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Delaware		1311		86-0460233
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

Kelly B. Rose Baker Botts L.L.P. One Shell Plaza 910 Louisiana Houston, Texas 77002 (713) 229-1796		Brian J. Lynch, Esq. Robert A. Welp, Esq. Hogan & Hartson L.L.P. 8300 Greensboro Drive, Suite 1100 McLean, Virginia 22102 (703) 610-6100

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The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

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WHERE YOU CAN FIND MORE INFORMATION			i
SUMMARY			1
SUMMARY SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA			13
RISK FACTORS			24
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS			38
USE OF PROCEEDS			39
CAPITALIZATION			39
DILUTION			40
DIVIDEND POLICY			40
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA			41
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION			44
STRENGTHS AND STRATEGIES OF MARINER FOLLOWING THE MERGER			52
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			55
BUSINESS			79
THE SPIN-OFF AND MERGER			95
THE MERGER AGREEMENT			118
THE DISTRIBUTION AGREEMENT			132
ANCILLARY AGREEMENTS			135
FINANCING ARRANGEMENTS RELATING TO THE SPIN-OFF AND THE MERGER			138
SELECTED CONSOLIDATED STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES OF THE FOREST GULF OF MEXICO OPERATIONS			140
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE FOREST GULF OF MEXICO OPERATIONS			141
THE FOREST GULF OF MEXICO OPERATIONS			146
FOREST OIL CORPORATION			154
MANAGEMENT OF MARINER			155
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			168
CERTAIN TRANSACTIONS WITH AFFILIATES AND MANAGEMENT			170
SELLING STOCKHOLDERS			170
PLAN OF DISTRIBUTION			182
DESCRIPTION OF CAPITAL STOCK			184
REGISTRATION RIGHTS			188
EXPERTS			190
LEGAL MATTERS			190
GLOSSARY OF OIL AND NATURAL GAS TERMS			191
INDEX TO FINANCIAL STATEMENTS			F-1
REPORT OF RYDER SCOTT COMPANY, L.P., INDEPENDENT PETROLEUM ENGINEERS			A-1
Consent of Deloitte & Touche LLP
Consent of KPMG LLP

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	Oil and natural gas prices are volatile, and a decline in oil and natural gas prices would reduce our revenues, profitability and cash flow and impede our growth.

	•	domestic and foreign supply of oil and natural gas;
	•	price and quantity of foreign imports;
	•	actions of the Organization of Petroleum Exporting Countries and other state-controlled oil companies relating to oil price and production controls;
	•	level of consumer product demand;
	•	domestic and foreign governmental regulations;
	•	political conditions in or affecting other oil-producing and natural gas-producing countries, including the current conflicts in the Middle East and conditions in South America and Russia;
	•	weather conditions;
	•	technological advances affecting oil and natural gas consumption;
	•	overall U.S. and global economic conditions; and
	•	price and availability of alternative fuels.

	Reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions will affect materially the quantities and present value of our reserves and the reserves of the Forest Gulf of Mexico operations, which may lower our bank borrowing base and reduce our access to capital.

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	In estimating future net revenues from proved reserves, we and Forest assume that future prices and costs are fixed and apply a fixed discount factor. If these assumptions or discount factor are materially inaccurate, our revenues, profitability and cash flow could be materially less than our estimates.

	Unless we replace our oil and natural gas reserves, our reserves and production will decline.

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	Relatively short production periods or reserve life for Gulf of Mexico properties subjects us to higher reserve replacement needs and may impair our ability to replace production during periods of low oil and natural gas prices.

	Any production problems related to our Gulf of Mexico properties could reduce our revenue, profitability and cash flow materially.

	Our exploration and development activities may not be commercially successful.

	•	unexpected drilling conditions;
	•	pressure or irregularities in formations;
	•	equipment failures or accidents;
	•	adverse weather conditions, including hurricanes, which are common in the Gulf of Mexico during certain times of the year;
	•	compliance with governmental regulations;
	•	unavailability or high cost of drilling rigs, equipment or labor;
	•	reductions in oil and natural gas prices; and
	•	limitations in the market for oil and natural gas.

	Our exploratory drilling projects are based in part on seismic data, which is costly and cannot ensure the commercial success of the project.

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	Oil and gas drilling and production involve many business and operating risks, any one of which could reduce our levels of production, cause substantial losses or prevent us from realizing profits.

	•	fires;
	•	explosions;
	•	blow-outs and surface cratering;
	•	uncontrollable flows of underground natural gas, oil and formation water;
	•	natural disasters;
	•	pipe or cement failures;
	•	casing collapses;
	•	lost or damaged oilfield drilling and service tools;
	•	abnormally pressured formations; and
	•	environmental hazards, such as natural gas leaks, oil spills, pipeline ruptures and discharges of toxic gases.

	Our offshore operations involve special risks that could increase our cost of operations and adversely affect our ability to produce oil and gas.

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	Our hedging transactions may not protect us adequately from fluctuations in oil and natural gas prices and may limit future potential gains from increases in commodity prices or result in losses.

	We will require additional capital to fund our future activities. If we fail to obtain additional capital, we may not be able to implement fully our business plan, which could lead to a decline in reserves.

	Properties we acquire (including the Forest Gulf of Mexico properties) may not produce as projected, and we may be unable to determine reserve potential, identify liabilities associated with the properties or obtain protection from sellers against such liabilities.

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	Market conditions or transportation impediments may hinder our access to oil and natural gas markets or delay our production.

	The unavailability or high cost of drilling rigs, equipment, supplies or personnel could affect adversely our ability to execute on a timely basis our exploration and development plans within budget, which could have a material adverse effect on our financial condition and results of operations.

	Competition in the oil and natural gas industry is intense, and many of our competitors have resources that are greater than ours giving them an advantage in evaluating and obtaining properties and prospects.

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	Financial difficulties encountered by our farm-out partners or third-party operators could affect the exploration and development of our prospects adversely.

	We cannot control the drilling and development activities on properties we do not operate, and therefore we may not be in a position to control the timing of development efforts, the associated costs or the rate of production of the reserves.

	Compliance with environmental and other government regulations could be costly and could affect production negatively.

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	Our insurance may not protect us against our business and operating risks.

	If the merger is not ultimately consummated, the market value of our common stock could decline, and our ability to consummate alternate acquisition transactions could be reduced.

	If the merger is not consummated, a significant part of the value of our production and reserves will be concentrated in a small number of offshore properties. As a result, any production problems or inaccuracies in reserve estimates related to those properties could reduce our revenue, profitability and cash flow materially.

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	If the merger is not consummated, the smaller size of our operations relative to those of the combined operations could reduce our ability to participate in projects or pursue acquisition opportunities that would increase our profitability.

	The consummation of the merger is subject to numerous conditions, many of which are beyond our control.

	•	the adoption of the merger agreement by Mariner stockholders holding a majority of the Mariner common stock and the approval of the proposed amendment to Mariner’s certificate of incorporation;
	•	the absence of legal restrictions that would prevent the completion of the transactions;
	•	the receipt by Forest, Mariner and Forest Energy Resources of an opinion from their respective counsel to the effect that the merger will be treated as a reorganization for federal income tax purposes;
	•	the completion of the spin-off in accordance with the distribution agreement;
	•	the receipt of material consents, approvals and authorizations of governmental authorities;
	•	the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Act;
	•	the SEC declaring effective the registration statements of Mariner relating to the shares of Mariner common stock to be issued in the merger and those shares held by its existing stockholders;
	•	the representations and warranties contained in the merger agreement being materially true and correct, the performance in all material respects by the parties of their covenants and other agreements in the merger agreement;
	•	the approval for listing on the New York Stock Exchange or Nasdaq of Mariner’s common stock; and
	•	Mariner and Forest receiving the consents required pursuant to their credit facilities (with Mariner or Forest Energy Resources having entered into a new or amended credit facility sufficient to operate the combined businesses), and Forest receiving any consents required from its bondholders.

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	The market value of our common stock could decline if large amounts of our common stock are sold following the spin-off and merger.

	The integration of the Forest Gulf of Mexico operations following the merger will be difficult, and will divert our management’s attention away from our normal operations.

	•	the challenge of integrating the Forest Gulf of Mexico operations while carrying on the ongoing operations of our business;
	•	the challenge of managing a significantly larger company, with more than twice the PV10 of Mariner on a stand-alone basis;
	•	faulty assumptions underlying our expectations;
	•	the difficulty associated with coordinating geographically separate organizations;
	•	the challenge of integrating the business cultures of the two companies;
	•	attracting and retaining personnel associated with the Forest Gulf of Mexico operations following the merger; and
	•	the challenge and cost of integrating the information technology systems of the two companies.

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	If we fail to realize the anticipated benefits of the merger, stockholders may receive lower returns than they expect.

	We expect to incur significant charges relating to the integration plan that could materially and adversely affect our period-to-period results of operations following the merger.

	The number of shares Forest shareholders will receive in the merger is not subject to adjustment based on the value of the Mariner or the Forest Gulf of Mexico operations. Accordingly, because this value may fluctuate, the market value of the Mariner common stock that Forest shareholders receive in the merger may not reflect the value of the individual companies at the time of the merger.

	Regulatory agencies may delay or impose conditions on approval of the spin-off and the merger, which may diminish the anticipated benefits of the merger.

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	In order to preserve the tax-free treatment of the spin-off, we will be required to abide by potentially significant restrictions which could limit our ability to undertake certain corporate actions (such as the issuance of our common shares or the undertaking of a change in control) that otherwise could be advantageous.

	Some of our directors and executive officers have interests that are different from, or in addition to, the interests of our stockholders.

	•	arrangements regarding the appointment of directors and officers of Mariner following the merger; and
	•	arrangements whereby our executive officers will receive a cash payment of $1,000 each in exchange for the waiver of certain rights under their employment agreements, including the automatic vesting or acceleration of restricted stock and options upon the completion of the merger and the right to receive a lump sum cash payment if the officer voluntarily terminates employment without good reason within nine months following the completion of the merger.

	An active market for our common stock may not develop and the market price for shares of our common stock may be highly volatile and could be subject to wide fluctuations after this offering.

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	•	actual or anticipated downward revisions in our reserve estimates;
	•	our operating results being less than anticipated;
	•	reductions in oil and gas prices;
	•	publication of unfavorable research reports about us or the exploration and production industry;
	•	increases in market interest rates which may increase our cost of capital;
	•	the enactment of more stringent laws or regulations applicable to our business, or unfavorable court rulings or enforcement or legal actions;
	•	increases in royalties or taxes payable in the operation of our business;
	•	a general decline in market valuations of similar companies;
	•	adverse market reaction to any increased indebtedness we incur in the future;
	•	departures of key management personnel;
	•	increases to our asset retirement obligations;
	•	adverse actions taken by our stockholders;
	•	negative speculation in the press or investment community; and
	•	adverse general market and economic conditions.

	We do not anticipate paying any dividends on our common stock in the foreseeable future.

	Mariner stockholders will experience substantial and immediate dilution as a result of the merger, and may experience dilution of their ownership interests due to the future issuance of additional shares of our common stock, which could have an adverse effect on our stock price.

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	Provisions in our organizational documents and under Delaware law could delay or prevent a change in control of our company, which could adversely affect the price of our common stock.

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	•	the volatility of oil and natural gas prices;
	•	discovery, estimation, development and replacement of oil and natural gas reserves;
	•	cash flow, liquidity and financial position;
	•	business strategy;
	•	amount, nature and timing of capital expenditures, including future development costs;
	•	availability and terms of capital;
	•	timing and amount of future production of oil and natural gas;
	•	availability of drilling and production equipment;
	•	operating costs and other expenses;
	•	prospect development and property acquisitions;
	•	marketing of oil and natural gas;
	•	competition in the oil and natural gas industry;
	•	the impact of weather and the occurrence of natural disasters such as fires, floods and other catastrophic events and natural disasters;
	•	governmental regulation of the oil and natural gas industry;
	•	developments in oil-producing and natural gas-producing countries;
	•	the proposed merger, including strategic plans, expectations and objectives for future operations, the completion of those transactions, and the realization of expected benefits from the transactions; and
	•	disruption from the merger making it more difficult to manage Mariner’s business.

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				September 30,
				2005
				(in millions)
Long-term debt:
	Credit facility— revolving note due March 2007			$	75.0
	Promissory note to former indirect stockholder(1)				4.0
		Total long-term debt			79.0
Stockholders’ equity(2)					178.6
		Total capitalization		$	257.6

(1)	For a description of the promissory note to our former indirect stockholder, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations— JEDI Term Promissory Note.”
(2)	Reflects the receipt of net proceeds from the sale of 3.6 million shares reduced by approximately $1.9 million of offering costs.

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Assumed offering price per share							$	20.00
	Net tangible book value per share at September 30, 2005		$	5.01
	Increase per share attributable to new investors			-0-
Net tangible book value per share after this offering								5.01
Dilution per share to new investors							$	14.99

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				Post-2004 Merger													Pre-2004 Merger
												Period from					Period from
								Period from				March 3,					January 1,
				Nine Months				March 3,				2004					2004
				Ended				2004 through				through					through				Year Ended December 31,
				September 30,				September 30,				December 31,					March 2,
				2005				2004				2004					2004				2003				2002				2001				2000
				(in millions, except per share data)
Statement of Operations Data:
	Total revenues(1)			$	151.2			$	122.5			$	174.4				$	39.8			$	142.5			$	158.2			$	155.0			$	121.1
	Lease operating expenses				20.2				15.1				21.4					4.1				24.7				26.1				20.1				17.2
	Transportation expenses				1.7				3.7				1.9					1.1				6.3				10.5				12.0				7.8
	Depreciation, depletion and amortization				43.4				37.4				54.3					10.6				48.3				70.8				63.5				56.8
	Impairment of production equipment held for use				0.5				1.0				1.0					—				—				—				—				—
	Derivative settlement				—				—				—					—				3.2				—				—				—
	Impairment of Enron related receivables				—				—				—					—				—				3.2				29.5				—
	General and administrative expenses				26.7				6.2				7.6					1.1				8.1				7.7				9.3				6.5
	Operating income				58.7				59.1				88.2					22.9				51.9				39.9				20.6				32.8
	Interest income				0.7				0.2				0.2					0.1				0.8				0.4				0.7				0.1
	Interest expense				(5.4	)			(4.4	)			(6.0	)				—				(7.0	)			(10.3	)			(8.9	)			(11.0	)
	Income before income taxes				54.0				54.9				82.4					23.0				45.7				30.0				12.4				21.9
	Provision for income taxes				(18.4	)			(19.2	)			(28.8	)				(8.1	)			(9.4	)			—				—				—
	Income before cumulative effect of change in accounting method net of tax effects				35.6				35.7				53.6					14.9				36.3				30.0				12.4				21.9
	Income before cumulative effect per common share
		Basic			1.10				1.20				1.80					.50				1.22				1.01				.42				.74
		Diluted			1.07				1.20				1.80					.50				1.22				1.01				.42				.74
	Cumulative effect of changes in accounting method				—				—				—					—				1.9				—				—				—
	Net income			$	35.6			$	35.7			$	53.6				$	14.9			$	38.2			$	30.0			$	12.4			$	21.9
	Net income per common share
		Basic			1.10				1.20				1.80					.50				1.29				1.01				.42				.74
		Diluted			1.07				1.20				1.80					.50				1.29				1.01				.42				.74
Capital Expenditure and Disposal Data:
	Exploration, including leasehold/seismic			$	23.6			$	35.7			$	40.4				$	7.5			$	31.6			$	40.4			$	66.3			$	46.7
	Development and other				106.8				50.2				93.2					7.8				51.7				65.7				98.2				61.4
	Proceeds from property conveyances				—				—				—					—				(121.6	)			(52.3	)			(90.5	)			(29.0	)
	Total capital expenditures net of proceeds from property conveyances			$	130.4			$	85.9			$	133.6				$	15.3			$	(38.3	)		$	53.8			$	74.0			$	79.1

(1)	Includes effects of hedging.

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			Post-2004 Merger									Pre-2004 Merger
												December 31,
			September 30,				December 31,
			2005				2004					2003				2002				2001				2000
			(in millions)
Balance Sheet Data:(1)
	Property and equipment, net, full cost method		$	393.3			$	303.8				$	207.9			$	287.6			$	290.6			$	287.8
	Total assets			502.2				376.0					312.1				360.2				363.9				335.4
	Long-term debt, less current maturities			79.0				115.0					—				99.8				99.8				129.7
	Stockholder’s equity			178.6				133.9					218.2				170.1				180.1				141.9
	Working capital (deficit)(2)			(30.2	)			(18.7	)				38.3				(24.4	)			(19.6	)			(15.4	)

(1)	Balance sheet data as of December 31, 2004 reflects purchase accounting adjustments to oil and gas properties, total assets and stockholder’s equity resulting from the acquisition of our former indirect parent on March 2, 2004.
(2)	Working capital (deficit) excludes current derivative assets and liabilities, deferred tax assets and restricted cash.

		Post-2004 Merger													Pre-2004 Merger
										Period from					Period from
						Period from				March 3,					January 1,
		Nine Months				March 3,				2004					2004
		Ended				2004 through				through					through				Year Ended December 31,
		September 30,				September 30,				December 31,					March 2,
		2005				2004				2004					2004				2003				2002				2001				2000
		(in millions)
Other Financial Data:
EBITDA(1)		$	102.7			$	97.5			$	143.5				$	33.4			$	100.3			$	113.9			$	113.6			$	89.6
Net cash provided by operating activities			135.4				96.8				135.9					20.3				103.5				60.3				113.5				63.9
Net cash (used) provided by investing activities			(142.1	)			(85.9	)			(133.6	)				(15.3	)			38.3				(53.8	)			(74.0	)			(79.1	)
Net cash (used) provided by financing activities			8.7				(74.9	)			64.9					—				(100.0	)			—				(30.0	)			17.4
Reconciliation of Non-GAAP Measures:
EBITDA(1)		$	102.7			$	97.5			$	143.5				$	33.4			$	100.3			$	113.9			$	113.6			$	89.6
Changes in working capital			25.1				9.7				6.9					(13.2	)			21.8				(20.4	)			7.5				(15.5	)
Non-cash hedge gain(2)			(3.6	)			(5.1	)			(7.9	)				—				(2.0	)			(23.2	)			—				—
Amortization/other			0.9				0.5				0.8					—				—				(0.1	)			0.6				0.7
Stock compensation expense			17.6				—				—					—				—				—				—				—
Net interest expense			(4.7	)			(4.2	)			(5.8	)				0.1				(6.2	)			(9.9	)			(8.2	)			(10.9	)
Income tax expense			(2.6	)			(1.6	)			(1.6	)				—				(10.4	)			—				—				—
Net cash provided by operating activities		$	135.4			$	96.8			$	135.9				$	20.3			$	103.5			$	60.3			$	113.5			$	63.9

(1)

EBITDA means earnings before interest, income taxes, depreciation, depletion and amortization. For the nine months ended September 30, 2005, EBITDA includes $17.6 million in non-cash stock compensation expense related to restricted stock and stock options granted in 2005. We believe that EBITDA is a widely accepted financial indicator that provides additional information about our ability to meet our future requirements for debt service, capital expenditures and working capital, but EBITDA should not be considered in isolation or as a substitute for net income, operating income, net cash provided by operating activities or any other measure of financial performance presented in

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	accordance with generally accepted accounting principles or as a measure of a company’s profitability or liquidity.
(2)	In accordance with SFAS No. 133 “Accounting for Derivative Instruments and Hedging Activities,” as amended by SFAS No. 137 and No. 138, we de-designated our contracts effective December 2, 2001 after the counterparty (an affiliate of Enron Corp.) filed for bankruptcy and recognized all market value changes subsequent to such de-designation in our earnings. The value recorded up to the time of de-designation and included in Accumulated Other Comprehensive Income (“AOCI”), has reversed out of AOCI and into earnings as the original corresponding production, as hedged by the contracts, is produced. We have designated subsequent hedge contracts as cash flow hedges with gains and losses resulting from the transactions recorded at market value in AOCI, as appropriate, until recognized as operating income in our Statement of Operations as the physical production hedged by the contracts is delivered.

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	•	incur indebtedness;
	•	grant certain liens;
	•	merge or consolidate with another entity;
	•	sell assets except in the ordinary course of business;
	•	make certain loans and investments; and
	•	permit trade payables to exceed 90 days.

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												Mariner
				Mariner				Merger				Pro Forma
				Historical				Adjustments(1)				Combined
				(in thousands)
ASSETS
Current Assets:
	Cash and cash equivalents			$	4,564			$	—			$	4,564
	Receivables				50,259				—				50,259
	Deferred tax asset				30,480				—				30,480
	Prepaid expenses and other				18,732				2,874	(2)			21,606
		Total current assets			104,035				2,874				106,909
Property and Equipment, net					393,258				1,463,846	(3)			1,857,104
Goodwill					—				142,000	(3)			142,000
Other Assets, net of amortization					4,916				7,597	(2)			12,513
		TOTAL ASSETS		$	502,209			$	1,616,317			$	2,118,526
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
	Accounts payable			$	14,573			$	—			$	14,573
	Accrued liabilities				88,993				32,491	(2)			121,484
	Accrued interest				141				—				141
	Derivative liability				76,902				108,031	(2)			184,933
		Total current liabilities			180,609				140,522				321,131
Long-Term Liabilities:
	Abandonment liability				26,314				116,203	(2)			142,517
	Deferred income tax				6,468				168,852	(4)			175,320
	Derivative liability				28,221				17,203	(2)			45,424
	Bank debt				75,000				200,000	(5)			275,000
	Note payable				4,000				—				4,000
	New debt				—				—				—
	Other long-term liabilities				3,000				—				3,000
		Total long-term liabilities			143,003				502,258				645,261
Stockholders’ Equity:
	Common stock				4				5	(6)			9
	Additional paid-in capital				171,667				973,532	(3)			1,145,199
	Unearned compensation				(14,548	)			—				(14,548	)
	Accumulated other comprehensive (loss)				(67,708	)			—				(67,708	)
	Accumulated retained earnings				89,182				—				89,182
		Total stockholders’ equity			178,597				973,537				1,152,134
		TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	502,209			$	1,616,317			$	2,118,526

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								Forest Energy								Mariner
				Mariner				Resources, Inc.				Merger				Pro Forma
				Historical				Historical(7)				Adjustments(1)				Combined
				(in thousands, except per share data)
Revenues:
	Oil & gas sales			$	148,492			$	326,722			$	—			$	475,214
	Other revenues				2,753				—				—				2,753
		Total revenues			151,245				326,722				—				477,967
Costs and Expenses:
	Lease operating expenses				20,170				59,379				—				79,549
	Transportation expenses				1,697				2,484				—				4,181
	General and administrative expenses				26,726				—				—				26,726
	Depreciation, depletion and amortization				43,457				—				201,255	(8)			244,712
	Impairment of production equipment held for use				498				—				—				498
		Total costs and expenses			92,548				61,863				201,255				355,666
OPERATING INCOME					58,697				264,859				(201,255	)			122,301
Interest:
	Income				696								—				696
	Expense, net of amounts capitalized				(5,416	)							(8,010	)(9)			(13,426	)
Income before taxes					53,977								(209,265	)			109,571
Provision for income taxes					(18,414	)							(19,936	)(10)			(38,350	)
NET INCOME					35,563								(229,201	)			71,221
Earnings per share:
Net Income per share—basic					1.10												0.86
Net Income per share—diluted					1.07												0.85
Weighted average shares outstanding—basic					32,438								50,637				83,075
Weighted average shares outstanding—diluted					33,313								50,637				83,950

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								Forest Energy								Mariner
				Mariner				Resources, Inc.				Merger				Pro Forma
				Historical				Historical(7)				Adjustments(1)				Combined
				(in thousands, except per share data)
Revenues:
	Oil & gas sales			$	214,187			$	453,139			$	—			$	667,326
	Other revenues				—				—				—				—
		Total revenues			214,187				453,139				—				667,326
Costs and Expenses:
	Lease operating expenses				25,484				81,627				—				107,111
	Transportation expenses				3,029				2,175				—				5,204
	General and administrative expenses				8,772				—				—				8,772
	Depreciation, depletion and amortization				64,911				—				303,261	(8)			368,172
	Impairment of production equipment held for use				957				—				—				957
		Total costs and expenses			103,153				83,802				303,261				490,216
OPERATING INCOME					111,034				369,337				(303,261	)			177,110
Interest:
	Income				316								—				316
	Expense, net of amounts capitalized				(6,050	)							(7,840	)(9)			(13,890	)
Income before taxes					105,300								(311,101	)			163,536
Provision for income taxes					(36,855	)							(20,383	)(10)			(57,238	)
NET INCOME					68,445								(331,484	)			106,298
Earnings per share:
Net Income per share—basic					2.30												1.32
Net Income per share—diluted					2.30												1.32
Weighted average shares outstanding—basic					29,748								50,637				80,385
Weighted average shares outstanding—diluted					29,748								50,637				80,385

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(1)	Transaction costs consisting of accounting, consulting and legal fees are anticipated to be approximately $12 million. These costs are directly attributable to the transaction and have been excluded from the pro forma financial statements as they represent material nonrecurring charges.
(2)	To record other current and long-term assets that we will receive in the spin-off and liabilities that we will assume as a result of the spin-off reflected at their estimated fair market values, including inventory of $2.1 million, abandonment escrows of $0.7 million, gas imbalances of $7.6 million, asset retirement obligations of $146.6 million and derivative liabilities of $125.2 million.
(3)	To record the preliminary purchase price allocation to the fair value of assets acquired, including oil and gas properties and goodwill. These adjustments also adjust depreciation, depletion and amortization expense to give effect to the acquisition of the Forest Gulf of Mexico operations and their step-up in value using the unit of production method under the full cost method of accounting.
(4)	To record the deferred tax position of the combined company, inclusive of the deferred tax gross-up in connection with the acquisition.
(5)	To record $200.0 million of debt that Forest Energy Resources, Inc. will incur under the terms of the distribution agreement. The actual amount of debt to be incurred will be adjusted to reflect the net cash proceeds generated by the Forest Gulf of Mexico operations since June 30, 2005 pursuant to the terms of the distribution agreement. Mariner plans to refinance the debt, which will mature 90 days after the closing, with a revolving credit facility that matures on the fourth anniversary of the closing. Forest Energy Resources, Inc. will be primarily liable for all indebtedness incurred in connection with the spin-off or any refinancing thereof.
(6)	To record issuance of 50,637,010 shares of common stock at par value of $.0001 per share.
(7)	The Forest Gulf of Mexico operations historically have been operated as part of Forest’s total oil and gas operations. No historical GAAP-basis financial statements exist for the Forest Gulf of Mexico operations on a stand-alone basis; however, statements of revenues and direct operating expenses are presented for the year ended December 31, 2004 (audited) and for the nine months ended September 30, 2005 (unaudited).
(8)	To adjust depreciation, depletion and amortization expense to give effect to the acquisition of the Forest Gulf of Mexico operations and their step-up in value using the unit of production method under the full cost method of accounting.
(9)	To adjust interest expense to give effect to the financing activities in connection with the organization of Forest Energy Resources, Inc. assuming an interest rate of 5.34% for the nine months ended September 30, 2005 and 3.92% for the year ended December 31, 2004 based on the terms of the senior term loan facility to be obtained by Forest Energy Resources. The interest rates used reflect 30-day LIBOR plus 1.50%, or 5.34% as of September 30, 2005 and 3.92% as of December 31, 2004. A change in interest rates of 1/8 percent would result in a change in interest expense of approximately $0.1 million and $0.2 million for the nine months ended September 30, 2005, and the year ended December 31, 2004, respectively.

