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                                                                  Exhibit 10.20


                             EMPLOYMENT AGREEMENT


         THIS EMPLOYMENT AGREEMENT (hereinafter called this "Agreement") is
entered into effective as of June 1, 1998 (the "Effective Date"), by and
between MARINER ENERGY, INC. (hereinafter called "Company") and L. V. McGuire
(hereinafter called "Employee").

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

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

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

         1.       Employment.

                  Company hereby employs Employee to serve as Senior Vice
                  President - Operations of Company. The permanent place of
                  Employee's employment shall be at a location within a 50-mile
                  radius of the central business district of the City of
                  Houston, Texas; provided, however, Employee shall be required
                  to undertake such ordinary and usual travel as is necessary
                  to properly discharge his duties and responsibilities
                  hereunder. Employee hereby accepts such employment, and
                  agrees to serve Company faithfully, diligently and in a good
                  and workmanlike manner.

         2.       Term.

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

         3.       Extension and Termination.

                  3.1      If either Employee or Company elects to terminate
                           this Agreement at the end of the term stated in
                           paragraph 2, or at the end of any extended term
                           hereof as hereinafter provided, notice of the
                           election to terminate shall be given to the other
                           party no later than six (6) months before the end of
                           this Agreement. If no notice is given by either
                           party, the term, or extended term, of this Agreement
                           shall be deemed to have been extended for an
                           additional six (6) months.

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

                           3.2.1    Company shall pay to Employee his salary
                                    and other benefits provided elsewhere in
                                    this Agreement for Employee's services


EMPLOYMENT AGREEMENT--L. V. McGUIRE

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                                    rendered to Company hereunder through the
                                    end of such term or extended term.

                           3.2.2    Company shall pay to Employee, on or before
                                    the last day of his employment hereunder, a
                                    lump sum cash payment equal to nine (9)
                                    months' salary at Employee's monthly rate
                                    for the month immediately preceding the
                                    month in which Company elects to terminate
                                    this Agreement.

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

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

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

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

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

                  3.5      Company may terminate this Agreement for "Cause" (as
                           hereinafter defined in this paragraph 3.5) upon
                           written notice of such termination to Employee by
                           Company. Any termination of this Agreement by
                           Company for Cause shall be effective thirty (30)
                           days after written notice of termination for Cause
                           is given by Company to Employee. If Company
                           terminates this Agreement for Cause, Company shall
                           have no liability or obligation to Employee
                           thereafter under this Agreement except for the
                           payment of his salary and other benefits through the
                           month of discharge, prorated in the case of salary
                           for the month of discharge on a daily basis to the
                           date of termination. As used in this Agreement, the
                           term "Cause" means (a) Employee is found guilty


EMPLOYMENT AGREEMENT--L. V. McGUIRE

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                           of, admits in writing facts amounting to, or is held
                           civilly liable for fraud, embezzlement or
                           dishonesty, (b) Employee is convicted of a felony
                           involving a crime of moral turpitude or any other
                           felony if the Board of Directors of the Company in
                           good faith determines that the continued employment
                           of the Employee would be materially detrimental to
                           the Company (in any case which felony through lapse
                           of time or otherwise is not subject to appeal), (c)
                           Employee knowingly discloses trade secrets or
                           confidential Company matters to unauthorized
                           persons, (d) Employee willfully breaches or
                           habitually neglects any duties he is required to
                           perform under the terms of this Agreement and any
                           such breach or neglect is not cured within thirty
                           (30) days after Company has provided Employee with
                           written notice of such breach or neglect, (e)
                           Employee materially breaches any of the other
                           material terms of this Agreement and any such breach
                           is not cured within thirty (30) days after the
                           Company has provided Employee with written notice of
                           such breach, and (f) the occurrence of an action or
                           finding described in paragraph 17, except as
                           otherwise provided in paragraph 17. The waiver by
                           Company of a breach of any provision of this
                           Agreement by Employee shall not operate or be
                           construed as a waiver of any subsequent breach by
                           Employee.

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

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

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

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

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


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                           3.7.2    A lump sum cash payment equal to nine (9)
                                    months' salary, at Employee's rate in
                                    effect at the time of such termination (but
                                    prior to giving effect to any reduction
                                    therein which precipitated such
                                    termination).

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

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

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

                           3.9.1    The assignment to Employee of any duties
                                    materially inconsistent with Employee's
                                    position (including office, title and
                                    reporting requirements), authority, duties
                                    or responsibilities with Company or any
                                    other action that results in a material
                                    diminution in, or interference with, such
                                    position, authority, duties or
                                    responsibilities, and any such assignment
                                    or action is not cured within thirty (30)
                                    days after Employee has provided Company
                                    with written notice of such assignment or
                                    action;

                           3.9.2    The failure to continue to provide Employee
                                    with office space, related facilities and
                                    support personnel (including, but not
                                    limited to, administrative and secretarial
                                    assistance) (a) that are both commensurate
                                    with Employee's responsibilities to and
                                    position with Company and not materially
                                    dissimilar to the office space, related
                                    facilities and support personnel provided
                                    to other employees of Company having
                                    comparable responsibility to that of
                                    Employee or (b) that are physically located
                                    at Company's principal executive offices,
                                    and any such failure is not cured within
                                    thirty (30) days after Employee has
                                    provided Company with written notice of
                                    such failure;

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


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                                    Employee has provided Company with written
                                    notice of such reduction or failure;

                           3.9.4    The relocation of Employee's or Company's
                                    principal office and principal place of
                                    Employee's performance of his duties and
                                    responsibilities to a location more than 50
                                    miles outside of the central business
                                    district of the City of Houston, Texas; or

                           3.9.5    A breach of any material provision of this
                                    Agreement by Company (other than any breach
                                    described in paragraphs 3.9.1, 3.9.2,
                                    3.9.3, and 3.9.4) which is not cured within
                                    thirty (30) days after Employee has
                                    provided Company with written notice of
                                    such breach.

         4.       Confidential Information.

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

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

         5.       Salary.

                  As compensation for his services rendered to Company
                  hereunder, Company shall pay to Employee a salary at the rate
                  of $15,833.33 per month. Employee's salary may be reviewed at
                  such times as may be determined by Company, and Company may
                  at its discretion increase this salary. Employee's salary
                  shall be paid in two equal monthly installments, payable on
                  the fifteenth and last days of each month (or on the first
                  business day of Company thereafter if any such payment date
                  is not a business day of Company), subject to any and all
                  necessary withholdings and deductions.

         6.       Automobile Allowance.

                  Company agrees to pay an automobile allowance of $250.00
                  dollars per month to Employee. In addition to such monthly
                  allowance, Company shall pay, in accordance


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                  with Company policy, for all gasoline, insurance and
                  maintenance required for use of the automobile.

         7.       Business Expenses.

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

                  7.1      The amount of the expenditure;

                  7.2      The time, place and description of the expense;

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

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

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

         8.       Vacation.

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

         9.       Annual Bonus; Stock Options.

                  9.1      In addition to the salary provided for in paragraph
                           5 hereof (the "Base Salary"), Employee shall be
                           eligible to receive, for each calendar year or
                           portion thereof occurring during the term of this
                           Agreement, an annual cash bonus based on performance
                           (the "Annual Bonus") in an amount up to forty
                           percent (40%) of the Base Salary for such calendar
                           year or portion thereof (or such greater percentage
                           of such Base Salary as the Board of Directors or the
                           Committee may, in its discretion, determine) upon
                           approval of such Annual Bonus by the Board of
                           Directors of Company (the "Board of Directors") or


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                           a committee of the Board of Directors designated by
                           the Board of Directors (the "Committee"). The amount
                           of any such Annual Bonus shall be determined by the
                           Board of Directors or the Committee, as the case may
                           be, in accordance with the cash incentive
                           compensation program of Company in effect with
                           respect to such determination. The Annual Bonus
                           shall be paid to Employee, less such amounts as
                           shall be required to be deducted or withheld
                           therefrom by applicable law and regulations, at such
                           time or times as is in accordance with the then
                           prevailing policy of Company relating to cash
                           incentive compensation payments.

