Exhibit 99.1
For Information
Mark A. Hellerstein
Robert T. Hanley
ST. MARY REPORTS YEAR 2001 FINANCIAL RESULTS
DENVER, February 19, 2002 - St. Mary Land & Exploration Company (Nasdaq:
MARY) today reported earnings of $40.5 million or $1.45 per basic share for the
year ended December 31, 2001. Year 2000 earnings were $55.6 million or $2.00 per
share. Revenues for 2001 were $207.5 million compared to $195.7 million for
2000. Discretionary Cash Flow, which is net income plus depreciation, depletion,
amortization, impairments, deferred taxes, exploration expense and unrealized
derivative loss, increased 3% from $134.7 million in 2000 to $138.6 million in
2001. On a per share basis Discretionary Cash Flow increased 2% to $4.95. Oil
and gas production for 2001 was a record 54.1 billion cubic feet of gas
equivalent (BCFE), a 3% increase over 2000.
Earnings for the fourth quarter were $1.0 million or 4 cents per basic share
compared to $16.0 million for the fourth quarter of 2000. Revenues for the
fourth quarter of 2001 were $40.7 million compared to $57.1 million for the same
period in 2000. Discretionary Cash Flow for the fourth quarter decreased 22% to
$27.6 million. Average daily oil and gas production during the fourth quarter
2001 totaled 150.2 MMCFE, up 6% from 142.1 MMCFE in the comparable 2000 period.
Average prices realized during the quarter were $2.67 per Mcf and $19.10 per
barrel, 37% and 15% lower, respectively, than the realized prices in the fourth
quarter of 2000. Fourth quarter earnings were also affected by a non-cash charge
(unrealized derivative loss) of $1.6 million due to gains from terminated oil
and gas hedge agreements with Enron North America Corp. not being collectible.
As the Enron hedges mature over their original lives, non-cash gains equal to
the charge recognized in 2001 will be realized.
St. Mary has signed a Purchase and Sale Agreement to acquire oil and gas
properties and an 89-mile gas gathering system from Merchant Resources #1 L.P.
of Houston, Texas for $7.75 million in cash. The properties are in the Arkoma
Basin of Oklahoma, include undrilled locations and are expected to complement
other St. Mary properties in the area. The properties currently produce an
estimated 1,200 Mcf of gas and 65 barrels of oil per day. The acquisition is
expected to close February 22, 2002, upon completion of customary due diligence.
The Company reaffirmed its 2002 forecast included in its February 5, 2002 press
release. In that press release St. Mary also announced a capital expenditures
budget of $164 million for 2002 and year-end 2001 reserves of 383 BCFE.
2001 EXPLORATION AND DEVELOPMENT PROGRAM
During 2001 St. Mary participated in a total of 196 wells with 166 successful
completions and 30 dry holes, an 85% completion rate. The Company also
participated in the recompletion of 77 wells of which 57 were successful.
MID-CONTINENT REGION
In the Mid-Continent region there were 88 wells drilled with 73 successful
completions and 15 dry holes during 2001. Completed wells during the fourth
quarter include the Easley 1-A (77%) in the Elk City field currently producing
at 6,400 MCFED, the Ross 2-21 (28%) in NE Mayfield completed at 3,900 MCFED and
the Billy 7-20 (100%) completed at 2,900 MCFED.
WILLISTON BASIN
During 2001, the Company drilled 17 wells in the Williston Basin with a 100%
success rate. During the fourth quarter the Nance-operated Burns 34-20 (100%)
was completed at an initial rate of 250 BOPD.
ARKLATEX
In the ArkLaTex region 35 wells were drilled during 2001 with 31 successful
completions and 4 dry holes. Wells completed during the fourth quarter include
the Wilson #14 (60%) completed at a rate of 1,200 MCFED, the Lakeway Dev. Co. #1
(48%) completed at 1,100 MCFED and the Texas Power & Light #6 (25%)
completed at 2,000 MCFED.
GULF COAST AND GULF OF MEXICO
Judge Digby
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During the fourth quarter the J. Wurtele #2 (20%) was completed in the B-6 and
B-7 Tuscaloosa sand intervals and has produced at rates up to 45,000 MCFED. The
J. Wurtele #3 (10%) is currently drilling below 17,000 feet to an estimated
total depth of 22,000 feet.
The St. Mary-operated Miami Corp T-1 (25%) at High Island was completed in the
Camerina sand and is producing at 4,000 MCFED.
OTHER
Fourteen test wells were drilled during the fourth quarter on the Company's
leased acreage in the Hanging Woman Basin for prospective coalbed methane
development. The wells are part of an 18-well pilot program and production
testing is scheduled for the second quarter of 2002. Laboratory testing of core
samples gathered from the pilot wells is currently being conducted, and the
Company is also currently investigating permitting and environmental issues
related to the potential development.