(10)	To record income tax expense on the combined company results of operations based on a statutory combined federal and state tax rate of 35%.

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														Forest Energy Resources, Inc.
		Mariner Historical												Historical												Mariner Pro Forma Combined
										Natural Gas												Natural Gas												Natural Gas
		Oil				Natural Gas				Equivalent				Liquids				Natural Gas				Equivalent				Liquids				Natural Gas				Equivalent
		(Mbbl)				(MMcf)				(Mmcfe)				(Mbbl)				(MMcf)				(Mmcfe)				(Mbbl)				(MMcf)				(Mmcfe)
December 31, 2003			13,079				127,584				206,060				11,357				295,347				363,489				24,436				422,931				569,549
Revisions of previous estimates			1,249				19,797				27,291				1,693				(2,860	)			7,298				2,942				16,937				34,589
Extensions, discoveries and other additions			2,225				28,334				41,684				630				14,449				18,229				2,855				42,783				59,913
Sales of reserves in place			—				—				—				—				—				—				—				—				—
Production			(2,298	)			(23,782	)			(37,570	)			(3,230	)			(61,684	)			(81,064	)			(5,528	)			(85,466	)			(118,634	)
Purchases of reserves in place			—				—				—				1,200				24,556				31,756				1,200				24,556				31,756
December 31, 2004			14,255				151,933				237,465				11,650	(1)			269,808				339,708				25,905	(1)			421,741				577,173

(1)	Includes 598 Mbbls of natural gas liquids.

Forest Energy Resources, Inc.

Mariner Historical

Historical

Mariner Pro Forma Combined

Natural Gas

Natural Gas

Natural Gas

Oil

Natural Gas

Equivalent

Liquids

Natural Gas

Equivalent

Liquids

Natural Gas

Equivalent

(Mbbl)

(MMcf)

(Mmcfe)

(Mbbl)

(MMcf)

(Mmcfe)

(Mbbl)

(MMcf)

(Mmcfe)

December 31, 2004

6,339

71,361

109,395

9,471

201,759

258,585

15,810

273,120

367,980

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			For the Year Ending December 31, 2004
							Forest Energy				Mariner Pro
			Mariner				Resources, Inc.				Forma
			Historical				Historical				Combined
Future cash inflows			$	1,601,240			$	2,155,217			$	3,756,457
Future production costs				(308,190	)			(272,020	)			(580,210	)
Future development costs				(193,689	)			(357,592	)			(551,281	)
Future income taxes				(285,701	)			(412,477	)			(698,178	)
Future net cash flows				813,660				1,113,128				1,926,788
Discount of future net cash flows at 10% per annum				(319,278	)			(187,291	)			(506,569	)
Standardized measure of discounted future net cash flows			$	494,382			$	925,837			$	1,420,219
Balance, beginning of period			$	418,159			$	949,421			$	1,367,580
Increase (decrease) in discounted future net cash flows:
	Sales and transfers of oil and gas produced, net of production costs			(185,673	)			(426,405	)			(612,078	)
	Net changes in prices and production costs			27,767				11,628				39,395
	Extensions and discoveries, net of future development and production costs			102,905				88,999				191,904
	Development costs during period and net change in development costs			44,417				79,642				124,059
	Revision of previous quantity estimates			89,814				28,701				118,515
	Sales of reserves in place			—				—				—
	Net change in income taxes			(27,634	)			(28,550	)			(56,184	)
	Purchases of reserves in place			—				100,681				100,681
	Accretion of discount before income taxes			41,816				121,720				163,536
	Changes in production rates (timing) and other			(17,189	)			—				(17,189	)
Balance, end of period			$	494,382			$	925,837			$	1,420,219

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	•	our high-quality assets with geographic and geological diversity;
	•	our successful track record of finding and developing oil and gas reserves; and
	•	our depth of operating experience.

	•	Our deepwater projects have the potential to provide large reserves, high production volumes and substantial cash flow. Approximately 65 Bcfe of our undeveloped estimated proved reserves as of December 31, 2004, are located in our high-impact deepwater projects—Swordfish, Pluto, Rigel, Baccarat, and Daniel Boone. The Baccarat project commenced production in July 2005 (although production was shut-in due to Hurricane Rita and recommenced in January 2006), and the Swordfish project commenced production in October 2005. Notwithstanding delays caused primarily by 2005 hurricane activity, we believe Pluto and Rigel will commence production in the second quarter of 2006. Proved undeveloped reserves attributable to those projects have been recategorized as proved developed reserves. Daniel Boone is currently scheduled for production in 2008.
	•	The Gulf of Mexico is an area that offers substantial growth opportunities, and we expect to continue to generate shelf, deep shelf and deepwater Gulf of Mexico prospects. The Forest Gulf of Mexico assets will more than double our existing undeveloped acreage position to approximately 465,000 net acres and increase our total net leasehold acreage offshore to nearly 1 million acres, providing numerous exploration, exploitation and development opportunities. We believe the additional acreage also will provide increased exposure to farm-out opportunities from other oil and gas operators. Our team of geoscientists currently has access to seismic data from multiple, recent vintage 3-D seismic databases covering more than 6,600 blocks in the Gulf of Mexico that we intend to continue to use to develop prospects on acreage being evaluated for leasing and to develop and further refine prospects on our expanded acreage position. The combination of our

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		undeveloped acreage position, inventory of development prospects, seismic data and technical knowledge should enhance our ability to select projects with the greatest return potential for future development. We will also gain access to a significant infrastructure in the shelf that we believe will provide substantial cost efficiencies to the combined operations.
	•	Our West Texas assets provide stable cash flow and long-lived reserves, with significant development opportunities. In West Texas, during the three years ended December 31, 2004, we drilled 105 wells, all commercially successful, added approximately 76 Bcfe of estimated proved reserves, and increased our average daily production by more than 400%. Our 52 Bcfe of undeveloped estimated proved reserves in West Texas includes 162 locations. Our recent West Texas acquisition adds to our asset base an approximate 35% working interest in over 200 existing producing wells and, we believe, will provide future infill development opportunities, much like our Aldwell unit. This recent acquisition, in conjunction with our existing West Texas acreage, gives Mariner an inventory of multi-year development drilling opportunities.

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	•	reduce our concentration risk;
	•	provide many exploration, exploitation and development opportunities;
	•	enable us to increase the number of our internally-generated prospects;
	•	expand our sphere of influence and enhance our ability to participate in prospects generated by other operators; and
	•	add a significant cash flow generating resource that will improve our ability to compete effectively in the Gulf of Mexico and provide funding for acquisition projects.

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	Recent Developments

	Nine Months Ended September 30, 2005 Highlights

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	2004 Highlights

	Production

57

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	Oil and Gas Property Costs

	Oil and Gas Reserves

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		Net Proved
		Undeveloped
		Reserves				Year
Property		(Bcfe)(1)				Added				Year Converted to Proved Developed or Sold
Mississippi Canyon 718 (Pluto)(2)			25.1				1998			2000 (100% converted to proved developed)
Ewing Bank 966 (Black Widow)			14.0				1999			2000 (100% converted to proved developed)
Mississippi Canyon 773 (Devils Tower)			28.0				2000			2001 (100% of Mariner’s interest sold)
Mississippi Canyon 305 (Aconcagua)			19.2				2000			2001 (100% of Mariner’s interest sold)
Green Canyon 472/473 (King Kong)			25.5				2000			2002 (100% converted to proved developed)
Green Canyon 516 (Yosemite)			14.9				2001			2002 (100% converted to proved developed)
East Breaks 579 (Falcon)			66.8				2001			2002 (50% of Mariner’s interest sold) 2003 (all of Mariner’s remaining interest sold)
Viosca Knoll 917 (Swordfish)			13.4				2001			2005 (100% converted to proved developed)
Green Canyon 178 (Baccarat)			4.0				2004			2005 (100% converted to proved developed)
Mississippi Canyon 296/252 (Rigel)			22.4				2003			2005 (75% converted to proved developed/ 25% remains undeveloped)

(1)	Net proved undeveloped reserves attributable to the project in the year it was first added to our proved reserves.
(2)	This field was shut-in in April 2004 pending the drilling of a new well and installation of an extension to the existing infield flowline and umbilical. As a result, as of December 31, 2004, 9.0 Bcfe of our net proved reserves attributable to this project were classified as proved undeveloped reserves. We expect production from Pluto to recommence in the second quarter of 2006.

Net Proved

Undeveloped

Year Expected to

Reserves

Year

Convert to Proved

Property

(Bcfe)(1)

Added

Developed Status

Green Canyon 646 (Daniel Boone)

16.4

2003

2007

Atwater Valley 380/381/382/425/426 (Bass Lite)

30.7

2005

2007

(1)	Net proved undeveloped reserves attributable to the project as of June 30, 2005.

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	Oil and Natural Gas Prices and Hedging Activities

	Operating Costs

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	Oil and Gas Properties

	Proved Reserves

	Compensation Expense

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	Revenue Recognition

	Income Taxes

	Capitalized Interest Costs

	Accrual for Future Abandonment Costs

	Hedging Program

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	Use of Estimates in the Preparation of Financial Statements

	Nine Months Ended September 30, 2005 compared to Nine Months Ended September 30, 2004

						Non-GAAP
						Combined				Post-Merger				Pre-Merger
		Nine Months Ended								Period from				Period from
		September 30,								March 3, 2004				January 1, 2004
										through September 30,				through March 2,
Summary Operating Information:		2005				2004				2004				2004
		(in thousands, except average sales price)
Net production:
Oil (MBbls)			1,336				1,748				1,335				413
Natural gas (MMcf)			14,508				17,959				13,726				4,233
Total (Mmcfe)			22,521				28,444				21,731				6,713
Average daily production (Mmcfe/d)			82				104				102				112
Hedging activities:
Oil revenues (loss)		$	(13,421	)		$	(6,874	)		$	(6,188	)		$	(686	)
Gas revenues (loss)			(9,979	)			(1,010	)			(2,441	)			1,431
Total hedging revenues (loss)		$	(23,400	)		$	(7,884	)		$	(8,629	)		$	745

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						Non-GAAP
						Combined				Post-Merger				Pre-Merger
		Nine Months Ended								Period from				Period from
		September 30,								March 3, 2004				January 1, 2004
										through September 30,				through March 2,
Summary Operating Information:		2005				2004				2004				2004
		(in thousands, except average sales price)
Average Sales Prices:
Oil (per Bbl) realized(1)		$	40.12			$	32.78			$	33.41			$	30.75
Oil (per Bbl) unhedged			50.17				36.71				38.05				32.41
Natural gas (per Mcf) realized(1)			6.54				5.85				5.68				6.39
Natural gas (per Mcf) unhedged			7.23				5.90				5.86				6.05
Total natural gas equivalent ($/Mcfe) realized(1)			6.59				5.71				5.64				5.92
Total natural gas equivalent ($/Mcfe) unhedged			7.63				5.98				6.04				5.81
Oil and gas revenues:
Oil sales		$	53,579			$	57,285			$	44,576			$	12,709
Gas sales			94,913				105,005				77,950				27,055
Total oil and gas revenues		$	148,492			$	162,290			$	122,526			$	39,764
Other revenues			2,753				—				—				—
Lease operating expenses			20,170				19,194				15,073				4,121
Transportation expenses			1,697				4,814				3,744				1,070
Depreciation, depletion and amortization			43,457				48,094				37,464				10,630
General and administrative expenses			26,726				7,305				6,174				1,131
Net interest expense (income)			4,720				4,127				4,213				(86	)
Income before taxes			53,977				77,799				54,901				22,898
Provision for income taxes			18,414				27,293				19,221				8,072

(1)	Average realized prices include the effects of hedges.

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	Year Ended December 31, 2004 compared to Year Ended December 31, 2003

						Non-GAAP
						Combined				Post-Merger				Pre-Merger
										Period from				Period from
		Year Ended December 31,								March 3, 2004				January 1, 2004
										through December 31,				through March 2,
Summary Operating Information:		2003				2004				2004				2004
		(in thousands, except average sales price)
Net production:
Oil (MBbls)			1,600				2,298				1,885				413
Natural gas (MMcf)			23,772				23,782				19,549				4,233
Total (Mmcfe)			33,374				37,569				30,856				6,713
Average daily production (Mmcfe/d)			91				103				101				112
Hedging activities:
Oil revenues (loss)		$	(4,969	)		$	(12,299	)		$	(11,613	)		$	(686	)
Gas revenues (loss)			(24,494	)			(7,498	)			(8,929	)			1,431
Total hedging revenues (loss)		$	(29,463	)		$	(19,797	)		$	(20,542	)		$	745
Average Sales Prices:
Oil (per Bbl) realized(1)		$	23.74			$	33.17			$	33.69			$	30.75
Oil (per Bbl) unhedged			26.85				38.52				39.85				32.41
Natural gas (per Mcf) realized(1)			4.40				5.80				5.67				6.39
Natural gas (per Mcf) unhedged			5.43				6.12				6.13				6.05
Total natural gas equivalent ($/Mcfe) realized(1)			4.27				5.70				5.65				5.92
Total natural gas equivalent ($/Mcfe) unhedged			5.15				6.23				6.32				5.81

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						Non-GAAP
						Combined				Post-Merger				Pre-Merger
										Period from				Period from
		Year Ended December 31,								March 3, 2004				January 1, 2004
										through December 31,				through March 2,
Summary Operating Information:		2003				2004				2004				2004
		(in thousands, except average sales price)
Oil and gas revenues:
Oil sales		$	37,992			$	76,207			$	63,498			$	12,709
Gas sales			104,551				137,980				110,925				27,055
Total oil and gas revenues		$	142,543			$	214,187			$	174,423			$	39,764
Lease operating expenses			24,719				25,484				21,363				4,121
Transportation expenses			6,252				3,029				1,959				1,070
Depreciation, depletion and amortization			48,339				64,911				54,281				10,630
General and administrative expenses			8,098				8,772				7,641				1,131
Impairment of production equipment held for use			—				957				957				—
Net interest expense (income)			6,225				5,734				5,820				(86	)
Income before taxes and change in accounting method			45,688				105,300				82,402				22,898
Provision for income taxes			9,387				36,855				28,783				8,072

(1)	Average realized prices include the effects of hedges.

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	Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

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	Cash Flows and Liquidity

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										Pre-Merger
		Combined				Post-Merger
														Year Ended
						Period from				Period from				December 31,
		Year Ended				March 3, 2004 to				January 1, 2004 to
		December 31, 2004				December 31, 2004				March 2, 2004				2003				2002
		(in millions)
Cash flows provided by operating activities		$	156.2			$	135.9			$	20.3			$	103.5			$	60.3

										Pre-Merger
		Combined				Post-Merger
														Year Ended
						Period from				Period from				December 31,
		Year Ended				March 3, 2004 to				January 1, 2004 to
		December 31, 2004				December 31, 2004				March 2, 2004				2003				2002
		(in millions)
Cash flows used in (provided by) investing activities		$	148.9			$	133.6			$	15.3			$	(38.3	)		$	53.8

										Pre-Merger
		Combined				Post-Merger
														Year Ended
						Period from				Period from				December 31,
		Year Ended				March 3, 2004 to				January 1, 2004 to
		December 31, 2004				December 31, 2004				March 2, 2004				2003				2002
		(in millions)
Cash flows used in financing activities		$	(64.9	)		$	(64.9	)			—			$	(100.0	)			—

	Commodity Prices and Related Hedging Activities

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											September 30, 2005
							Fixed				Fair Value
Fixed Price Swaps			Quantity				Price				Gain/(Loss)
											(in millions)
Crude Oil (Bbls)
	October 1—December 31, 2005			138,000			$	25.22			$	(5.7	)
	January 1—December 31, 2006			140,160				29.56				(5.2	)
Natural Gas (MMBtus)
	October 1—December 31, 2005			1,352,400				5.00				(12.3	)
	January 1—December 31, 2006			1,827,547				5.53				(13.6	)
	Total										$	(36.8	)

															September 30, 2005
															Fair Value
Costless Collars			Quantity				Floor				Cap				Gain/(Loss)
															(in millions)
Crude Oil (Bbls)
	October 1—December 31, 2005			57,960			$	35.60			$	44.77			$	(1.2	)
	January 1—December 31, 2006			251,850				32.65				41.52				(6.2	)
	January 1—December 31, 2007			202,575				31.27				39.83				(4.8	)
Natural Gas (MMBtus)
	October 1—December 31, 2005			2,189,600				6.01				8.02				(12.3	)
	January 1—December 31, 2006			7,347,450				5.78				7.85				(29.1	)
	January 1—December 31, 2007			5,310,750				5.49				7.22				(14.7	)
	Total														$	(68.3	)

											December 31, 2004
							Fixed				Fair Value
Fixed Price Swaps			Quantity				Price				Gain/(Loss)
											(in millions)
Crude Oil (Bbls)
	January 1—December 31, 2005			606,000			$	26.15			$	(10.0	)
	January 1—December 31, 2006			140,160				29.56				(1.5	)
Natural Gas (MMBtus)
	January 1—December 31, 2005			8,670,159				5.41				(7.0	)
	January 1—December 31, 2006			1,827,547				5.53				(1.9	)
	Total										$	(20.4	)

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															December 31, 2004
															Fair Value
Costless Collars			Quantity				Floor				Cap				Gain/(Loss)
															(in millions)
Crude Oil (Bbls)
	January 1—December 31, 2005			229,950			$	35.60			$	44.77			$	(0.4	)
	January 1—December 31, 2006			251,850				32.65				41.52				(0.7	)
	January 1—December 31, 2007			202,575				31.27				39.83				(0.6	)
Natural Gas (MMBtus)
	January 1—December 31, 2005			2,847,000				5.73				7.80				0.4
	January 1—December 31, 2006			3,514,950				5.37				7.35				(0.3	)
	January 1—December 31, 2007			1,806,750				5.08				6.26				(0.4	)
	Total														$	(2.0	)

		Year Ended December 31,
		2004				2003				2002
		(dollars in millions)
Natural Gas
Quantity settled (MMBtus)			18,823,063				25,520,000				—
Increase (Decrease) in Natural Gas Sales		$	(10.8	)		$	(27.1	)			—
Crude Oil
Quantity settled (Mbbls)			1,554				730				353
Increase (Decrease) in Crude Oil Sales		$	(16.9	)		$	(5.0	)		$	(0.8	)

	Interest Rate Hedges

	Credit Facility

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	•	maintain a ratio, as of the last day of each fiscal quarter, of (a) current assets (excluding cash posted as collateral to secure hedging obligations) plus unused availability under the credit facility to (b) current liabilities (excluding the current portion of debt and current portion of hedge liabilities) of not less than 1.00 to 1.00;
	•	maintain a ratio, as of the last day of each fiscal quarter, of (a) EBITDA (earnings before interest, taxes, depreciation, amortization and depletion) to (b) the sum of interest expense and maintenance capital expenditures for such period and 20% (on an annualized basis) of outstanding advances, of not less than 1.20 to 1.00; and
	•	maintain a ratio, as of the last day of each fiscal quarter, of (a) total debt to (b) EBITDA of not greater than 1.75 to 1.00 prior to the issuance of bonds as described in the credit agreement and 3.00 to 1.00 thereafter.

	JEDI Term Promissory Note

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	Capital Expenditures and Capital Resources

											Pre-Merger
			Combined				Post-Merger
															Year Ended
							Period from				Period from				December 31,
			Year Ended				March 3, 2004 to				January 1, 2004
			December 31, 2004				December 31, 2004				to March 2, 2004				2003				2002
			(in millions)
Capital expenditures:
	Leasehold acquisition		$	4.8			$	4.4			$	0.4			$	4.8			$	14.9
	Oil and natural gas exploration			43.0				35.9				7.1				26.8				25.5
Oil and natural gas development				88.6				82.0				6.6				44.3				55.3
Proceeds from property conveyances				—				—				—				(121.6	)			(52.3	)
Acquisitions				4.9				4.9				—				—				—
Other items (primarily capitalized overhead and interest)				7.6				6.4				1.2				7.4				10.4
Total capital expenditures, net of proceeds from property conveyances			$	148.9			$	133.6			$	15.3			$	(38.3	)		$	53.8

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						Less
						Than One												More Than
		Total				Year				1-3 Years				3-5 Years				5 Years
		(in millions)
Long-term debt obligations(1)		$	115.0			$	—			$	115.0			$	—			$	—
Interest obligations(2)			0.6				0.5				0.1				—				—
Operating leases			1.1				0.6				0.5				—				—
Abandonment liabilities			24.0				4.7				7.2				7.7				4.4
Derivative liability(3)			22.4				17.0				5.4				—				—
Other long-term liabilities			3.0				2.0				1.0				—				—
Total contractual cash commitments		$	166.1			$	24.8			$	129.2			$	7.7			$	4.4

(1)	As of December 31, 2004, we had incurred debt obligations under our credit facility and the JEDI promissory note that are due as follows: $10 million in 2006; and $105 million in 2007. However, we used a portion of the net proceeds of the private equity placement to repay a portion of amounts outstanding under our credit facility and $6 million under the JEDI promissory note. As of November 30, 2005, we had incurred debt obligations under our credit facility of $75 million and under the JEDI promissory note of $4 million.
(2)	Interest obligations represent approximately 14 months of interest due on the JEDI promissory note at 10%. Future interest obligations under our credit facility are uncertain, due to the variable interest rate on fluctuating balances. Based on a 5.2% weighted average interest rate on amounts outstanding under our credit facility as of December 31, 2004, $5.5 million, $5.5 million and $0.9 million would be due under the credit facility in 2005, 2006 and 2007, respectively.
(3)	As of September 30, 2005, the fair value of the derivative liabilities was $105.1 million, including $76.9 million due in less than one year.

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												Approximate								Date				Estimated
								Mariner				Water				Gross				Production				Proved								Standardized
								Working				Depth				Producing				Commenced/				Reserves				PV10 Value				Measure
				Operator				Interest				(Feet)				Wells(1)				Expected				(Bcfe)				(In $ Millions)(2)				(In $ Millions)
								%
West Texas Permian Basin:
	Aldwell Unit				Mariner				66.5	(3)			Onshore				185				1949				112.7			$	203.8
Gulf of Mexico Deepwater:
	Mississippi Canyon 296/252 (Rigel)				Dominion				22.5				5,200				0			Second Quarter 2006					22.4				82.9
	Viosca Knoll 917/961/962 (Swordfish)				Mariner(4)				15.0				4,700				2			Fourth Quarter 2005					13.4				59.3
	Green Canyon 516 (Yosemite)				ENI				44.0				3,900				1				2002				15.1				66.6
	Mississippi Canyon 718 (Pluto)(5)				Mariner				51.0				2,830				0				1999				9.0				31.7
	Green Canyon 178 (Baccarat)				W&T				40.0				1,400				0			Third Quarter 2005					4.0				14.3
	Green Canyon 472/473 (King Kong)				ENI				50.0				3,850				0				2002				1.2				2.0
Gulf of Mexico Shelf:
	Mississippi Canyon 66 (Ochre)(6)				Mariner				75.0				1,150				0				2004				3.6				11.7
	Other Properties																43								56.1				195.7
		Total:															231								237.5			$	668.0			$	494.4

(1)	Wells producing or capable of producing as of December 31, 2004.
(2)	Please see “—Estimated Proved Reserves” for a definition of PV10 and a reconciliation of PV10 to the standardized measure of discounted future net cash flows.
(3)	We operate the field and own working interests in individual wells ranging from approximately 33% to 84%.
(4)	Mariner served as operator until December 2005, at which time pursuant to certain contractual arrangements, Noble Energy, Inc., a 60% partner in the project, began serving as operator.
(5)	This field was shut-in in April 2004 pending the drilling of a new well and installation of an extension to the existing infield flowline and umbilical. As a result, as of December 31, 2004, 9.0 Bcfe of our net proved reserves attributable to this project were classified as proved undeveloped reserves. We expect production from Pluto to recommence in the second quarter of 2006.
(6)	Field has been shut in since September 2004 due to destruction of host platform by Hurricane Ivan.

