By OGJ editors
HOUSTON, Dec. 5 -- Mariner Energy Inc. on Nov. 1 completed the sale of its 20% working interest in the Cottonwood project in the Gulf of Mexico, to the project's operator, Petrobras America Inc., for $31.8 million. Cottonwood lies on Garden Banks Block 244 in 2,300 ft of water.
The sale will result in a pretax gain of $22 million to Mariner in the fourth quarter. Mariner will not be required to fund $21 million of development costs necessary to establish first production, estimated to occur in first quarter 2007.
Consequently, Mariner's 2006 capital spending forecast of $525-545 million (excluding hurricane repairs and acquisitions) is now expected to be about $504-524 million (excluding hurricane repairs, acquisitions, and dispositions).
Mariner acquired its interest in the Cottonwood project from Petrobras in April 2005 when Mariner allowed Petrobras access to Noble Drilling Inc.'s Noble Lorris Bouzigard deepwater semisubmersible, which Mariner has under long-term contract. Since acquiring its interest in 2005, Mariner participated with Petrobras in two sidetrack wells in the project.