                  9.2      As of the Effective Date, Company shall, or shall
                           cause Mariner Holdings Inc. to, grant to Employee
                           stock options for 9,120 shares of the common stock
                           of Mariner Holdings, Inc. ("Parent Common Stock")
                           pursuant to the Mariner Holdings Inc. 1996 Stock
                           Option Plan. To the fullest extent possible, the
                           options granted to Employee shall be incentive stock
                           options, and otherwise shall be non-qualified stock
                           options. The terms, conditions and restrictions with
                           regard to such stock options shall be evidenced by
                           an Incentive Stock Option Agreement (as to the
                           qualified stock options) and a Nonstatutory Stock
                           Option Agreement (as to be nonqualified stock
                           options), substantially in the forms attached hereto
                           as Exhibit A and Exhibit B, respectively, which are
                           incorporated herein by reference and their terms,
                           conditions and restrictions shall be considered a
                           part of this Agreement.

         10.      Insurance.

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

         11.      Outside Activities.

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


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                  before December 31 of each year. If, in the opinion of
                  Company, a conflict of interest exists between Company (and
                  its affiliates) and the organization in which the Employee
                  holds a directorship, Company can require Employee to resign
                  the outside directorship.

         12.      Right to Invest.

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

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

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

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

         13.      Disability During Employment.

                  If Employee shall become unable to perform his duties by
                  reason of disability, he shall be entitled to receive, in
                  addition to any insurance benefits he may receive, all of his
                  salary for the first one (1) month of his disability, and
                  one-half (1/2) of his salary for the next three (3) months of
                  disability. Periods of disability shall not be cumulative so
                  long as they are separated by at least ninety (90) days of
                  continuous service.

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


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         14.      Merger or Acquisition.

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

         15.      Arbitration.

                  15.1     If a dispute arises out of or related to this
                           Agreement and the dispute cannot be settled through
                           direct discussions, Company and Employee agree that
                           they shall first endeavor to settle the dispute in
                           an amicable fashion. If such efforts fail to resolve
                           the dispute, the dispute shall, except as otherwise
                           provided in paragraph 19, be resolved as follows:

                           15.1.1   Except as provided in paragraph 15.1.2
                                    below, any and all claims, demands, cause
                                    of action, disputes, controversies, and
                                    other matters in question arising out of or
                                    relating to this Agreement, any provision
                                    hereof, the alleged breach thereof, or in
                                    any way relating to the subject matter of
                                    this Agreement, involving Company,
                                    Employee, and/or their respective
                                    representatives, even though some or all of
                                    such claims allegedly are extracontractual
                                    in nature, whether such claims sound in
                                    contract, tort, or otherwise, at law or in
                                    equity, under state or federal law, whether
                                    provided by statute or the common law, for
                                    damages or any other relief, shall be
                                    resolved by binding arbitration pursuant to
                                    the Federal Arbitration Act in accordance
                                    with the Commercial Arbitration Rules then
                                    in effect with the American Arbitration
                                    Association (the "AAA"). The arbitration
                                    proceeding shall be conducted in Houston,
                                    Texas. The arbitration may be initiated by
                                    either party by providing to the other a
                                    written notice of arbitration specifying
                                    the claims, and the parties shall
                                    thereafter endeavor to agree on an
                                    arbitrator. If within thirty (30) days of
                                    the notice of initiation of the arbitration
                                    procedure, the parties are unable to agree
                                    on an arbitrator, the party requesting
                                    arbitration shall file a request with the
                                    AAA that the Houston, Texas office of the
                                    AAA provide a list of potential arbitrators
                                    to both parties. The parties shall
                                    thereafter have sixty (60) days to select
                                    an arbitrator from such list, with such
                                    selection to be by mutual agreement. If the
                                    parties fail to select an arbitrator within
                                    such time by mutual agreement, then either
                                    party may request that the Chief Judge of
                                    the U.S. District Court for the Southern
                                    District of Texas appoint an arbitrator,
                                    and any such appointment shall be binding.
                                    The arbitrator, utilizing the Commercial
                                    Arbitration Rules of the American
                                    Arbitration Association, shall within 120
                                    days of his or her selection, resolve all


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                                    disputes between the parties. There shall
                                    be no transcript of the hearings before the
                                    arbitrator. The arbitrator's decision shall
                                    be in writing, but shall be as brief as
                                    possible. The arbitrator shall not assign
                                    the reasons for his or her decision. The
                                    arbitrator's decision shall be final and
                                    non-appealable to the maximum extent
                                    permitted by law. Judgment upon any award
                                    rendered in any such arbitration proceeding
                                    may be entered by any federal or state
                                    court having jurisdiction. This agreement
                                    to arbitrate shall be enforceable in either
                                    federal or state court. The enforcement of
                                    this agreement to arbitrate and all
                                    procedural aspects of this agreement to
                                    arbitrate, including but not limited to,
                                    the construction and interpretation of this
                                    agreement to arbitrate, the issues subject
                                    to arbitration (i.e., arbitrability), the
                                    scope of the arbitrable issues, allegations
                                    of waiver, delay or defenses to
                                    arbitrability, and the rules governing the
                                    conduct of the arbitration, shall be
                                    governed by and construed pursuant to the
                                    Federal Arbitration Act and shall be
                                    decided by the arbitrator. In deciding the
                                    substance of any such claims, the
                                    arbitrator shall apply the substantive laws
                                    of the State of Texas (excluding Texas
                                    choice-of-law principles that might call
                                    for the application of some other State's
                                    law); provided, however, it is expressly
                                    agreed that the arbitrator shall have no
                                    authority to award treble, exemplary, or
                                    punitive damages under any circumstances
                                    regardless of whether such damages may be
                                    available under Texas law, the parties
                                    hereby waiving their right, if any, to
                                    recover treble, exemplary, or punitive
                                    damages in connection with any such claims.

                           15.1.2   Notwithstanding the agreement to arbitrate
                                    contained in paragraph 15.1.1 above, in the
                                    event that either party wishes to seek a
                                    temporary restraining order, a preliminary
                                    or temporary injunction, or other
                                    injunctive relief in connection with any or
                                    all such claims, demands, cause of action,
                                    disputes, controversies, and other matters
                                    in question arising out of or relating to
                                    this Agreement, any provision hereof, the
                                    alleged breach thereof, or in any way
                                    relating to the subject matter of this
                                    Agreement, involving Company, Employee,
                                    and/or their respective representatives,
                                    including disputes arising out of a breach
                                    or alleged breach of paragraph 4 or 16,
                                    even though some or all of such claims
                                    allegedly are extra-contractual in nature,
                                    whether such claims sound in contract,
                                    tort, or otherwise, at law or in equity,
                                    under state or federal law, whether
                                    provided by statute or the common law, for
                                    damages or any other relief, each party
                                    shall have the right to pursue such
                                    injunctive relief in court, rather than by
                                    arbitration. The parties agree that such
                                    action for a temporary restraining order, a
                                    preliminary or temporary injunction, or
                                    other injunctive relief will be brought in
                                    the State or federal courts residing in
                                    Houston, Harris County, Texas.


