Mariner Energy's Got Some Serious Depth

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This week, independent exploration and production companies are out strutting their stuff in San Francisco, as they seek to woo analysts, investors, and portfolio managers at the Oil & Gas Investor Symposium. It's a fine opportunity to put the spotlight on promising oil plays that don't otherwise receive much attention.

Having more or less ignored Mariner Energy (NYSE: ME) for the past two years, I'd missed an interesting transformation taking hold at the company. At the end of 2007, 46% of Mariner's proved reserves were in West Texas, while 39% were on the Gulf of Mexico shelf (i.e., shallow-water properties, some of which were acquired from Forest Oil (NYSE: FST) and StatoilHydro (NYSE: STO) in recent years). That left just 15% of reserves sitting in the deepwater.

Even in 2007, the deepwater segment punched above its weight, with 23% of total production. Since that time, a string of discoveries has really illuminated Mariner's significant deepwater potential.

In 2008, Mariner drilled eight deepwater wells with a 63% success rate. Reserves in that segment jumped 62% to 199 billion cubic feet equivalent, or 20% of total proved reserves. The Geauxpher discovery, made with partner Apache (NYSE: APA), was a standout. Deepwater production jumped to 34% of Mariner's total production for the year.

2009 has brought success at the Anadarko Petroleum (NYSE: APC)-operated Heidelberg prospect (a large oil target with appraisal drilling expected by year end) and the Mariner-operated Bushwood prospect. Mariner has also further hitched its wagon to Anadarko through an acreage swap undertaken in August. That's a wise move, judging by Anadarko's own hugely impressive string of deepwater discoveries.

Bear in mind that Mariner didn't just stumble into the deepwater dance. The firm's been operating in this area since 1996, and had participated in more than 84 deepwater wells by the publication of the 2008 annual report.

Rather than being a Johhny-come-lately, Mariner appears to be coming into its own. Exploration is the key value driver here, so make sure your personal risk tolerance can bear the occasional dry hole disappointment before even thinking about scooping up this stock.

Motley Fool CAPS players hold Mariner in moderate regard, rating the firm three stars out of a possible five. Your author is still smarting from a lazy underperform call placed back in March. Make your own call on the offshore explorer right here.