S&P Boosts Mariner Energy Outlook To "Stable"

NEW YORK (AP) — Standard & Poor's Ratings Services on Thursday boosted its credit outlook for Mariner Energy Inc. to "Stable" from "Negative," and affirmed its ratings on the oil and gas exploration and production company.

S&P cited the company's improved liquidity and lower debt levels, due to plans Mariner Energy announced Tuesday to sell 10 million shares of common stock and $250 million worth of its senior notes due 2016.

S&P said the Houston-based company plans to use the resulting proceeds of up to $400 million to repay borrowing from its $1 billion credit facility.

S&P also said Mariner's near-term financial measures "should remain healthy" because of a solid hedging position this year, and production growth.

Mariner Energy has a "B+" corporate debt rating from S&P, which is four notches into junk status.

S&P's prior "Negative" outlook had signaled the possibility of a credit rating downgrade should business conditions worsen.

Shares of Mariner Energy rose 85 cents, or nearly 6.2 percent, to close at $14.65.