As previously announced, the St. Mary year-end 2001 earnings teleconference call
is scheduled for February 20 at 8:00 am (MST). The call participation number is
888-424-5231. Through February 27 a replay of the call will be available at
800-642-1687, identification number 3079748. International callers can dial
706-634-6088 to take part in the live conference call and 706-645-9291 to listen
to a replay. In addition the call will be broadcast live online at
www.stmaryland.com. An audio recording of the conference call will be available
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at that site through February 27.
This release contains forward looking statements within the meaning of
securities laws, including information regarding forecasts and the budgeted
capital expenditures of St. Mary for 2002. The words "will," "believe,"
"anticipate," "intend," "estimate," and "expect" and similar expressions are
intended to identify forward looking statements. These statements involve known
and unknown risks, which may cause St. Mary's actual results to differ
materially from results expressed or implied by the forward looking statements.
These risks include such factors as the volatility and level of oil and natural
gas prices, production rates and reserve replacement, reserve estimates,
drilling and operating service availability and risks, uncertainties in cash
flow, the financial strength of hedge contract counterparties, the availability
of attractive exploration and development and property acquisition opportunities
and any necessary financing, expected acquisition and development benefits,
competition, litigation, environmental matters, the potential impact of
government regulations, and other matters discussed under the "Risk Factors"
section of St. Mary's 2000 Annual Report on Form 10-K filed with the SEC.
Although St. Mary may from time to time voluntarily update its forward looking
statements, it disclaims any commitment to do so except as required by
securities laws.
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Financial Highlights Follow
ST. MARY LAND & EXPLORATION COMPANY
FINANCIAL HIGHLIGHTS
Three Months Ended Year Ended
December 31, % December 31, %
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2001 2000 Change 2001 2000 Change
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(In thousands, except per share)
Revenues:
Oil and gas production $38,778 $53,509 $203,973 $188,407
Gain on sale of producing properties 388 1,064 367 3,404
Other 1,524 2,546 3,129 3,855
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40,690 57,119 207,469 195,666
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Operating Expenses:
Oil and gas production costs 14,751 11,106 55,000 38,461
Depletion, depreciation & amortization 13,470 13,324 51,346 40,129
Exploration 4,660 2,884 19,518 9,633
Impairment and abandonment 2,132 1,467 4,685 6,290
General and administrative 1,401 3,728 11,762 11,166
Unrealized derivative loss 1,573 - 1,573 -
Minority interest and other 1,011 259 1,673 1,437
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38,998 32,768 145,557 107,116
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Income from operations 1,692 24,351 61,912 88,550
Interest income 58 242 466 897
Interest expense (50) (12) (90) (160)
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Income before income tax expense 1,700 24,581 62,288 89,287
Income tax expense (benefit) - current (4,105) 6,942 804 10,604
Income tax expense - deferred 4,834 1,641 21,025 23,063
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Net income $971 $15,998 $40,459 $55,620
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Basic weighted average
common shares outstanding 27,738 28,053 27,973 27,781
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Basic earnings per common share: $0.04 $0.57 $1.45 $2.00
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Diluted weighted average
common shares outstanding 28,189 28,731 28,555 28,271
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Diluted earnings per common share: $0.03 $0.56 $1.42 $1.97
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Average price:
Oil $19.10 $22.58 -15% $23.29 $23.53 -1%
Gas $2.67 $4.21 -37% $3.73 $3.44 8%
Margin analysis per MCFE:
Net realized price $2.81 $4.09 -31% $3.77 $3.57 6%
Oil and gas production costs $1.07 $0.85 26% $1.02 $0.73 39%
General and administrative costs $0.10 $0.29 -64% $0.22 $0.21 3%
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Operating margin $1.64 $2.95 -44% $2.54 $2.63 -4%
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Depletion, depreciation & amortization $0.97 $1.02 -4% $0.95 $0.76 25%
Production (in thousands):
Oil (Bbls) 622 572 9% 2,434 2,398 1%
Gas (MCF) 10,087 9,635 5% 39,491 38,346 3%
MCFE (6:1) 13,819 13,070 6% 54,093 52,731 3%
Dec 31, Dec 31,
BALANCE SHEET 2001 2000
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Working Capital $34,000 $40,639
Long-term debt 64,000 22,000
Stockholders' equity 286,117 250,136
Shares outstanding 27,770 28,158
Dec 31, Dec 31,
PROVEN RESERVES (in thousands): 2001 2000
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Domestic:
Oil (Bbls) 23,669 20,950
Gas (MCF) 241,231 225,975
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MCFE (6:1) 383,247 351,675
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