EXHIBIT 99.1
For Information
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Mark A. Hellerstein
Robert T. Hanley
303-861-8140
ST. MARY REPORTS RECORD EARNINGS FOR FIRST QUARTER 2003
DENVER, May 7, 2003- St. Mary Land & Exploration Company (NYSE: SM) today
announced its earnings for first quarter 2003 of $32.8 million or $1.08 per
basic share, which reflects higher oil and gas prices and increased production
as compared to the first quarter 2002.
First quarter 2003 earnings also includes income net of income tax of $5.4
million or 18 cents per basic share from the required adoption of Statement of
Financial Accounting Standards No. 143 which requires the recognition of the
fair value of the Company's asset retirement liability. First quarter 2002
earnings were $2.3 million or 8 cents per basic share. Revenues for the first
quarter of 2003 were $101.2 million compared to $42.8 million for the first
quarter of 2002. First quarter Discretionary Cash Flow, which is net income plus
depreciation, depletion, amortization, impairments, deferred taxes and
exploration expense less the change in accounting principle and unrealized
derivative gain, increased from $24.3 million in the first quarter of 2002 to
$56.9 million in the first quarter of 2003. For a presentation of net cash flows
from operating activities and a reconciliation of Discretionary Cash Flow
thereto, see the attached financial highlights.
Daily oil and gas production during the first quarter 2003 averaged 199.5
million cubic feet of gas equivalent (MMCFE), up from 153.2 MMCFE in the
comparable 2002 period. Average prices realized during the quarter were $5.63
per MCF and $28.58 per barrel, 118% and 22% higher, respectively, than the
realized prices in the first quarter of 2002.
The Company's forecasts for the second quarter and the full year 2003 are as
follows:
2nd Quarter Year
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Oil and Gas Production 18.5-19.5 BCFE 72 - 77 BCFE
Lease operating expenses,
including production taxes and
transportation $1.15-$1.25/MCFE $1.15-$1.25/MCFE
General & administrative expense $.22-$.26/MCFE $.24-$.28/MCFE
Depreciation, depletion & amort. $1.10-$1.20/MCFE $1.10-$1.20/MCFE
Mark Hellerstein, Chairman, President and CEO commented, "The combination of
high commodity prices and a 30% increase in production over the first quarter of
2002 has made this the most profitable quarter in our history. Production from
our recent property acquisitions from Burlington Resources and Flying J along
with increased production from drilling, particularly in Northeast Mayfield in
our Mid-Continent region, has come at an opportune time in the commodity price
cycle. In addition, costs have remained moderate, keeping margins strong in this
high price environment."
An operational update for the first quarter 2003 was provided in the Company's
April 17, 2003 press release.
As previously announced, the St. Mary first quarter earnings teleconference call
is scheduled for May 8 at 8:00 am (MDT). The call participation number is
888-424-5231. A digital recording of the conference call will be available two
hours after the completion of the call, 24 hours per day through May 23 at
800-642-1687, conference number 9834449. International participants can dial
706-634-6088 to take part in the conference call, and can access a replay of the
call at 706-645-9291, conference number 9834449. In addition the call will be
broadcast live at St. Mary's website at www.stmaryland.com and this press
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release and financial highlights attachment will be available before the call at
www.stmaryland.com under "News--Press Releases." An audio recording of the
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conference call will be available at that site through May 23.
This release contains forward looking statements within the meaning of
securities laws, including forecasts and projections for future periods. The
words "will," "believe," "anticipate," "intend," "estimate," "forecast" 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
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 benefits, competition, litigation, environmental matters, the
potential impact of government regulations, and other such matters discussed in
the "Risk Factors" section of St. Mary's 2002 Annual Report on Form 10-K filed
with the SEC. Although St. Mary may from time to time voluntarily update its
prior forward looking statements, it disclaims any commitment to do so except as
required by securities laws.
PR-03-09
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ST. MARY LAND & EXPLORATION COMPANY
FINANCIAL HIGHLIGHTS
Three Months Ended
March 31,
---------------------- %
2003 2002 Change
----------------------
(Unaudited in thousands,
except per share)
Revenues:
Oil and gas production $95,688 $41,093
Gas marketing revenue 3,775 505
Gain (loss) on sale of proved
properties 36 (36)
Derivative gain 115 -
Other 1,590 1,211
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101,204 42,773
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Operating Expenses:
Oil and gas production costs 21,130 14,030
Depletion, depreciation & 18,885 13,054 Reconciliation of Discretionary Cash Flow to Cash
amortization and accretion Provided by Operations:
Exploration 4,150 6,916 -----------------------------------------------------------
Impairment and abandonment 919 697 Three Months Ended
General and administrative 6,146 3,141 March 31,
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Derivative loss - 352 2003 2002
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Gas marketing expense 3,359 424 Discretionary Cash Flow $ 56,853 $ 24,262
Minority interest and other 196 377
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54,785 38,991 (Gain) loss on property sales (36) 36
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Gain on sale of KMOC stock - (836)
Income from operations 46,419 3,782 Non-expl dry hole exploration exp (3,705) (2,738)
Interest income 230 110 Minority interest & other 253 (791)
Interest expense (2,216) (452) Changes in working capital (11,111) 21,859
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Income before income tax expense 44,433 3,440
Income tax expense - current 11,318 197 Cash provided by operations $ 42,254 $ 41,792
Income tax expense - deferred 5,753 925
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Income from continuing operations $27,362 $2,318
Cumulative effect from change Mar 31, Dec 31,
in accounting principle 5,435 - BALANCE SHEET 2003 2002
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Net income $32,797 $2,318 Working Capital $11,546 $2,050
======================
Long-term debt 170,625 113,601
Basic weighted avg shares outstanding 30,354 27,786 Stockholders' equity 331,574 299,513
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Diluted weighted avg shares outstanding 34,861 28,294
======================
Basic earnings per common share: Shares outstanding - permanent equity 28,058 27,973
Income from continuing operations $0.90 $0.08 Shares outstanding - temporary equity 3,381 -
Cumulative effect of accounting
change 0.18 - Note receivable from Flying J
(contra-equity) $ 71,594 $ -
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Basic net income per common share: $1.08 $0.08
======================
Diluted earnings per common share: Dec 31,
Income from continuing operations $0.81 $0.08 PROVEN RESERVES (in thousands): 2002
Cumulative effect of accounting --------
change 0.16 - Domestic:
---------------------- Oil (Bbls) 36,119
Diluted net income per common share: $0.97 $0.08 Gas (Mcf) 274,172
====================== --------
MCFE (6:1) 490,887
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Average price:
Oil (per Bbl) $28.58 $23.37 22%
Gas (per Mcf) $5.63 $2.58 118%
Margin analysis per MCFE:
Net realized price $5.33 $2.98 79%
Oil and gas production costs $1.18 $1.02 16%
General and administrative costs $0.34 $0.23 50%
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Operating margin $3.81 $1.74 120%
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Depletion, depreciation &
amortization $1.05 $0.95 11%
Production (in thousands):
Oil (Bbls) 1,041 705 48%
Gas (Mcf) 11,704 9,555 22%
MCFE (6:1) 17,951 13,785 30%