	West Texas Permian Basin

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	Gulf of Mexico Deepwater

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	Other Prospects and Activity

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	Gulf of Mexico Shelf

	Other Activity

			Estimated Proved
			Reserve Quantities
							Natural								PV10 Value(3)
			Oil				Gas				Total																Standardized
Geographic Area			(MMbbls)				(Bcf)				(Bcfe)				Developed				Undeveloped				Total				Measure
																											(millions)
															(millions)
West Texas Permian Basin				8.7				62.8				114.8			$	141.1			$	64.4			$	205.5
Gulf of Mexico Deepwater(1)				4.5				59.8				86.7				91.1				219.6				310.7
Gulf of Mexico Shelf(2)				1.1				29.3				36.0				103.2				48.6				151.8
	Total			14.3				151.9				237.5			$	335.4			$	332.6			$	668.0			$	494.4
Proved Developed Reserves				6.3				71.4				109.4

(1)	Deepwater refers to water depths greater than 1,300 feet (the approximate depth of deepwater designation for royalty purposes by the U.S. Minerals Management Service).

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(2)	Shelf refers to water depths less than 1,300 feet and includes an insignificant amount of Gulf Coast onshore properties.
(3)	Please see “—Estimated Proved Reserves” for a definition of PV10 and a reconciliation of PV10 to the standardized measure of discounted future net cash flows.

		At December 31,
		2004				2003				2002
PV10		$	667,975			$	533,544			$	514,995
Future income taxes, discounted at 10%			173,593				115,385				51,423
Standardized measure of discounted future net cash flows		$	494,382			$	418,159			$	463,572

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							Year Ended December 31,
			Nine Months Ended
			September 30, 2005				2004				2003				2002
Production:
	Natural Gas (Bcf)			14.5				23.8				23.8				29.6
	Oil (MMbbls)			1.3				2.3				1.6				1.7
	Total natural gas equivalent (Bcfe)			22.5				37.6				33.4				39.8
Average realized sales price per unit (excluding effects of hedging):
	Natural gas ($/Mcf)		$	7.23			$	6.12			$	5.43			$	3.35
	Oil ($/bbl)			50.17				38.52				26.85				21.60
	Total natural gas equivalent ($/Mcfe)			7.63				6.23				5.15				3.41
Average realized sales price per unit (including effects of hedging):
	Natural gas ($/Mcf)		$	6.54			$	5.80			$	4.40			$	4.03
	Oil ($/bbl)			40.12				33.17				23.74				22.85
	Total natural gas equivalent ($/Mcfe)			6.59				5.70				4.27				3.97
Expenses ($/Mcfe):
	Lease operating		$	0.90			$	0.68			$	0.74			$	0.65
	Transportation			0.08				0.08				0.19				0.26
	General and administrative, net(1)			1.18				0.23				0.24				0.19
	Depreciation, depletion and amortization (excluding impairments)			1.93				1.73				1.45				1.78

(1)	Net of overhead reimbursements received from other working interest owners and amounts capitalized under the full cost accounting method. General and administrative expenses for the nine months ended September 30, 2005 include compensation expense of $17.6 million for restricted stock and options granted in March 2005.

			Total Productive Wells at
			December 31,								December 31,
			2004								2003
			Gross				Net				Gross				Net
Oil				197				127.9				141				101.3
Gas				34				9.5				37				10.1
	Total			231				137.4				178				111.4

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			Developed Acres(1)								Undeveloped Acres(2)
			Gross				Net				Gross				Net
West Texas				22,413				14,448				—				—
Gulf of Mexico Deepwater(3)				79,200				30,275				224,640				124,588
Gulf of Mexico Shelf(4)				130,302				36,979				130,186				84,242
Other Onshore				3,232				732				856				243
	Total			235,147				82,434				355,682				209,073

(1)	Developed acres are acres spaced or assigned to productive wells.
(2)	Undeveloped acres are acres on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas regardless of whether such acreage contains proved reserves.
(3)	Deepwater refers to water depths greater than 1,300 feet (the approximate depth of deepwater designated for royalty purposes by the U.S. Minerals Management Service).
(4)	Shelf refers to water depths less than 1,300 feet.

			Undeveloped Acreage
			Subject to Expiration in the Year Ended December 31,
			2005								2006								2007
			Gross				Net				Gross				Net				Gross				Net
Gulf of Mexico Deepwater				—				—				46,080				12,988				28,800				9,360
Gulf of Mexico Shelf				9,298				3,100				10,760				6,260				46,000				31,183
	Total			9,298				3,100				56,840				19,248				74,800				40,543

				Year Ended December 31,
				2004								2003								2002
				Gross				Net				Gross				Net				Gross				Net
Exploratory wells:
	Producing				7				3.34				6				2.03				2				1.00
	Dry				7				2.65				6				2.35				5				2.10
		Total			14				5.99				12				4.38				7				3.10
Development wells:
	Producing				56				34.84				45				30.07				11				6.65
	Dry				1				0.68				—				—				—				—
		Total			57				35.52				45				30.07				11				6.65
Total wells:
	Producing				63				38.18				51				32.10				13				7.65
	Dry				8				3.33				6				2.35				5				2.10
		Total			71				41.51				57				34.45				18				9.75

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		Percentage of
		Total Revenues
		for Year Ended
		December 31,
Customer		2004				2003				2002
Sempra			*				34	%			—
Bridgeline Gas Distributing Company			27	%			19	%			42	%
Trammo Petroleum Inc.			9	%			14	%			—
Conoco Phillips			*				*				14	%
Duke Energy			*				6	%			9	%
Genesis Crude Oil LP			*				4	%			4	%
Chevron Texaco			18	%			—				—
BP Energy			12	%			—				—

*	Less than 1%

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Water Depth		Royalty Relief
200-400 meters		no royalty payable on the first 105 Bcfe produced
400-800 meters		no royalty payable on the first 315 Bcfe produced
800 meters or deeper		no royalty payable on the first 525 Bcfe produced

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	Transportation and Sale of Natural Gas

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	Regulation of Production

	Environmental Regulations

	•	require acquisition of a permit before drilling commences;
	•	restrict the types, quantities and concentrations of various materials that can be released into the environment in connection with drilling and production activities; and
	•	limit or prohibit construction or drilling activities in certain ecologically sensitive and other protected areas.

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	•	the increased size of the combined company, which would have approximately three times the pro forma daily net production of Mariner on a stand-alone basis, could reduce volatility related to large-scale deepwater projects, and could allow it to participate in larger scale exploratory and development drilling projects and acquisition opportunities than would be available to Mariner on a stand-alone basis;
	•	the merger would be expected to increase Mariner’s estimated proved reserves, on a pro forma basis as of December 31, 2004, by approximately 243%, making Mariner larger on a reserve basis than many of its peer companies, and would more than double Mariner’s undeveloped acreage;
	•	the integration of the businesses and the realization of expected benefits could be facilitated by the fact that Mariner is already active in the Gulf of Mexico with assets that are complementary to the Forest Gulf of Mexico assets;
	•	the merger could generate increased visibility in the capital markets and trading liquidity for the combined company, which could enhance the market valuation of Mariner common stock;
	•	the merger would increase the number of Mariner’s producing fields by approximately 400%, thereby diversifying Mariner’s asset base and reducing Mariner’s dependence on a concentrated number of properties;
	•	the assets comprising the Forest Gulf of Mexico operations, which historically have been used as a cash flow generator for Forest, could be candidates for increased exploitation;

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	•	oil and natural gas prices are currently at or near historical highs, which could increase the revenues and enhance the profitability of the Forest Gulf of Mexico operations;
	•	the merger would be consummated only if approved by the holders of a majority of the Mariner common stock;
	•	the merger is structured as a tax-free reorganization for U.S. federal income tax purposes and, accordingly, would not be taxable either to Mariner or its stockholders;
	•	the board’s belief that the potential financial benefits stemming from the enhanced growth prospects of the combined company outweigh the anticipated direct and indirect costs of the merger;
	•	the terms of the merger agreement permit Mariner to terminate the merger agreement at any time before the stockholder meeting to accept a superior proposal, subject to its obligation to comply with certain procedural requirements and to pay a termination fee and expense reimbursement; and
	•	the opinion, dated September 9, 2005, of Lehman Brothers Inc. to the Mariner board of directors that, as of that date, based upon and subject to the factors and assumptions set forth in the opinion, the exchange ratio in the merger was fair from a financial point of view to Mariner.

	•	the risk that there may be difficulties in combining the business of Mariner and the Forest Gulf of Mexico operations;
	•	the risk that the potential benefits sought in the merger might not be fully realized;
	•	the risk that the proved undeveloped, probable and possible reserves of the Forest Gulf of Mexico operations may never be converted to proved developed reserves;
	•	the risks inherent in owning properties located in the Gulf of Mexico, including the risks of future hurricanes that could damage or destroy the acquired properties;
	•	the risk that current high commodity prices could fall, thereby reducing the profitability of the acquired operations;
	•	the risk that the merger might not be completed;
	•	the fact that, in order to preserve the tax-free treatment of the spin-off, Mariner would be required to abide by restrictions that could reduce its ability to engage in certain business transactions that otherwise might be advantageous;
	•	the fact that under the merger agreement, Mariner could be required to pay Forest a termination fee and expense reimbursement in certain circumstances; and
	•	certain of the other matters described under “Risk Factors” beginning on page 24.

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		2005				2006
Revenue (in millions)		$	230.2			$	421.4
EBITDA (in millions)		$	185.2			$	353.9
Net income (in millions)		$	60.9			$	158.7
Net income per common share		$	1.71			$	4.45
Capital expenditures (in millions)		$	257.4			$	250.5

	•	weighted average common shares outstanding of 35.6 million in both periods;
	•	NYMEX prices for oil and Henry Hub prices for gas, as adjusted for pricing differentials and hedging contracts in place at such date as follows:

		2005				2006
Oil (per Bbl)		$	41.27			$	48.83
Gas (per Mcf)		$	6.86			$	7.87
Total (per Mcfe)		$	6.87			$	7.94

	•	annual production as follows:

		2005				2006
Oil (MBbls)			1.9				2.4
Gas (Bcf)			21.6				38.8
Total (Bcfe)			33.2				53.1

	•	a depreciation, depletion and amortization rate of $1.84 per Mcfe for 2005 and $1.80 per Mcfe for 2006;
	•	an effective income tax rate of 35% in each period; and
	•	various assumptions relating to delays in scheduled commencement of production at Pluto, Swordfish, Ochre and Dice, suspension of production at producing fields and increased capital expenditures due to Hurricane Katrina.

		Six Months Ended
		December 31,
		2005				2006
Revenue (in millions)		$	214.1			$	529.4
EBITDA (in millions)		$	173.5			$	450.5
Net income (in millions)		$	43.9			$	124.3
Net income per common share		$	0.87			$	2.45
Capital expenditures (in millions)		$	123.0			$	202.3

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	•	weighted average common shares outstanding of 50.6 million in each period;
	•	NYMEX prices for oil and Henry Hub prices for gas, as adjusted for pricing differentials and hedging contracts in place at such date as follows:

		Six Months Ended
		December 31,
		2005				2006
Oil (per Bbl)		$	47.42			$	48.41
Gas (per Mcf)		$	6.64			$	7.13
Total (per Mcfe)		$	7.02			$	7.35

	•	production as follows:

		Six Months Ended
		December 31,
		2005				2006
Oil (MBbls)			1.5				2.9
Gas (Bcf)			21.3				54.7
Total (Bcfe)			30.5				72.0

	•	a depreciation, depletion and amortization rate of $3.26 per Mcfe for 2005 and $3.43 per Mcfe for 2006;
	•	an effective income tax rate of 35% in each period;
	•	the allocation from July 1, 2005 to December 31, 2005 of general and administrative expenses as set forth in the distribution agreement;
	•	net hedging losses of $11.7 million for the six months ended December 31, 2005 and $19.5 million in 2006;
	•	various assumptions relating to general and administrative expenses to reflect the allocation set forth in the distribution agreement; and
	•	transaction-related expenses of $12 million for the six months ended December 31, 2005.

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	•	the fact that Mariner’s board of directors unanimously approved the merger, including all directors with no interest in the merger other than their interests as stockholders of Mariner;
	•	the fact that the stockholders of Mariner will be given the opportunity to vote on the merger, and that the merger agreement would not be adopted without the affirmative vote of at least a majority of Mariner’s common stock;
	•	the fact that Mariner does not have a controlling stockholder, and that directors and officers of Mariner own less than 11% of the outstanding stock of Mariner;
	•	the fact that independent financial and legal advisors were retained to assist in the negotiation of the terms of the merger agreement, the distribution agreement and the other ancillary agreements; and
	•	the fact that Mariner received a written opinion from its independent financial advisor as to the fairness, from a financial point of view, of the merger consideration.

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	•	the merger agreement, the distribution agreement, the other transaction agreements and the specific terms of the merger;
	•	publicly available information concerning Mariner that Lehman Brothers believed to be relevant to its analysis, including, without limitation, the Amendment No. 1 to the Registration Statement on Form S-1 filed on July 26, 2005 by Mariner;
	•	publicly available information concerning Forest that Lehman Brothers believed to be relevant to its analysis, including, without limitation, the Annual Report on Form 10-K for the year ended December 31, 2004 and the Quarterly Reports on Form 10-Q for the periods ended March 31, 2005 and June 30, 2005;
	•	financial and operating information with respect to the business, operations and prospects of Mariner as furnished to Lehman Brothers by Mariner, including financial projections and oil and gas reserve estimates as of June 30, 2005 for Mariner as prepared by the management of Mariner;
	•	financial and operating information with respect to the Forest Gulf of Mexico operations as furnished to Lehman Brothers by Forest, including financial projections and oil and gas reserve estimates as of June 30, 2005 for the Forest Gulf of Mexico operations as prepared by the management of Forest;
	•	a comparison of the historical financial results and present financial condition of Mariner and the Forest Gulf of Mexico operations with each other and with those of other companies that Lehman Brothers deemed relevant;
	•	a comparison of the financial terms of the merger with the financial terms of certain other transactions that Lehman Brothers deemed relevant;
	•	commodity prices assumptions used by the management of Mariner, commodity prices assumptions published by Lehman Brothers equity research, and commodity prices as quoted on the NYMEX on August 19, 2005 (collectively the “Commodity Price Assumptions”);
	•	estimates of certain proved reserves generated by third-party reserve engineers as of December 31, 2004 for Mariner and the Forest Gulf of Mexico operations;
	•	the potential pro forma impact of the merger on the current financial condition and future financial performance of Mariner, including the impact on Mariner’s operating metrics, including, the composition of its reserves between oil and gas; the percentage of reserves attributable to onshore, the shelf of the Gulf of Mexico and deepwater Gulf of Mexico; and the ratio of reserves as of June 30, 2005 to 2005 expected production;
	•	the relative contributions of Mariner and the Forest Gulf of Mexico operations to the current and future financial performance of the combined company on a pro forma basis;
	•	the report dated as of September 9, 2005, prepared by the management of Mariner, assessing the damage to the Gulf of Mexico assets of Mariner caused by Hurricane Katrina; and
	•	the report dated as of September 9, 2005, prepared by the management of Forest, assessing the damage to the Gulf of Mexico assets of the Forest Gulf of Mexico operations caused by Hurricane Katrina.

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	Scope of the Discussion

	•	a “U.S. holder” is a beneficial owner of Forest Energy Resources or Mariner common stock that is (1) an individual citizen or resident of the U.S., (2) a corporation or any other entity taxable as a corporation created or organized in or under the laws of the U.S. or of a state of the U.S. or the District of Columbia, (3) a trust (i) in respect of which a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantive decisions of the trust or (ii) that was in existence on August 20, 1996 and validly elected to continue to be treated as a domestic trust, or (4) an estate that is subject to U.S. tax on its worldwide income from all sources;
	•	a “non-U.S. holder” is any holder of Forest Energy Resources or Mariner common stock other than a U.S. holder; and

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	•	the term “U.S. tax” means U.S. federal income tax under the Internal Revenue Code of 1986, as amended.

	•	tax exempt organizations;
	•	financial institutions, insurance companies and broker-dealers;
	•	holders who hold their Forest Energy Resources or Mariner common stock, as applicable, as part of a hedge, straddle, wash sale, synthetic security, conversion transaction or other integrated investment comprised of Forest Energy Resources or Mariner common stock and one or more other investments;
	•	mutual funds;
	•	holders that have a functional currency other than the U.S. dollar;
	•	traders in securities who elect to apply a mark-to-market method of accounting;
	•	holders who acquired their shares in compensatory transactions;
	•	holders who are subject to the alternative minimum tax; or
	•	non-U.S. holders who are or have previously been engaged in the conduct of a trade or business in the U.S. or who have ceased to be U.S. citizens or to be taxed as resident aliens.

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	Material U.S. Tax Consequences of the Merger

	•	Mariner receive an opinion from Baker Botts L.L.P., dated as of the effective date of the merger, to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code; and
	•	Forest and Forest Energy Resources receive an opinion from Weil, Gotshal & Manges LLP, tax counsel to Forest, dated as of the effective date of the merger, to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code.

	•	a Mariner stockholder will not recognize gain or loss pursuant to the merger, and such holder’s tax basis and holding period in Mariner common stock will not be affected by the merger;
	•	a Forest Energy Resources stockholder who exchanges Forest Energy Resources common stock solely for Mariner common stock in the merger will not recognize gain or loss except, as described below, to the extent of any cash received in lieu of fractional shares of Mariner common stock;
	•	the aggregate tax basis in the Mariner common stock a Forest Energy Resources stockholder receives in the merger (including any fractional shares for which cash is received) will be the same as his or her aggregate tax basis in the Forest Energy Resources common stock surrendered in the merger;
	•	the holding period of the Mariner common stock received in the merger by a holder of Forest Energy Resources common stock (including any fractional shares for which cash is received) will include the holding period of Forest Energy Resources common stock that such stockholder surrendered in the merger; and
	•	a Forest Energy Resources stockholder who receives fractional share proceeds as a result of the sale of shares of Mariner common stock by the transfer agent will be treated as if such fractional share had been received by the shareholder as part of the merger and then sold by such stockholder. Accordingly, such stockholder will recognize capital gain or loss equal to the difference between the cash so received and the portion of the tax basis in Mariner common stock that is allocable to such fractional share. Any such capital gain or loss will be treated as a long-term or short-term capital gain or loss based on the holder’s holding period for the Mariner common stock (as determined above). Non-U.S. holders who receive fractional share proceeds may be subject to withholding tax with respect to the fractional share proceeds under special rules governing the disposition of interests in a United States real property holding corporation.

	Material U.S. Federal Tax Consequences to U.S. Holders of Holding and Disposing of Mariner Common Stock

	Distributions on Common Stock

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	Sales or Dispositions of Common Stock

	Information Reporting and Backup Withholding

	U.S. Federal Estate Tax

	Material U.S. Federal Tax Consequences to Non-U.S. Holders of Holding and Disposing of Mariner Common Stock

	Distributions on Common Stock

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	•	in the case of Mariner common stock held by a foreign partnership, the certification requirement will generally be applied to the partners of the partnership and the partnership will be required to provide certain information;
	•	in the case of Mariner common stock held by a foreign trust, the certification requirement will generally be applied to the trust or the beneficial owners of the trust depending on whether the trust is a “foreign complex trust,” “foreign simple trust” or “foreign grantor trust” as defined in the U.S. Treasury Regulations; and
	•	look-through rules will apply for tiered partnerships, foreign simple trusts and foreign grantor trusts.

	Sales or Dispositions of Common Stock

	•	the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the U.S. and, if an income tax treaty applies, is attributable to a permanent establishment maintained by the non-U.S. holder in the U.S.; in these cases, the gain will be taxed on a net income basis at the rates and in the manner applicable to U.S. persons, and if the non-U.S. holder is a foreign corporation, the branch profits tax described above may also apply;
	•	the non-U.S. holder is an individual who is present in the U.S. for 183 days or more in the taxable year of the disposition and meets other requirements; or
	•	Mariner is or has been a “United States real property holding corporation” for U.S. tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the non-U.S. holder held such Mariner common stock.

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	Information Reporting and Backup Withholding

	•	is a U.S. person for U.S. tax purposes;
	•	derives 50% or more of its gross income in specific periods from the conduct of a trade or business in the U.S.;
	•	is a “controlled foreign corporation” for U.S. tax purposes; or
	•	is a foreign partnership, if at any time during its tax year:

	•	one or more of its partners are U.S. persons who in the aggregate hold more than 50% of the income or capital interests in the partnership; or
	•	the foreign partnership is engaged in a U.S. trade or business,

	U.S. Federal Estate Tax

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	Structure of the Merger

	Effective Time of the Merger

	Merger Consideration

	Cancellation of Certain Shares

	Procedure for Surrender of Certificates

	Treatment of Certain Forest Stock Options

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	•	the number of shares of Forest common stock subject to the portion of such option that is unexercisable immediately before the effective time, by
	•	the “option exchange ratio” described below,

	•	the average of the daily closing prices per share of Forest common stock for the last five trading days immediately preceding the effective time of the merger, by
	•	the average of the daily closing prices per share of Mariner common stock for the first five trading days following the effective time of the merger,

	Board of Directors and Officers of Mariner

	•	corporate existence, qualifications to conduct business and corporate standing and power;
	•	corporate authorization, enforceability and actions by the board of directors;
	•	capitalization;
	•	financial statements and undisclosed liabilities;
	•	absence of certain material changes or events since June 30, 2005;
	•	governmental investigations and litigation;
	•	licenses and compliance with laws;

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	•	the registration statements to be filed with the SEC and the proxy statement/ prospectus-information statement related to the Mariner annual meeting of stockholders;
	•	information supplied to governmental authorities;
	•	compliance with environmental laws;
	•	tax matters;
	•	benefit plans;
	•	labor matters;
	•	intellectual property matters;
	•	material contracts;
	•	financial advisor opinion (given only by Mariner);
	•	payment of broker’s and finder’s fees in connection with the merger agreement and other transaction agreements;
	•	takeover statutes (given only by Mariner);
	•	certain findings of the board of directors to approve the merger;
	•	stockholder votes necessary to complete the merger;
	•	absence of requirement for Forest stockholder approval (given only by Forest);
	•	Forest Energy Resources stockholder approval (given only by Forest Energy Resources);
	•	payments to certain affiliated individuals or entities;
	•	title to, and sufficiency of, assets;
	•	loans made to third parties;
	•	oil and gas reserves; and
	•	derivative transactions.

	•	due organization and good standing;
	•	corporate power, authorization and validity of agreements;
	•	information supplied to governmental authorities;
	•	payment of broker’s and finder’s fees in connection with the merger agreement and other transaction agreements; and
	•	rights plan.

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	No Solicitation

	•	solicit, initiate, encourage, facilitate or induce any inquiry, proposal or offer with respect to an acquisition proposal;
	•	participate in any discussions or negotiations regarding, provide nonpublic information with respect to, or otherwise facilitate any acquisition proposal;
	•	engage in discussions with respect to an acquisition proposal;
	•	approve, endorse or recommend an acquisition proposal, except as provided in the merger agreement; or
	•	enter into any agreement related to any acquisition proposal, except as provided by the merger agreement.

	•	any purchase by any person, entity or group, as defined in Section 13(d) of the Exchange Act, of more than 15% of the total outstanding voting securities of Mariner;
	•	any tender or exchange offer that would result in any person, entity or group, as defined in Section 13(d) of the Exchange Act, owning 15% or more of the total outstanding voting securities of Mariner;
	•	any merger, consolidation, business combination or similar transaction involving Mariner;
	•	any sale, exchange, transfer, acquisition or disposition, or any lease or license outside of the ordinary course of business, of more than 15% of Mariner’s assets; or
	•	any liquidation of dissolution of Mariner.

