Mariner Energy shares fall after platform fire

By Blake Ellis and Aaron Smith, staff reporters

NEW YORK ( -- Shares of Mariner Energy tumbled Thursday after a fire in one of the company's production platforms in the Gulf of Mexico.

The fire, on Mariner's Vermilion Oil platform 380, took place at least 80 miles south of Vermilion Bay on the Louisiana coast, according to John Edwards, chief petty officer of the U.S. Coast Guard in New Orleans.

Mariner Energy said that all 13 members of the crew were evacuated safely from the fire. There were no injuries, the company said.

The Coast Guard said there was no oil spill, though there were conflicting reports earlier on. On Thursday, the company said that a flyover of the area showed no evidence of a spill. But later in the afternoon, at about 2 p.m., the Coast Guard said that there was a sheen at the site about one mile long and 100 feet wide - a statement that it eventually retracted.

The Coast Guard also said the fire was out. The company said the cause of the fire was "not known and an investigation will be undertaken."

Shares of Mariner Energy (ME) plunged about 5% during its lowest point on Thursday, but had recovered most of its losses by the close, dropping 60 cents to $22.75 per share.

The Coast Guard said the platform is in 340 feet of water. The workers started emergency shut down procedures before abandoning the platform, which does not have a blowout preventer, according to the Coast Guard.

The Coast Guard initially said that the platform was in production at the time of the accident, but then retracted that statement.

A faulty blowout preventer has been blamed for the devastating spill from the BP (BP)-controlled platform that killed 11 workers in April, also in the Gulf of Mexico.

Neal Dingmann, analyst for Wunderlich Securities, said that the occurrence of two high-profile platform accidents within a few months of each other is rare. The likely outcome will be a more tightly regulated industry.

"Although this incident is very different from Macondo [the well operated by BP,] I think the government will continue to look at this and will add more rules and regulations," he said.

In April, Mariner Energy announced that it had formed a merger with another oil exploration company, Apache Corp. (APA, Fortune 500) The stock price for Apache slipped on Thursday by $1.16 per share, closing at $91.30.

Mariner Energy would still be considered the operator of the platform because the merger isn't scheduled to be completed for several weeks, according to Apache spokesman Bob Dye.

A production platform is built after the drilling of an oil or gas well. The platform often remains in operation for years, pumping pressure down the hole to keep the well flowing.

Nicholas Pope, an analyst for the investment bank Dahlman Rose, said the Mariner Energy platform is in the Gulf Shelf, which is not a deepwater area so it would not be affected by the ban on deepwater drilling.

CNN's Tim Lister contributed to this story. To top of page

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