Mariner Energy to acquire Shell's 50 % interest in "King Kong" project

Jul 31, 2000 02:00 AM

Mariner Energy announced that it has entered into an agreement whereby it will ultimately acquire Shell Exploration and Production Company's 50 % working interest in the "King Kong" Deepwater Gulf of Mexico development project. The project is located in approximately 3,900 feet of water in Green Canyon Blocks 472, 473 and 517, approximately 150 miles south-east of New Orleans.
Mariner purchased Shell's interest for an undisclosed amount of cash and overriding royalty interest in the field. Mariner will be named operator for development of the project. Agip Petroleum (the US upstream division of Eni), as a successor to British Borneo, owns the remaining 50 % working interest.
Mariner intends to develop gas reserves from two separate reservoirs discovered by three exploration wells that were previously drilled in the project. The initial development plan calls for completing a previously drilled well and drilling an additional development well, with both subsea wells tied back 16 miles to theAllegheny mini-TLP operated by Agip.

Mariner also plans to drill its "Yosemite" exploration prospect located adjacent to King Kong in Green Canyon Block 516 before the end of the year. If successful, the company expects Yosemite to be jointly developed with King Kong. Mariner anticipates production from the project to commence by December 31, 2001.
Robert E. Henderson, Mariner's chairman and CEO, remarked, "We are very pleased to bring this project into the Mariner fold. Our ability to build value through Deepwater Gulf exploitation projects was most recently demonstrated by the completion of our Pluto project in Mississippi Canyon. The King Kong development project represents a continuation of this Deepwater exploitation strategy. In addition, this project is located in the same area of Green Canyon where we have assembled five exploration prospects, including Yosemite, providing us with the opportunity to capitalise on synergies for the development of any discoveries."

Mariner Energy is a Houston-based oil and gas exploration and production company with principal operations in the Gulf of Mexico and along the US Gulf Coast. The Company is majority owned by an affiliate of Enron North America which, along with a group of Mariner employees, provided equity financing for a management-led buyout in 1996.
Mariner has been an active explorer in the Gulf Coast area since the mid-1980s (initially as Trafalgar House Oil and Gas USA and then as Hardy Oil & Gas USA) and has successfully grown its production and reserve base through the drill bit. Mariner is one of the most experienced independent operators in the Deepwater Gulf of Mexico.

Source: Mariner Energy, Inc. via Newspage
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