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|UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549FORM 10-QQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2002

Commission file number 333-12707Mariner Energy, Inc.(Exact name of registrant as specified in its charter)Internal Revenue Service - Employer Identification No. 86-0460233
State of other jurisdiction of incorporation or organization - Delaware580 WestLake Park Blvd., Suite 1300
Houston, Texas 77079
(Address of principal executive offices including Zip Code)(281) 584-5500
(Registrant's telephone number)Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90
days. Yes [X]    No [ ]

Note: The Company is not subject to the filing requirements of the Securities Exchange Act of 1934. This
quarterly report is filed pursuant to contractual obligations imposed on the Company by an Indenture, dated as
of August 1, 1996, under which the Company is the issuer of certain debt.


As of May 10, 2002, there were 1,380 shares of the registrant's common stock outstanding.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



|MARINER ENERGY, INC.
Form 10-Q
March 31, 2002
TABLE OF CONTENTS
|---------------------------------------------------------------
|PART I                                                         
|Item 1.                                                        
|                                                               
|                                                               
|                                                               
|                                                               
|Item 2.                                                        
|Item 3.                                                        
|PART II                                                        
|Item 1.                                                        
|Item 2.                                                        
|Item 3.                                                        
|Item 4.                                                        
|Item 5.                                                        
|Item 6.                                                        
|SIGNATURE                                                      

Part I, Item 1.

|MARINER ENERGY, INC.BALANCE SHEETS(in thousands)                                         
|-----------------------------------------------------------------------------------------
|
|
|
|
|Current Assets:                                                                          
|Cash and cash equivalents                                                                
|Receivables                                                                              
|Prepaid expenses and other                                                               
|                                                                                         
|Total current assets                                                                     
|                                                                                         
|Property and Equipment:                                                                  
|Oil and gas properties, at full cost:                                                    
|Proved                                                                                   
|Unproved, not subject to amortization                                                    
|                                                                                         
|Total                                                                                    
|Other property and equipment                                                             
|Accumulated depreciation, depletion and amortization                                     
|                                                                                         
|Total property and equipment, net                                                        
|                                                                                         
|Other Assets, Net of Amortization                                                        
|Long-Term Related Party Receivable                                                       
|                                                                                         
|TOTAL ASSETS                                                                             
|                                                                                         
|LIABILITIES AND STOCKHOLDER'S EQUITY                                                     
|Current Liabilities:                                                                     
|Accounts payable                                                                         
|Accrued liabilities                                                                      
|Accrued interest                                                                         
|Revolving credit facility                                                                
|                                                                                         
|Total current liabilities                                                                
|                                                                                         
|Other Liabilities                                                                        
|Long-Term Debt:                                                                          
|Senior Subordinated Notes                                                                
|                                                                                         
|Total long-term debt                                                                     
|                                                                                         
|Stockholder's Equity:                                                                    
|Common stock, $1 par value; 2,000 shares         authorized, 1,380 issued
and outstanding
|Additional paid-in-capital                                                               
|Other comprehensive income                                                               
|Accumulated deficit                                                                      
|                                                                                         
|Total stockholder's equity                                                               
|                                                                                         
|TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                                               
|                                                                                         
|The accompanying notes are an integral part of these financial statements                



|MARINER ENERGY, INC.STATEMENTS OF OPERATIONS(in thousands)               
|-------------------------------------------------------------------------
|
|
|
|
|REVENUES:                                                                
|Oil sales                                                                
|Gas sales                                                                
|
|Total revenues                                                           
|
|COSTS AND EXPENSES:                                                      
|Lease operating expense                                                  
|Transportation expense                                                   
|General and administrative expense                                       
|Depreciation, depletion and amortization                                 
|Unrealized loss on derivative instruments                                
|
|Total costs and expenses                                                 
|
|OPERATING INCOME                                                         
|INTEREST:                                                                
|Income                                                                   
|Expense                                                                  
|
|INCOME (LOSS) BEFORE TAXES                                               
|PROVISION FOR INCOME TAXES                                               
|
|NET INCOME (LOSS)                                                        
|
|The accompanying notes are an integral part of these financial statements



|MARINER ENERGY, INC.STATEMENTS OF CASH FLOWS(unaudited, in thousands)               
|------------------------------------------------------------------------------------
|
|
|
|
|OPERATING ACTIVITIES:                                                               
|Net income (loss)                                                                   
|Adjustments to reconcile net loss to net cash      provided by operating activities:
|Depreciation, depletion and amortization                                            
|Unrealized loss and other non-cash   derivative instrument adjustments              
|Changes in operating assets and liabilities:                                        
|Receivables                                                                         
|Other current assets                                                                
|Other assets                                                                        
|Accounts payable and accrued liabilities                                            
|
|Net cash provided by (used in) operating activities                                 
|
|INVESTING ACTIVITIES:                                                               
|Additions to oil and gas properties                                                 
|Proceeds from property conveyances                                                  
|Additions to other property and equipment                                           
|
|Net cash used in investing activities                                               
|
|FINANCING ACTIVITIES:                                                               
|Repayment of revolving credit facility                                              
|
|Net cash provided by (used in) financing activities                                 
|
|INCREASE IN CASH AND CASH EQUIVALENTS                                               
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                    
|
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                          
|
|The accompanying notes are an integral part of these financial statements           