	•	notify Forest and Forest Energy Resources orally and in writing of the material terms of the acquisition proposal, request or inquiry;
	•	identify to Forest and Forest Energy Resources the person making the acquisition proposal, request or inquiry;
	•	furnish to Forest and Forest Energy Resources copies of all written materials provided in connection with the acquisition proposal or inquiry;
	•	provide to Forest and Forest Energy Resources as promptly as practicable, both orally and in writing, all information reasonably necessary to keep Forest and Forest Energy Resources informed in all material respects of the status and details of the acquisition proposal, request or inquiry, including providing copies of written materials received from and provided to the third party making the acquisition proposal, request or inquiry; and

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	•	provide Forest and Forest Energy Resources 48 hours’ prior notice (or such lesser notice as is provided to Mariner’s directors) of any meeting of Mariner’s board of directors at which it will consider an acquisition proposal, unless shorter notice is provided to the board of directors, in which case Forest and Forest Energy Resources are to be provided the same notice.

	•	Mariner has complied with all of its non-solicitation and notification obligations in the merger agreement;
	•	in the good faith judgment of Mariner’s board of directors (after receiving the advice of its legal counsel and financial advisor), the acquisition proposal is a superior offer or is reasonably likely to result in a superior offer;
	•	concurrently with furnishing any nonpublic information, Mariner notifies Forest and Forest Energy Resources in writing of its intention to furnish nonpublic information and furnishes the same nonpublic information to Forest and Forest Energy Resources;
	•	concurrently with engaging in negotiations with the third party, Mariner notifies Forest and Forest Energy Resources in writing of its intent to enter into negotiations with the third party; and
	•	Mariner executes a customary confidentiality agreement with the third party with terms at least as restrictive as the confidentiality agreement between Forest and Mariner.

	•	Mariner stockholders have not already approved the merger and the merger agreement;
	•	Mariner notifies Forest and Forest Energy Resources in writing:

	•	that it has received a superior offer;
	•	of the terms and conditions of the superior offer;
	•	of the identity of the third party making the superior offer; and
	•	that it intends to change its recommendation that Mariner stockholders approve the merger and the manner in which it intends to do so;

	•	Mariner provides Forest and Forest Energy Resources with copies of all written materials delivered by Mariner to the third party making the superior offer that have not previously been provided to Forest and Forest Energy Resources, and Mariner has otherwise made available to Forest and Forest Energy Resources all materials and information made available to the third party; and
	•	Mariner has not breached any of the provisions of the merger agreement relating to acquisition proposals and superior offers.

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	Board of Directors Covenant to Call Stockholders’ Meeting and to Recommend the Merger

	Operations of Forest (in respect of the Forest Gulf of Mexico operations), Forest Energy Resources and Mariner Pending Closing

	•	in the case of Mariner, declare or pay any dividends on or make other distributions in respect of its capital stock;
	•	split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its capital stock;
	•	redeem, repurchase or otherwise acquire (or permit any subsidiary to redeem, repurchase or otherwise acquire) any shares of its capital stock;
	•	issue, deliver or sell any shares of, or securities convertible into, its capital stock of any class, except, in the case of Mariner, the issuance of stock options with three-year vesting or restricted stock for up to 300,000 shares of Mariner common stock;

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	•	amend its governing documents;
	•	other than purchases from vendors or suppliers in the ordinary course of business consistent with past practice, exercises of preferential rights and, in the case of Mariner, certain specified transactions, engage in acquisitions valued at more than $25 million in the aggregate;
	•	other than product sales and other dispositions in connection with normal equipment maintenance or salvage in the ordinary course of business and consistent with past practice and permitted liens, dispose of assets valued at more than $10 million in the aggregate, except, in the case of Mariner, transactions permitted as described under “—No Solicitation” above, and except, in the case of Forest, dispositions of property to Forest and any of its wholly owned subsidiaries;
	•	incur or guarantee indebtedness, other than, in the case of Forest Energy Resources, indebtedness incurred or guaranteed in connection with the spin-off, or, in the case of Mariner, up to $185 million pursuant to a new or amended credit agreement;
	•	fail to continue its capital expenditure program for exploration and development or fail to perform, to the extent reasonably practicable, all capital expenditures at an aggregate cost not exceeding 120% of the aggregate costs set forth in the capital expenditure program;
	•	make material changes to employment arrangements;
	•	fail to comply with any laws, ordinances or regulations or permit to expire or terminate without renewal any license that is necessary to the operation of the business, to the extent the same would result in a material adverse effect;
	•	adopt a plan of complete or partial liquidation or dissolution;
	•	change its fiscal year or make any material change in its methods of accounting except as required by the Financial Accounting Standards Board or changes in generally accepted accounting principles, or in response to comments made by the SEC with respect to any registration statement;
	•	amend any agreement or arrangement with any affiliates (including employees of Mariner and Forest Energy Resources) on terms materially less favorable than could be reasonably expected to have been obtained with an unaffiliated third party on an arm’s-length basis;
	•	except in the ordinary course of business consistent with past practice, modify, amend, terminate or renew any material contract or waive, release or assign any material rights or claims, in each case if the action would have a material adverse effect or impair in any material respect the party’s ability to perform its obligations under the merger agreement and other transaction agreements;
	•	waive any preferential rights;
	•	enter into any contract not in the ordinary course of business involving total consideration of $2 million or more with a term longer than one year, unless it can be terminated by it without penalty upon no more than 30 days’ prior notice;
	•	fail to maintain insurance in amounts and against risks and losses as are customary for companies engaged in their respective businesses, except, in the case of Mariner, self-insurance with respect to operators’ extra expense insurance, physical damage to wellsite real and personal property insurance and business interruption insurance;
	•	make or rescind any material express or deemed election relating to taxes unless the action will not materially and adversely affect that party on a going-forward basis;
	•	settle or compromise any material claim or controversy relating to taxes, except where the settlement or compromise will not result in a material adverse effect on that party;
	•	amend any material tax returns;

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	•	change in any material respect any of its methods of reporting income or deductions for federal income tax purposes, except as may be required by applicable law or except for changes that are reasonably expected not to result in a material adverse effect on that party;
	•	pay, discharge or satisfy any material claims, liabilities or obligations, other than the payment, discharge or satisfaction, in the ordinary course of business or, in the case of Mariner, in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent consolidated financial statements or incurred in the ordinary course of business;
	•	take or cause or permit to be taken any action that would disqualify the spin-off under the distribution agreement from constituting a tax-free spin-off or that would disqualify either the merger or the contribution of assets from Forest to Forest Energy Resources from constituting a tax-free reorganization;
	•	intentionally take or agree or commit to take any action that would result in any of the conditions set forth in the merger agreement not being satisfied at the effective time of the merger;
	•	enter into any derivative transaction or any fixed price commodity sales agreement with a term of more than 60 days; and
	•	agree or otherwise take any action inconsistent with the foregoing.

	Commercially Reasonable Efforts, Further Assurances

	Employee Benefit Plans

	•	will participate in Mariner benefit plans as of the effective time of the merger on a basis no less favorable than that applicable to similarly situated Mariner employees, and be granted full credit for all purposes under such plans for prior service with Forest and Forest Energy Resources and their affiliates before the effective time of the merger (except to the extent necessary to avoid duplication of benefits);

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	•	will, if the effective time of the merger occurs in 2006, receive vacation benefits for 2006 that are equal to the employee’s accrued and unused vacation under Forest’s vacation policy as of the effective time of the merger plus any additional vacation entitlement the employee would have earned under the terms of Mariner’s vacation policy; and
	•	will receive specified relocation benefits if, from the effective time of the merger to the later of June 30, 2006 or six months after the effective time of the merger, Mariner or a subsidiary of Mariner relocates the principal place of employment of the employee by 50 miles or more from the location of his or her principal place of employment immediately prior to the effective time of the merger.

	Directors’ and Officers’ Indemnification

	Litigation Defense

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	Accounting Matters

	Reorganization Treatment

	Letter of Credit

	•	completion of the spin-off in accordance with the distribution agreement;
	•	obtaining all material consents, approvals and authorizations of any governmental authority legally required for the consummation of the transactions contemplated by the merger agreement and the other transaction agreements;
	•	the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Act;
	•	the SEC having declared effective the registration statements of Mariner relating to the shares of Mariner common stock to be issued in connection with the merger and the shares held by its existing stockholders;
	•	the approval for listing on the New York Stock Exchange or Nasdaq of the shares of Mariner common stock and such other shares required to be reserved for issuance in connection with the merger, subject to official notice of issuance;
	•	adoption of the merger agreement by the Mariner stockholders at the meeting;
	•	the absence of a final and non-appealable injunction or other prohibition issued by a court or other governmental entity that restrains, enjoins or prohibits the spin-off or the merger;
	•	there being no action by a governmental authority pending to restrain, enjoin, prohibit or delay consummation of the transactions contemplated by the merger agreement, or to impose any material restrictions or requirements on the transactions contemplated by the merger agreement or on Forest Energy Resources or Mariner with respect to the transactions;
	•	there being no action taken and no statute, rule, regulation or executive order enacted, entered, promulgated or enforced by any governmental authority with respect to the merger that, individually or in the aggregate, would restrain, prohibit or delay the consummation of the merger

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		or impose material restrictions or requirements on consummation of the merger or on Forest Energy Resources or Mariner with respect to the transactions;
	•	the performance by Forest, Forest Energy Resources and Mariner in all material respects of their respective covenants and agreements contained in the merger agreement and the truthfulness and correctness of the representations and warranties in the merger agreement in all respects, except in each case where the failure to be true and correct, individually or in the aggregate, would not have a material adverse effect or to the extent specifically contemplated or permitted by the merger agreement; and
	•	Forest, Forest Energy Resources and Mariner having received an opinion from their respective counsel to the effect that the merger will be treated for federal income tax purposes as a reorganization.

	•	Forest having received any consents required from its bondholders; and
	•	Forest having received the consents required pursuant to its credit facility.

	•	Mariner having received the consents required pursuant to its credit facility; and
	•	Forest Energy Resources and/or Mariner having entered into a new or amended credit facility with available borrowing capacity sufficient to operate the Forest Gulf of Mexico operations and Mariner’s business after the closing of the merger transaction consistent with past practice.

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	Right to Terminate

	•	by mutual written consent of the parties;
	•	by any party:

	•	if the effective time of the merger has not occurred on or before March 31, 2006, except that a party may not terminate the merger agreement if the cause of the merger not being completed on or before such date resulted from the party’s failure to fulfill its obligations;
	•	if a court or other governmental entity issues a final and non-appealable injunction or otherwise prohibits the merger and the terminating party has used all commercially reasonable efforts to remove such injunction or prohibition; or
	•	if the adoption of the merger agreement and the approval of the transactions contemplated by the merger agreement by the Mariner stockholders is not obtained, except that Mariner may not terminate the merger agreement if the cause of the approval not being obtained resulted from the action or failure to act of Mariner and such action or failure to act constitutes a breach by Mariner of the provisions of the merger agreement relating to non-solicitation in any respect or a material breach by Mariner of any of the other covenants or agreements contained in the merger agreement;

	•	by Mariner:

	•	if either Forest or Forest Energy Resources fails to perform in any material respect any of its respective covenants or agreements contained in the merger agreement required to be performed at or prior to the effective time of the merger, or the respective representations and warranties of Forest or Forest Energy Resources in the merger agreement are or will become untrue in any respect at any time prior to the effective time of the merger and the failure to be true and correct, individually or in the aggregate, would have a material adverse effect on the Forest Gulf of Mexico operations, Forest Energy Resources or Mariner and has not been cured within 30 days after written notice was given to Forest and Forest Energy Resources of such failure or untruth; or
	•	if the board of directors of Mariner changes its recommendation that Mariner stockholders approve the merger in order to accept a superior offer, provided that:

	•	Mariner is not in breach of the provisions of the merger agreement relating to non-solicitation or in material breach of any other covenant or agreement contained in the merger agreement, and has not breached any of its representations and warranties contained in the merger agreement in any material respect;
	•	Forest has not made an offer that is at least favorable as the superior offer within three business days after Forest receives written notice of the superior offer;

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	•	the Mariner board of directors authorizes Mariner to enter into a binding written agreement with respect to the superior offer and notifies Forest and Forest Energy Resources of its intent to do so and provides a copy of the most current version of the agreement; and
	•	Mariner pays the termination fee and expense reimbursement;

	•	by Forest:

	•	if Mariner fails to perform in any material respect any of its covenants or agreements contained in the merger agreement required to be performed at or prior to the effective time of the merger, or the representations and warranties of Mariner in the merger agreement are or will become untrue in any respect at any time prior to the effective time of the merger and the failure to be true and correct, individually or in the aggregate, would have a material adverse effect on Mariner, the Forest Gulf of Mexico operations or Forest Energy Resources and has not been cured within 30 days after written notice was given to Mariner of such failure or untruth; or
	•	if the board of directors of Mariner (i) fails to reaffirm publicly its approval of the merger, as soon as reasonably practicable, and in no event within three business days after Forest’s request, or resolves not to reaffirm the merger, (ii) fails to include in this proxy statement/ prospectus-information statement its recommendation, without modification or qualification, that Mariner stockholders approve the merger, (iii) withholds, withdraws, amends or modifies its recommendation that Mariner stockholders approve the merger, (iv) changes its recommendation that Mariner stockholders approve the merger or (v) within ten business days after commencement, fails to recommend against acceptance of any tender or exchange offer for shares of Mariner common stock or takes no position with respect to any tender or exchange offer.

	Termination Fees and Expenses

	•	the other party’s failure to perform in any material respect any of its covenants or agreements contained in the merger agreement; or
	•	the representations and warranties of such other party in the merger agreement being or becoming untrue; and
	•	the failure to be true and correct, individually or in the aggregate, would have a material adverse effect on Forest Energy Resources, the Mariner business or Mariner and has not been cured within 30 days after written notice was given to such party of such failure or untruth,

	•	(i) either Forest or Mariner terminates the merger agreement as a result of the failure to obtain the requisite stockholder approval from Mariner stockholders, (ii) either Forest or Mariner terminates the merger agreement as a result of the effective time of the merger not occurring on or before March 31, 2006 or (iii) Forest terminates the merger agreement as a result of the failure of Mariner to perform in any material respect any of its covenants and agreements contained in the merger agreement, plus an acquisition proposal had been publicly announced prior to the termination and, within twelve months of the date of termination, Mariner either completes an acquisition proposal with a third party or enters into an agreement or recommends approval of any acquisition proposal that is subsequently completed (whether or not within the twelve-month period);

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	•	Forest terminates the merger agreement as a result of the board of directors of Mariner (i) having failed to reaffirm publicly its approval of the merger, as soon as reasonably practicable, and in no event later than three business days, after request by Forest, or having resolved not to reaffirm the merger, (ii) having failed to include in this proxy statement/ prospectus-information statement its recommendation, without modification or qualification, that Mariner stockholders approve the merger, (iii) having withheld, withdrawn, amended or modified its recommendation that Mariner stockholders approve the merger, (iv) having changed its recommendation that Mariner stockholders approve the merger or (v) within ten business days after commencement, having failed to recommend against acceptance of any tender or exchange offer for shares of Mariner common stock or takes no position with respect to any such tender or exchange offer; or
	•	Mariner terminates the merger agreement as a result of the board of directors of Mariner changing its recommendation that Mariner stockholders approve the merger in order to permit Mariner to accept a superior offer.

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	•	all real property interests, overriding royalty interests, reversionary interests, real or immovable property (including use and occupation rights, rights to pooled, communitized or unitized acreage, and platforms, pipelines and improvements), easements, inventory, hydrocarbons, equipment, personal or movable property, spare parts, contracts, books and records, proceeds, refunds, settlements, claims and current assets to the extent comprising a part of the Forest Gulf of Mexico operations;
	•	other assets of Forest and the subsidiaries of Forest to the extent specifically assigned by Forest or any subsidiaries pursuant to the distribution agreement; and
	•	all rights of Forest Energy Resources under the distribution agreement and the other agreements entered into in connection with the merger and the spin-off.

	•	all of the liabilities of the Forest Gulf of Mexico operations to the extent arising after June 30, 2005 and attributable to the conduct of the business after that date;
	•	legal obligations to plug, abandon, remove or retire platforms, pipelines, improvements, equipment, personal or movable property, fixtures and improvements comprising part of the Forest Gulf of Mexico assets, to the extent the obligation was previously disclosed to Mariner, arose after June 30, 2005 or was not known to Forest after due inquiry on the date of the distribution agreement;
	•	environmental liabilities arising from the conduct of the Forest Gulf of Mexico operations (subject to a monetary cap with respect to specified conditions), unless such liability was required to have been disclosed to Mariner prior to the execution of the merger agreement and was not so disclosed; and
	•	liabilities under specified derivatives contracts with an estimated fair value of $50.8 million as of June 30, 2005.

	•	minus revenue derived from the Forest Gulf of Mexico operations from June 30, 2005 through the date of the spin-off (which period is referred to as the “measurement period”);
	•	minus cash consideration from any sale of property, plant and equipment related to the Forest Gulf of Mexico assets during the measurement period;
	•	plus certain net assets and liabilities specified on the date of the distribution agreement;

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	•	plus or minus the net gas balancing assets or liabilities of the Forest Gulf of Mexico operations as of June 30, 2005;
	•	plus or minus the net settlement amounts in respect of settlements of gas imbalances effected during the measurement period;
	•	plus capital and operating expenditures attributable to the Forest Gulf of Mexico operations during the measurement period;
	•	plus an amount equal to hypothetical income taxes attributable to the Forest Gulf of Mexico operations during the measurement period;
	•	plus interest expense attributable to the Forest Gulf of Mexico operations during the measurement period;
	•	plus $1.6 million per month during the measurement period in respect of general and administrative expenses;
	•	plus an amount, not to exceed $7 million, in respect of the fees and expenses of Forest and Forest Energy Resources in connection with the merger and related transactions;
	•	plus or minus an amount equal to the change in working capital accounts (other than cash) of the Forest Gulf of Mexico operations during the measurement period;
	•	plus or minus an amount to adjust for the above items to the extent they are settled through intercompany accounts prior to the closing.

	•	to pay, among other things, any losses or liabilities of Forest or its subsidiaries (including liabilities under the agreements entered into in connection with the merger and the spin-off);

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	•	to transfer to Forest Energy Resources or any of its subsidiaries all of the assets to be transferred to Forest Energy Resources; and
	•	to perform any of its obligations under the distribution agreement.

	•	obtaining all material consents, approvals and authorizations of any governmental authority that are legally required for the spin-off and other transactions contemplated by the other agreements entered into in connection with the spin-off and the merger;
	•	the absence of an injunction or other prohibition issued by a court or other governmental entity that restrains, enjoins or prohibits or otherwise imposes material restrictions on the spin-off or the merger;
	•	the SEC having declared effective the registration statement on Form S-4 of Mariner relating to the shares of Mariner common stock to be issued into which shares of Forest Energy Resources common stock will be converted pursuant to the merger.
	•	the approval for listing on the New York Stock Exchange or Nasdaq of the Mariner common stock and the other shares required to be reserved for issuance in connection with the merger, subject to official notice of issuance;
	•	the adoption of the merger agreement by the Mariner stockholders at the meeting;
	•	Forest having received an opinion from its tax counsel to the effect that the contribution will constitute a reorganization under Section 368(a) of the Internal Revenue Code and the distribution will qualify under Section 355 of the Internal Revenue Code;
	•	Forest having received the consents required from its bondholders;
	•	the performance by Mariner in all material respects of its covenants and agreements contained in the merger agreement required to be performed at or prior to the date of the spin-off; and
	•	the truthfulness and correctness of the representations and warranties of Mariner in the merger agreement in all respects, except as permitted by the merger agreement or where the failure to be true and correct would not have a material adverse effect.

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	Preparation and Filing of Tax Returns

	Liability for Taxes

	Transaction Taxes

	Continuing Covenants

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	•	a ruling from the Internal Revenue Service to the effect that the action contemplated would not affect the tax-free status of the spin-off,
	•	an opinion from a nationally recognized law firm both reasonably acceptable to Forest and Mariner to the effect that the action contemplated would not affect the tax-free status of the spin-off, or
	•	the agreement of both Forest and Mariner that such contemplated action would not affect the tax-free status of the spin-off.

	Miscellaneous

	•	sets forth the rights of the Forest Gulf of Mexico operations employees under certain of the Forest plans in which they previously participated, including with respect to the portion of their stock options that are exercisable at the effective time of the merger; and

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	•	provides for the assumption by Forest Energy Resources of certain liabilities of Forest relating to employees who are transferred to Forest Energy Resources, including the assumption of liabilities under Forest’s educational assistance plan and accrued vacation liabilities.

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		Applicable Margin
Usage as a %		LIBOR				Reference				Unused
Borrowing Base		Loans				Rate Loans				Fee
Less than 50%			1.25%				0.00%				0.375%
51% to 75%			1.50%				0.00%				0.375%
76% to 90%			1.75%				0.25%				0.250%
Greater than 90%			2.00%				0.50%				0.250%

	•	incur certain indebtedness;
	•	grant certain liens;
	•	merge or consolidate with another entity;
	•	sell unmortgaged property or other assets which generate proceeds in excess of 10% of the borrowing base;
	•	sell assets comprising collateral pledged to the lenders;
	•	make certain loans and investments;
	•	enter new lines of business; and
	•	permit certain trade payables to exceed 90 days.

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	•	consolidated current assets plus the unused borrowing base to consolidated current liabilities of not less than 1.0 to 1.0; and
	•	total debt to EBITDA of not more than 2.5 to 1.0.

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			Nine Months Ended								Years Ended
			September 30,								December 31,
			2005				2004				2004				2003				2002
			(dollars in thousands)
Oil and natural gas revenues(1)			$	326,722				324,426				453,139				342,019				228,896
Direct Operating Expenses:
	Lease operating expenses			57,431				63,022				80,079				45,716				52,076
	Transportation			2,484				1,424				2,175				2,652				3,855
	Production taxes			1,948				1,243				1,548				1,521				947
Total direct operating expenses				61,863				65,689				83,802				49,889				56,878
Revenues in excess of direct operating expenses			$	264,859				258,737				369,337				292,130				172,018
Production:
Natural gas (MMcf)				41,442				46,036				61,684				58,785				50,566
Oil and condensate (MBbls)				1,845				2,004				2,624				2,143				1,974
Natural gas liquids (MBbls)				628				186				606				2				6
Total (MMcfe)				56,280				59,176				81,064				71,655				62,446
Average daily production (MMcfe/d)				206				216				221				196				171
Per Mcfe:
Average realized sales price(1)			$	5.81				5.48				5.59				4.77				3.67
Lease operating expenses			$	1.02				1.06				0.99				0.64				0.83
Transportation			$	0.04				0.02				0.03				0.04				0.06
Production taxes			$	0.03				0.02				0.02				0.02				0.02

(1)	Includes effects of hedging.

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	•	Sales volumes decreased 5% to 56.3 Bcfe in the nine months ended September 30, 2005 from 59.2 Bcfe in 2004.
	•	Average realized prices increased 6% to $5.81 per Mcfe in 2005 from $5.48 per Mcfe in 2004.
	•	Higher realized prices partially offset by decreased sales volumes resulted in oil and natural gas revenues increasing 1% to $326.7 million in the nine months ended September 30, 2005 from $324.4 million in the corresponding period in 2004.
	•	Lease operating expense declined 4% from $1.06 per Mcfe for 2004 to $1.02 per Mcfe for 2005.

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	Production

	Oil and Gas Property Costs

	Oil and Gas Reserves

	Oil and Natural Gas Prices and Hedging Activities

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		Natural Gas (NYMEX HH)
						Weighted Average
		Bbtu per				Hedged Price per
		Day				MMBtu
Fourth Quarter 2005			55.0			$	4.88
First Quarter 2006			40.0				6.15
Second Quarter 2006			40.0				6.15
Third Quarter 2006			40.0				6.15
Fourth Quarter 2006			40.0				6.15

	Nine Months Ended September 30, 2005 compared to Nine Months Ended September 30, 2004

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	Year Ended December 31, 2004 compared to Year Ended December 31, 2003

	Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

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			Nine Months Ended								Years Ended
			September 30,								December 31,
			2005				2004				2004				2003				2002
Property acquisitions			$	25				85,546				87,165				168,485				3,263
Exploration				47,418				23,261				28,331				39,683				17,503
Development				57,248				57,145				70,027				74,690				70,833
	Total Capital Expenditures		$	104,691				165,952				185,523				282,858				91,599

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												Approximate
												Water				Gross				Date Production				Estimated				PV10 Value				Standardized
								Working				Depth				Producing				Commenced/				Proved Reserves				(In $				Measure
				Operator				Interest				(Feet)				Wells(a)				Expected				(Bcfe)(b)				Millions)(b)				(In $ Millions)
								%
Gulf of Mexico Shelf:
	East Cameron 14				FOC				50.0				25				2				1969				17.2			$	81.0
	Eugene Island 273				FOC				77.7				175				7				1970				5.4				27.9
	Eugene Island 292				FOC				45.0				195				4				1970				8.5				39.0
	Eugene Island 53				FOC				50.0	(c)			40				5				1964				12.6				68.9
	High Island 116				FOC				98.9	(d)			45				2				1986				10.2				44.9
	High Island 195				Apache				23.5				50				6				1989				3.8				20.9
	Main Pass 166				FOC				100.0				125				0				2006				5.1				18.0
	Ship Shoal 26				FOC				100.0				10				1				1969				5.5				24.6
	South Marsh Isl 149				Unocal				50.0				150				4				1979				5.5				31.7
	South Marsh Isl 18				FOC				100.0				75				1				1993				9.8				32.7
	South Pass 24–NCOC				FOC				100.0				10				37				1957				22.8				73.7
	South Timbalier 72				FOC				100.0	(e)			65				4				1963				6.8				39.1
	Vermilion 14				FOC				100.0				20				21				1959				35.4				129.4
	Vermilion 380				FOC				100.0				320				3				1982				11.5				40.7
	West Cameron 110				BP/Amoco				37.5				40				1				1958				7.7				36.8
	West Cameron 112				FOC				55%				43				1				2004				3.7				22.8
	West Cameron 205				FOC				100.0				50				3				1982				5.9				30.0
	Other Properties																871								146.1				392.3
Gulf of Mexico Deepwater:
	East Breaks 420				Samedan				50.0				2,560				1				2002				16.2				67.8
		Total:															974								339.7			$	1,222.2			$	925.8

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(a)	Wells producing or capable of producing as of December 31, 2004.
(b)	As of December 31, 2004. Please see “The Forest Gulf of Mexico Operations—Estimated Proved Reserves” for a definition of PV10 and a reconciliation of PV10 to the standardized measure of discounted future net cash flows.
(c)	Forest operates the field and owns working interests in individual wells ranging from approximately 50% to 100%.
(d)	Forest operates the field and owns working interests in individual wells ranging from approximately 98.9% to 100%.
(e)	Forest operates the field and owns working interests in individual wells ranging from approximately 37.5% to 100%.

