/ RICK G. LESTERName: Rick G. LesterTitle: Vice President, Chief Financial Officer and Treasurer
 34




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##### Table of Contents



Exhibit Index
 Number
    
    Description2.1*
    
    Agreement and Plan of Merger, dated as of September 9, 2005, among Forest Oil Corporation, SML
Wellhead Corporation, Mariner Energy, Inc. and MEI Sub, Inc. (incorporated by reference to
Exhibit 2.1 to Mariners Registration Statement on Form S-4 (File No. 333-129096) filed on October
18, 2005).2.2*
    
    Letter Agreement, dated as of February 3, 2006, among Forest Oil Corporation, Forest Energy
Resources, Inc., Mariner Energy, Inc., and MEI Sub, Inc. amended the transaction agreements
(incorporated by reference to Exhibit 2.2 to Amendment No. 3 to Mariners Registration Statement
on Form S-4 (File No. 333-129096) filed on February 8, 2006).2.3*
    
    Letter Agreement, dated as of February 28, 2006, among Forest Oil Corporation, Forest Energy
Resources, Inc., Mariner Energy, Inc. and MEI Sub, Inc. amended the transaction agreements
(incorporated by reference to Exhibit 2.1 to Mariners Form 8-K filed on March 3, 2006).2.4*
    
    Letter Agreement, dated April 12, 2006, among Forest Oil Corporation, Mariner Energy Resources,
Inc. and Mariner Energy, Inc. amended the transaction agreements (incorporated by reference to
Exhibit 2.1 to Mariners Form 8-K filed on April 13, 2006).3.1*
    
    Second Amended and Restated Certificate of Incorporation of Mariner Energy, Inc., as amended
(incorporated by reference to Exhibit 3.1 to Mariners Registration Statement on Form S-8 (File
No.333-132800) filed on March 29, 2006).3.2*
    
    Fourth Amended and Restated Bylaws of Mariner Energy, Inc. (incorporated by reference to Exhibit
3.2 to Mariners Registration Statement on Form S-4 (File No. 333-129096) filed on October 18,
2005).4.1*
    
    Indenture, dated as of April 24, 2006, among Mariner Energy, Inc., the guarantors party thereto
and Wells Fargo Bank, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Mariners Form
8-K filed on April 25, 2006).4.2*
    
    Exchange and Registration Rights Agreement, dated as of April 24, 2006, among Mariner Energy,
Inc., the guarantors party thereto and the initial purchasers party thereto (incorporated by
reference to Exhibit 4.2 to Mariners Form 8-K filed on April 25, 2006).




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##### Table of Contents



Number
    
    Description4.3*
    
    Amended and Restated Credit Agreement, dated as of March 2, 2006, among Mariner Energy, Inc. and
Mariner Energy Resources, Inc., as Borrowers, the Lenders party thereto from time to time, as
Lenders, and Union Bank of California, N.A., as Administrative Agent and as Issuing Lender
(incorporated by reference to Exhibit 4.1 to Mariners Form 8-K filed on March 3, 2006).4.4*
    
    Amendment No. 1 and Consent, dated as of April 7, 2006, among Mariner Energy, Inc. and Mariner
Energy Resources, Inc., as Borrowers, the Lenders party thereto, and Union Bank of California,
N.A., as Administrative Agent for such Lenders and as Issuing Lender for such Lenders
(incorporated by reference to Exhibit 4.1 to Mariners Form 8-K filed on April 13, 2006).4.5*
    
    Credit Agreement among Mariner Energy Inc., the Lenders party thereto and Union Bank of
California, N.A., dated as of March 2, 2004 (incorporated by reference to Exhibit 10.1 to
Mariners Registration Statement on Form S-4 (File No. 333-129096) filed on October 18, 2005).4.6*
    
    Amendment No. 1 and Assignment Agreement among Mariner Energy, Inc., Mariner Holdings, Inc.,
Mariner Energy LLC, the Lenders party thereto, and Union Bank of California, N.A., dated as of
July 14, 2004 (incorporated by reference to Exhibit 10.2 to Mariners Registration Statement
on Form S-4 (File No. 333-129096) filed on October 18, 2005).4.7*
    
    Waiver and Consent among Mariner Energy, Inc., Mariner Holdings, Inc., Mariner Energy LLC, the
Union Bank of California, N.A. and the Lenders party thereto, dated December 29, 2004
(incorporated by reference to Exhibit 10.3 to Mariners Registration Statement on Form S-4 (File
No. 333-129096) filed on October 18, 2005).4.8*
    
    Amendment No. 2 and Consent among Mariner Energy, Inc., Mariner Holdings, Inc., Mariner Energy
LLC, the Lenders party thereto, and Union Bank of California, N.A., dated as of February 7, 2005
(incorporated by reference to Exhibit 10.4 to Mariners Registration Statement on Form S-4
(File No. 333-129096) filed on October 18, 2005).4.9*
    
    Amendment No. 3 and Consent among Mariner Energy, Inc., Mariner LP LLC, Mariner Energy Texas LP,
the Lenders party thereto, and Union Bank of California, N.A., dated as of March 3, 2005
(incorporated by reference to Exhibit 10.5 to Mariners Registration Statement on Form S-4 (File
No. 333-129096) filed on October 18, 2005).4.10*
    
    Amendment No. 4 among Mariner Energy, Inc., Mariner LP LLC, Mariner Energy Texas LP, the Lenders
party thereto, and Union Bank of California, N.A., dated as of July 14, 2005 (incorporated by
reference to Exhibit 4.10 to Mariners Form 10-Q filed on May 12, 2006.)4.11*
    
    Amendment No. 5 among Mariner Energy, Inc., Mariner LP LLC, Mariner Energy Texas LP, the Lenders
party thereto, and Union Bank of California, N.A., dated as of August 5, 2005 (incorporated by
reference to Exhibit 4.11 to Mariners Form 10-Q filed on May 12, 2006.).10.1*
    
    Purchase Agreement, dated as of April 19, 2006, among Mariner Energy, Inc., Mariner LP LLC,
Mariner Energy Resources, Inc., Mariner Energy Texas LP and the initial purchasers party thereto
(incorporated by reference to Exhibit 10.1 to Mariners Form 8-K filed on April 25, 2006).10.2*
    
    Amendment to Employment Agreement by and between Mariner Energy, Inc. and Michiel C. van den Bold,
dated as of June 8, 2006 (incorporated by reference to Exhibit 10.1 to Mariners current report on
Form 8-K filed on June 9, 2006).10.3*
    
    Second Amended and Restated Employment Agreement by and among Mariner Energy, Inc., Mariner Energy
Resources, Inc. and Judd Hansen, dated June 8, 2006 (incorporated by reference to Exhibit 10.2 to
Mariners current report on Form 8-K filed on June 9, 2006).10.4*
    
    Amendment to Employment Agreement by and between Mariner Energy, Inc. and Teresa G. Bushman, dated
as of June 8, 2006 (incorporated by reference to Exhibit 10.3 to Mariners current report on Form
8-K filed on June 9, 2006).31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.




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##### Table of Contents



Number
    
    Description32.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Incorporated by reference as indicated.