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

         16.      Noncompetition Obligations.

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

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

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

                           16.1.3   render advice or services to, or otherwise
                                    assist, any other person, association, or
                                    entity who is engaged, directly or
                                    indirectly, in any business competitive
                                    with Company's business within the
                                    parameters described in paragraphs 16.1.1
                                    and 16.1.2 above with respect to such
                                    competitive business; or

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

                           These non-competition obligations shall commence
                           upon the date of execution of this Agreement and
                           extend until the earlier of (a) the expiration of
                           the term of this Agreement (or any extended term) or
                           (b) twelve (12)


EMPLOYMENT AGREEMENT--L. V. McGUIRE

                                      -11-

<PAGE>   12

                           months after termination of the employment
                           relationship; provided, however, that
                           notwithstanding anything contained in this paragraph
                           16 to the contrary, such obligations shall only
                           apply after the termination of employment if the
                           termination of employment results from termination
                           for Cause by Company under paragraph 3.5 or
                           voluntary termination without Good Reason by
                           Employee (it being understood and agreed that
                           termination of this Agreement by Employee under
                           paragraph 3.1 shall not, for purposes of this
                           paragraph 16, constitute voluntary termination
                           without Good Reason by Employee).

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

                  16.3     It is expressly understood and agreed that Company
                           and Employee consider the restrictions contained in
                           this paragraph 16 to be reasonable and necessary.
                           Nevertheless, if any of the aforesaid restrictions
                           are found by a court having jurisdiction to be
                           unreasonable, or overly broad as to geographic area
                           or time, or otherwise unenforceable, the parties
                           intend for the restrictions therein set forth to be
                           modified by such courts so as to be reasonable and
                           enforceable and, as so modified by the court, to be
                           fully enforced.

         17.      Foreign Corrupt Practices Act.

                  Employee shall at all times comply with the United States
                  Foreign Corrupt Practices Act, generally codified in 15 USC
                  78 (FCPA), as the FCPA may hereafter be amended, and/or its
                  successor statutes. If Employee pleads guilty to or nolo
                  contendere or admits civil or criminal liability under the
                  FCPA, or if a court finds that Employee committed an action
                  resulting in any Company entity having civil or criminal
                  liability or responsibility under the FCPA with knowledge of
                  the activities giving rise to such liability or knowledge of
                  facts from which Employee should have reasonably inferred the
                  activities giving rise to liability had occurred or were
                  likely to occur, such action or finding shall constitute
                  Cause for termination by Company under paragraph 3.5 of this
                  Agreement unless Company's Board of Directors


EMPLOYMENT AGREEMENT--L. V. McGUIRE

                                      -12-

<PAGE>   13

                  determines that the actions found to be in violation of the
                  FCPA were taken in good faith and in compliance with all
                  applicable policies of Company.

         18.      Survival.

                  The provisions of paragraphs 4 and 16 shall survive any
                  termination of the employment relationship and/or of this
                  Agreement for the periods stated therein. The provisions of
                  paragraph 15 relating to arbitration shall survive any
                  termination of the employment relationship between Employee
                  and Company and the termination of this Agreement. Amounts,
                  compensation, rights and benefits which Employee is entitled
                  to receive or have accrued to Employee under this Agreement
                  or under any plan, program, arrangement, agreement or policy
                  of or with Company or any of its affiliates before, at or
                  subsequent to the termination of the employment relationship
                  between Employee and Company or the termination of this
                  Agreement shall not be superseded and shall survive any such
                  termination.

         19.      Certain Additional Payments by Company.

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

                  19.2     Subject to the provisions of paragraph 19.3 through
                           19.11, any determination (individually, a
                           "Determination") required to be made under this
                           paragraph 19, including whether a Gross-Up Payment
                           is required and the amount of such Gross-Up Payment,
                           shall initially be made, at Company's expense, by
                           nationally recognized tax counsel mutually
                           acceptable to Company and Employee ("Tax Counsel").
                           Tax Counsel shall provide detailed supporting legal
                           authorities, calculations, and documentation both to
                           Company and


EMPLOYMENT AGREEMENT--L. V. McGUIRE

                                      -13-

<PAGE>   14

                           Employee within 15 business days of the termination
                           of Employee's employment, if applicable, or such
                           other time or times as is reasonably requested by
                           Company or Employee. If Tax Counsel makes the
                           initial Determination that no Excise Tax is payable
                           by Employee with respect to a Payment or Payments,
                           it shall furnish Employee with an opinion reasonably
                           acceptable to Employee that no Excise Tax will be
                           imposed with respect to any such Payment or
                           Payments. Employee shall have the right to dispute
                           any Determination (a "Dispute") within 15 business
                           days after delivery of Tax Counsel's opinion with
                           respect to such Determination. The Gross-Up Payment,
                           if any, as determined pursuant to such Determination
                           shall be paid by Company to Employee within five
                           business days of Employee's receipt of such
                           Determination. The existence of a Dispute shall not
                           in any way affect Employee's right to receive the
                           Gross-Up Payment in accordance with such
                           Determination. If there is no Dispute, such
                           Determination shall be binding, final and conclusive
                           upon Company and Employee, subject in all respects,
                           however, to the provisions of paragraph 19.3 through
                           19.11 below. As a result of the uncertainty in the
                           application of Sections 4999 and 280G of the Code,
                           it is possible that Gross-Up Payments (or portions
                           thereof) which will not have been made by Company
                           should have been made ("Underpayment"), and if upon
                           any reasonable written request from Employee or
                           Company to Tax Counsel, or upon Tax Counsel's own
                           initiative, Tax Counsel, at Company's expense,
                           thereafter determines that Employee is required to
                           make a payment of any Excise Tax or any additional
                           Excise Tax, as the case may be, Tax Counsel shall,
                           at Company's expense, determine the amount of the
                           Underpayment that has occurred and any such
                           Underpayment shall be promptly paid by Company to
                           Employee.

                  19.3     Company shall defend, hold harmless, and indemnify
                           Employee on a fully grossed-up after tax basis from
                           and against any and all claims, losses, liabilities,
                           obligations, damages, impositions, assessments,
                           demands, judgements, settlements, costs and expenses
                           (including reasonable attorneys', accountants', and
                           experts' fees and expenses) with respect to any tax
                           liability of Employee resulting from any Final
                           Determination (as defined in paragraph 19.10) that
                           any Payment is subject to the Excise Tax.

                  19.4     If a party hereto receives any written or oral
                           communication with respect to any question,
                           adjustment, assessment or pending or threatened
                           audit, examination, investigation or administrative,
                           court or other proceeding which, if pursued
                           successfully, could result in or give rise to a
                           claim by Employee against Company under this
                           paragraph 19 ("Claim"), including, but not limited
                           to, a claim for indemnification of Employee by
                           Company under paragraph 19.3, then such party shall
                           promptly notify the other party hereto in writing of
                           such Claim ("Tax Claim Notice").


EMPLOYMENT AGREEMENT--L. V. McGUIRE

                                      -14-

<PAGE>   15

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

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

                           19.5.2   Company shall have advanced to Employee on
                                    an interest-free basis, the total amount of
                                    the tax claimed in order for Employee, at
                                    Company's request, to pay or cause to be
                                    paid the tax claimed, file a claim for
                                    refund of such tax and, subject to the
                                    provisions of the last sentence of
                                    paragraph 19.7, sue for a refund of such
                                    tax if such claim for refund is disallowed
                                    by the appropriate taxing authority (it
                                    being understood and agreed by the parties
                                    hereto that Company shall only be entitled
                                    to sue for a refund and Company shall not
                                    be entitled to initiate any proceeding in,
                                    for example, United States Tax Court) and
                                    shall indemnify and hold Employee harmless,
                                    on a fully grossed-up after tax basis, from
                                    any tax imposed with respect to such
                                    advance or with respect to any imputed
                                    income with respect to such advance; and

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

                  19.6     Subject to the provisions of paragraph 19.5 hereof,
                           Company shall have the right to defend or prosecute,
                           at the sole cost, expense and risk of Company, such
                           Employee Claim by all appropriate proceedings, which
                           proceedings shall be defended or prosecuted
                           diligently by Company to a Final Determination;
                           provided, however, that (i) Company shall not,
                           without