# MARINER
ENERGY, INC.Notes to Financial Statements(unaudited)

1.      BASIS OF
PRESENTATION

        The
condensed financial statements of Mariner Energy, Inc. (the Company)
included herein have been prepared, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC).
Accordingly, they reflect all adjustments (consisting only of normal, recurring
accruals) which are, in the opinion of management, necessary for a fair
presentation of the financial results for the interim periods. Certain
information and notes normally included in condensed financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the disclosures are adequate
to make the information presented not misleading. These condensed financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Companys Form 10-K for the year ended December 31,
2001. The results of operations and cash flows for the three-months ended March
31, 2002 are not necessarily indicative of the results for the full year.2.      OIL AND GAS
PROPERTIES

        Under
the full cost method of accounting for oil and gas properties, the net carrying
value of proved oil and gas properties is limited to an estimate of the future
net revenues, discounted at 10%, from proved oil and gas reserves based on
period-end prices and costs plus the lower of cost or estimated fair value of
unproved properties.

        On
March 20, 2002, with bids totaling $10.9 million net to us, we were the apparent
high bidder solely or with industry partners, on 12 out of 16 blocks on which we
and our partners submitted bids in the Central Gulf of Mexico Oil and Gas Lease
Sale 182 held on that date. Each of the blocks is in water depths ranging from
approximately 20 feet to 2,400 feet. Mariner has a 100% working interest in four
of the blocks, 50% working interest in seven blocks and 20% working interest in
one block.

        In
April 2002, we sold 50% of our working interest in our Falcon discovery and
surrounding blocks, located in East Breaks Block 579 in the western Gulf of
Mexico, for $48.8 million, as determined under an effective sales date of
January 1, 2002. The Company will be reimbursed by the purchaser for all cost
incurred subsequent to the effective date. Subsequent to the sale we have a 25%
working interest in the discovery and surrounding blocks. The project is
currently expected to begin production in the first quarter of 2003. At December
31, 2001, the Falcon project had 66.8 Bcfe assigned as proven oil and gas
reserves to our interest. 3.     RELATED-PARTY TRANSACTIONS

        Enron
Bankruptcy -On December 2, 2001, Enron Corp. (Enron)
and one of its affiliates, Enron North America Corp. (ENA), filed
voluntary petitions for bankruptcy protection. The Company has been informed
that of the various affiliates of both Enron and Mariner, only Enron and ENA are
included in the bankruptcy. We do not know at this time if any other affiliates
of Enron will seek bankruptcy protection or what effect, if any, this may have
on the ownership of Mariner Energy LLC which owns 100% of Mariner Holdings, Inc.
(our direct parent) or on Joint Energy Development Investments Limited
Partnership (JEDI), which owns approximately 96% of Mariner Energy
LLC. Enron is the parent of ENA, and an affiliate of ENA is the general partner
of JEDI. JEDI is 100% owned by several different Enron and ENA affiliates.
Accordingly, Enron may be deemed to control JEDI, Mariner Energy LLC, Mariner
Holdings and the Company. Additionally, seven of the Companys directors
are officers of Enron or affiliates of Enron. Because of these various
potentially conflicting interests, ENA, the Company, JEDI and the members of the
Companys management who are also shareholders of Mariner Energy LLC have
entered into an agreement that is intended to make clear that Enron and its
affiliates have no duty to make business opportunities available to the Company.

        Mariner
Energy LLCs only asset is 100% of the common stock of Mariner Holdings,
Inc., our direct parent. The only asset of Mariner Holdings is 100% of the
common shares of Mariner. Covenants in Mariners Revolving Credit Facility
and Senior Subordinated Notes restrict the funds of Mariner that can be
distributed to Mariner Energy LLC to repay its term loan or distribute earnings
to an ENA affiliate  see below ENA Affiliate Term Loan.
Mariner Energy LLC is currently attempting to obtain an extension of the ENA
Affiliate Term Loan, but there can be no assurance that an extension will be
obtained. In the event Mariner Energy LLC is unable to obtain an extension or
restructure its obligations, it would either default or be forced to sell its
interest in Mariner or cause Mariner to sell a substantial portion of its assets
to repay its Revolving Credit Facility, if any amounts are outstanding, and
outstanding Senior Subordinated Notes so that it could distribute any remaining
cash proceeds to Mariner Energy LLC to be used to repay the ENA Affiliate Term
Loan.

        As
a result of the Enron and ENA bankruptcies, among other implications, as part of
our normal operations we may not be able to obtain credit from banks or trade
vendors or enter into hedging arrangements on acceptable terms. To date, our
operations have not been materially effected by the bankruptcies however, our
ability to enter into certain transactions including purchase or sale
arrangements and to conduct significant capital programs may be effected in the
future.