	Gulf of Mexico Shelf Properties

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	Gulf of Mexico Deepwater Property

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			Estimated Proved
			Reserve Quantities
							Natural								PV10 Value(3)
			Oil				Gas				Total																Standardized
Geographic Area			(MMbbls)				(Bcf)				(Bcfe)				Developed				Undeveloped				Total				Measure
															(millions)												(millions)
Gulf of Mexico Shelf(1)				11.7				253.6				323.5			$	907.8			$	246.6			$	1,154.4
Gulf of Mexico Deepwater(2)				—				16.2				16.2				67.8				—				67.8
	Total			11.7				269.8				339.7			$	975.6			$	246.6			$	1,222.2			$	925.8
Proved Developed Reserves				9.5				201.8				258.6

(1)	Shelf refers to water depths less than 1,300 feet.
(2)	Deepwater refers to water depths greater than 1,300 feet (the approximate depth of deepwater designated for royalty purposes by the U.S. Minerals Management Service).
(3)	Please see below for a definition of PV10 and a reconciliation of PV10 to the standardized measure of discounted future net cash flows.

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		At December 31,
		2004				2003				2002
		(millions)
PV10		$	1,222.2			$	1,217.2			$	828.1
Future income taxes, discounted at 10%			296.4				267.8				180.1
Standardized measure of discounted future net cash flows		$	925.8			$	949.4			$	648.0

				Nine Months
				Ended				Year Ended December 31,
				September 30,
				2005				2004				2003				2002
				(unaudited)
Production:
	Natural gas (Bcf)				41.4				61.7				58.8				50.6
	Oil (MMbbls)				1.8				2.6				2.1				2.0
	Natural gas liquids (MMbbls)				.6				.6				—				—
	Total natural gas equivalent (Bcfe)				56.3				81.1				71.7				62.4
Average realized sales price per unit:
	Natural gas ($/Mcf):
		Sales price received		$	7.14			$	6.30			$	5.41			$	3.39
		Effects of hedging			(1.13	)			(0.56	)			(0.63	)			0.17
		Net sales price received			6.01				5.74				4.78				3.56
	Oil ($/bbl):
		Sales price received		$	51.97			$	40.06			$	30.19			$	24.85
		Effects of hedging			(19.95	)			(8.55	)			(1.90	)			—
		Net sales price received			32.02				31.51				28.29				24.85
	Natural gas liquids ($/bbl)
		Sales price received		$	29.54			$	27.28			$	19.00			$	12.33
Average realized sales price per Mcfe (including effects of hedging) ($/Mcfe)				$	5.81			$	5.59			$	4.77			$	3.67

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			Nine Months
			Ended				Year Ended December 31,
			September 30,
			2005				2004				2003				2002
			(unaudited)
Expenses ($/Mcfe):
	Lease operating		$	1.02			$	0.99			$	0.64			$	0.83
	Transportation			0.04				0.03				0.04				0.06
	Production taxes			0.03				0.02				0.02				0.02

			Total
			Productive
			Wells at
			December 31,
			2004
			Gross				Net
Oil				338				163
Gas				636				366
	Total			974				529

			Developed Acres(1)								Undeveloped Acres(2)
Location			Gross				Net				Gross				Net
Gulf of Mexico Shelf(3)				906,448				402,094				341,976				215,675
Gulf of Mexico Deepwater(4)				11,520				5,760				46,080				40,320
	Total			917,968				407,854				388,056				255,995

(1)	Developed acres are acres spaced or assigned to productive wells.
(2)	Undeveloped acres are acres on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas regardless of whether such acreage contains proved reserves.
(3)	Shelf refers to water depths less than 1,300 feet.
(4)	Deepwater refers to water depths greater than 1,300 feet (the approximate depth of deepwater designated for royalty purposes by the U.S. Minerals Management Service).

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				Year Ended December 31,
				2004								2003								2002
				Gross				Net				Gross				Net				Gross				Net
Exploratory wells:
	Producing				11.0				6.15				4.0				2.92				1.0				0.72
	Dry holes				3.0				2.62				2.0				2.00				2.0				0.68
		Total			14.0				8.77				6.0				4.92				3.0				1.40
Development wells:
	Producing				6.0				4.37				6.0				4.20				13.0				7.30
	Dry holes				—				—				1.0				0.50				1.0				0.17
		Total			6.0				4.37				7.0				4.70				14.0				7.47
Total wells:
	Producing				17.0				10.52				10.0				7.12				14.0				8.02
	Dry holes				3.0				2.62				3.0				2.50				3.0				0.85
		Total			20.0				13.14				13.0				9.62				17.0				8.87

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	Insurance Matters

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Name		Age				Position with Company
Scott D. Josey			48			Chairman of the Board, Chief Executive Officer and President
Dalton F. Polasek			54			Chief Operating Officer
Rick G. Lester			54			Vice President, Chief Financial Officer and Treasurer
Jesus G. Melendrez			47			Vice President— Corporate Development
Mike C. van den Bold			43			Vice President and Chief Exploration Officer
Teresa G. Bushman			56			Vice President, General Counsel and Secretary
Judd A. Hansen			50			Vice President— Shelf and Onshore
Cory L. Loegering			50			Vice President— Deepwater
Bernard Aronson			59			Director
Jonathan Ginns			41			Director
John F. Greene			65			Director
John L. Schwager			57			Director

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							Annual Compensation								Long-Term Compensation
															Awards								Payouts
																			Securities
															Restricted Stock				Underlying				LTIP				All Other
Name and Principal Position			Year				Salary($)				Bonuses(1)($)				Awards($)(2)				Options(#)				Payouts($)				Compensation($)(3)
Scott D. Josey				2005			$	375,000			$				$	—				—			$	—			$	16,210
	Chairman of the Board,			2004				350,000				550,000				9,522,534				200,000				575,000				15,133
	Chief Executive Officer			2003				300,290				850,000				—				—				—				514,895
	and President
Dalton F. Polasek				2005				250,000								—				—				—				16,626
	Chief Operating Officer			2004				215,000				300,000				4,316,886				102,000				248,400				15,236
				2003				176,698				325,000				—				—				—				280,677
Mike C. van den Bold				2005				200,000								—				—				—				15,819
	Vice President and			2004				192,500				215,000				3,174,178				74,000				322,000				14,949
	Chief Exploration Officer			2003				170,150				350,000				—				—				—				45,430
Rick G. Lester				2005				200,000								—				—				—				16,363
	Vice President,			2004				43,352				120,000				428,512				40,000				—				3,502
	Chief Financial Officer			2003				—				—				—				—				—				—
	and Treasurer
Teresa G. Bushman				2005				200,000								—				—				—				17,197
	Vice President, General			2004				190,000				215,000				1,920,380				40,000				59,800				14,834
	Counsel and Secretary			2003				97,750				200,000				—				—				—				23,270

(1)	As of January 31, 2006, bonuses for 2005 have not yet been paid.
(2)	Dollar amounts are calculated by multiplying the number of shares of common stock awarded by $14, the trading price of our common stock on the business day immediately preceding the date the award was granted. Grantees are entitled to vote, and accrue dividends on, the restricted stock prior to vesting; provided, that any dividends that accrue on the restricted stock prior to vesting will only be paid to grantees to the extent the restricted stock vests. Except in specified circumstances, the

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restricted shares will be automatically forfeited in the event a grantee’s employment terminates prior to the vesting date of the awards. The restricted stock granted will vest, and restrictions will terminate, on the later of (i) the first anniversary of the grant date, which was March 11, 2005, and (ii) the occurrence of a “Public Sale Date”, as defined in our Equity Participation Plan; but in no event later than the second anniversary of the date of grant. Notwithstanding this vesting schedule, the unvested shares of restricted stock will become fully vested upon death or disability of the employee, or if employment is terminated by us for reasons other than for “cause,” or if the employee elects to terminate employment with “good reason,” or upon the occurrence of a “change of control,” as those terms are defined in the agreement with us governing the grant. In connection with the merger, each of Mariner’s executive officers has agreed, in exchange for a cash payment of $1,000, that his or her shares of restricted stock will not vest before the later of March 11, 2006 or ninety days after the effective date of the merger. For additional information regarding these special long-term grants, please see “—Equity Participation Plan.”

	At December 31, 2005, the value of all restricted stock held by each named executive (based on the $17.75 trading price of our common stock on December 31, 2005) was as follows:

Name		No. of Shares				Value
Scott D. Josey			680,181			$	12,073,213
Dalton F. Polasek			308,349				5,473,195
Mike C. van den Bold			226,727				4,024,404
Rick G. Lester			30,608				543,292
Teresa G. Bushman			137,170				2,434,768

(3)

Amounts shown reflect insurance premiums paid by us with respect to term life insurance for the benefit of the named executive officers and retention payments paid during the year. The amounts for 2005 for Messrs. Josey, Polasek, van den Bold, and Lester and Ms. Bushman include $7,000 of employer matching contributions made pursuant to our 401(k) plan and $8,400 made pursuant to the profit sharing portion of our 401(k) plan. In addition, the 2005 amount for Mr. Josey includes $810 of insurance premiums under our group term life insurance. The 2005 amount for Mr. Polasek also includes $1,226 of insurance premiums under our group term life insurance. The 2005 amount for Mr. van den Bold also includes $419 of insurance premiums under our group term life insurance. The 2005 amount for Mr. Lester also includes $963 of insurance premiums under our group term life insurance. The 2005 amount for Ms. Bushman includes $1,797 of insurance premiums under our group term life insurance.

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Officer or Group		No. of Shares				Value at Grant(1)
Scott D. Josey			680,181			$	9,522,534
Dalton F. Polasek			308,349				4,316,886
Mike C. van den Bold			226,727				3,174,178
Rick G. Lester			30,608				428,512
Teresa G. Bushman			137,170				1,920,380
Officers as a group (8 persons)			1,803,613				25,250,582

(1)	Based on a price of $14.00 per share.

	•	the 90th day following the date on which our common stock is listed on the New York Stock Exchange or admitted to trading and quoted on the Nasdaq National Market or Nasdaq SmallCap Market; and
	•	the first date on which both of the following conditions are met: (a) a registration statement covering the resale of the restricted stock has been declared effective by the SEC, and no stop order suspending the effectiveness of such registration statement is in effect and (b) the common stock is listed on the New York Stock Exchange or admitted to trading and quoted on the Nasdaq National Market or Nasdaq SmallCap Market;

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	Shares Subject to the Stock Incentive Plan

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	Administration and Eligibility

	Awards

	•	at the time the ISO is granted, the option price is at least 110% of the fair market value of the common stock subject to the option and
	•	such ISO, by its terms, is not exercisable after the expiration of five years from the date of grant.

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	Other Provisions

	•	provide for either the termination of any such award in exchange for cash in the amount that would have been attained upon the exercise of such award or the replacement of such award with other rights or property selected by the Committee;
	•	provide that such award be assumed by the successor or survivor corporation or its parent or be substituted for by similar options, rights or awards; or
	•	make adjustments in the number and type of shares or other property subject to outstanding awards.

	Stock Incentive Plan Benefits

	U.S. Federal Tax Consequences

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	Restricted Stock

	Stock Options

	•	the excess of the fair market value of such shares on the option exercise date over the exercise price paid for the shares, or
	•	the amount realized on the sale or disposition over the exercise price paid for the shares.

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																		Potential Realizable
																		Value of Assumed
																		Annual Rates of Stock
																		Price Appreciation for
						% of Total Options												Option Term (a)
		No. of Securities				Granted to Employees				Exercise				Expiration
Name		Underlying Options				in Fiscal Year				Price				Date				5%($)				10%($)
Scott D. Josey			200,000				24.7	%		$	14.00				3/11/2015			$	1,760,905			$	4,462,479
Dalton F. Polasek			102,000				12.6				14.00				3/11/2015				898,062				2,275,864
Mike C. van den Bold			74,000				9.1				14.00				3/11/2015				651,535				1,651,117
Rick G. Lester			40,000				4.9				14.00				3/11/2015				352,181				892,496
Teresa G. Bushman			40,000				4.9				14.00				3/11/2015				352,181				892,496

	(a)	In accordance with SEC rules, these columns show gain that could accrue for the listed options, assuming that the market price per share of our common stock appreciates from the date of grant over a period of 10 years at an annualized rate of 5% and 10%, respectively. If the stock price does not increase above the exercise price at the time of exercise, the realized value from these options will be zero.

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						Percent of
Name of Beneficial Owner		Amount(1)				Class(2)
5% Stockholder:
FMR Corp.(3)			5,002,200				13.9	%
SAB Capital Advisors, L.L.C.(4)			2,255,700				6.3	%
ACON E&P, LLC(5)			1,895,630				5.3	%
Officers and Directors(6):
Scott D. Josey(7)			746,848				2.1	%
Dalton F. Polasek(8)			342,349				*
Mike C. van den Bold(9)			251,394				*
Rick G. Lester(10)			43,942				*
Teresa G. Bushman(10)			150,504				*
Bernard Aronson(11)			3,405,207				9.5	%
Jonathan Ginns(12)			3,405,207				9.5	%
John F. Greene(13)			1,500				*
John L. Schwager(13)			1,500				*
Executive officers and directors as a group (12 persons)			5,406,491				15.1	%

	*	Less than 1%.
	(1)	Includes grants of restricted stock to executive officers under our Equity Participation Plan. These shares may be voted, but not disposed of, prior to vesting. Also includes shares issuable upon exercise of options held by certain of the indicated persons to the extent the options vest in the next 60 days.
	(2)	Includes shares issuable upon exercise of options held by employees and directors to the extent the options vest in the next 60 days.
	(3)	Of the amount shown, 1,847,200 shares are held by Fidelity Contrafund, 1,831,700 shares are held by Fidelity Puritan Fund: Fidelity Low-Priced Stock Fund, 527,600 shares are held by Variable Insurance Products Fund II: Contra-Fund Portfolio, 516,300 shares are held by Fidelity Puritan Trust: Fidelity Balanced Fund, 200,000 shares are held by Fidelity Securities Fund: Fidelity Small Cap Value Fund, 75,000 shares are held by Fidelity Securities Fund: Fidelity Small Cap Growth Fund, and 4,400 shares are held by Fidelity Management Trust Company on behalf of accounts managed by it. Fidelity may be deemed a beneficial owner of these shares by virtue of its affiliation with these holders of record.
	(4)	The address of SAB Capital Advisors, L.L.C. is 712 Fifth Avenue, 42nd Floor, New York, New York 10019. Of the amount shown, 1,098,083 shares are held by SAB Capital Partners, L.P. and 1,157,617 shares are held by SAB Overseas Master Fund, L.P.
	(5)	The address of ACON E&P, LLC is c/o ACON Investments LLC, 1133 Connecticut Avenue, N.W., Suite 700, Washington, D.C. 20036. The shares beneficially owned by ACON E&P, LLC are held of record by MEI Acquisitions Holdings, LLC.
	(6)	The address of each officer and director is c/o Mariner Energy, Inc., One BriarLake Plaza, Suite 2000, 2000 West Sam Houston Parkway South, Houston, Texas 77042.

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	(7)	Includes 66,667 shares issuable upon exercise of an option that vests as to these shares on March 11, 2006.
	(8)	Includes 34,000 shares issuable upon exercise of an option that vests as to these shares on March 11, 2006.
	(9)	Includes 24,667 shares issuable upon exercise of an option that vests as to these shares on March 11, 2006.

(10)	Includes 13,334 shares issuable upon exercise of an option that vests as to these shares on March 11, 2006.
(11)	Mr. Aronson may be deemed to be a beneficial owner of 1,895,630 shares and 1,509,577 shares that are beneficially owned by ACON E&P, LLC and ACON Investments LLC, respectively. MEI Investment Holdings, LLC is the record holder of the shares beneficially owned by ACON Investments LLC. Mr. Aronson is a manager of ACON E&P, LLC and a managing member of ACON Investments LLC, the managing member of MEI Investment Holdings, LLC. Mr. Aronson disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. Mr. Aronson’s address is c/o ACON Investments, LLC, 1133 Connecticut Avenue, N.W., Suite 700, Washington, D.C. 20036.
(12)	Mr. Ginns may be deemed to be a beneficial owner of 1,895,630 shares and 1,509,577 shares that are beneficially owned by ACON E&P, LLC and ACON Investments LLC, respectively. MEI Investment Holdings, LLC is the record holder of the shares beneficially owned by ACON Investments LLC. Mr. Ginns is a managing member of Burns Park Investments LLC, a manager of ACON E&P, LLC. Mr. Ginns is a managing member of ACON Investments LLC, the managing member of MEI Investment Holdings, LLC. Mr. Ginns disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. Mr. Ginn’s address is c/o ACON Investments, LLC, 1133 Connecticut Avenue, N.W., Suite 700, Washington, D.C. 20036.
(13)	Includes shares that will be issuable upon exercise of an option that will vest as to these shares upon the date of Mariner’s next annual stockholders meeting, which is scheduled to occur on March 2, 2006.

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						Percentage of
		Number of Shares of				Common
		Common Stock That				Stock
Selling Stockholder		May Be Sold				Outstanding
ACON E&P, LLC(1)			1,895,630				5.32	%
ACON Investments LLC(2)			1,509,577				4.24	%
Acorn Overseas Securities Co			2,600				*
Alexander, Leslie			570,000				1.62	%
Alexandra Global Master Fund, Ltd			300,000				*
Alexis A. Shehata-Personal Portfolio			1,840				*
Allied Funding, Inc.			17,000				*
America			40,000				*
Anderson, William J.(3)			22,673				*
Anima S.G.R.P.A.			112,000				*
Anita L. Rankin Revocable Trust-U/ A DTD 4/28/1995-Anita L. Rankin, TTEE			380				*
Ann K. Miller-Personal Portfolio			6,300				*
Anne Marie Romer-Personal Portfolio			1,290				*
Anthony L. Kremer Revocable Living Trust-U/ A DTD 1/27/1998-Anthony L. Kremer TTEE			1,000				*
Anthony L. Kremer-IRA			1,010				*
Atlas (QP), LP			5,550				*
Atlas Capital ID Fund LP			875				*
Atlas Capital (Q.P.), L.P.			50,809				*
Atlas Capital Master Fund Ltd.			107,846				*
Atlas Master Fund			10,920				*
Auto Disposal Systems-401(k)-All Cap Value Account			650				*
Auto Disposal Systems-401(k)-Balanced 60 Account			480				*
Auto Disposal Systems-401(k)-Small Cap Value Account			850				*
Aviation Sales Inc.-401(k) Profit Sharing Plan-Rick J. Penwell TTEE			1,470				*
Axia Offshore Partners, LTD			9,315				*
Axia Partners Qualified, LP			95,739				*
Axia Partners, LP			42,136				*
Baker-Hazel Funeral Home, Inc.-401(k) Plan			550				*
Baker-Hazel Funeral Home-Corporate Investment Fund			330				*
Banks, Michael R.(3)			7,935				*
Basso Fund Ltd.			21,100				*
Basso Multi-Strategy Holding Fund Ltd			78,700				*
Basso Private Opportunities Holding Fund Ltd.			40,800				*
BBT Fund, L.P.			505,811				1.42	%
BBVA			321,429				*

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						Percentage of
		Number of Shares of				Common
		Common Stock That				Stock
Selling Stockholder		May Be Sold				Outstanding
Beach, Patrick & Christine JTWROS			6,666				*
Bear Stearns Sec. Corp. Cust. FBO Emerson Partners			50,000				*
Bear Stearns Sec. Corp. Cust. FBO J. Steven Emerson IRA R/O II			720,000				2.02	%
Bear Stearns Sec. Corp. Cust. FBO J. Steven Emerson Roth IRA			420,000				1.18	%
Bear Stearns Sec. Corp. Cust. FBO J. Steven Emerson			186,000				*
Belmont, Francis E			1,500				*
Bennett Family LLC			2,000				*
Benny L. & Alexandra P. Tumbleston JT WROS			1,890				*
Bermuda Partners, LP			33,000				*
Black Sheep Partners, LLC			44,150				*
BLT Enterprises, LLLP-Partnership			1,100				*
Blueprint Partners, L.P.			20,000				*
Borman, Casey J.			5,000				*
Boston Partners Asset Management, LLC(4)			536,115				1.51	%
Bradley J. Hausfeld-IRA			400				*
Brady Retirement Fund L.P.			27,500				*
Brunswick Master Pension Trust			23,600				*
Calm Waters Partnership			201,500				*
Campbell, Thomas M.(3)			46,932				*
Canyon Capital Balanced Equity Master Fund, Ltd(4)			71,429				*
Canyon Value Realization Fund (Cayman) Ltd.(4)			500,000				1.40	%
Canyon Value Realization Fund L.P.(4)			121,428				*
Canyon Value Realization MAC- 18 Ltd(4)			7,143				*
Cap Fund, L.P.			185,619				*
Carmine and Wendy Guerro Living Trust-U/ A DTD 7/31/2000-C Guerro and W Guerro, TTEES			1,080				*
Carmine Guerro-IRA Rollover			2,090				*
Carol D. Shellabarger Green-Revocable Trust DTD 4/21/00-Carol Downing Green TTEE			890				*
Carol Downing Green-IRA			470				*
Carol V. Hicks-Personal Portfolio			30				*
Carter, Debra R.(3)			5,441				*
Castle Rock Fund Ltd			126,800				*
Castlerock Partners II, L.P.			15,800				*
Castlerock Partners, L.P.			392,000				1.10	%
Catalyst Fund Offshore Ltd.			6,434				*
Caxton International Limited(4)			714,200				2.01	%
Ceisel, Charles B			1,500				*
Chamberlain Investments Ltd.			18,794				*
Charles L. & Miriam L. Bechtel-Joint Personal Portfolio			450				*
Cheyne Special Situations Fund LP			757,000				2.13	%
Chimermine, Lawrence			2,000				*
Christine Hausfeld-IRA			160				*
Christopher M. Ruff-IRA Rollover			200				*
Cindu International Pension Fund			2,900				*
Citi Canyon Ltd.(4)			7,143				*
Clam Partners, LLC			70,000				*

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						Percentage of
		Number of Shares of				Common
		Common Stock That				Stock
Selling Stockholder		May Be Sold				Outstanding
Clark Manufacturing Co.-Pension Plan DTD 5/16/1998-John A. Barron TTEE			180				*
Clark Manufacturing Co.-PSP DTD 5/16/98-John A. Barron TTEE			360				*
Concentrated Alpha Partners, L.P.			185,619				*
Congress Ann Hazel-IRA			590				*
Cynthia Mollica Barron-Personal Portfolio			150				*
David Keith Ray-IRA			940				*
David M. Morad Jr.-IRA Rollover			2,800				*
David R. Kremer Revocable Living Trust-DTD 5/7/1996-David R. Kremer & Ruth E. Kremer, TTEES			1,230				*
Davis, John L.(3)			17,005				*
DB AG London(4)			53,571				*
Deanne W. Joseph-IRA Rollover			370				*
Deephaven Event Trading Ltd.(4)			1,176,135				3.30	%
Deephaven Growth Opportunities Trading Ltd.(4)			481,770				1.35	%
Delaware Street Capital Master Fund, L.P.			1,210,750				3.40	%
Dickerson, Estelle E.(3)			7,935				*
Dinger, Blaine E.(3)			17,005				*
Dominguez, Melissa D.(3)			3,173				*
Don A. Keasel and Judith Keasel-JTWROS			120				*
Don Keasel-IRA Rollover			810				*
Donald G. Tekamp Revocable Trust-DTD 8/16/2000-Donald G. Tekamp TTEE			1,460				*
Donald L. and Edythe Aukeman-Joint Personal Portfolio			400				*
Donald L. Aukerman-IRA			620				*
Donna M. Ruff-IRA Rollover			80				*
Dorothy W. Savage-Kemp-IRA			440				*
Dorothy W. Savage-Kemp-TOD			820				*
Douglas & Melissa Marchal-Joint Personal Portfolio			290				*
Dr. Donald H. Nguyen & Lynn A. Buffington-JTWROS			540				*
Dr. Juan M. Palomar-IRA Rollover			1,520				*
Drake Associates, L.P.			53,929				*
Duke, James A.(3)			10,203				*
Edenworld International Ltd.			9,636				*
Edison Sources Ltd.			33,600				*
Edward W. Eppley-IRA — SEP			600				*
Edwards, Susan R.(3)			5,895				*
Edythe M. Aukeman-IRA			140				*
Elaine S. Berman Trust-DTD 6/30/95-Elaine S. Berman TTEE			550				*
Elaine S. Berman-Inherited IRA-Beneficiary of Freda Levine			460				*
Elaine S. Berman-SEP-IRA			540				*
Electrical Workers Pension Funds Part A			1,855				*
Electrical Workers Pension Funds Part B			1,335				*
Electrical Workers Pension Funds Part C			645				*
Emerson Electric Company			32,300				*
Emerson Partners			60,000				*
Emerson, J. Steven			200,000				*
Emerson, J. Steven IRA R/ O II			740,000				2.08	%