EMPLOYMENT AGREEMENT--L. V. McGUIRE

                                      -15-

<PAGE>   16

                           Employee's prior written consent, enter into any
                           compromise or settlement of such Employee Claim that
                           would adversely affect Employee, (ii) any request
                           from Company to Employee regarding any extension of
                           the statute of limitations relating to assessment,
                           payment, or collection of taxes for the taxable year
                           of Employee with respect to which the contested
                           issues involved in, and amount of, the Employee
                           Claim relate is limited solely to such contested
                           issues and amount, and (iii) Company's control of
                           any contest or proceeding shall be limited to issues
                           with respect to the Employee Claim and Employee
                           shall be entitled to settle or contest, in his sole
                           and absolute discretion, any other issue raised by
                           the Internal Revenue Service or any other taxing
                           authority. So long as Company is diligently
                           defending or prosecuting such Employee Claim,
                           Employee shall provide or cause to be provided to
                           Company any information reasonably requested by
                           Company that relates to such Employee Claim, and
                           shall otherwise cooperate with Company and its
                           representatives in good faith in order to contest
                           effectively such Employee Claim. Company shall keep
                           Employee informed of all developments and events
                           relating to any such Employee Claim (including,
                           without limitation, providing to Employee copies of
                           all written materials pertaining to any such
                           Employee Claim), and Employee or his authorized
                           representatives shall be entitled, at Employee's
                           expense, to participate in all conferences, meetings
                           and proceedings relating to any such Employee Claim.

                  19.7     If, after actual receipt by Employee of an amount of
                           a tax claimed (pursuant to an Employee Claim) that
                           has been advanced by Company pursuant to paragraph
                           19.5.2 hereof, the extent of the liability of
                           Company hereunder with respect to such tax claimed
                           has been established by a Final Determination,
                           Employee shall promptly pay or cause to be paid to
                           Company any refund actually received by, or actually
                           credited to, Employee with respect to such tax
                           (together with any interest paid or credited thereon
                           by the taxing authority and any recovery of legal
                           fees from such taxing authority related thereto),
                           except to the extent that any amounts are then due
                           and payable by Company to Employee, whether under
                           the provisions of this Agreement or otherwise. If,
                           after the receipt by Employee of an amount advanced
                           by Company pursuant to paragraph 19.5.2, a
                           determination is made by the Internal Revenue
                           Service or other appropriate taxing authority that
                           Employee shall not be entitled to any refund with
                           respect to such tax claimed and Company does not
                           notify Employee in writing of its intent to contest
                           such denial of refund prior to the expiration of 30
                           days after such determination, then such advance
                           shall be forgiven and shall not be required to be
                           repaid and the amount of such advance shall offset,
                           to the extent thereof, the amount of any Gross-Up
                           Payments and other payments required to be paid
                           hereunder.

                  19.8     With respect to any Employee Claim, if Company fails
                           to deliver an Election Notice to Employee within the
                           period provided in paragraph 19.5.1 hereof or,


EMPLOYMENT AGREEMENT--L. V. McGUIRE

                                      -16-

<PAGE>   17

                           after delivery of such Election Notice, Company
                           fails to comply with the provisions of paragraph
                           19.5.2, 19.5.3 or 19.6 hereof, then Employee shall
                           at any time thereafter have the right (but not the
                           obligation), at his election and in his sole and
                           absolute discretion, to defend or prosecute, at the
                           sole cost, expense and risk of Company, such
                           Employee Claim. Employee shall have full control of
                           such defense or prosecution and such proceedings,
                           including any settlement or compromise thereof. If
                           requested by Employee, Company shall cooperate, and
                           shall cause its affiliates to cooperate, in good
                           faith with Employee and his authorized
                           representatives in order to contest effectively such
                           Employee Claim. Company may attend, but not
                           participate in or control, any defense, prosecution,
                           settlement or compromise of any Employee Claim
                           controlled by Employee pursuant to this paragraph
                           19.8 and shall bear its own costs and expenses with
                           respect thereto. In the case of any Employee Claim
                           that is defended or prosecuted by Employee, Employee
                           shall, from time to time, be entitled to current
                           payment, on a fully grossed-up after tax basis, from
                           Company with respect to costs and expenses incurred
                           by Employee in connection with such defense or
                           prosecution.

                  19.9     In the case of any Employee Claim that is defended
                           or prosecuted to a Final Determination pursuant to
                           the terms of this paragraph 19.9, Company shall pay,
                           on a fully grossed-up after tax basis, to Employee
                           in immediately available funds the full amount of
                           any taxes arising or resulting from or incurred in
                           connection with such Employee Claim that have not
                           theretofore been paid by Company to Employee,
                           together with the costs and expenses, on a fully
                           grossed-up after tax basis, incurred in connection
                           therewith that have not theretofore been paid by
                           Company to Employee, within ten calendar days after
                           such Final Determination. In the case of any
                           Employee Claim not covered by the preceding
                           sentence, Company shall pay, on a fully grossed-up
                           after tax basis, to Employee in immediately
                           available funds the full amount of any taxes arising
                           or resulting from or incurred in connection with
                           such Employee Claim at least ten calendar days
                           before the date payment of such taxes is due from
                           Employee, except where payment of such taxes is
                           sooner required under the provisions of this
                           paragraph 19.9, in which case payment of such taxes
                           (and payment, on a fully grossed-up after tax basis,
                           of any costs and expenses required to be paid under
                           this paragraph 19.9 shall be made within the time
                           and in the manner otherwise provided in this
                           paragraph 19.9.

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


EMPLOYMENT AGREEMENT--L. V. McGUIRE

                                      -17-

<PAGE>   18

                           on a timely basis; or (D) any final disposition by
                           reason of the expiration of all applicable statutes
                           of limitations.

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

         20.      No Obligation to Mitigate.

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

         21.      Miscellaneous.

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

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

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

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

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


EMPLOYMENT AGREEMENT--L. V. McGUIRE

                                      -18-

<PAGE>   19

                           EMPLOYEE FURTHER ACKNOWLEDGES RECEIPT OF ONE COPY
                           OF THIS AGREEMENT.

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

                           If to Company:

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

                               Attention:  President and Chief Executive Officer

                           If to Employee:

                               L. V. McGuire
                               266 Promenade East
                               Montgomery, Texas  77356

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

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

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


Acknowledged by:                        MARINER ENERGY, INC.

/s/ W. Hunt Hodge                       By: /s/ Robert E. Henderson
-------------------------------             -----------------------------------
        W. Hunt Hodge                               Robert E. Henderson
Vice President - Administration                        President and
                                                  Chief Executive Officer

                                                                      "COMPANY"


                                        /s/ L. V. McGuire
                                        ---------------------------------------
                                                     L. V. McGuire

                                                                     "EMPLOYEE"


EMPLOYMENT AGREEMENT--L. V. McGUIRE

                                      -19-
<PAGE>   20
                                                                    EXHIBIT 23.1


                   CONSENT OF INDEPENDENT PETROLEUM ENGINEERS






                  We consent to the use of the name of this firm and of certain
information contained in our reserve report dated December 31, 1998, prepared
for Mariner Energy, Inc. ("Mariner"), in Mariner's Annual Report on Form 10-K
for the year ended December 31, 1998.




                                            /s/ RYDER SCOTT COMPANY
                                                 PETROLEUM ENGINEERS




                                            RYDER SCOTT COMPANY
                                            PETROLEUM ENGINEERS


Houston, Texas
March 30, 1999

<PAGE>   21
[LOGO]   [RYDER SCOTT COMPANY LETTERHEAD]



                                              March 29, 1999



Mariner Energy, Inc.
580 WestLake Park Blvd., Suite 1300
Houston, Texas  77079

Gentlemen:

         At your request, we have prepared an estimate of the reserves, future
production, and income attributable to certain leasehold interests of Mariner
Energy, Inc. (Mariner) as of January 1, 1999. The subject properties are
located in the states of Louisiana, Mississippi, and Texas and in the federal
waters offshore Louisiana and Texas. The income data were estimated using the
Securities and Exchange Commission (SEC) guidelines for future price and cost
parameters.