        Mariner Energy LLC

        ENA
Affiliate Term Loan  In March 2000, Mariner Energy LLC established an
unsecured term loan with ENA to repay amounts outstanding under various
affiliate credit facilities at Mariner Energy LLC and Mariner Energy, Inc. and
to provide additional working capital. The additional working capital of $55
million was contributed to Mariner in 2000. The loan bears interest at 15%,
which interest accrues and is added to the loan principal. Repayment of the
balance of loan principal and accrued interest, which was approximately $149
million as of March 31, 2002, is due March 20, 2003. As part of the loan
agreement, two five-year warrants were issued to ENA providing the right to
purchase up to 900,000 of common shares of Mariner Energy LLC for $0.01 per
share.

        We
have been informed that the Term Loan and warrants were transferred from ENA to
an ENA affiliate.

        Mariner Energy, Inc.

        Oil
and Gas Production Sales to ENA or Affiliates  During the three years
ending December 31, 2001, 2000 and 1999, sales of oil and gas production to ENA
or affiliates were $50.2 million, $73.4 million and $16.2 million, respectively.
These sales were generally made on 1 to 3 month contracts. At the time ENA filed
its petition for bankruptcy protection, the Company immediately ceased selling
its physical production to ENA. As of March 31, 2002, we had an outstanding
receivable for $3.0 million from ENA. This amount was not paid as scheduled and
is still outstanding. The Company has estimated 90% of this balance is
uncollectible and has recorded an allowance and related expense for $2.7
million.

        Accounting
for Price Risk Management Activities  Mariner engages in price risk
management activities from time to time. These activities are intended to manage
Mariners exposure to fluctuations in commodity prices for natural gas and
crude oil. The Company primarily utilizes price swaps and costless collars as a
means to manage such risk. All of the Companys hedging contracts were with
ENA. As a result of ENAs bankruptcy, the contracts are currently in
default. The November 2001 through March 31, 2002 settlements for oil and gas
have not been collected, and there is significant uncertainty these settlements
or any future settlements will be collected. As a result of the default, the
Company has recorded an allowance representing 90% of the recorded hedge
settlements receivable of $11.0 million. In accordance with Statement of
Financial Accounting Standards (SFAS) No. 133 Accounting for
Derivative Instruments and Hedging Activities, as amended by SFAS No. 137
and No. 138, we have de designated our contracts effective December 2, 2001 and
are recognizing all market value changes subsequent to such de-designation in
earnings of the Company. The value recorded up to the time of de-designation and
included in Accumulated Other Comprehensive Income (AOCI), will
reverse out of AOCI and into earnings as the original corresponding production,
as hedged by the contracts, is produced. For the three months ending March 31,
2002 approximately $6.6 million has reversed out to earnings. As of March 31,
2002, $19.2 million remained in AOCI to be reversed out during the contract
periods covering April 1, 2002 through December 31, 2003. Due to the uncertainty
of future settlements, the overall effect of the ENA bankruptcy has been to
eliminate our commodity price hedge protection. Currently we are negotiating
with third parties to enter into price risk management activities.

        The
following table sets forth the results of hedging transactions during the
periods indicated:

|                                                     | THREE-MONTHSENDED MARCH 31,
|---------------------------------------------------- | ---------------------------
|
|
|
|Natural gas quantity hedged (Mmbtu)                  | 3,737                      
|Increase (decrease) in natural gas sales (thousands) | $5,569                     
|Crude oil quantity hedged (MBbls)                    | 180                        
|Increase (decrease) in crude oil sales (thousands)   | $1,021                     

The following table sets forth our open positions as of March 31, 2002.

|TIME PERIOD                   | NOTIONALQUANTITIES | FIXED PRICE | FAIR VALUE(in millions)
|----------------------------- | ------------------ | ----------- | -----------------------
|NATURAL GAS (MMBTU)          
|April 1 - October 31, 2002   
|Fixed price swap purchased    | 1,244              | $2.18       | $(1.5)                 
|April 1 - December 31, 2002  
|Fixed price swap purchased    | 8,984              | 4.43        | 8.8                    
|Fixed price swap purchased    | 4,125              | 3.03        | (1.7)                  
|January 1 - December 31, 2003
|Fixed price swap purchased    | 3,650              | 3.74        | 0.2                    
|CRUDE OIL (MBBL)             
|April 1 - June 30, 2002      
|Fixed price swap purchased    | 91                 | 25.15       | (0.1)                  
|April 1 - December 31, 2002  
|Fixed price swap purchased    | 275                | 25.48       | (0.1)                  
|Sub-Total                     |                    |             | $5.6(1)                
|                              |                    |             |                        
|Allowance for impairment      |                    |             | $(5.0)                 
|                              |                    |             |                        
|Total                         |                    |             | $0.6                   
|                              |                    |             |                        

1. Subsequent to the date of default by Enron and ENA, and as of March 31, 2002,  the  contracts  decreased in gross market value
              by $13.1  million,  which is reflected in the  unrealized  loss on derivative  instruments at the net valuation of 10% or
              $1.3 million, after consideration for allowance.