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						Percentage of
		Number of Shares of				Common
		Common Stock That				Stock
Selling Stockholder		May Be Sold				Outstanding
Emerson, J. Steven Roth IRA			400,000				1.12	%
Empyrean Capital Fund			96,250				*
Empyrean Capital Overseas Benefit Plan Fund, Ltd.			18,462				*
Empyrean Capital Overseas Fund, Ltd.			160,288				*
Endeavor Asset Management			20,000				*
Ernst Enterprises-Deferred Compensation DTD 05/20/90-fbo Mark Van de Grift			1,360				*
Ernst Enterprises-Deferred Compensation Plan DTD 05/20/90-fbo Terry Killian			1,560				*
Evan L. Julber-IRA			9,000				*
Excelsior Value and Restructuring Fund			1,500,000				4.21	%
Farallon Capital Institutional Partners II, L.P.			5,400				*
Farallon Capital Institutional Partners III, L.P.			6,400				*
Farallon Capital Institutional Partners, L.P.			65,600				*
Farallon Capital Offshore Investors, Inc.			124,006				*
Farallon Capital Offshore Investors II, L.P.			61,994				*
Farallon Capital Partners, L.P.			99,086				*
Farvane Limited			2,617				*
FBO Marjorie G. Kasch-U/ A/ D 3/21/80-Thomas A. Holton TTEE			700				*
Fidelity Contrafund(5)			1,847,200				5.19	%
Fidelity Management Trust Company on behalf of accounts managed by it(6)			4,400				*
Fidelity Puritan Trust: Fidelity Balanced Fund(5)			516,300				1.45	%
Fidelity Puritan Trust: Fidelity Low-Priced Stock Fund(5)			1,831,700				5.14	%
Fidelity Securities Fund: Fidelity Small Cap Growth Fund(5)			75,000				*
Fidelity Securities Fund: Fidelity Small Cap Value Fund(5)			200,000				*
Fisher, William F.(3)			56,682				*
Flagg Street Offshore, LP			103,538				*
Flagg Street Partners LP			34,345				*
Flagg Street Partners Qualified LP			37,117				*
Fleet Maritime, Inc.			33,139				*
Folksam			35,000				*
Fondo America			40,000				*
Fondo Attivo			17,000				*
Fondo Trading			55,000				*
Fort Mason Master, L.P.			501,829				1.41	%
Fort Mason Partners, L.P.			33,171				*
Framtidsfonden			25,000				*
Gallatin, Ronald			25,000				*
Gary M. Youra, M.D.-IRA Rollover			2,060				*
Geary Partners			95,000				*
George Hicks-Personal Portfolio			860				*
George & Carol V. Hicks Joint Personal Portfolio			30				*
Gerald Allen-IRA			420				*
Gerald E. & Deanne W. Joseph-Combined Portfolio			1,180				*
Gerald J. Allen-Personal Portfolio			3,580				*
GLG Market Neutral Fund			178,570				*
GLG North American Opportunity Fund			850,000				2.39	%

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						Percentage of
		Number of Shares of				Common
		Common Stock That				Stock
Selling Stockholder		May Be Sold				Outstanding
Global Capital Ltd.			20,000				*
GMI Master Retirement Trust			33,395				*
Goins, Rebecca L.(3)			5,441				*
Goldman Sachs & Co., Inc.(4)			317,756				*
Goldstein, Robert B. & Candy K			4,000				*
Gracie Capital International			75,000				*
Gracie Capital LP			150,000				*
Greek, Cathy & Frank			3,900				*
Gregory A. & Bibi A. Reber-Joint Personal Portfolio			580				*
Gregory J. Thomas-IRA—SEP			370				*
Grelsamer, Philippe			2,500				*
Gruber & McBaine International			15,140				*
Guggenheim Portfolio Company LLC			40,000				*
Guggenheim Portfolio Company XII LLC			35,700				*
H. Joseph & Rosemary Wood-Joint Personal Portfolio			880				*
Hagan, Dawn E.(3)			5,895				*
Hancock, David H			13,300				*
Harbor Advisors, LLC FBO Butterfield Bermuda General Account			20,000				*
Harold & Congress Hazel Trust-U/ A DTD 4/21/1991-Congress Ann Hazel, TTEE			740				*
Harold A. & Lois M. Ferguson-Joint Personal Portfolio			1,040				*
Hartley, Steven C.(3)			2,267				*
HCM Energy Holdings LLC			78,571				*
HedgEnergy Master Fund LP			120,000				*
HFR HE Systematic Master Trust			28,500				*
Highbridge Event Driven/ Relative Value Fund, L.P.(4)			98,702				*
Highbridge Event Driven/ Relative Value Fund, Ltd(4)			760,441				2.14	%
Highbridge International LLC(4)			671,428				1.89	%
Highland Equity Focus Fund, LP			70,000				*
Highland Equity Fund, LP			30,000				*
HSBC Guyerzeller Trust Company			12,630				*
Hsien-Ming Meng-IRA Rollover			990				*
Idnani, Rajesh			7,500				*
Institutional Benchmarks Master Fund, Ltd(4)			7,143				*
Ironman Energy Capital, L.P.			70,000				*
James R. Goldstein-Personal Portfolio			570				*
Jan Munroe Trust(4)			10,000				*
Janice S. Hamon-Personal Portfolio			410				*
Jeannine E. Philpot-Personal Portfolio			820				*
JMG Capital Partners, LP			125,000				*
JMG Triton Offshore Fund Ltd			125,000				*
John & Betty Eubel-Combined Portfolio			5,100				*
John & Lisa O’Neil-Joint Personal Portfolio			1,290				*
John A. Barron-IRA Rollover			2,300				*
John A. Barron-Personal Portfolio			170				*
John A. Barron-Personal Portfolio			390				*

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						Percentage of
		Number of Shares of				Common
		Common Stock That				Stock
Selling Stockholder		May Be Sold				Outstanding
John B. Maynard Jr.-Irrevocable Trust U/ A DTD 12/12/93-John B. Maynard Sr., TTEE			320				*
John C. & Sarah L. Kunesh-JTWROS			610				*
John F. Carroll-IRA—SEP			130				*
John H. Lienesch-IRA			2,080				*
John Hancock Funds II			37,240				*
John Hancock Trust			41,800				*
John M. Walsh, Jr.-IRA Rollover			980				*
John O’Meara-IRA Rollover			400				*
John T. Dahm-IRA			1,870				*
Johnson, Richard J.			10,000				*
Johnson Revocable Living Trust			10,000				*
Jon D. and Linda W. Gruber Trust			15,100				*
Jon R. Yenor-IRA Rollover			910				*
Jon R. Yenor & Caroline L. Breckner-Joint Tenants			1,230				*
Joseph D. Maloney-Personal Portfolio			810				*
Joseph F. & Mary K. Scullion-Combined Portfolio			1,400				*
Josey, Scott D.(7)			680,181				1.91	%
Judith Keasel-IRA Rollover			340				*
Julber, Evan L			4,000				*
Kandythe J. Miller-Combined Portfolio			850				*
Kathleen J. Lienesch Family Trust-DTD 2/2/00-Kathleen J. Lienesch TTEE			1,500				*
Kathleen J. Lienesch-IRA			240				*
Kathryn A. Leeper-Revocable Living Trust DTD 06/29/95-Kathryn A. Leeper, TTEE			540				*
Keith L. Aukeman-IRA Rollover			1,600				*
Kenneth E. Shelton-IRA Rollover			820				*
Kettering Anesthesia Associates-Profit Sharing Plan-FBO David J. Pappenfus			1,230				*
Kevin E. Slattery-Trust B DTD 5/17/99-De Ette Rae Hart TTEE			1,270				*
Kirby C. Leeper-IRA Rollover			590				*
Koehler, Anne C.(3)			14,737				*
Lagunitas Partners LP			69,760				*
Lamb Partners LP			165,600				*
Lanza III, Nick(3)			7,935				*
Larry & Marilyn Lehman-Combined Portfolio			1,600				*
Lawrence J. Harmon Trust A-DTD 1/29/2001-G Harmon & T Harmon & H Wall TTEES			680				*
Leo K. & Katherine H. Wingate-Joing Personal Portfolio			580				*
Lester J. & Susan A. Chamock-JTWROS			2,140				*
Lester, Ricky G.(7)			30,608				*
Linda M. Meister-Personal Portfolio			1,000				*
LJB Inc. Savings Plan & Trust-U/ A DTD 1/1/1985 FBO T. Beach-Stephen D. Williams TTEE			490				*
Loegering, Cory L.(7)			124,700				*
Long, Annette R.(3)			7,482				*
Loyola University Employee’s Retirement Plan Trust			8,400				*
Loyola University of Chicago Endowment Fund			8,450				*

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							Percentage of
			Number of Shares of				Common
			Common Stock That				Stock
Selling Stockholder			May Be Sold				Outstanding
MA Deep Event, Ltd.(4)				114,095				*
Magnetar Capital Master Fund, L.P.				90,000				*
Margaret S. Adam Revocable TRUST-DTD 4/10/02-Margaret S. Adam, TTEE				360				*
Marily E. Lipson-IRA				140				*
Marilyn E. Lehman-IRA Rollover				1,600				*
Martha S. Senklw-Revocable Living Trust DTD 11/02/98-Martha S. Senkiw, TTEE				240				*
Martin J. Grunder, Jr.-IRA—SEP				450				*
Marvin E. Nevins-Personal Portfolio				920				*
Mary Ellen Kremer Living Trust-U/ A DTD 01/27/1998-Mary Ellen Kremer TTEE				1,100				*
Mary K. Scullion-IRA				1,400				*
Maureen K. Aukeman-Personal Portfolio				190				*
Maureen K. Aukerman-IRA Rollover				880				*
McClung, Emily R.(3)				9,069				*
McCullough, Michael C.(3)				19,272				*
Melodee Ruffo-Combined Portfolio				720				*
Metal Trades				4,500				*
Miami Valleo Cardiologists, Inc.-Profit Sharing Plan
	Trust-EBS Small Cap			6,800				*
Miami Valley Cardiologists, Inc.-Profit Sharing Plan Trust-EBS Equity 100				10,060				*
Michael & Marilyn E. Lipson-JTWROS				290				*
Michael A. Houser & H. Stephen Wargo-JTWROS				270				*
Michael F. & Renee D. Ciferri-Joint Personal Portfolio				700				*
Michael G. & Dara L. Bradshaw-Combined Portfolio				1,440				*
Michael G. Lunsford-IRA				640				*
Michael J. Suttman-Personal Portfolio				620				*
Michael Lipson-IRA				190				*
Milo Noble-Personal Portfolio				3,690				*
Minnesota Mining & Manufacturing Company				184,300				*
Molohon, Richard A.(3)				56,682				*
Monte R. Black-Personal Portfolio				5,380				*
Morgan Stanley & Co. Incorporated(4)				500,000				1.40	%
Muellenberg, Jerry L.(3)				6,802				*
Mulholland Fund, L.P.				13,800				*
Micro-Cap Equity Fund(4)				144,000				*
Neal L. & Kandythe J. Miller-Joint Personal Portfolio				560				*
Neal L. Miller-IRA Rollover				270				*
Neelam Idnani Julian				7,500				*
Nemeth, Denise A.(3)				13,604				*
Northwestern Mutual Life Insurance(4)				1,775,714				4.99	%
Ospraie Portfolio Ltd				1,100,000				3.09	%
OZ Master Fund, Ltd.				527,464				1.48	%
Pam Graeser-Personal Portfolio				430				*
Parsons, Thomas B.				1,000				*
Passport Master Fund, LP				224,000				*
Passport Master Fund II, LP				176,000				*

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						Percentage of
		Number of Shares of				Common
		Common Stock That				Stock
Selling Stockholder		May Be Sold				Outstanding
Patricia A. Kremer Revocable Trust -DTD 4/29/04-Donald G. Kremer, TTEE			1,250				*
Patricia Meyer Dorn-Personal Portfolio			2,800				*
Paul R. & Dina E. Cmkovich-Joint Personal Portfolio			4,750				*
Paul S. & Cynthia J. Guthrie-Joint Personal Portfolio			1,530				*
Paul S. Guthrie-IRA			130				*
Paul W. Nordt III-IRA Rollover			80				*
Paul W. Nordt III-IRA Rollover—401(k)			1,390				*
Peck Family Investments, Ltd.			1,090				*
Peter & Noreen McInnes-Combined Portfolio			8,800				*
Peter D. Senkiw-Revocable Living Trust DTD 11/02/98-Peter D. Senkiw, TTEE			320				*
Peter R. Newman-IRA Rollover			2,430				*
Philip M. Haisley-IRA Rollover			330				*
Plemons, Melanie O.(3)			6,802				*
Poole, Richard A.(3)			9,069				*
Precept Capital Master Fund, G.P			20,000				*
Presidio Partners			127,500				*
Prism Partners I, L.P.			114,782				*
Prism Partners II Offshore Fund			42,857				*
Prism Partners III Leveraged L.P.			137,738				*
Prism Partners IV Leveraged Offshore Fund			160,694				*
Producers-Writers Guild of America			11,700				*
Rae, Rita-Roxanne R.(3)			9,069				*
Raymond W. Lane-Personal Portfolio			1,700				*
Raytheon Company Combined DB/ DC Master Trust			23,000				*
Raytheon Master Pension Trust			96,100				*
Rebecca A. Nelson-IRA Rollover			1,200				*
Reed, Sammy D.(3)			13,604				*
Renee D. Ciferri-IRA Rollover			410				*
Richard D. Smith-Combined Portfolio			1,300				*
Richard H. LeSourd, Jr.-IRA—SEP			1,200				*
Richard, Karen A.(3)			9,069				*
Robert A. Riley Beneficiary-Inherited IRA			1,390				*
Robert A. Riley-Revocable Family Trust DTD 5/8/97-Robert A. Riley TTEE			380				*
Robert F. Mays Trust-DTD 12/7/95-Robert F. Mays TTEE			1,470				*
Robert N. Sturwold-Personal Portfolio			520				*
Robert W. Lowry-Personal Portfolio			2,020				*
Ronald Lee Devore MD & Duneen Lynn Devore-JTWROS			270				*
Rosemary Winner Wood-IRA			650				*
Russell, Gregory D.(3)			1,134				*
Ruth E. Kremer Revocable Living Trust-DTD 5/7/96-David R. Kremer & Ruth E. Kremer, TTEES			830				*
SAB Capital Partners, L.P.			1,098,083				2.98	%
SAB Overseas Master Fund, L.P.			1,157,617				3.25	%
Sandra E. Nischwitz-Personal Portfolio			1,240				*
Savannah International Longshoremen’s Association Employers Pension Trust			10,200				*
Seneca Capital International Ltd			446,200				1.25	%

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						Percentage of
		Number of Shares of				Common
		Common Stock That				Stock
Selling Stockholder		May Be Sold				Outstanding
Seneca Capital LP			215,400				*
Seneca Capital II LP			1,100				*
Settegast, Cynthia L.(3)			7,482				*
SF Capital Partners Ltd(4)			224,500				*
Sharon A. Lowry-IRA-Robert W. Lowry, POA			1,560				*
Sisters of St. Joseph Carondelet			4,700				*
Slovin, Bruce			10,000				*
Sniper Fund			3,300				*
Sound Energy Capital Offshore Fund, Ltd.			41,900				*
Soundpost Partners, LP			9,000				*
Southport Energy Plus Offshore Fund, Inc.			139,300				*
Southport Energy Plus Partners L.P.			318,800				*
Sprain, Janet E.(3)			8,389				*
Spring Street Partners L.P.			40,000				*
SRI Fund, L.P.			22,856				*
Stanley J. Katz-IRA			350				*
State Street Research Energy & Natural Resources Hedge Fund LLC			147,300				*
Steamfitters			1,745				*
Steven & Victoria Conover-Joint Personal Portfolio			470				*
Steven M. Rebecca A. Nelson-Combined Portfolio			1,200				*
Susan J. Gagnon-Revocable Living Trust UA 8/30/95-Susan J. Gagnon TTEE			2,100				*
Talkot Fund, L.P.			40,000				*
Tanya P. Hrinyo Pavlina-Revocable Trust DTD 11/21/95-Tanya P. Hrinyo Pavlina TTEE			1,200				*
Tetra Capital Partners, LP			8,000				*
The Anderson Family-Revocable Trust, DTD 09/23/02-J. Kendall & Tamera L. Anderson, TTEES			1,740				*
The Catalyst Fund Offshore, Ltd.			3,242				*
The Charles T. Walsh Trust-DTD 12/6/2000-Charles T
Walsh TTEE			2,500				*
The Edward W. & Frances L. Eppley-Combined Portfolio			600				*
The Johnson Irrevocable Living Trust DTD May 1998			10,000				*
The Louis J. Thomas-Irrevocable Trust DTD 12/6/2000-Gregory J. Thomas, TTEE			530				*
Thomas L. Hausfeld-IRA			250				*
Thomas V. & Charlotte E. Moon Family Trust-Joint Personal Trust			740				*
Timothy A. Pazyniak-IRA Rollover			2,830				*
Timothy J. and Karen A. Beach-JTWROS			460				*
Tinicum Partners, L.P.			1,800				*
TNM Investments LTD-Partnership			310				*
Touradji Global Resources Master Fund, Ltd.			497,000				1.40	%
Town of Darien Employee Pension			3,300				*
Town of Darien Police Pension			2,900				*
TPG-Axon Partners (Offshore), Ltd			768,783				2.16	%
TPG-Axon Partners, LP			495,017				1.39	%
Treaty Oak Ironwood			74,295				*
Treaty Oak Master Fund			59,235				*

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						Percentage of
		Number of Shares of				Common
		Common Stock That				Stock
Selling Stockholder		May Be Sold				Outstanding
Tumbleston-JTWROS			1,890				*
Turnberry Asset Management			10,000				*
United Capital Management			17,000				*
University of Richmond Endowment Fund			10,400				*
University of Southern California Endowment Fund			23,000				*
Van den Bold, Michiel C.(7)			226,727				*
Variable Insurance Products Fund II: Contrafund Portfolio(2)			527,600				1.48	%
Verizon			122,700				*
Verle McGillivray-IRA Rollover			680				*
Victoire Finance et Aestion BV			35,714				*
Virginia & Edward O’Neil JTWROS			1,650				*
Walter A. Mauck-IRA Rollover			870				*
Warren Foundation			25,000				*
Wildlife Conservation Society			5,800				*
William J. Turner Revocable Living Trust-DTD 05/20/98 Schwab Account-William J. Turner, TTEE			570				*
William U. Warren Fund K			25,000				*
Wooster Capital, LP			33,500				*
Wooster Offshore Fund, Ltd.			70,000				*
York Capital Management, L.P.			119,058				*
York Credit Opportunities Fund L.P.			97,046				*
York Global Value Partners, L.P.			122,363				*
York Investment Limited			528,684				1.48	%
York Select Unit Trust			103,376				*
York Select, L.P.			124,473				*
Yvette Van de Grift-Personal Portfolio			220				*
Zelin, Leonard IRA			40,000				*

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	*	Less than 1%.

(1)	Following our merger in March 2004, but prior to our recent private equity placement in March 2005, MEI Acquisitions Holdings, LLC, an affiliate of ACON E&P, LLC, was our sole stockholder. At the time of the private equity placement, MEI Acquisitions Holdings, LLC was managed by a board of managers consisting of four of our directors, Messrs. Ginns, Aronson, Lapeyre and Leuschen and two of our former directors, Messrs. Beard and Lancaster. See “Certain Transactions with Affiliates and Management.”
(2)	The shares beneficially owned by ACON Investments LLC are held of record by MEI Investment Holdings, LLC. See “Certain Transactions with Affiliates and Management.”
(3)	Employee of Mariner.
(4)	Broker-dealer or an affiliate of a broker-dealer.
(5)	The entity is a registered investment fund (the “Fund”) advised by Fidelity Management & Research Company (“FMR Co.”), a registered investment adviser under the Investment Advisers Act of 1940, as amended. FMR Co., 82 Devonshire Street, Boston, Massachusetts 02109, a wholly owned subsidiary of FMR Corp. and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 4,997,800 shares of the common stock outstanding of the Company as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940.

	Edward C. Johnson 3d, FMR Corp., through its control of FMR Co., and the Fund each has sole power to dispose of the securities owned by the Fund.
	Neither FMR Corp. nor Edward C. Johnson 3d, Chairman of FMR Corp., has the sole power to vote or direct the voting of the shares owned directly by the Fund, which power resides with the Fund’s Board of Trustees.
	The Fund is an affiliate of a broker-dealer. The Fund purchased the shares in the ordinary course of business and, at the time of the purchase of the shares to be resold, the Fund did not have any agreements or understandings, directly or indirectly, with any person to distribute the shares.

(6)

Shares indicated as owned by the entity are owned directly by various private investment accounts, primarily employee benefit plans for which Fidelity Management Trust Company (“FMTC”) serves as trustee or managing agent. FMTC is a wholly owned subsidiary of FMR Corp. and a bank as defined in Section 3(a)(6) of the Securities Exchange Act of 1934, as amended. FMTC is the beneficial owner of 4,400 shares of the common stock of the Company as a result of its serving as investment manager of the institutional account(s).

	Edward C. Johnson 3d and FMR Corp., through its control of Fidelity Management Trust Company, each has sole dispositive power over 4,400 shares and sole power to vote or to direct the voting of 4,400 shares of common stock owned by the institutional account(s) as reported above.

(7)	Executive officer of Mariner.

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	•	directly by the selling stockholders and their successors, which includes their donees, pledgees or transferees or their successors-in-interest, or
	•	through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, commissions or agent’s commissions from the selling stockholders or the purchasers of the common stock. These discounts, concessions or commissions may be in excess of those customary in the types of transactions involved.

	•	fixed prices;
	•	prevailing market prices at the time of sale;
	•	prices related to such prevailing market prices;
	•	varying prices determined at the time of sale; or
	•	negotiated prices.

	•	on any national securities exchange or quotation on which the common stock may be listed or quoted at the time of the sale;
	•	in the over-the-counter market;
	•	in transactions other than on such exchanges or services or in the over-the-counter market;
	•	through the writing of options (including the issuance by the selling stockholders of derivative securities), whether the options or such other derivative securities are listed on an options exchange or otherwise;
	•	through the settlement of short sales; or
	•	through any combination of the foregoing.

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	•	engage in short sales of the common stock in the course of hedging their positions;
	•	sell the common stock short and deliver the common stock to close out short positions;
	•	loan or pledge the common stock to broker-dealers or other financial institutions that in turn may sell the common stock;
	•	enter into option or other transactions with broker-dealers or other financial institutions that require the delivery to the broker-dealer or other financial institution of the common stock, which the broker-dealer or other financial institution may resell under the prospectus; or
	•	enter into transactions in which a broker-dealer makes purchases as a principal for resale for its own account or through other types of transactions.

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	General

	Classified Board

	Filling Board of Directors Vacancies; Removal

	No Stockholder Action by Written Consent

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	Call of Special Meetings

	Advance Notice Requirements for Stockholder Proposals and Director Nominations

	No Cumulative Voting

	Authorized but Unissued Shares

	Delaware Business Opportunity Statute

	Amendments to our Certificate of Incorporation and Bylaws

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	Delaware Anti-Takeover Statute

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	•	file with the SEC (which occurs pursuant to the filing of the shelf registration statement of which this prospectus is a part), within 210 days after the closing date of the private equity placement, a registration statement (a “shelf registration statement”);
	•	use our commercially reasonable efforts to cause the shelf registration statement to become effective under the Securities Act as soon as practicable after the filing;
	•	continuously maintain the effectiveness of the shelf registration statement under the Securities Act until the first to occur of:

	•	the sale of all of the shares of common stock covered by the shelf registration statement pursuant to a registration statement;
	•	the sale, transfer or other disposition of all of the shares of common stock covered by the shelf registration statement or pursuant to Rule 144 under the Securities Act;
	•	such time as all of the shares of our common stock sold in this offering and covered by the shelf registration statement and not held by affiliates of us are, in the opinion of our counsel, eligible for sale pursuant to Rule 144(k) (or any successor or analogous rule) under the Securities Act;
	•	the shares have been sold to us or any of our subsidiaries; or
	•	the second anniversary of the initial effective date of the shelf registration statement.