         The estimated reserves and future income amounts presented in this
report are related to hydrocarbon prices. December 1998 hydrocarbon prices were
used in the preparation of this report as required by SEC guidelines; however,
actual future prices may vary significantly from December 1998 prices.
Therefore, volumes of reserves actually recovered and amounts of income
actually received may differ significantly from the estimated quantities
presented in this report. The results of this study are summarized below.

                                 SEC PARAMETERS
                     Estimated Net Reserves and Income Data
                         Certain Leasehold Interests of
                              MARINER ENERGY, INC.
                             As of January 1, 1999

<TABLE>
<CAPTION>
                                                                   Proved
                                           ------------------------------------------------------
                                                   Developed                     Total
                                           --------------------------- --------------------------
                                            Producing    Non-Producing  Undeveloped     Proved
                                           ------------  ------------- ------------  ------------
<S>                                        <C>           <C>           <C>           <C>      
NET REMAINING RESERVES
Oil/Condensate - Barrels                      2,282,975       582,551     6,472,846     9,338,372
Plant Products - Barrels                         10,329        10,580             0        20,909
Gas - MMCF                                       57,082        28,942        42,871       128,895

INCOME DATA
Future Gross Revenue                       $150,978,685  $ 65,653,902  $157,499,321  $374,131,908
Deductions                                   44,159,398    24,415,844   106,555,833   175,131,075
                                           ------------  ------------  ------------  ------------
Future Net Income (FNI)                    $106,819,287  $ 41,238,058  $ 50,943,488  $199,000,833

Discounted FNI @ 10%                       $ 86,947,896  $ 33,976,023  $ 26,705,382  $147,629,301
</TABLE>

         Liquid hydrocarbons are expressed in standard 42 gallon barrels. All
gas volumes are sales gas expressed in millions of cubic feet (MMCF) at the
official temperature and pressure bases of the areas in which the gas reserves
are located.


<PAGE>   22

March 29, 1999
Page 2


         The future gross revenue is after the deduction of production taxes.
The deductions are comprised of the normal direct costs of operating the wells,
ad valorem taxes, recompletion costs, development costs, and certain
abandonment costs net of salvage. The future net income is before the deduction
of state and federal income taxes and general administrative overhead, and has
not been adjusted for outstanding loans that may exist nor does it include any
adjustment for cash on hand or undistributed income. No attempt was made to
quantify or otherwise account for any accumulated gas production imbalances
that may exist. Gas reserves account for approximately 74.7 percent of the
total future gross revenue from proved reserves. Liquid hydrocarbon reserves
account for approximately 25.2 percent and plant product reserves account for
the remaining 0.1 percent of total future gross revenue from proved reserves.

         The discounted future net income shown above was calculated using a
discount rate of 10 percent per annum compounded monthly. Future net income was
discounted at four other discount rates which were also compounded monthly.
These results are shown on each estimated projection of future production and
income presented in a later section of this report and in summary form below.

<TABLE>
<CAPTION>
                                            Discounted Future Net Income
                                               As of January 1, 1999
                                            ----------------------------
        Discount Rate                                  Total
           Percent                                     Proved
        -------------                               ------------
        <S>                                <C>         
             15                                     $130,676,504
             20                                     $116,923,905
             25                                     $105,465,882
             30                                     $ 95,740,539
</TABLE>

The results shown above are presented for your information and should not be
construed as our estimate of fair market value.

RESERVES INCLUDED IN THIS REPORT

         The proved reserves included herein conform to the definition as set
forth in the Securities and Exchange Commission's Regulation S-X Part 210.4-10
(a) as clarified by subsequent Commission Staff Accounting Bulletins. The
definition of proved reserves is included in the attached "Reserve Definitions
and Pricing Assumptions".

         The proved developed non-producing reserves included herein are
comprised of shut-in and behind pipe categories. The various reserve status
categories are defined in the attached "Reserve Definitions and Pricing
Assumptions".

ESTIMATES OF RESERVES

         In general, the reserves included herein were estimated by performance
methods or the volumetric method; however, other methods were used in certain
cases where characteristics of the data indicated such other methods were more
appropriate in our opinion. The reserves estimated by the performance method
utilized extrapolations of various historical data in those cases where such
data were definitive. Reserves were estimated by the volumetric method in those
cases where there 

<PAGE>   23

March 29, 1999
Page 2


were inadequate historical performance data to establish a definitive trend or
where the use of production performance data as a basis for the reserve
estimates was considered to be inappropriate.

         The reserves included in this report are estimates only and should not
be construed as being exact quantities. They may or may not be actually
recovered, and if recovered, the revenues therefrom and the actual costs
related thereto could be more or less than the estimated amounts. Moreover,
estimates of reserves may increase or decrease as a result of future
operations.

FUTURE PRODUCTION RATES

         Initial production rates are based on the current producing rates for
those wells now on production. Test data and other related information were
used to estimate the anticipated initial production rates for those wells or
locations which are not currently producing. If no production decline trend has
been established, future production rates were held constant, or adjusted for
the effects of curtailment where appropriate, until a decline in ability to
produce was anticipated. An estimated rate of decline was then applied to
depletion of the reserves. If a decline trend has been established, this trend
was used as the basis for estimating future production rates. For reserves not
yet on production, sales were estimated to commence at an anticipated date
furnished by Mariner.

         In general, we estimate that future gas production rates limited by
allowables or marketing conditions will continue to be the same as the average
rate for the latest available 12 months of actual production until such time
that the well or wells are incapable of producing at this rate. The well or
wells were then projected to decline at their decreasing delivery capacity
rate. Our general policy on estimates of future gas production rates is
adjusted when necessary to reflect actual gas market conditions in specific
cases.

         The future production rates from wells now on production may be more
or less than estimated because of changes in market demand or allowables set by
regulatory bodies. Wells or locations which are not currently producing may
start producing earlier or later than anticipated in our estimates of their
future production rates.

HYDROCARBON PRICES

         Mariner furnished us with prices in effect at January 1, 1999 and
these prices were held constant except for known and determinable escalations.
In accordance with Securities and Exchange Commission guidelines, changes in
liquid and gas prices subsequent to December 31, 1998 were not taken into
account in this report. Future prices used in this report are discussed in more
detail in the attached "Reserve Definitions and Pricing Assumptions".

COSTS

         Operating costs for the leases and wells in this report are based on
the operating expense reports of Mariner and include only those costs directly
applicable to the leases or wells. When applicable, the operating costs include
a portion of general and administrative costs allocated directly to the leases
and wells under terms of operating agreements. No deduction was made for
indirect costs such as general administration and overhead expenses, loan
repayments, interest expenses, and exploration and development prepayments that
are not charged directly to the leases or wells.

<PAGE>   24

March 29, 1999
Page 2


         Development costs were furnished to us by Mariner and are based on
authorizations for expenditure for the proposed work or actual costs for
similar projects. Three offshore undeveloped fields, Ewing Bank 966,
Mississippi Canyon 718 and Galveston Island 144, have relatively large capital
expense requirements which have been allocated to both the proved and probable
categories. In these three cases, two thirds of the total field development
costs were allocated to proved and one third of the costs were allocated to
probable. The estimated net cost of abandonment after salvage was included for
properties where abandonment costs net of salvage are significant. The
estimates of the net abandonment costs furnished by Mariner were accepted
without independent verification.

         Current costs were held constant throughout the life of the
properties.

GENERAL

         Table A presents a one line summary of proved reserve and income data
for each of the subject properties which are ranked according to their future
net income discounted at 10 percent per year. Table B presents a one line
summary of gross and net reserves and income data for each of the subject
properties. Table C presents a one line summary of initial basic data for each
of the subject properties. Tables 1 through 320 in our report present our
estimated projection of production and income by years beginning January 1,
1999, by state, field, and lease or well.