Supplemental Affiliate Data - provided below is a supplemental balance sheet and income statement for affiliate entities:

|                                        | YEAR ENDED DECEMBER 31,
|--------------------------------------- | -----------------------
|
|
|RELATED PARTY RECEIVABLE:               |                        
|Derivative Asset                        | $0.6                   
|Settled Hedge Receivable                | 1.0                    
|Oil and Gas Receivable                  | 0.3                    
|ACCURED LIABILITIES:                    |                        
|Transportation Contract                 | $0.7                   
|Service Agreement                       | $0.4                   
|STOCKHOLDERS' EQUITY:                  
|Common Stock                            | $0.001                 
|Additional Paid-in Capital              | $227.3                 
|INCOME STATEMENT DATA                  
|Oil and Gas Sales                       | $50.2                  
|General and Administrative Expenses     | 0.2                    
|Transportation Expenses                 | 4.2                    
|Impairment of Enron Related Receivables | 29.5                   

4.      LIQUIDITY

        As
of March 31, 2002, we had a working capital deficit of approximately $42.5
million, compared to a working capital deficit of $19.6 million at March 31,
2001. The increase in the working capital deficit was primarily a result of the
existence of $25.5 million in borrowings under the Companys Revolving
Credit Facility with a bank. These borrowings were used to fund the
Companys King Kong / Yosemite project capital expenditures. We expect our
2002 capital expenditures, excluding capitalized general and administrative
expenses, interest costs and proceeds from property conveyances (see Note
2. Oil & Gas Properties), to be approximately $101.9 million, which
would exceed cash flow from operations. However, we believe that increased
commodity prices and proceeds from property conveyances will result in
sufficient cash flow to permit us to fund our remaining planned activities in
2002. There can be no assurance that our access to capital will be sufficient to
meet our needs for capital. As such, we may be required to reduce our planned
capital expenditures and forego planned exploratory drilling.

        The
Companys Revolving Credit Facility matures in October 2002. We expect to
begin renegotiation of our agreement with existing banks that provide the
facility during the first half of 2002. All outstanding balances at March 31,
2002 related to the Revolving Credit Facility were repaid with the proceeds from
the April 2002 property conveyance previously mentioned. We plan to minimize the
use of the facility until such time as this agreement can be renegotiated or
replaced with a similar agreement. There is no assurance that this agreement can
be renegotiated or replaced. In addition our parent, Mariner Energy LLC, is
currently obligated under a three-year unsecured term loan with an ENA
affiliate, which matures in March 2003. Mariner Energy LLC currently plans to
seek an extension on this agreement. In the event Mariner Energy LLC is unable
to obtain an extension an extension or restructure its obligations, Mariner
Energy LLC would either default or be forced to sell its interest in the
Company, or cause the Company to sell a substantial portion of its assets to
repay its Revolving Credit Facility and outstanding Senior Subordinated Notes so
that it could distribute cash to Mariner Energy LLC to be used to repay the term
loan. In the event of either a change of control of the Company or a sale of a
substantial portion of the Companys assets, both the balances outstanding
under the Senior Subordinated Notes and Revolving Credit Facility would have to
be repaid prior to payment of the term loan. There can be no assurance that an
extension will be obtained.5.      COMMITMENTS AND CONTINGENCIES

        Litigation
 The Company, in the ordinary course of business, is a claimant and/or a
defendant in various legal proceedings, including proceedings as to which the
Company has insurance coverage. The Company does not consider its exposure in
these proceedings, individually or in the aggregate, to be material. 6.      OTHER COMPREHENSIVE INCOME

        Other
Comprehensive Income includes net income and certain items recorded directly to
Stockholders Equity and classified as Other Comprehensive Income. The
following table illustrates the calculation of Other Comprehensive Income:

|                                                                        | Three-Months Ended
March 31, 2002
(In thousands)
|----------------------------------------------------------------------- | ------------------------------------------------
|
|
|                                                                        |                                                 
|Other comprehensive income - December 31, 2001                          |                                                 
|Net income                                                              | $1,856                                          
|Other comprehensive loss                                               
|Reclassification adjustment for price risk management settled contracts | (6,590)                                         
|                                                                        |                                                 
|Other comprehensive income                                              | (6,590)                                         
|                                                                        |                                                 
|Comprehensive income                                                    | $(4,734)                                        
|                                                                        |                                                 
|Other comprehensive income                                              |                                                 
|                                                                        |                                                 

There were no items in Other Comprehensive Income other than the Company's hedging activity.



Independent Accountants Report

Board of Directors and Stockholder
Mariner Energy, Inc.
Houston, Texas

We have reviewed the
accompanying balance sheet of Mariner Energy, Inc. as of March 31, 2002 and the
related statements of operations and cash flows for the three-months ended March
31, 2002 and 2001. These financial statements are the responsibility of the
Companys management.

We conducted our review in
accordance with standards established by the American Institute of Certified
Public Accountants. A review of interim financial information consists primarily
of applying analytical procedures to financial data and making inquiries of
persons responsible for financial and accounting matters. It is substantially
less in scope than an audit conducted in accordance with auditing standards
generally accepted in the United States of America, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.

Based on our review, we are
not aware of any material modifications that should be made to the accompanying
financial statements for them to be in conformity with accounting
principles generally accepted in the United States of America.

