2.2.0.7 false Long-Term Debt 0203 - Disclosure - Long-Term Debt true false false false 1 USD false false USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 Shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 $ 2 Long-Term Debt [Abstract] 0 us-gaap_LongTermDebtAbstract us-gaap true na duration No definition available. false false false false false true false false false false false false 1 false false false false 0 0 false false false xbrli:stringItemType string No definition available. false 3 Long-Term Debt 1 us-gaap_LongTermDebtTextBlock us-gaap true na duration No definition available. false false false false false false false false false false false verboselabel false 1 false false false false 0 0   <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>3. Long-Term Debt</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     As of June 30, 2010 and December 31, 2009, the Company’s long-term debt was as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>(In thousands)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Bank credit facility </div></td> <td> </td> <td align="left">$</td> <td align="right">568,000</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">305,000</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">7 <sup style="font-size: 85%; vertical-align: text-top">1</sup>/<sub style="font-size: 85%; vertical-align: text-bottom">2</sub>% Senior Notes, due April 15, 2013, net of discount </div></td> <td> </td> <td> </td> <td align="right">298,410</td> <td> </td> <td> </td> <td> </td> <td align="right">298,125</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">8% Senior Notes, due May 15, 2017 </div></td> <td> </td> <td> </td> <td align="right">300,000</td> <td> </td> <td> </td> <td> </td> <td align="right">300,000</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">11 <sup style="font-size: 85%; vertical-align: text-top">3</sup>/<sub style="font-size: 85%; vertical-align: text-bottom">4</sub>% Senior Notes, due June 30, 2016, net of discount </div></td> <td> </td> <td> </td> <td align="right">292,154</td> <td> </td> <td> </td> <td> </td> <td align="right">291,725</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Total long-term debt </div></td> <td> </td> <td align="left">$</td> <td align="right">1,458,564</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,194,850</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Bank Credit Facility — </i>The Company has a secured revolving credit facility with a group of banks pursuant to an amended and restated credit agreement dated March 2, 2006, as further amended. The credit facility matures January 31, 2012 and is subject to a borrowing base which is redetermined periodically. The outstanding principal balance of loans under the credit facility may not exceed the borrowing base. The most recent borrowing base redetermination concluded in April 2010 when the credit facility was amended to: </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" style="background: transparent"> </td> <td width="1%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Increase the borrowing base by $150.0 million to $950.0 million until the next redetermination under the credit agreement,</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" style="background: transparent"> </td> <td width="1%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Reschedule the regular periodic borrowing base redeterminations to begin in February and August of each year,</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" style="background: transparent"> </td> <td width="1%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Give the lenders an option to redetermine the borrowing base upon termination of hedge contracts with more than six months remaining in their original nominal term,</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" style="background: transparent"> </td> <td width="1%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Increase the maximum permitted ratio of total debt to EBITDA (as defined in the credit agreement) to 3.5 to 1.0 from 2.5 to 1.0, and</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" style="background: transparent"> </td> <td width="1%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Give Mariner optionality to issue before January 1, 2011 up to $400.0 million in additional unsecured debt with a non-default interest rate of up to 13% per annum (plus a maximum default rate of 3%) and a scheduled maturity date no earlier than March 2, 2015. Upon closing such a debt issuance, the borrowing base automatically would reduce by 25% of the aggregate principal amount of the debt issued until otherwise redetermined under the credit agreement.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     As of June 30, 2010, maximum credit availability under the facility was $1.0 billion, including up to $50.0 million in letters of credit, subject to a borrowing base of $950.0 million. As of June 30, 2010, there were $568.0 million in advances outstanding under the credit facility and four letters of credit outstanding totaling $4.7 million, of which $4.2 million is required for plugging and abandonment obligations at certain of the Company’s offshore fields. As of June 30, 2010, after accounting for the $4.7 million of letters of credit, the Company had $377.3 million available to borrow under the credit facility. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Borrowings under the bank credit facility bear interest at either a LIBOR-based rate or a prime-based rate, at the Company’s option, plus a specified margin. At June 30, 2010, when borrowings at both LIBOR and prime-based rates were outstanding, the blended interest rate was 2.92% on all amounts borrowed. During the six months ended June 30, 2010, the commitment fee on unused capacity was 0.5% per annum. Commitment fees are included in “Accrued interest” in the Condensed Consolidated Balance Sheets in Item 1 of Part I of this Quarterly Report. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The credit facility subjects the Company to various restrictive covenants and contains other usual and customary terms and conditions, including limits on additional debt, cash dividends and other restricted payments, liens, investments, asset dispositions, mergers and speculative hedging. Financial covenants under the credit facility require the Company to, among other things: </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" style="background: transparent"> </td> <td width="1%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>maintain a ratio of consolidated current assets plus the unused borrowing base to consolidated current liabilities of not less than 1.0 to 1.0; and</td> </tr> </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" style="background: transparent"> </td> <td width="1%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>maintain a ratio of total debt to EBITDA (as defined in the credit agreement) of not more than 3.5 to 1.0.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company was in compliance with these covenants as of June 30, 2010 when the ratio of consolidated current assets plus the unused borrowing base to consolidated current liabilities was 1.92 to 1.0 and the ratio of total debt to EBITDA was 2.6 to 1.0. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company’s payment and performance of its obligations under the credit facility (including any obligations under commodity and interest rate hedges entered into with facility lenders) are secured by liens upon substantially all of the assets of the Company and its subsidiaries, except its Canadian subsidiary, and guaranteed by its subsidiaries, other than Mariner Energy Resources, Inc. which is a co-borrower, and its Canadian subsidiary. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Senior Notes — </i>In 2009, the Company sold and issued $300.0 million aggregate principal amount of its 11<sup style="font-size: 85%; vertical-align: text-top">3</sup>/<sub style="font-size: 85%; vertical-align: text-bottom">4</sub>% senior notes due 2016 (the “11<sup style="font-size: 85%; vertical-align: text-top">3</sup>/<sub style="font-size: 85%; vertical-align: text-bottom">4</sub>% Notes”). In 2007, the Company sold and issued $300.0 million aggregate principal amount of its 8% senior notes due 2017 (the “8% Notes”). In 2006, the Company sold and issued $300.0 million aggregate principal amount of its 7<sup style="font-size: 85%; vertical-align: text-top">1</sup>/<sub style="font-size: 85%; vertical-align: text-bottom">2</sub>% senior notes due 2013 (the “7<sup style="font-size: 85%; vertical-align: text-top">1</sup>/<sub style="font-size: 85%; vertical-align: text-bottom">2</sub>% Notes” and together with the 11<sup style="font-size: 85%; vertical-align: text-top">3</sup>/<sub style="font-size: 85%; vertical-align: text-bottom">4</sub>% Notes and the 8% Notes, the “Notes”). The Notes are governed by indentures that are substantially identical for each series. The Notes are senior unsecured obligations of the Company. The 11<sup style="font-size: 85%; vertical-align: text-top">3</sup>/<sub style="font-size: 85%; vertical-align: text-bottom">4</sub>% Notes mature on June 30, 2016 with interest payable on June 30 and December 30 of each year beginning December 30, 2009. The 8% Notes mature on May 15, 2017 with interest payable on May 15 and November 15 of each year. The 7<sup style="font-size: 85%; vertical-align: text-top">1</sup>/<sub style="font-size: 85%; vertical-align: text-bottom">2</sub>% Notes mature on April 15, 2013 with interest payable on April 15 and October 15 of each year. There is no sinking fund for the Notes. The Company and its restricted subsidiaries are subject to certain financial and non-financial covenants under each of the indentures governing the Notes. The Company was in compliance with the financial covenants under the Notes as of June 30, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Capitalized Interest — </i>For the three-month periods ended June 30, 2010 and 2009, capitalized interest totaled $6.2 million and $3.0 million, respectively. For the six-month periods ended June 30, 2010 and 2009, capitalized interest totaled $11.5 million and $5.2 million, respectively. </div> </div>  <!-- Begin Block Tagged Note false false false us-types:textBlockItemType textblock This element may be used as a single block of text to encapsulate the entire disclosure for long-term borrowings including data and tables. Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 22 -Article 5 false 1 2 false UnKnown UnKnown UnKnown false true