         While it may reasonably be anticipated that the future prices received
for the sale of production and the operating costs and other costs relating to
such production may also increase or decrease from existing levels, such
changes were, in accordance with rules adopted by the SEC, omitted from
consideration in making this evaluation.

         The estimates of reserves presented herein were based upon a detailed
study of the properties in which Mariner owns an interest; however, we have not
made any field examination of the properties. No consideration was given in
this report to potential environmental liabilities which may exist nor were any
costs included for potential liability to restore and clean up damages, if any,
caused by past operating practices. Mariner has informed us that they have
furnished us all of the accounts, records, geological and engineering data, and
reports and other data required for this investigation. The ownership
interests, prices, and other factual data furnished by Mariner were accepted
without independent verification. The estimates presented in this report are
based on data available through December 1998.

         Neither we nor any of our employees have any interest in the subject
properties and neither the employment to make this study nor the compensation
is contingent on our estimates of reserves and future income for the subject
properties.

<PAGE>   25

March 29, 1999
Page 2


         This report was prepared for the exclusive use and sole benefit of
Mariner Energy, Inc.. The data, work papers, and maps used in this report are
available for examination by authorized parties in our offices. Please contact
us if we can be of further service.

                                                Very truly yours,

                                                RYDER SCOTT COMPANY
                                                PETROLEUM  ENGINEERS

                                                /s/ Timothy J. Torres

                                                Timothy J. Torres, P.E.
                                                Petroleum Engineer
JRW/sw


Approved:

/s/ John R. Warner
--------------------------------
John R. Warner, P.E.
Senior Vice President


<PAGE>   26

                            DEFINITIONS OF RESERVES




PROVED RESERVES  (SEC DEFINITION)

         Proved reserves of crude oil, condensate, natural gas, and natural gas
liquids are estimated quantities that geological and engineering data
demonstrate with reasonable certainty to be recoverable in the future from
known reservoirs under existing operating conditions, i.e., prices and costs as
of the date the estimate is made. Prices include consideration of changes in
existing prices provided only by contractual arrangements, but not on
escalation based on future conditions.

         Reservoirs are considered proved if economic producibility is
supported by either actual production or conclusive formation test. In certain
instances, proved reserves are assigned on the basis of a combination of core
analysis and electrical and other type logs which indicate the reservoirs are
analogous to reservoirs in the same field which are producing or have
demonstrated the ability to produce on a formation test. The area of a
reservoir considered proved includes (1) that portion delineated by drilling
and defined by fluid contacts, if any, and (2) the adjoining portions not yet
drilled that can be reasonably judged as economically productive on the basis
of available geological and engineering data. In the absence of data on fluid
contacts, the lowest known structural occurrence of hydrocarbons controls the
lower proved limit of the reservoir.

         Reserves that can be produced economically through the application of
improved recovery techniques are included in the proved classification when
these qualifications are met: (1) successful testing by a pilot project or the
operation of an installed program in the reservoir provides support for the
engineering analysis on which the project or program was based, and (2) it is
reasonably certain the project will proceed. Improved recovery includes all
methods for supplementing natural reservoir forces and energy, or otherwise
increasing ultimate recovery from a reservoir, including (1) pressure
maintenance, (2) cycling, and (3) secondary recovery in its original sense.
Improved recovery also includes the enhanced recovery methods of thermal,
chemical flooding, and the use of miscible and immiscible displacement fluids.

         Proved natural gas reserves are comprised of non-associated,
associated and dissolved gas. An appropriate reduction in gas reserves has been
made for the expected removal of natural gas liquids, for lease and plant fuel,
and for the exclusion of non-hydrocarbon gases if they occur in significant
quantities and are removed prior to sale. Estimates of proved reserves do not
include crude oil, natural gas, or natural gas liquids being held in
underground or surface storage.

         Proved reserves are estimates of hydrocarbons to be recovered from a
given date forward. They may be revised as hydrocarbons are produced and
additional data become available.

<PAGE>   27

                           RESERVE STATUS CATEGORIES



         Reserve status categories define the development and producing status
of wells and/or reservoirs.

PROVED DEVELOPED  (SEC DEFINITION)

         Proved developed oil and gas reserves are reserves that can be
expected to be recovered through existing wells with existing equipment and
operating methods. Additional oil and gas expected to be obtained through the
application of fluid injection or other improved recovery techniques for
supplementing the natural forces and mechanisms of primary recovery should be
included as "proved developed reserves" only after testing by a pilot project
or after the operation of an installed program has confirmed through production
response that increased recovery will be achieved.

         Developed reserves may be subcategorized as producing or non-producing
using the SPE/SPEE Definitions:

         Producing

         Producing reserves are expected to be recovered from completion
         intervals open at the time of the estimate and producing. Improved
         recovery reserves are considered to be producing only after an
         improved recovery project is in operation.

         Non-Producing

         Non-producing reserves include shut-in and behind pipe reserves.
         Shut-in reserves are expected to be recovered from completion
         intervals open at the time of the estimate, but which had not started
         producing, or were shut-in for market conditions or pipeline
         connection, or were not capable of production for mechanical reasons,
         and the time when sales will start is uncertain. Behind pipe reserves
         are expected to be recovered from zones behind casing in existing
         wells, which will require additional completion work or a future
         recompletion prior to the start of production.

PROVED UNDEVELOPED  (SEC DEFINITION)

         Proved undeveloped oil and gas reserves are reserves that are expected
to be recovered from new wells on undrilled acreage, or from existing wells
where a relatively major expenditure is required for recompletion. Reserves on
undrilled acreage shall be limited to those drilling units offsetting
productive units that are reasonably certain of production when drilled. Proved
reserves for other undrilled units can be claimed only where it can be
demonstrated with reasonable certainty that there is continuity of production
from the existing productive formation. Estimates for proved undeveloped
reserves are attributable to any acreage for which an application of fluid
injection or other improved technique is contemplated, only when such
techniques have been proved effective by actual tests in the area and in the
same reservoir.

<PAGE>   28

                         HYDROCARBON PRICING PARAMETERS

                 SECURITIES AND EXCHANGE COMMISSION PARAMETERS



OIL AND CONDENSATE

         Mariner furnished us with oil and condensate prices in effect at
January 1, 1999 and these prices were held constant to depletion of the
properties. In accordance with Securities and Exchange Commission guidelines,
changes in liquid prices subsequent to January 1, 1999 were not considered in
this report.

PLANT PRODUCTS

         Mariner furnished us with plant product prices in effect at January 1,
1999 and these prices were held constant to depletion of the properties.

GAS

         Mariner furnished us with gas prices in effect at January 1, 1999 and
with its forecasts of future gas prices which take into account SEC guidelines,
current spot market prices, contract prices, and fixed and determinable price
escalations where applicable. In accordance with SEC guidelines, the future gas
prices used in this report make no allowances for future gas price increases
which may occur as a result of inflation nor do they make any allowance for
seasonal variations in gas prices which may cause future yearly average gas
prices to be somewhat lower than January 1, 1999 gas prices. For gas sold under
contract, the contract gas price including fixed and determinable escalations,
exclusive of inflation adjustments, was used until the contract expires and
then was adjusted to the current market price for the area and held at this
adjusted price to depletion of the reserves.

<PAGE>   29

                              MARINER ENERGY, INC.









