Thursday, Credit Suisse initiated coverage of Mariner Energy, Inc. (ME) stock with an Outperform rating and a price target of $16.
Analyst Patel noted that ME is one of the few mid-cap producers offering exposure to deepwater exploration that is otherwise only available through larger E&Ps or Major oils. Exploring since the late 1990s, ME has an established track record (65% success rate) with demonstrated expertise in quickly moving projects from discovery to first production.
The analyst said that unlike many mid-size E&Ps that target absolute production growth, ME focuses on returns while spending within cash flow. ME's organic spending has averaged 90% of internal cash flow over the last three years and for 2009-10, the analyst forecasts ~$160 million of cumulative free cash flow with strong production per share growth of 6% and 12%, respectively.
ME trades at a 6% discount to the analyst's proved (1P) net asset value, or NAV, of $13 versus a 19% group premium. The analyst's $16 risk-weighted NAV includes value for unbooked discoveries to date, representing 69% of ME's total probable reserves (285 Bcfe). The analyst thus sees option value for future exploration successes with the next three tests offering another $1-3/share of NAV upside.
Currently, ME is up $0.28 or 2.30% and trading at $12.48.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.