We have previously audited,
in accordance with auditing standards generally accepted in the United Sates of
America, the balance sheet as of December 31, 2001, and the related statements
of operations, stockholders equity, and cash flows for the year ended
December 31, 2001 (not presented herein), and in our report dated April 16,
2002, we expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying balance sheet as of
December 31, 2001 is fairly stated, in all material respects, in relation to the
balance sheet from which it has been derived.

As described in Note 3, the
Company has various related-party transactions and certain control relationships
with Enron Corp.

/s/ DELOITTE & TOUCHE LLPDELOITTE &
TOUCHE LLP

Houston, Texas
May 14, 2002



Part I, Item 2.  Management's Discussion and Analysis of Financial Condition and Results of  Operations.

        The
following review of operations for the three-month periods ended March 31, 2002
and 2001 should be read in conjunction with the financial statements of the
Company and Notes thereto included elsewhere in this Form 10-Q and with the
Financial Statements, Notes, and Managements Discussion and Analysis of
Financial Condition and Results of Operations included in the Companys
Annual Report on Form 10-K for the year ended December 31, 2001, filed with the
Securities and Exchange Commission on April 16, 2002.Information
Regarding Forward Looking Statements

        All
statements other than statements of historical fact included in this quarterly
report on Form 10-Q, including, without limitation, statements contained in this
Managements Discussion and Analysis of Financial Condition and
Results of Operations regarding the Companys financial position,
business strategy, plans and objectives of management of the Company for future
operations, and industry conditions, are forward-looking statements. Although
the Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct, and actual results could differ materially from the
Companys expectations. Factors that could influence these results include,
but are not limited to, oil and gas price volatility, results of future
drilling, availability of drilling rigs, future production and costs, capital
resources, liquidity and other factors described in the Companys annual
report on Form 10-K for the year ended December 31, 2001, filed with the
Securities and Exchange Commission on April 16, 2002.Results of Operations

The following table sets
forth certain information regarding results of operations for the periods shown:

|                                   | THREE-MONTHS ENDEDMARCH 31,
|---------------------------------- | ---------------------------
|
|
|
|Total Revenue, $MM                 | $27.9                      
|EBITDA(1), $MM                     | 18.9                       
|Net Income (Loss), $MM             | 1.9                        
|Production:                       
|Oil and condensate (Mbbls)         | 531                        
|Natural gas (Mmcf)                 | 4,635                      
|Natural gas equivalents (Mmcfe)    | 7,821                      
|Average Realized Sales Prices:    
|Oil and condensate ($/Bbl)         | $20.35                     
|Natural gas ($/Mcf)                | 3.68                       
|Natural gas equivalents ($/Mcfe)   | 3.56                       
|Cash Margin(2)Per Mcfe:           
|Revenue (pre-hedge)                | $2.72                      
|Hedging impact                     | 0.84                       
|Lease operating expenses           | (0.50)                     
|Transportation                     | (0.24)                     
|Gross G&A costs                    | (0.48)                     
|
|Cash margin                        | $2.34                      
|
|Capital Expenditures(3), $MM:     
|Exploration:                      
|Leasehold and G&G costs            | $6.8                       
|Drilling                           | 1.5                        
|Development & other                | 23.4                       
|Capitalized G&A and interest costs | 1.8                        
|Less property conveyances          | --                         
|
|TOTAL                              | $33.5                      
|

1. EBITDA equals earnings before interest, income taxes, depreciation, depletion,
and amortization. EBITDA should be used as a supplement to, and not as a
supplement for, net earnings and cash provided by operating activities (as
disclosed in the financial statements) in analyzing the Companys results
of operations and liquidity.
2. Cash margin measures the net cash generated by a companys operations
during a given period, without regard to the period such cash is physically
received or spent by the company.
3. Net of $39.5 million
of proceeds from property conveyances for the three-month period ended March 31,
2001.

Results of Operations for the First Quarter of 2002
        Net
production was 7.8 billion cubic feet of natural gas equivalent (Bcfe) as
compared to 10.1 Bcfe in the same period of 2001. The reduction of production
was due to the early loss of production on our Dulcimer and Apia projects
located in Garden Banks 367 and 73, respectively.

        Hedging
activitiesfor the first quarter of 2002 increased our average realized
natural gas sales price $1.20 per Mcf and revenues by $5.6 million and realized
oil prices by $1.92 per Bbl and revenues by $1.0 million during the first
quarter of 2002. Hedging activities for the first quarter 2001 reduced our
average realized natural gas and crude oil prices by $1.96 per Mcf, resulting in
reductions in revenue of $10.6 million. There were no oil hedges in place during
the first quarter of 2001.

        Oil
and gas revenues decreased to $27.9 million for the first quarter of 2002
from $49.9 million for the first quarter of 2001 due to the decrease in
production mentioned above and a decrease in realized prices to $3.56 per Mcfe
for the first quarter from $4.92 per Mcfe in the same period of 2001.

        Lease
operating expenses decreased to $3.9 million for the first quarter of 2002
from $5.1 million for the first quarter of 2001 due to the reduction of two
wells mentioned above.