                                   Estimated

                           Future Reserves and Income

                            Attributable to Certain

                              Leasehold Interests






                                (SEC Parameters)



                                     As of

                                January 1, 1999


<PAGE>   30
[LOGO]   [RYDER SCOTT COMPANY LETTERHEAD]



                                              March 29, 1999



Mariner Energy, Inc.
580 WestLake Park Blvd., Suite 1300
Houston, Texas  77079

Gentlemen:

         At your request, we have prepared an estimate of the reserves, future
production, and income attributable to certain leasehold interests of Mariner
Energy, Inc. (Mariner) as of January 1, 1999. The subject properties are
located in the states of Louisiana, Mississippi, and Texas and in the federal
waters offshore Louisiana and Texas. The income data were estimated using the
Securities and Exchange Commission (SEC) guidelines for future price and cost
parameters.

         The estimated reserves and future income amounts presented in this
report are related to hydrocarbon prices. December 1998 hydrocarbon prices were
used in the preparation of this report as required by SEC guidelines; however,
actual future prices may vary significantly from December 1998 prices.
Therefore, volumes of reserves actually recovered and amounts of income
actually received may differ significantly from the estimated quantities
presented in this report. The results of this study are summarized below.

                                 SEC PARAMETERS
                     Estimated Net Reserves and Income Data
                         Certain Leasehold Interests of
                              MARINER ENERGY, INC.
                             As of January 1, 1999

<TABLE>
<CAPTION>
                                                                   Proved
                                           ------------------------------------------------------
                                                   Developed                     Total
                                           --------------------------- --------------------------
                                            Producing    Non-Producing  Undeveloped     Proved
                                           ------------  ------------- ------------  ------------
<S>                                        <C>           <C>           <C>           <C>      
NET REMAINING RESERVES
Oil/Condensate - Barrels                      2,282,975       582,551     6,472,846     9,338,372
Plant Products - Barrels                         10,329        10,580             0        20,909
Gas - MMCF                                       57,082        28,942        42,871       128,895

INCOME DATA
Future Gross Revenue                       $150,978,685  $ 65,653,902  $157,499,321  $374,131,908
Deductions                                   44,159,398    24,415,844   106,555,833   175,131,075
                                           ------------  ------------  ------------  ------------
Future Net Income (FNI)                    $106,819,287  $ 41,238,058  $ 50,943,488  $199,000,833

Discounted FNI @ 10%                       $ 86,947,896  $ 33,976,023  $ 26,705,382  $147,629,301
</TABLE>

         Liquid hydrocarbons are expressed in standard 42 gallon barrels. All
gas volumes are sales gas expressed in millions of cubic feet (MMCF) at the
official temperature and pressure bases of the areas in which the gas reserves
are located.


<PAGE>   31

March 29, 1999
Page 2


         The future gross revenue is after the deduction of production taxes.
The deductions are comprised of the normal direct costs of operating the wells,
ad valorem taxes, recompletion costs, development costs, and certain
abandonment costs net of salvage. The future net income is before the deduction
of state and federal income taxes and general administrative overhead, and has
not been adjusted for outstanding loans that may exist nor does it include any
adjustment for cash on hand or undistributed income. No attempt was made to
quantify or otherwise account for any accumulated gas production imbalances
that may exist. Gas reserves account for approximately 74.7 percent of the
total future gross revenue from proved reserves. Liquid hydrocarbon reserves
account for approximately 25.2 percent and plant product reserves account for
the remaining 0.1 percent of total future gross revenue from proved reserves.

         The discounted future net income shown above was calculated using a
discount rate of 10 percent per annum compounded monthly. Future net income was
discounted at four other discount rates which were also compounded monthly.
These results are shown on each estimated projection of future production and
income presented in a later section of this report and in summary form below.

<TABLE>
<CAPTION>
                                            Discounted Future Net Income
                                               As of January 1, 1999
                                            ----------------------------
        Discount Rate                                  Total
           Percent                                     Proved
        -------------                               ------------
        <S>                                <C>         
             15                                     $130,676,504
             20                                     $116,923,905
             25                                     $105,465,882
             30                                     $ 95,740,539
</TABLE>

The results shown above are presented for your information and should not be
construed as our estimate of fair market value.

RESERVES INCLUDED IN THIS REPORT

         The proved reserves included herein conform to the definition as set
forth in the Securities and Exchange Commission's Regulation S-X Part 210.4-10
(a) as clarified by subsequent Commission Staff Accounting Bulletins. The
definition of proved reserves is included in the attached "Reserve Definitions
and Pricing Assumptions".

         The proved developed non-producing reserves included herein are
comprised of shut-in and behind pipe categories. The various reserve status
categories are defined in the attached "Reserve Definitions and Pricing
Assumptions".

ESTIMATES OF RESERVES

         In general, the reserves included herein were estimated by performance
methods or the volumetric method; however, other methods were used in certain
cases where characteristics of the data indicated such other methods were more
appropriate in our opinion. The reserves estimated by the performance method
utilized extrapolations of various historical data in those cases where such
data were definitive. Reserves were estimated by the volumetric method in those
cases where there 

<PAGE>   32

March 29, 1999
Page 2


were inadequate historical performance data to establish a definitive trend or
where the use of production performance data as a basis for the reserve
estimates was considered to be inappropriate.

         The reserves included in this report are estimates only and should not
be construed as being exact quantities. They may or may not be actually
recovered, and if recovered, the revenues therefrom and the actual costs
related thereto could be more or less than the estimated amounts. Moreover,
estimates of reserves may increase or decrease as a result of future
operations.

FUTURE PRODUCTION RATES

         Initial production rates are based on the current producing rates for
those wells now on production. Test data and other related information were
used to estimate the anticipated initial production rates for those wells or
locations which are not currently producing. If no production decline trend has
been established, future production rates were held constant, or adjusted for
the effects of curtailment where appropriate, until a decline in ability to
produce was anticipated. An estimated rate of decline was then applied to
depletion of the reserves. If a decline trend has been established, this trend
was used as the basis for estimating future production rates. For reserves not
yet on production, sales were estimated to commence at an anticipated date
furnished by Mariner.

         In general, we estimate that future gas production rates limited by
allowables or marketing conditions will continue to be the same as the average
rate for the latest available 12 months of actual production until such time
that the well or wells are incapable of producing at this rate. The well or
wells were then projected to decline at their decreasing delivery capacity
rate. Our general policy on estimates of future gas production rates is
adjusted when necessary to reflect actual gas market conditions in specific
cases.

         The future production rates from wells now on production may be more
or less than estimated because of changes in market demand or allowables set by
regulatory bodies. Wells or locations which are not currently producing may
start producing earlier or later than anticipated in our estimates of their
future production rates.

HYDROCARBON PRICES

         Mariner furnished us with prices in effect at January 1, 1999 and
these prices were held constant except for known and determinable escalations.
In accordance with Securities and Exchange Commission guidelines, changes in
liquid and gas prices subsequent to December 31, 1998 were not taken into
account in this report. Future prices used in this report are discussed in more
detail in the attached "Reserve Definitions and Pricing Assumptions".

COSTS

         Operating costs for the leases and wells in this report are based on
the operating expense reports of Mariner and include only those costs directly
applicable to the leases or wells. When applicable, the operating costs include
a portion of general and administrative costs allocated directly to the leases
and wells under terms of operating agreements. No deduction was made for
indirect costs such as general administration and overhead expenses, loan
repayments, interest expenses, and exploration and development prepayments that
are not charged directly to the leases or wells.

<PAGE>   33

March 29, 1999
Page 2


         Development costs were furnished to us by Mariner and are based on
authorizations for expenditure for the proposed work or actual costs for
similar projects. Three offshore undeveloped fields, Ewing Bank 966,
Mississippi Canyon 718 and Galveston Island 144, have relatively large capital
expense requirements which have been allocated to both the proved and probable
categories. In these three cases, two thirds of the total field development
costs were allocated to proved and one third of the costs were allocated to
probable. The estimated net cost of abandonment after salvage was included for
properties where abandonment costs net of salvage are significant. The
estimates of the net abandonment costs furnished by Mariner were accepted
without independent verification.

         Current costs were held constant throughout the life of the
properties.