	•	the representative of the underwriters of an underwritten offering of primary shares by us has advised us that the sale of shares of our common stock under the shelf registration statement would have a material adverse effect on our initial public offering;
	•	a majority of our board of directors, in good faith, determines that (1) the offer or sale of any shares of our common stock would materially impede, delay or interfere with any proposed financing, offer or sale of securities, acquisition, merger, tender offer, business combination, corporate reorganization, consolidation or other significant transaction involving us; (2) after the advice of counsel, the sale of the shares covered by the shelf registration statement would require disclosure of non-public material information not otherwise required to be disclosed under applicable law; or (3) either (x) we have a bona fide business purpose for preserving the confidentiality of the proposed transaction, (y) disclosure would have a material adverse effect on us or our ability to consummate the proposed transaction, or (z) the proposed transaction renders us unable to comply with SEC requirements; or
	•	a majority of our board of directors, in good faith, determines, that we are required by law, rule or regulation to supplement the shelf registration statement or file a post-effective amendment to the shelf registration statement in order to incorporate information into the shelf registration statement for the purpose of (1) including in the shelf registration statement any prospectus required under Section 10(a)(3) of the Securities Act; (2) reflecting in the prospectus included in the shelf registration statement any facts or events arising after the effective date of the shelf registration statement (or the most-recent post-effective amendment) that, individually or in the aggregate,

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		represents a fundamental change in the information set forth in the prospectus; or (3) including in the prospectus included in the shelf registration statement any material information with respect to the plan of distribution not disclosed in the shelf registration statement or any material change to such information.

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MARINER ENERGY, INC.
	Report of Independent Registered Public Accounting Firm			F-2
	Balance Sheets at September 30, 2005 (unaudited), December 31, 2004 and 2003			F-3
	Statements of Operations for the nine months ended September 30, 2005 (unaudited); the period from March 3, 2004 through September 30, 2004 (unaudited); the period from March 3, 2004 through December 31, 2004; the period from January 1, 2004 through March 2, 2004; and the years ended December 31, 2003 and 2002			F-4
	Statements of Stockholder’s Equity and Comprehensive Income for the nine months ended September 30, 2005 (unaudited); the period from January 1, 2004 through March 2, 2004; the period from March 3, 2004 through December 31, 2004; and the years ended December 31, 2003 and 2002			F-5
	Statements of Cash Flows for the nine months ended September 30, 2005 (unaudited); the period from March 3, 2004 through September 30, 2004 (unaudited); the period from March 3, 2004 through December 31, 2004; the period from January 1, 2004 through March 2, 2004; and the years ended December 31, 2003 and 2002			F-7
	Notes to the Financial Statements			F-8
FOREST GULF OF MEXICO OPERATIONS
	Report of Independent Registered Public Accounting Firm			F-37
	Statements of Revenues and Direct Operating Expenses for the nine months ended September 30, 2005 and September 30, 2004 (unaudited) and the years ended December 31, 2004, 2003 and 2002			F-38
	Notes to Statements of Revenues and Direct Operating Expenses of Forest Gulf of Mexico Operations			F-39

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	/s/ DELOITTE & TOUCHE LLP

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					Post-Merger									Pre-Merger
					September 30,				December 31,					December 31,
					2005				2004					2003
					(unaudited)
									(in thousands except
									share data)
Current Assets:
	Cash and cash equivalents				$	4,564			$	2,541				$	60,174
	Restricted cash					—				—					621
	Receivables					50,259				52,734					33,272
	Deferred tax asset					30,480				—					—
	Prepaid expenses and other					18,732				10,471					9,014
			Total current assets			104,035				65,746					103,081
Property and Equipment:
	Oil and gas properties, full cost method:
		Proved				446,868				319,553					599,762
		Unproved, not subject to amortization				31,126				36,245					36,619
			Total			477,994				355,798					636,381
	Other property and equipment					10,074				960					5,651
	Accumulated depreciation, depletion and amortization					(94,810	)			(52,985	)				(434,160	)
			Total property and equipment, net			393,258				303,773					207,872
Deferred Tax Asset						—				3,029					—
Other Assets, Net of Amortization						4,916				3,471					1,151
			TOTAL ASSETS		$	502,209			$	376,019				$	312,104
LIABILITIES AND STOCKHOLDER’S EQUITY
Current Liabilities:
	Accounts payable				$	14,573			$	2,526				$	28,640
	Accrued liabilities					88,993				81,831					35,486
	Accrued interest					141				79					—
	Derivative liability					76,902				16,976					2,464
			Total current liabilities			180,609				101,412					66,590
Long-Term Liabilities:
	Abandonment liability					26,314				19,268					15,027
	Taxes payable to parent company					—				—					5,664
	Deferred income tax					6,468				—					4,769
	Derivative liability					28,221				5,432					1,897
	Bank debt					75,000				105,000					—
	Note payable					4,000				10,000					—
	Other long-term liabilities					3,000				1,000					—
			Total long-term liabilities			143,003				140,700					27,357
Stockholder’s Equity:
	Common stock, $.0001 par value; 70,000,000 shares authorized, issued and outstanding, 35,615,400, 29,748,130 and 29,748,130 shares at September 30, 2005, December 31, 2004 and December 31, 2003, respectively					4				1					1
	Additional paid-in-capital					171,667				91,917					227,318
	Unearned compensation					(14,548	)			—					—
	Accumulated other comprehensive (loss)					(67,708	)			(11,630	)				(4,360	)
	Accumulated retained earnings (deficit)					89,182				53,619					(4,802	)
			Total stockholder’s equity			178,597				133,907					218,157
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY					$	502,209			$	376,019				$	312,104

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				Post-Merger													Pre-Merger
								Period from				Period from					Period from
				Nine Months				March 3, 2004				March 3, 2004					January 1, 2004
				Ended				through				through					through				Year Ended December 31,
				September 30,				September 30,				December 31,					March 2,
				2005				2004				2004					2004				2003				2002
				(unaudited)				(unaudited)
				(in thousands except per share data)
Revenues:
	Oil sales			$	53,579			$	44,576			$	63,498				$	12,709			$	37,992			$	38,792
	Gas sales				94,913				77,950				110,925					27,055				104,551				119,436
	Other revenues				2,753				—				—					—				—				—
		Total revenues			151,245				122,526				174,423					39,764				142,543				158,228
Costs and Expenses:
	Lease operating expense				20,170				15,073				21,363					4,121				24,719				26,076
	Transportation expense				1,697				3,744				1,959					1,070				6,252				10,480
	General and administrative expense				26,726				6,174				7,641					1,131				8,098				7,716
	Depreciation, depletion and amortization				43,457				37,464				54,281					10,630				48,339				70,821
	Derivative settlements				—				—				—					—				3,222				—
	Impairment of Enron-related receivables				—				—				—					—				—				3,234
	Impairment of production equipment held for use				498				957				957					—				—				—
		Total costs and expenses			92,548				63,412				86,201					16,952				90,630				118,327
OPERATING INCOME					58,697				59,114				88,222					22,812				51,913				39,901
Interest:
	Income				696				168				225					91				756				390
	Expense, net of amounts capitalized				(5,416	)			(4,381	)			(6,045	)				(5	)			(6,981	)			(10,298	)
Income before taxes					53,977				54,901				82,402					22,898				45,688				29,993
Provision for income taxes					(18,414	)			(19,221	)			(28,783	)				(8,072	)			(9,387	)			—
Income before cumulative effect of change in accounting method, net of tax effects					35,563				35,680				53,619					14,826				36,301				29,993
Cumulative effect of change in accounting method, net of tax effects					—				—				—					—				1,943				—
NET INCOME				$	35,563				35,680			$	53,619				$	14,826			$	38,244			$	29,993
Earnings per share:
Net income per share—basic
	Income before cumulative effect of change in accounting method, net of tax effects			$	1.10			$	1.20			$	1.80				$	.50			$	1.22			$	1.01
	Cumulative effect of change in accounting method, net of tax effects				—				—				—					—				.07				—
	Income per share—basic			$	1.10			$	1.20			$	1.80				$	.50			$	1.29			$	1.01
Net income per share—diluted
	Income before cumulative effect of change in accounting method, net of tax effects			$	1.07			$	1.20			$	1.80				$	.50			$	1.22			$	1.01
	Cumulative effect of change in accounting method, net of tax effects				—				—				—					—				.07				—
	Income per share—diluted			$	1.07			$	1.20			$	1.80				$	.50			$	1.29			$	1.01
Weighted average shares outstanding—basic					32,438,240				29,748,130				29,748,130					29,748,130				29,748,130				29,748,130
Weighted average shares outstanding—diluted					33,312,831				29,748,130				29,748,130					29,748,130				29,748,130				29,748,130

F-4

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																			Accumulated				Accumulated
			Common Stock								Additional								Other				Retained				Total
											Paid-In				Unearned				Comprehensive				Earnings				Stockholder’s
			Shares				Amount				Capital				Compensation				Income (Loss)				(Deficit)				Equity
			(in thousands)
Balance at December 31, 2001				29,748			$	1			$	227,318				—			$	25,803			$	(73,039	)		$	180,083
	Net income			—				—				—				—				—				29,993				29,993
	Change in fair value of derivative hedging instruments			—				—				—				—				(17,105	)			—				(17,105	)
	Hedge settlements reclassified to income			—				—				—				—				(22,875	)			—				(22,875	)
	Total comprehensive income (loss)			—				—				—				—				—				—				(9,987	)
Balance at December 31, 2002				29,748			$	1			$	227,318				—			$	(14,177	)		$	(43,046	)		$	170,096
	Net income			—				—				—				—				—				38,244				38,244
	Change in fair value of derivative hedging instruments			—				—				—				—				39,280				—				39,280
	Hedge settlements reclassified to income			—				—				—				—				(29,463	)			—				(29,463	)
																—
	Total comprehensive income			—				—				—				—				—				—				48,061
Balance at December 31, 2003				29,748			$	1			$	227,318				—			$	(4,360	)		$	(4,802	)		$	218,157
Pre-Merger Net Income				—				—				—				—				—				14,826				14,826
	Change in fair value of derivative hedging instruments			—				—				—				—				(7,312	)			—				(7,312	)
	Hedge settlements reclassified to income			—				—				—				—				(745	)			—				(745	)
	Total comprehensive income			—				—				—				—				—				—				6,769
	Pre-Merger Balance at March 2, 2004			29,748			$	1			$	227,318				—			$	(12,417	)		$	10,024			$	224,926
Post-Merger
	Dividend			—				—				—				—				—				(166,432	)			(166,432	)
	Merger adjustments			—				—				(135,401	)			—				12,417				156,408				33,424
Balance at March 3, 2004				29,748			$	1			$	91,917				—			$	—			$	—			$	91,918
	Net income			—				—				—				—				—				53,619				53,619
	Change in fair value of derivative hedging instruments—net of income taxes			—				—				—				—				(32,171	)			—				(32,171	)
	Hedge settlements reclassified to income—net of income taxes			—				—				—				—				20,541				—				20,541
	Total comprehensive income			—				—				—				—				—				—				41,989
Balance at December 31, 2004				29,748			$	1			$	91,917				—			$	(11,630	)		$	53,619			$	133,907

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																			Accumulated				Accumulated
			Common Stock								Additional								Other				Retained				Total
											Paid-In				Unearned				Comprehensive				Earnings				Stockholder’s
			Shares				Amount				Capital				Compensation				Income (Loss)				(Deficit)				Equity
			(in thousands)
	Common shares issued—private equity offering (unaudited)			3,600				2				44,532				—				—				—				44,534
	Common shares issued—restricted stock (unaudited)			2,267				1				31,741				(31,742	)			—				—				—
	Amortization of unearned compensation—net of income taxes (unaudited)			—				—				—				17,194				—				—				17,194
	Stock compensation expense— stock options—net of income taxes (unaudited)			—				—				420				—				—				—				420
Contributed capital—Mariner Energy, LLC and Mariner Holdings, Inc. (unaudited)				—				—				3,057				—				—				—				3,057
Comprehensive income:
	Net income (unaudited)			—				—				—				—				—				35,563				35,563
	Other comprehensive income (loss):
	Change in fair value of derivative hedging instruments—net of income taxes (unaudited)			—				—				—				—				(79,479	)			—				(79,479	)
	Hedge settlements reclassified to income—net of income taxes (unaudited)			—				—				—				—				23,401				—				23,401
	Total comprehensive income (loss) (unaudited)			—				—				—				—				—				—				(20,515	)
Balance at September 30, 2005 (unaudited)				35,615			$	4			$	171,667			$	(14,548	)		$	(67,708	)		$	89,182			$	178,597

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					Post-Merger													Pre-Merger
									Period from				Period from					Period from
					Nine Months				March 3, 2004				March 3, 2004					January 1, 2004				Year Ended
					Ended				through				through					through				December 31,
					September 30,				September 30,				December 31,					March 2,
					2005				2004				2004					2004				2003				2002
					(unaudited)				(unaudited)
					(in thousands)
Operating Activities:
	Net income				$	35,563			$	35,680			$	53,619				$	14,826			$	38,244			$	29,993
	Adjustments to reconcile net loss to net cash provided by operating activities:
	Deferred income tax					15,862				17,601				27,162					8,072				—				—
	Depreciation, depletion and amortization					44,321				37,964				55,067					10,630				48,414				70,588
	Stock compensation expense					17,614				—				—					—				—				—
	Hedge activities					—				—				—					—				(2,030	)			(23,200	)
	Impairment of Enron-related receivables					—				—				—					—				—				3,234
	Impairment of production equipment held for use					498				957				957					—				—				—
	Loss on sale of fixed assets					—				—				—					—				—				69
	Cumulative effect of changes in accounting method					—				—				—					—				(2,988	)			—
	Changes in operating assets and liabilities:
		Receivables				2,476				7,707				(10,615	)				(8,847	)			(3,599	)			4,449
		Prepaid expenses and other				418				2,100				(965	)				551				(2,257	)			3,249
		Other assets				(629	)			(636	)			321					(963	)			1,485				344
		Restricted cash				—				(7,800	)			620					1				14,574				(15,195	)
		Accounts payable and accrued liabilities				19,251				3,261				9,697					(3,974	)			1,208				(13,256	)
		Taxes payable to parent company and deferred income tax				—				—				—					—				10,432				—
			Net cash provided by operating activities			135,374				96,834				135,863					20,296				103,483				60,275
Investing Activities:
	Additions to oil and gas properties					(132,988	)			(85,699	)			(133,425	)				(15,264	)			(83,228	)			(105,360	)
	Proceeds from property conveyances					18				—				—					—				121,625				52,329
	Additions to other property and equipment					(9,114	)			(169	)			(172	)				(78	)			(50	)			(738	)
			Net cash (used in) provided by investing activities			(142,084	)			(85,868	)			(133,597	)				(15,342	)			38,347				(53,769	)
Financing Activities:
	Initial borrowings from revolving credit facility, net of fees					—				131,579				131,579					—				—				—
	Repayment of subordinated notes					—				—				—					—				(100,000	)			—
	Repayment of term note					(6,000	)			—				—					—				—				—
	Credit facility borrowings (repayments), net					(30,000	)			(40,000	)			(30,000	)				—				—				—
	Proceeds from private equity offering					44,534				—				—					—				—				—
	Deferred offering costs					(2,680	)			—				—					—				—				—
	Capital contribution from affiliates					2,879				—				—					—				—				—
	Dividend to Mariner Energy LLC					—				(166,431	)			(166,432	)				—				—				—
			Net cash (used in) provided by financing activities			8,733				(74,852	)			(64,853	)				—				(100,000	)			—
Increase (Decrease) in Cash and Cash Equivalents						2,023				(63,886	)			(62,587	)				4,954				41,830				6,506
Cash and Cash Equivalents at Beginning of Period						2,541				65,128				65,128					60,174				18,344				11,838
Cash and Cash Equivalents at End of Period					$	4,564			$	1,242			$	2,541				$	65,128			$	60,174			$	18,344

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1.	Summary of Significant Accounting Policies

F-8

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Mariner Energy, Inc. bank loan proceeds			$	135.0
Note payable issued by Mariner Energy, Inc. to former parent				10.0
Equity from new owners				100.0
Distributions from Mariner Energy, Inc.				31.2
Assignment by Mariner Energy, Inc. of receivables				1.9
	Total		$	278.1
Repayment of former parent debt obligation			$	197.6
Merger consideration to stockholders and warrant holders				73.5
Acquisition costs and other expenses				7.0
	Total		$	278.1

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			March 2, 2004
			(in millions)
Oil and natural gas properties— proved			$	203.5
Oil and natural gas properties— unproved				25.2
Other property and equipment and other assets				0.7
Current assets				83.2
Deferred tax asset(1)				9.1
Other assets				4.6
Accounts payable and accrued expenses				(62.2	)
Long-Term Liability				(14.7	)
Fair value of oil and natural gas derivatives				(12.4	)
Debt				(145.0	)
	Total Allocation		$	92.0

(1)	Represents deferred income taxes recorded at the date of the Merger due to differences between the book basis and the tax basis of assets. For book purposes, we had a step-up in basis related to purchase accounting while our existing tax basis carried over.

		Twelve Months
		Ending
		December 31,
		2004
		(in millions)
Revenues and other income		$	214.2
Income before taxes and change in accounting method			103.0
Net income			67.0

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		Post-Merger													Pre-Merger
						Period from				Period from					Period from
		Nine Months				March 3, 2004				March 3, 2004					January 1, 2004				Years Ended
		Ended				through				through					through				December 31,
		September 30,				September 30,				December 31,					March 2,
		2005				2004				2004					2004				2003				2002
		(unaudited)				(unaudited)
Numerator:
Income before cumulative effect of change in accounting method, net of tax effects		$	35,563			$	35,680			$	53,619				$	14,826			$	36,301			$	29,993
Cumulative effect of change in accounting method, net of tax effects			—				—				—					—				1,943				—
Net income		$	35,563			$	35,680			$	53,619				$	14,826			$	38,244			$	29,993
Denominator:
Weighted average shares outstanding			32,438				29,748				29,748					29,748				29,748				29,748
Add dilutive securities: Restricted shares			875				—				—					—				—				—
Total weighted average shares outstanding and dilutive securities			33,313				29,748				29,748					29,748				29,748				29,748
Earnings per share— basic:
Income before cumulative effect of change in accounting method, net of tax effects		$	1.10			$	1.20			$	1.80				$	.50			$	1.22			$	1.01
Cumulative effect of change in accounting method, net of tax effects			—				—				—					—				.07				—
Net income per share—basic		$	1.10			$	1.20			$	1.80				$	.50			$	1.29			$	1.01
Earnings per share— diluted:
Income before cumulative effect of change in accounting method, net of tax effects		$	1.07			$	1.20			$	1.80				$	.50			$	1.22			$	1.01
Cumulative effect of change in accounting method, net of tax effects			—				—				—					—				.07				—
Net income per share— diluted		$	1.07			$	1.20			$	1.80				$	.50			$	1.29			$	1.01

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F-12

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F-13

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F-14

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		(in millions)
Abandonment liability as of January 1, 2003 (Pre-Merger)		$	15.7
Liabilities incurred			1.8
Claims settled			(3.9	)
Accretion expense			1.4
Abandonment liability as of December 31, 2003 (Pre-Merger)		$	15.0
Liabilities Incurred			—
Claims Settled			(1.5	)
Accretion Expense			0.2
Abandonment Liability as of March 2, 2004 (Pre-merger)		$	13.7
Abandonment Liability as of March 3, 2004 (Post-merger)		$	13.7
Liabilities Incurred			11.5
Claims Settled			(2.7	)
Accretion Expense			1.5
Abandonment Liability as of December 31, 2004 (Post-merger)(1)		$	24.0
Liabilities Incurred (unaudited)			9.4
Claims Settled (unaudited)			(1.9	)
Accretion Expense (unaudited)			1.6
Abandonment Liability as of September 30, 2005 (Post-merger) (unaudited)(2)		$	33.1

(1)	Includes $4.7 million classified as a current accrued liability at December 31, 2004.
(2)	Includes $6.8 million classified as a current accrued liability at September 30, 2005.

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F-16

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F-17

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2.	Related Party Transactions

	Mariner Energy LLC

F-18

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	Mariner Energy, Inc.

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		Year Ending
		December 31,
		2004				2003
Natural gas quantity hedged (MMbtu)			—				3,650,000
Increase (decrease) in natural gas sales (thousands)			—			$	2,603
Crude oil quantity hedged (MBbls)			—				—
Increase (decrease) in crude oil sales (thousands)			—				—

			December 31,				December 31,
			2004				2003
			(amount in millions)
Balance Sheet Data
Related Party Receivable:
	Derivative Asset		$	—			$	—
	Settled Hedge Receivable			—				—
	Oil and Gas Receivable			—				—
Accrued Liabilities:
	Transportation Contract			—				0.1
	Service Agreement			—				0.4
Stockholder’s Equity:
	Common Stock		$	—			$	.001
	Additional Paid in Capital			—				227.3
	Accumulated other Comprehensive Income		$	—			$	227.3

		Year Ended
		December 31,
		2004				2003
Income Statement Data
Oil and Gas Sales		$	—			$	32.6
General and Administrative Expenses			—				0.4
Transportation Expenses			—				1.9
Unrealized gain and other non-cash derivative instrument adjustments			—				—

	Post-Merger Related Party Transactions

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3.	Property Conveyances

4.	Long-Term Debt

F-21

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F-22

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	JEDI Term Promissory Note

	Cash Interest Expense

5.	Stockholder’s Equity

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6.	Employee Benefit And Royalty Plans

7.	Commitments And Contingencies

2005		$	561
2006			446
2007			148
2008			—
2009			—

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											September 30,
											2005
							Fixed				Fair Value
Fixed Price Swaps			Quantity				Price				Gain/(Loss)
											(in millions)
Crude Oil (Bbls)
	October 1—December 31, 2005			138,000			$	25.22			$	(5.7	)
	January 1—December 31, 2006			140,160				29.56				(5.2	)
Natural Gas (MMbtus)
	October 1—December 31, 2005			1,352,400,				5.00				(12.3	)
	January 1—December 31, 2006			1,827,547				5.53				(13.6	)
	Total										$	(36.8	)

															September 30,
															2005
															Fair Value
Costless Collars			Quantity				Floor				Cap				Gain/(Loss)
															(in millions)
Crude Oil (Bbls)
	October 1—December 31, 2005			57,960			$	35.60			$	44.77			$	(1.2	)
	January 1—December 31, 2006			251,850				32.65				41.52				(6.2	)
	January 1—December 31, 2007			202,575				31.27				39.83				(4.8	)
Natural Gas (MMbtus)
	October 1—December 31, 2005			2,189,600				6.01				8.02				(12.3	)
	January 1—December 31, 2006			7,347,450				5.78				7.85				(29.1	)
	January 1—December 31, 2007			5,310,750				5.49				7.22				(14.7	)
	Total														$	(68.3	)

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											December 31, 2004
							Fixed				Fair Value
Fixed Price Swaps			Quantity				Price				Gain/(Loss)
											(in millions)
Crude Oil (Bbls)
	January 1—December 31, 2005			606,000			$	26.15			$	(10.0	)
	January 1—December 31, 2006			140,160				29.56				(1.5	)
Natural Gas (MMbtus)
	January 1—December 31, 2005			8,670,159				5.41				(7.0	)
	January 1—December 31, 2006			1,827,547				5.53				(1.9	)
	Total										$	(20.4	)

															December 31, 2004
															Fair Value
Costless Collars			Quantity				Floor				Cap				Gain/(Loss)
															(in millions)
Crude Oil (Bbls)
	January 1—December 31, 2005			229,950			$	35.60			$	44.77			$	(0.4	)
	January 1—December 31, 2006			251,850				32.65				41.52				(0.7	)
	January 1—December 31, 2007			202,575				31.27				39.83				(0.6	)
Natural Gas (MMbtus)
	January 1—December 31, 2005			2,847,000				5.73				7.80				0.4
	January 1—December 31, 2006			3,514,950				5.37				7.35				(0.3	)
	January 1—December 31, 2007			1,806,750				5.08				6.26				(0.4	)
	Total														$	(2.0	)

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			Post-Merger				Pre-Merger
			Period from				Period from
			March 3, 2004				January 1
			through				through				December 31,
			December 31,				March 2,
			2004				2004				2003				2002
Natural Gas
	Quantity hedged (MMbtu)			16,723,063				2,100,000				25,520,000				—
	Increase (Decrease) in Natural Gas Sales (in thousands)		$	(12,223	)		$	1,431			$	(27,097	)			—
Crude Oil
	Quantity hedged (MBbls)			1,375				179				730				353
	Increase (Decrease) in Crude Oil Sales (in thousands)		$	(16,221	)		$	(686	)		$	(4,969	)		$	(762	)

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F-28

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8.	Income Taxes

			Post-Merger				Pre-Merger
			Period from				Period from
			March 3, 2004				January 1				Year Ending
			through				through				December 31,
			December 31,				March 2,
			2004				2004				2003				2002
			$				$				$				$
Current				—				—				—				—
Deferred				28,783				8,072				10,432				—
	Total			28,783				8,072				10,432				—