        Transportation
expenses decreased to $1.8 million for the first quarter of 2002 from $3.5
million for the same period of 2001. This decrease was primarily attributable to
the reduced production mentioned above.

        Depreciation,
depletion, and amortization expense (DD&A) decreased to $14.1 million
for the first quarter of 2002 from $17.5 million for the first quarter of 2001
as a result of the decrease in equivalent volumes produced offset in part by an
increase in the unit-of-production DD&A rate to $1.81 per Mcfe from $1.73
per Mcfe.

        General
and administrative expenses,which are net of overhead
reimbursements received from other working interest owners were flat at $2.0
million for both the first quarter of 2002 and 2001.

        Interest
expense for the first quarter of 2002 increased to $2.9 million from $2.4
million in the first quarter of 2001 due to the existence of $25.5 million in
borrowings under our Revolving Credit Facility. 

        Net
Incomedecreased to $1.9 million for the first quarter of 2002 from $19.4
million for the comparable period last year, as a result of the aforementioned
factors.

        Liquidity, Capital Expenditures and Capital Resources

        As
of March 31, 2002, we had a working capital deficit of approximately $42.5
million, compared to a working capital deficit of $19.6 million at March 31,
2001. The increase in the working capital deficit was primarily a result of the
existence of $25.5 million in borrowings under the Companys Revolving
Credit Facility with a bank. These borrowings were used to fund the
Companys King Kong / Yosemite project capital expenditures. We expect our
2002 capital expenditures, excluding capitalized general and administrative
expenses, interest costs and proceeds from property conveyances (see Note
2. Oil & Gas Properties), to be approximately $101.9 million, which
would exceed cash flow from operations. However, we believe that increased
commodity prices and proceeds from property conveyances will result in
sufficient cash flow to permit us to fund our remaining planned activities in
2002. There can be no assurance that our access to capital will be sufficient to
meet our needs for capital. As such, we may be required to reduce our planned
capital expenditures and forego planned exploratory drilling.

        The
Companys Revolving Credit Facility matures in October 2002. We expect to
begin renegotiation of our agreement with existing banks that provide the
facility during the first half of 2002. All outstanding balances at March 31,
2002 related to the Revolving Credit Facility were repaid with the proceeds from
the April 2002 property conveyance previously mentioned. We plan to minimize the
use of the facility until such time as this agreement can be renegotiated or
replaced with a similar agreement. There is no assurance that this agreement can
be renegotiated or replaced. In addition our parent, Mariner Energy LLC, is
currently obligated under a three-year unsecured term loan with an ENA
affiliate, which matures in March 2003. Mariner Energy LLC currently plans to
seek an extension on this agreement. In the event Mariner Energy LLC is unable
to obtain an extension an extension or restructure its obligations, Mariner
Energy LLC would either default or be forced to sell its interest in the
Company, or cause the Company to sell a substantial portion of its assets to
repay its Revolving Credit Facility and outstanding Senior Subordinated Notes so
that it could distribute cash to Mariner Energy LLC to be used to repay the term
loan. In the event of either a change of control of the Company or a sale of a
substantial portion of the Companys assets, both the balances outstanding
under the Senior Subordinated Notes and Revolving Credit Facility would have to
be repaid prior to payment of the term loan. There can be no assurance that an
extension will be obtained.

        Net
cash outflow from operating activities was $2.1 million in the first quarter of
2002, a decrease of $53.6 million from the same period of 2001. A period to
period decrease of approximately $26.6 million in operating cash flow before
changes in operating assets and liabilities was due primarily to lower
production and higher commodity prices. An increase of $25.3 million in net cash
provided by changes in working capital was caused by reductions in joint
interest receivables and the timing of payments made on accounts payable.

        Net
cash outflow from investing activities in the first three months of 2002
increased to $33.5 million from a cash inflow of $5.4 million for the same
period in 2001 due primarily to proceeds from property conveyances of $39.5
million in the first quarter of 2001.

        Cash
inflow in financing activities was $25.5 million for the first three months of
2002 compared to cash used of $30.0 million for the same period in 2001.

        Capital
expenditures for the first three months of 2002 were $33.4 million including
$1.8 million of capitalized general, administrative and interest costs. Net
capital expenditures included $8.3 million for exploration activities and $25.2
million for development and other activities.

        During
the remainder of 2002, we expect to conduct drilling operations on four to seven
exploratory wells, making additions to our seismic and leasehold positions. The
development budget includes funds for completing the Falcon Deepwater project.

        Long-term
debt outstanding as of March 31, 2002 was approximately $99.7 million for our
senior subordinated notes.

        There
can be no assurance that funds available to us under the Revolving Credit
Facility will be sufficient for us to fund our currently planned capital
expenditures. We may be required to reduce our planned capital expenditures and
forego planned exploratory drilling or to monetize portions of our proved
reserves or undeveloped inventory if additional capital resources are not
available to us on terms we consider reasonable.

