S&P: Mariner Energy unaffected

Standard & Poor's said its ratings and outlook on Mariner Energy Inc. (B/stable) are unaffected by the announced acquisition of BP Exploration & Production Inc.'s 62.5% working interest in West Cameron Blocks 110 and 111 for roughly $71 million, or around $3.55 per thousand cubic feet equivalent, assuming estimated reserves of 20 billion cubic feet equivalent.

The agency said that acquisition costs will be funded via borrowing capacity under Mariner's $500 million credit facility.

The transaction will make Mariner the operator, as well as give it a 100% working interest in the property, with such acquisitions expected in the current rating, S&P said.

Nevertheless, aggressive exploration and development spending has outpaced internal cash flows year to date, resulting in increased borrowings under Mariner's credit facility, the agency noted.

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