		Post-Merger								Pre-Merger
		Period from								Period from
		March 3, 2004								January 1								Year Ending December 31,
		through								through
		December 31,								March 2,
		2004								2004								2003								2002
		$				%				$				%				$				%				$				%
Income before income taxes including change in accounting in 2003			82,402				—				22,898				—				48,676				—				29,993				—
Income tax expense (benefit) computed at statutory rates			28,841				35				8,014				35				17,037				35				10,498				35
Change in valuation allowance			—				—				—				—				(7,090	)			(14	)			(11,507	)			(38	)
Other			(58	)			—				58				—				485				—				1,009				3
Tax Expense			28,783				35				8,072				35				10,432				21				—				—

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				Year Ending
				December 31,
				2004				2003
Deferred Tax Assets:
	Net operating loss carry forwards			$	15,639			$	—
	Alternative minimum Tax Credit				1,606				—
	Differences between book and tax basis of receivables				—				676
	Other comprehensive income-derivative instruments				6,262				—
	Valuation allowance				(5,909	)			—
		Total net deferred tax assets			17,598				676
Deferred Tax Liabilities:
	Differences between book and tax basis of properties				(14,569	)			(5,445	)
		Total net deferred asset (liability)		$	3,029			$	(4,769	)

9.	Oil and Gas Producing Activities and Capitalized Costs (Unaudited)

			Year Ending December 31,
			2004				2003				2002
Oil and gas sales			$	214,187			$	142,543			$	158,228
Lease operating costs				(25,484	)			(24,719	)			(26,076	)
Transportation				(3,029	)			(6,252	)			(10,480	)
Depreciation, depletion and amortization				(64,911	)			(48,339	)			(70,821	)
	Results of operations		$	120,763			$	63,233			$	50,851

			As of December 31,
			2004				2003				2002
Unevaluated properties, not subject to amortization			$	36,245			$	36,619			$	44,630
Properties subject to amortization				319,553				599,762				620,949
	Capitalized costs			355,798				636,381				665,579
Accumulated depreciation, depletion and amortization				(52,680	)			(429,323	)			(379,543	)
Net capitalized costs			$	303,118			$	207,058			$	286,036

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			Year Ending December 31,
			2004				2003				2002
Property acquisition costs
	Unproved properties		$	4,844			$	4,746			$	14,813
Exploration costs				43,022				26,823				25,545
Development costs				100,823				51,659				65,002
	Total costs incurred			148,689			$	83,228			$	105,360
Depreciation, depletion and amortization rate per equivalent Mcf before impairment			$	1.73			$	1.45			$	1.78

			Period Incurred
			Year Ended December 31,																Total at
																			December 31,
			2004				2003				2002				Prior				2004
Unproved leasehold acquisition and geological and geophysical costs			$	4,354			$	76			$	10,251			$	7,324			$	22,005
Unevaluated exploration and development costs				8,955				(51	)			(209	)			5,150				13,845
Capitalized interest				267				118				10				—				395
	Total		$	13,576			$	143			$	10,052			$	12,474			$	36,245

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10.	Supplemental Oil and Gas Reserve and Standardized Measure Information (Unaudited)

F-32

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											Natural Gas
			Oil				Natural Gas				Equivalent
			(Mbbl)				(MMcf)				(MMcfe)
			(in thousands)
December 31, 2001				10,101				176,461				237,069
	Revisions of previous estimates			541				5,523				8,769
	Extensions, discoveries and other additions			2,108				18,791				31,439
	Sale of reserves in place			(35	)			(35,088	)			(35,298	)
	Production			(1,697	)			(29,632	)			(39,814	)
December 31, 2002				11,018				136,055				202,165
	Revisions of previous estimates			900				(3,076	)			2,324
	Extensions, discoveries and other additions			2,795				62,609				79,379
	Sale of reserves in place			(34	)			(44,233	)			(44,437	)
	Production			(1,600	)			(23,771	)			(33,371	)
December 31, 2003				13,079				127,584				206,060
	Revisions of previous estimates			1,249				19,797				27,291
	Extensions, discoveries and other additions			2,225				28,334				41,684
	Sale of reserves in place			—				—				—
	Production			(2,298	)			(23,782	)			(37,570	)
December 31, 2004				14,255				151,933				237,465

										Natural Gas
		Oil				Natural Gas				Equivalent
		(Mbbl)				(MMcf)				(MMcfe)
		(in thousands)
December 31, 2002			3,609				64,586				86,240
December 31, 2003			5,951				60,881				96,587
December 31, 2004			6,339				71,361				109,395

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		Year Ending December 31,
		2004				2003				2002
		(in thousands)
Future cash inflows		$	1,601,240			$	1,182,509			$	992,700
Future production costs			(308,190	)			(196,695	)			(154,661	)
Future development costs			(193,689	)			(138,694	)			(110,474	)
Future income taxes			(285,701	)			(183,199	)			(72,648	)
Future net cash flows			813,660				663,921				654,917
Discount of future net cash flows at 10% per annum			(319,278	)			(245,762	)			(191,345	)
Standardized measure of discounted future net cash flows		$	494,382			$	418,159			$	463,572

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		Year Ending December 31,
		2004				2003				2002
Sales and transfers of oil and gas produced, net of production costs		$	(185,673	)		$	(111,572	)		$	(125,610	)
Net changes in prices and production costs			27,767				27,403				331,085
Extensions and discoveries, net of future development and production costs			102,905				180,237				50,085
Development costs during period and net change in development costs			44,417				31,709				28,474
Revision of previous quantity estimates			89,814				6,276				7,480
Sales of reserves in place			—				(138,016	)			(25,887	)
Net change in income taxes			(27,634	)			(63,962	)			(51,423	)
Accretion of discount before income taxes			41,816				51,500				29,488
Changes in production rates (timing) and other			(17,189	)			(28,988	)			(12,148	)
Net change		$	76,223			$	(45,413	)		$	231,544

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11.	Unaudited Quarterly Financial Information

			Post-Merger																	Pre-Merger
															Period from					Period from
			2004 Quarter Ended												March 3, 2004					January 1, 2004				2003 Quarter Ended
															through					through
			December 31				September 30				June 30				March 31, 2004					March 2, 2004				December 31				September 30				June 30				March 31
			(in thousands, except per share data)
Total revenues			$	51,897			$	50,202			$	51,086			$	21,238				$	39,764			$	33,231			$	29,002			$	35,099			$	45,211
Operating income			$	29,108			$	24,403			$	25,045			$	9,666				$	22,812			$	14,474			$	4,428			$	9,681			$	23,330
Income before income taxes			$	27,501			$	22,804			$	23,071			$	9,026				$	22,898			$	14,453			$	2,758			$	7,583			$	20,894
Provision for income taxes				9,562				8,498				7,630				3,093					8,072				10,432				(1,045	)			—				—
Income before cumulative effect of change in accounting method, net of tax effects				17,939				14,306				15,441				5,933					14,826				4,021				3,803				7,583				20,894
Cumulative effect of change in accounting method, net of tax effects				—				—				—				—					—				—				(1,045	)			—				2,988
Net Income			$	17,939			$	14,306			$	15,441			$	5,933				$	14,826			$	4,021			$	2,758			$	7,583			$	23,882
Earnings per share:
Net income per share—basic
	Income before cumulative effect of change in accounting method, net of tax effects		$	0.60			$	0.48			$	0.52			$	0.20				$	0.50			$	0.14			$	0.13			$	0.25			$	0.70
	Cumulative effect of change in accounting method, net of tax effects			—				—				—				—					—				—				(0.04	)			—				0.10
	Income per share—basic		$	0.60			$	0.48			$	0.52			$	0.20				$	0.50			$	0.14			$	0.09			$	0.25			$	0.80
Net income per share—diluted
	Income before cumulative effect of change in accounting method, net of tax effects		$	0.60			$	0.48			$	0.52			$	0.20				$	0.50			$	0.14			$	0.13			$	0.25			$	0.70
	Cumulative effect of change in accounting method, net of tax effects			—				—				—				—					—				—				(0.04	)			—				0.10
	Income per share—diluted		$	0.60			$	0.48			$	0.52			$	0.20				$	0.50			$	0.14			$	0.09			$	0.25			$	0.80
Weighted average shares outstanding—basic				29,748,130				29,748,130				29,748,130				29,748,130					29,748,130				29,748,130				29,748,130				29,748,130				29,748,130
Weighted average shares outstanding—diluted				29,748,130				29,748,130				29,748,130				29,748,130					29,748,130				29,748,130				29,748,130				29,748,130				29,748,130

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	KPMG LLP

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			Nine Months Ended
			September 30,								Years Ended December 31,
			2005				2004				2004				2003				2002
			(unaudited)
			(in thousands)
Oil and natural gas revenues			$	326,722			$	324,426			$	453,139			$	342,019			$	228,896
Direct Operating Expenses:
	Lease operating expenses			57,431				63,022				80,079				45,716				52,076
	Transportation			2,484				1,424				2,175				2,652				3,855
	Production taxes			1,948				1,243				1,548				1,521				947
Total direct operating expenses				61,863				65,689				83,802				49,889				56,878
Revenues in excess of direct operating expenses			$	264,859			$	258,737			$	369,337			$	292,130			$	172,018

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1.	BASIS OF PRESENTATION

2.	DERIVATIVE INSTRUMENTS

3.	SUPPLEMENTAL INFORMATION REGARDING PROVED OIL AND GAS RESERVES (UNAUDITED)

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	Estimated Proved Reserves

		Liquids				Gas				Total
		(MBbls)				(MMcf)				(MMcfe)
Balance at January 1, 2002			12,767				296,497				373,099
Revisions of previous estimates			(280	)			12,671				10,991
Extensions and discoveries			481				5,557				8,443
Production			(1,980	)			(50,566	)			(62,446	)
Purchases of reserves in place			—				2,009				2,009
Balance at December 31, 2002			10,988				266,168				332,096
Revisions of previous estimates			(2,492	)			(14,565	)			(29,517	)
Extensions and discoveries			357				23,714				25,856
Production			(2,145	)			(58,785	)			(71,655	)
Purchases of reserves in place			4,649				78,815				106,709
Balance at December 31, 2003			11,357				295,347				363,489
Revisions of previous estimates			1,693				(2,860	)			7,298
Extensions and discoveries			630				14,449				18,229
Production			(3,230	)			(61,684	)			(81,064	)
Purchases of reserves in place			1,200				24,556				31,756
Balance at December 31, 2004			11,650				269,808				339,708
Proved developed reserves at:
December 31, 2002			7,644				208,904				254,768
December 31, 2003			7,920				205,334				252,854
December 31, 2004			9,471				201,759				258,585

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	Standardized Measure of Discounted Future Net Cash Flows

		December 31,
		2004				2003				2002
		(in thousands)
Future cash inflows		$	2,155,217				2,105,447				1,539,033
Future production costs			(272,020	)			(272,335	)			(237,876	)
Future development costs			(357,592	)			(372,139	)			(213,020	)
Future income taxes			(412,477	)			(360,707	)			(257,647	)
Future net cash flows			1,113,128				1,100,266				830,490
10% annual discount			(187,291	)			(150,845	)			(182,450	)
Standardized measure of discounted future net cash flows relating to proved reserves		$	925,837				949,421				648,040

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			December 31,
			2004				2003				2002
			(in thousands)
Balance, beginning of period			$	949,421				648,040				434,955
Increase (decrease) in discounted future net cash flows:
	Sales of oil and gas, net of production costs			(426,405	)			(333,029	)			(163,604	)
	Net changes in prices and future production costs			11,628				345,947				373,243
	Net changes in future development costs			9,615				(82,874	)			(43,636	)
	Extensions, discoveries and improved recovery			88,999				98,561				24,292
	Previously estimated development costs incurred during the period			70,027				74,690				70,833
	Revisions of previous quantity estimates			28,701				(104,674	)			31,446
	Purchases of reserves in place			100,681				307,686				3,741
	Accretion of discount			121,720				82,808				48,343
Net change in income taxes				(28,550	)			(87,734	)			(131,573	)
Balance, end of period			$	925,837				949,421				648,040

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				Proved
				Developed
																Total
				Producing				Non-Producing				Undeveloped				Proved
Net Remaining Reserves
		Oil/ Condensate—Barrels			6,171,886				167,142				7,916,458				14,255,486
		Gas—MMCF			57,788				13,573				80,572				151,933
Cash Flow Data (M$)
	Future Gross Revenue			$	621,366.9			$	91,410.3			$	836,425.2			$	1,549,202.4
	Deductions				143,343.3				27,769.0				278,728.5				449,840.8
	Future Net Cash Flow			$	478,023.6			$	63,641.3			$	557,696.7			$	1,099,361.6
	(Before Taxes)
	Present Value @ 10%			$	281,479.0			$	53,887.8			$	332,608.3			$	667,975.1
	(PV10)

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				Present Value
				As of December 31, 2004
				(M$)
Discount Rate				Total
Percent				Proved
	5			$	815,643.4
	15			$	575,781.8
	20			$	511,036.7
	25			$	462,061.6

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	Very truly yours,
	RYDER SCOTT COMPANY, L.P.
	Timothy J. Torres, P.E.
	Vice President

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	(i) Reservoirs are considered proved if economic producibility is supported by either actual production or conclusive formation test. The area of a reservoir considered proved includes:

	(A) that portion delineated by drilling and defined by gas-oil and/or oil-water contacts, if any; and
	(B) the immediately adjoining portions not yet drilled, but which can be reasonably judged as economically productive on the basis of available geological and engineering data. In the absence of information on fluid contacts, the lowest known structural occurrence of hydrocarbons controls the lower proved limit of the reservoir.

	(ii) Reserves which can be produced economically through application of improved recovery techniques (such as fluid injection) are included in the “proved” classification when 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.

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	(iii) Estimates of proved reserves do not include the following:

	(A) oil that may become available from known reservoirs but is classified separately as “indicated additional reserves”;
	(B) crude oil, natural gas, and natural gas liquids, the recovery of which is subject to reasonable doubt because of uncertainty as to geology, reservoir characteristics, or economic factors;
	(C) crude oil, natural gas, and natural gas liquids, that may occur in undrilled prospects; and
	(D) crude oil, natural gas, and natural gas liquids, that may be recovered from oil shales, coal, gilsonite and other such sources.

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Item 13.	Other Expenses of Issuance and Distribution.

SEC registration fee			$	56,000
NASD filing fee				50,000
Listing fee				5,000
Legal fees and expenses				970,000
Printer fees				247,000
Transfer agent fees				18,000
Blue sky fees and expenses				19,000
Accounting fees and expenses				365,000
Miscellaneous				170,000
	Total		$	1,900,000

Item 14.	Indemnification of Officers and Directors.

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Item 15.	Recent Sales of Unregistered Securities.

	1. On March 11, 2005, we issued 16,350,000 shares of our common stock in consideration of $212,877,000 before expenses to qualified institutional buyers, non-U.S. persons and accredited investors in transactions exempt from registration under Section 4(2) of the Securities Act. We paid Friedman, Billings, Ramsey & Co., Inc., who acted as placement agent in this transaction, $16,023,000 in discounts and placement fees. A selling stockholder in the offering paid an additional $10,035,200 in discounts and placement fees to Friedman, Billings, Ramsey & Co., Inc.
	2. On March 11, 2005, we issued 2,267,270 shares of restricted common stock to employees pursuant to our Equity Participation Plan. The issuance of these shares was exempt from the registration requirements of the Securities Act pursuant to Rule 701.
	3. We issued 787,360, 1,200, 5,400 and 5,000 options to purchase our common stock to employees pursuant to our Stock Incentive Plan on March 11, 2005, May 16, 2005, July 18, 2005 and July 25, 2005, respectively. The issue of those options was exempt from the registration requirements of the Securities Act pursuant to Rule 701.
	4. On March 2, 2004, we issued 29,748,130 shares of our common stock in connection with a merger of our former parent, Mariner Energy LLC, into MEI Acquisitions Holdings, LLC. The issue of those shares was exempt from the registration requirements of the Securities Act under Section 4(2) of the Securities Act.

Item 16.	Exhibits and Financial Statement Schedules.

Exhibit
Number				Description of Document
	2	.1*		Agreement and Plan of Merger dated as of September 9, 2005 among Forest Oil Corporation, SML Wellhead Corporation, Mariner Energy, Inc. and MEI Sub, Inc.
	2	.2*		Letter Agreement dated as of February 3, 2006 among Forest Oil Corporation, Forest Energy Resources, Inc., Mariner Energy, Inc., and MEI Sub, Inc. amending the transaction agreements.
	3	.1*		Second Amended and Restated Certificate of Incorporation of Mariner Energy, Inc.
	3	.2*		Fourth Amended and Restated Bylaws of Mariner Energy, Inc.
	4	.1*		Registration Rights Agreement among Mariner Energy, Inc. and each of the investors identified therein, dated March 11, 2005.
	4	.2*		Specimen Common Stock Certificate.
	5	.1*		Opinion of Baker Botts L.L.P. regarding legality of securities being issued.
	8	.1*		Form of opinion of Baker Botts L.L.P. regarding tax matters.
	10	.1*		Credit Agreement by and among Mariner Energy Inc. and the Lenders party thereto, dated March 2, 2004.

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Exhibit
Number				Description of Document
	10	.2*		Amendment No. 1 and Assignment Agreement among Mariner Energy, Inc., Mariner Holdings, Inc. and Mariner Energy LLC, the Union Bank of California, N.A. and the Lenders party thereto, dated July 14, 2004.
	10	.3*		Waiver and Consent among Mariner Energy, Inc., Mariner Holdings, Inc., Mariner Energy LLC, the Union Bank of California, N.A. and the Lenders party thereto, dated December 29, 2004.
	10	.4*		Amendment No. 2 and Consent among Mariner Energy, Inc., Mariner Holdings, Inc., Mariner Energy LLC, the Union Bank of California, N.A., and the Lenders party thereto, dated February 7, 2005.
	10	.5*		Amendment No. 3 and Consent among Mariner Energy, Inc., Mariner LP LLC, Mariner Energy Texas LP, the Union Bank of California, N.A., and the Lenders party thereto, dated March 3, 2005.
	10	.6*		Form of Indemnification Agreement between Mariner Energy, Inc. and each of its directors and officers.
	10	.7*		Mariner Energy, Inc. Amended and Restated Stock Incentive Plan, effective as of March 11, 2005.
	10	.8*		Form of Non-Qualified Stock Option Agreement, Mariner Energy, Inc. Stock Incentive Plan for employees without employment agreements.
	10	.9*		Form of Non-Qualified Stock Option Agreement, Mariner Energy, Inc. Stock Incentive Plan for employees with employment agreements.
	10	.10*		Mariner Energy, Inc. Equity Participation Plan, effective March 11, 2005.
	10	.11*		Form of Restricted Stock Agreement, Mariner Energy, Inc. Equity Participation Plan for employees with employment agreements.
	10	.12*		Form of Restricted Stock Agreement, Mariner Energy, Inc. Equity Participation Plan for employees without employment agreements.
	10	.13*		Employment Agreement by and between Mariner Energy, Inc. and Scott D. Josey, dated February 7, 2005.
	10	.14*		Employment Agreement by and between Mariner Energy, Inc. and Dalton F. Polasek, dated February 7, 2005.
	10	.15*		Employment Agreement by and between Mariner Energy, Inc. and Michiel C. van den Bold, dated February 7, 2005.
	10	.16*		Employment Agreement by and between Mariner Energy, Inc. and Judd Hansen, dated February 7, 2005.
	10	.17*		Employment Agreement by and between Mariner Energy, Inc. and Teresa Bushman, dated February 7, 2005.
	10	.18*		Form of Nonstatutory Stock Option Agreement for certain employees of Mariner Energy, Inc. or Mariner Energy Resources, Inc. who formerly held unvested options issued by Forest Oil Corporation.
	10	.19*		Amendment No. 6, Waiver and Agreement among Mariner Energy, Inc., Mariner LP LLC, Mariner Energy Texas LP, the Union Bank of California, N.A. and the lenders party thereto, dated January 20, 2006.
	10	.20*		Employment Agreement by and between Mariner Energy, Inc. and Ricky G. Lester, dated February 7, 2005.
	21*			List of subsidiaries.
	23	.1		Consent of Deloitte & Touche LLP.
	23	.2		Consent of KPMG LLP.

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Exhibit
Number				Description of Document
	23	.3*		Consent of Ryder Scott Company, L.P.
	23	.4*		Consent of Baker Botts L.L.P. (included in Exhibit 5.1).
	24*			Power of Attorney.

*	Previously filed.

	(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

	(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended;
	(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and
	(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

	(2) That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
	(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

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	Mariner Energy, Inc.
	By: /s/ Scott D. Josey
	Name: Scott D. Josey

	Title:	Chairman of the Board, Chief Executive

	Officer and President

Signature				Title
* Scott D. Josey				Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer)
/s/ Rick G. Lester Rick G. Lester				Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
* Bernard Aronson				Director
* Jonathan Ginns				Director
* John F. Greene				Director
* John L. Schwager				Director
*By:		/s/ Rick G. Lester Attorney-in-fact

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Exhibit
Number				Description of Document
	2	.1*		Agreement and Plan of Merger dated as of September 9, 2005 among Forest Oil Corporation, SML Wellhead Corporation, Mariner Energy, Inc. and MEI Sub, Inc.
	2	.2*		Letter Agreement dated as of February 3, 2006 among Forest Oil Corporation, Forest Energy Resources, Inc., Mariner Energy, Inc., and MEI Sub, Inc. amending the transaction agreements.
	3	.1*		Second Amended and Restated Certificate of Incorporation of Mariner Energy, Inc.
	3	.2*		Fourth Amended and Restated Bylaws of Mariner Energy, Inc.
	4	.1*		Registration Rights Agreement among Mariner Energy, Inc. and each of the investors identified therein, dated March 11, 2005.
	4	.2*		Specimen Common Stock Certificate.
	5	.1*		Opinion of Baker Botts L.L.P. regarding legality of securities being issued.
	8	.1*		Form of opinion of Baker Botts L.L.P. regarding tax matters.
	10	.1*		Credit Agreement by and among Mariner Energy Inc. and the Lenders party thereto, dated March 2, 2004.
	10	.2*		Amendment No. 1 and Assignment Agreement among Mariner Energy, Inc., Mariner Holdings, Inc. and Mariner Energy LLC, the Union Bank of California, N.A. and the Lenders party thereto, dated July 14, 2004.
	10	.3*		Waiver and Consent among Mariner Energy, Inc., Mariner Holdings, Inc., Mariner Energy LLC, the Union Bank of California, N.A. and the Lenders party thereto, dated December 29, 2004.
	10	.4*		Amendment No. 2 and Consent among Mariner Energy, Inc., Mariner Holdings, Inc., Mariner Energy LLC, the Union Bank of California, N.A., and the Lenders party thereto, dated February 7, 2005.
	10	.5*		Amendment No. 3 and Consent among Mariner Energy, Inc., Mariner LP LLC, Mariner Energy Texas LP, the Union Bank of California, N.A., and the Lenders party thereto, dated March 3, 2005.
	10	.6*		Form of Indemnification Agreement between Mariner Energy, Inc. and each of its directors and officers.
	10	.7*		Mariner Energy, Inc. Amended and Restated Stock Incentive Plan, effective as of March 11, 2005.
	10	.8*		Form of Non-Qualified Stock Option Agreement, Mariner Energy, Inc. Stock Incentive Plan for employees without employment agreements.
	10	.9*		Form of Non-Qualified Stock Option Agreement, Mariner Energy, Inc. Stock Incentive Plan for employees with employment agreements.
	10	.10*		Mariner Energy, Inc. Equity Participation Plan, effective March 11, 2005.
	10	.11*		Form of Restricted Stock Agreement, Mariner Energy, Inc. Equity Participation Plan for employees with employment agreements.
	10	.12*		Form of Restricted Stock Agreement, Mariner Energy, Inc. Equity Participation Plan for employees without employment agreements.
	10	.13*		Employment Agreement by and between Mariner Energy, Inc. and Scott D. Josey, dated February 7, 2005.
	10	.14*		Employment Agreement by and between Mariner Energy, Inc. and Dalton F. Polasek, dated February 7, 2005.
	10	.15*		Employment Agreement by and between Mariner Energy, Inc. and Michiel C. van den Bold, dated February 7, 2005.
	10	.16*		Employment Agreement by and between Mariner Energy, Inc. and Judd Hansen, dated February 7, 2005.
	10	.17*		Employment Agreement by and between Mariner Energy, Inc. and Teresa Bushman, dated February 7, 2005.

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Exhibit
Number				Description of Document
	10	.18*		Form of Nonstatutory Stock Option Agreement for certain employees of Mariner Energy, Inc. or Mariner Energy Resources, Inc. who formerly held unvested options issued by Forest Oil Corporation.
	10	.19*		Amendment No. 6, Waiver and Agreement among Mariner Energy, Inc., Mariner LP LLC, Mariner Energy Texas LP, the Union Bank of California, N.A. and the lenders party thereto, dated January 20, 2006.
	10	.20*		Employment Agreement by and between Mariner Energy, Inc. and Ricky G. Lester, dated February 7, 2005.
	21*			List of subsidiaries.
	23	.1		Consent of Deloitte & Touche LLP.
	23	.2		Consent of KPMG LLP.
	23	.3*		Consent of Ryder Scott Company, L.P.
	23	.4*		Consent of Baker Botts L.L.P. (included in Exhibit 5.1).
	24*			Power of Attorney.

*	Previously filed.