        We
believe there will be adequate cash flow in order for us to fund our remaining
planned activities in 2002. Our capital resources still may not be sufficient to
meet our anticipated future requirements for working capital, capital
expenditures and scheduled payments of principal and interest on our
indebtedness. There can be no assurance that anticipated growth will be
realized, that our business will generate sufficient cash flow from operations
or that future borrowings or equity capital will be available in an amount
sufficient to enable us to service our indebtedness or make necessary capital
expenditures. In addition, depending on the levels of our cash flow and capital
expenditures (the latter of which are, to a large extent, discretionary), we may
need to refinance a portion of the principal amount of our senior subordinated
debt at or prior to maturity. However, there can be no assurance that we would
be able to obtain financing on acceptable terms to complete a refinancing.

        Enron
Bankruptcy -On December 2, 2001, Enron Corp. (Enron)
and one of its affiliates, Enron North America Corp. (ENA), filed
voluntary petitions for bankruptcy protection. The Company has been informed
that of the various affiliates of both Enron and Mariner, only Enron and ENA are
included in the bankruptcy. We do not know at this time if any other affiliates
of Enron will seek bankruptcy protection or what effect, if any, this may have
on the ownership of Mariner Energy LLC which owns 100% of Mariner Holdings, Inc.
(our direct parent) or on Joint Energy Development Investments Limited
Partnership (JEDI), which owns approximately 96% of Mariner Energy
LLC. Enron is the parent of ENA, and an affiliate of ENA is the general partner
of JEDI. JEDI is 100% owned by several different Enron and ENA affiliates.
Accordingly, Enron may be deemed to control JEDI, Mariner Energy LLC, Mariner
Holdings and the Company. Additionally, seven of the Companys directors
are officers of Enron or affiliates of Enron. Because of these various
potentially conflicting interests, ENA, the Company, JEDI and the members of the
Companys management who are also shareholders of Mariner Energy LLC have
entered into an agreement that is intended to make clear that Enron and its
affiliates have no duty to make business opportunities available to the Company.

        Mariner
Energy LLCs only asset is 100% of the common stock of Mariner Holdings,
Inc., our direct parent. The only asset of Mariner Holdings is 100% of the
common shares of Mariner. Covenants in Mariners Revolving Credit Facility
and Senior Subordinated Notes restrict the funds of Mariner that can be
distributed to Mariner Energy LLC to repay its term loan or distribute earnings
to an ENA affiliate  see below ENA Affiliate Term Loan.
Mariner Energy LLC is currently attempting to obtain an extension of the ENA
Affiliate Term Loan, but there can be no assurance that an extension will be
obtained. In the event Mariner Energy LLC is unable to obtain an extension or
restructure its obligations, it would either default or be forced to sell its
interest in Mariner or cause Mariner to sell a substantial portion of its assets
to repay its Revolving Credit Facility, if any amounts are outstanding, and
outstanding Senior Subordinated Notes so that it could distribute any remaining
cash proceeds to Mariner Energy LLC to be used to repay the ENA Affiliate Term
Loan. 
        As
a result of the Enron and ENA bankruptcies, among other implications, as part of
our normal operations we may not be able to obtain credit from banks or trade
vendors or enter into hedging arrangements on acceptable terms. To date, our
operations have not been materially effected by the bankruptcies however, our
ability to enter into certain transactions including purchase or sale
arrangements and to conduct significant capital programs may be effected in the
future. 

        Mariner Energy LLC

        ENA
Affiliate Term Loan In March 2000, Mariner Energy LLC established an
unsecured term loan with ENA to repay amounts outstanding under various
affiliate credit facilities at Mariner Energy LLC and Mariner Energy, Inc. and
to provide additional working capital. The additional working capital of $55
million was contributed to Mariner in 2000. The loan bears interest at 15%,
which interest accrues and is added to the loan principal. Repayment of the
balance of loan principal and accrued interest, which was approximately $149
million as of March 31, 2002, is due March 20, 2003. As part of the loan
agreement, two five-year warrants were issued to ENA providing the right to
purchase up to 900,000 of common shares of Mariner Energy LLC for $0.01 per
share. 

        We
have been informed that the Term Loan was transferred from ENA to an ENA
affiliate.

        Mariner Energy, Inc.

        Oil
and Gas Production Sales to ENA or Affiliates  During the three years
ending December 31, 2001, 2000 and 1999, sales of oil and gas production to ENA
or affiliates were $50.2 million, $73.4 million and $16.2 million, respectively.
These sales were generally made on 1 to 3 month contracts. At the time ENA filed
its petition for bankruptcy protection, the Company immediately ceased selling
its physical production to ENA. As of March 31, 2002, we had an outstanding
receivable for $3.0 million from ENA. This amount was not paid as scheduled and
is still outstanding. The Company has estimated 90% of this balance is
uncollectible and has recorded an allowance and related expense for $2.7
million.