GENERAL

         Table A presents a one line summary of proved reserve and income data
for each of the subject properties which are ranked according to their future
net income discounted at 10 percent per year. Table B presents a one line
summary of gross and net reserves and income data for each of the subject
properties. Table C presents a one line summary of initial basic data for each
of the subject properties. Tables 1 through 320 in our report present our
estimated projection of production and income by years beginning January 1,
1999, by state, field, and lease or well.

         While it may reasonably be anticipated that the future prices received
for the sale of production and the operating costs and other costs relating to
such production may also increase or decrease from existing levels, such
changes were, in accordance with rules adopted by the SEC, omitted from
consideration in making this evaluation.

         The estimates of reserves presented herein were based upon a detailed
study of the properties in which Mariner owns an interest; however, we have not
made any field examination of the properties. No consideration was given in
this report to potential environmental liabilities which may exist nor were any
costs included for potential liability to restore and clean up damages, if any,
caused by past operating practices. Mariner has informed us that they have
furnished us all of the accounts, records, geological and engineering data, and
reports and other data required for this investigation. The ownership
interests, prices, and other factual data furnished by Mariner were accepted
without independent verification. The estimates presented in this report are
based on data available through December 1998.

         Neither we nor any of our employees have any interest in the subject
properties and neither the employment to make this study nor the compensation
is contingent on our estimates of reserves and future income for the subject
properties.

<PAGE>   34

March 29, 1999
Page 2


         This report was prepared for the exclusive use and sole benefit of
Mariner Energy, Inc.. The data, work papers, and maps used in this report are
available for examination by authorized parties in our offices. Please contact
us if we can be of further service.

                                                Very truly yours,

                                                RYDER SCOTT COMPANY
                                                PETROLEUM  ENGINEERS

                                                /s/ Timothy J. Torres

                                                Timothy J. Torres, P.E.
                                                Petroleum Engineer
JRW/sw


Approved:

/s/ John R. Warner
--------------------------------
John R. Warner, P.E.
Senior Vice President


<PAGE>   35

                            DEFINITIONS OF RESERVES




PROVED RESERVES  (SEC DEFINITION)

         Proved reserves of crude oil, condensate, natural gas, and natural gas
liquids are estimated quantities that geological and engineering data
demonstrate with reasonable certainty to be recoverable in the future from
known reservoirs under existing operating conditions, i.e., prices and costs as
of the date the estimate is made. Prices include consideration of changes in
existing prices provided only by contractual arrangements, but not on
escalation based on future conditions.

         Reservoirs are considered proved if economic producibility is
supported by either actual production or conclusive formation test. In certain
instances, proved reserves are assigned on the basis of a combination of core
analysis and electrical and other type logs which indicate the reservoirs are
analogous to reservoirs in the same field which are producing or have
demonstrated the ability to produce on a formation test. The area of a
reservoir considered proved includes (1) that portion delineated by drilling
and defined by fluid contacts, if any, and (2) the adjoining portions not yet
drilled that can be reasonably judged as economically productive on the basis
of available geological and engineering data. In the absence of data on fluid
contacts, the lowest known structural occurrence of hydrocarbons controls the
lower proved limit of the reservoir.

         Reserves that can be produced economically through the application of
improved recovery techniques are included in the proved classification when
these qualifications are met: (1) successful testing by a pilot project or the
operation of an installed program in the reservoir provides support for the
engineering analysis on which the project or program was based, and (2) it is
reasonably certain the project will proceed. Improved recovery includes all
methods for supplementing natural reservoir forces and energy, or otherwise
increasing ultimate recovery from a reservoir, including (1) pressure
maintenance, (2) cycling, and (3) secondary recovery in its original sense.
Improved recovery also includes the enhanced recovery methods of thermal,
chemical flooding, and the use of miscible and immiscible displacement fluids.

         Proved natural gas reserves are comprised of non-associated,
associated and dissolved gas. An appropriate reduction in gas reserves has been
made for the expected removal of natural gas liquids, for lease and plant fuel,
and for the exclusion of non-hydrocarbon gases if they occur in significant
quantities and are removed prior to sale. Estimates of proved reserves do not
include crude oil, natural gas, or natural gas liquids being held in
underground or surface storage.

         Proved reserves are estimates of hydrocarbons to be recovered from a
given date forward. They may be revised as hydrocarbons are produced and
additional data become available.

<PAGE>   36

                           RESERVE STATUS CATEGORIES



         Reserve status categories define the development and producing status
of wells and/or reservoirs.

PROVED DEVELOPED  (SEC DEFINITION)

         Proved developed oil and gas reserves are reserves that can be
expected to be recovered through existing wells with existing equipment and
operating methods. Additional oil and gas expected to be obtained through the
application of fluid injection or other improved recovery techniques for
supplementing the natural forces and mechanisms of primary recovery should be
included as "proved developed reserves" only after testing by a pilot project
or after the operation of an installed program has confirmed through production
response that increased recovery will be achieved.

         Developed reserves may be subcategorized as producing or non-producing
using the SPE/SPEE Definitions:

         Producing

         Producing reserves are expected to be recovered from completion
         intervals open at the time of the estimate and producing. Improved
         recovery reserves are considered to be producing only after an
         improved recovery project is in operation.

         Non-Producing

         Non-producing reserves include shut-in and behind pipe reserves.
         Shut-in reserves are expected to be recovered from completion
         intervals open at the time of the estimate, but which had not started
         producing, or were shut-in for market conditions or pipeline
         connection, or were not capable of production for mechanical reasons,
         and the time when sales will start is uncertain. Behind pipe reserves
         are expected to be recovered from zones behind casing in existing
         wells, which will require additional completion work or a future
         recompletion prior to the start of production.

PROVED UNDEVELOPED  (SEC DEFINITION)

         Proved undeveloped oil and gas reserves are reserves that are expected
to be recovered from new wells on undrilled acreage, or from existing wells
where a relatively major expenditure is required for recompletion. Reserves on
undrilled acreage shall be limited to those drilling units offsetting
productive units that are reasonably certain of production when drilled. Proved
reserves for other undrilled units can be claimed only where it can be
demonstrated with reasonable certainty that there is continuity of production
from the existing productive formation. Estimates for proved undeveloped
reserves are attributable to any acreage for which an application of fluid
injection or other improved technique is contemplated, only when such
techniques have been proved effective by actual tests in the area and in the
same reservoir.

<PAGE>   37

                         HYDROCARBON PRICING PARAMETERS

                 SECURITIES AND EXCHANGE COMMISSION PARAMETERS



OIL AND CONDENSATE

         Mariner furnished us with oil and condensate prices in effect at
January 1, 1999 and these prices were held constant to depletion of the
properties. In accordance with Securities and Exchange Commission guidelines,
changes in liquid prices subsequent to January 1, 1999 were not considered in
this report.

PLANT PRODUCTS

         Mariner furnished us with plant product prices in effect at January 1,
1999 and these prices were held constant to depletion of the properties.

GAS

         Mariner furnished us with gas prices in effect at January 1, 1999 and
with its forecasts of future gas prices which take into account SEC guidelines,
current spot market prices, contract prices, and fixed and determinable price
escalations where applicable. In accordance with SEC guidelines, the future gas
prices used in this report make no allowances for future gas price increases
which may occur as a result of inflation nor do they make any allowance for
seasonal variations in gas prices which may cause future yearly average gas
prices to be somewhat lower than January 1, 1999 gas prices. For gas sold under
contract, the contract gas price including fixed and determinable escalations,
exclusive of inflation adjustments, was used until the contract expires and
then was adjusted to the current market price for the area and held at this
adjusted price to depletion of the reserves.

<PAGE>   38

                              MARINER ENERGY, INC.









                                   Estimated

                           Future Reserves and Income

                            Attributable to Certain

                              Leasehold Interests






                                (SEC Parameters)



                                     As of

                                January 1, 1999