        Accounting
for Price Risk Management Activities  Mariner engages in price risk
management activities from time to time. These activities are intended to manage
Mariners exposure to fluctuations in commodity prices for natural gas and
crude oil. The Company primarily utilizes price swaps and costless collars as a
means to manage such risk. All of the Companys hedging contracts were with
ENA. As a result of ENAs bankruptcy, the contracts are currently in
default. The November 2001 through March 31, 2002 settlements for oil and gas
have not been collected, and there is significant uncertainty that the amount
owed to the Company for these settlements or any future settlements will be
collected. As a result of the default, the Company has recorded an allowance
representing 90% of the recorded hedge settlements receivable of $11.0 million.
In accordance with Statement of Financial Accounting Standards
(SFAS) No. 133 Accounting for Derivative Instruments and
Hedging Activities, as amended by SFAS No. 137 and No. 138, we have de
designated our contracts effective December 2, 2001 and are recognizing all
market value changes subsequent to such de-designation in earnings of the
Company. The value recorded up to the time of de-designation and included in
Accumulated Other Comprehensive Income (AOCI), will reverse out of
AOCI and into earnings as the original corresponding production, as hedged by
the contracts, is produced. As of March 31, 2002, $19.2 million remained in AOCI
to be reversed out during the contract periods covering April 1, 2002 through
December 31, 2003. Due to the uncertainty of future settlements, the overall
effect of the ENA bankruptcy has been to eliminate our commodity price hedge
protection. Currently we are negotiating with third parties to enter into price
risk management activities.

        The
following table sets forth the results of hedging transactions during the
periods indicated:

|                                                     | THREE-MONTHSENDED MARCH 31,
|---------------------------------------------------- | ---------------------------
|
|
|
|Natural gas quantity hedged (Mmbtu)                  | 3,737                      
|Increase (decrease) in natural gas sales (thousands) | $5,569                     
|Crude oil quantity hedged (MBbls)                    | 180                        
|Increase (decrease) in crude oil sales (thousands)   | $1,021                     

The following table sets forth our open positions as of March 31, 2002.

|TIME PERIOD                   | NOTIONALQUANTITIES | FIXED PRICE | FAIR VALUE(in millions)
|----------------------------- | ------------------ | ----------- | -----------------------
|NATURAL GAS (MMBTU)          
|April 1 - October 31, 2002   
|Fixed price swap purchased    | 1,244              | $2.18       | $(1.5)                 
|April 1 - December 31, 2002  
|Fixed price swap purchased    | 8,984              | 4.43        | 8.8                    
|Fixed price swap purchased    | 4,125              | 3.03        | (1.7)                  
|January 1 - December 31, 2003
|Fixed price swap purchased    | 3,650              | 3.74        | 0.2                    
|CRUDE OIL (MBBL)             
|April 1 - June 30, 2002      
|Fixed price swap purchased    | 91                 | 25.15       | (0.1)                  
|April 1 - December 31, 2002  
|Fixed price swap purchased    | 275                | 25.48       | (0.1)                  
|                              |                    |             |                        
|Sub-Total                     |                    |             | $5.6(1)                
|                              |                    |             |                        
|Allowance for impairment      |                    |             | $(5.0)                 
|                              |                    |             |                        
|Total                         |                    |             | $0.6                   
|                              |                    |             |                        

1. Subsequent to the date of default by Enron and ENA, and as of March 31, 2002,  the  contracts  decreased in gross market value
              by $13.1  million,  which is reflected in the  unrealized  loss on derivative  instruments at the net valuation of 10% or
              $1.3 million, after consideration for allowance.

Supplemental Affiliate Data - provided below is a supplemental balance sheet and income statement for affiliate entities:

|                                        | YEAR ENDED DECEMBER 31,
|--------------------------------------- | -----------------------
|
|
|RELATED PARTY RECEIVABLE:               |                        
|Derivative Asset                        | $0.6                   
|Settled Hedge Receivable                | 1.0                    
|Oil and Gas Receivable                  | 0.3                    
|ACCURED LIABILITIES:                    |                        
|Transportation Contract                 | $0.7                   
|Service Agreement                       | $0.4                   
|STOCKHOLDERS' EQUITY:                  
|Common Stock                            | $0.001                 
|Additional Paid-in Capital              | $227.3                 
|INCOME STATEMENT DATA                  
|Oil and Gas Sales                       | $50.2                  
|General and Administrative Expenses     | 0.2                    
|Transportation Expenses                 | 4.2                    
|Impairment of Enron Related Receivables | 29.5                   

Part I, Item 3. Quantitative and Qualitative Disclosures about Market Risk.

        See Part I, Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations".Part II. Other
Information

        Item 1.    Legal Proceedings

        None.

        Item 2.    Changes in Securities and Use of Proceeds

        None

        Item 3. Defaults Upon Senior Securities

        None.

        Item 4. Submission of Matters to a Vote of Security Holders

        None.

        Item 5. Other Information

        None.

        Item 6. Exhibits and Reports on Form 8-K

          (a) The following exhibits are filed herewith.


          (b) The Company filed no Current Reports on Form 8-K during the quarter ended March 31, 2002.

# SIGNATURE

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.

|                   | MARINER ENERGY, INC.                                                                                                                                       
|------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|Date: May 14, 2001 | /s/ Michael A. Wichterich                                                                                                                                  
|                   |                                                                                                                                                            
|                   | Michael A. WichterichVice President of Financeand Administration(Principal Financial Officer andOfficer Duly Authorized to Signon Behalf of the Registrant)