Exhibit 99.1
For Information
Mark A. Hellerstein
Robert T. Hanley
303-861-8140
FOR IMMEDIATE RELEASE
ST. MARY ANNOUNCES 2003 CAPITAL EXPENDITURES BUDGET, YEAR END 2002 RESERVES AND
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PROVIDES OPERATIONS UPDATE
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DENVER, January 27, 2003 - St. Mary Land & Exploration Company (NYSE: SM)
announced today that its capital expenditures budget for 2003 is $225 million.
The 2003 budget represents a 16% increase from the $193 million forecasted
capital expenditures for 2002. The budget includes $135 million for exploration
and development and $90 million for property acquisitions, including the
previously announced pending acquisition of oil and gas properties from Flying J
Oil & Gas Inc. and Big West Oil & Gas Inc. which is expected to close
January 29, 2003. Approximately 33% of the exploration and development budget is
being allocated to the Mid-Continent region, 24% to the Rockies region
(including the Williston Basin), 14% to the ArkLaTex region, 13% to the Gulf
Coast and Gulf of Mexico region, 9% to the Permian Basin and 7% to
unconventional gas projects.
St. Mary also announced that its oil and gas reserves at December 31, 2002
increased 28% from 383 BCFE at year-end 2001 to 491 BCFE, 88% which are proved
developed. The Company replaced 305% of its estimated 2002 production at an
estimated all-inclusive finding cost of $1.15 per MCFE.
The Company updated its forecast for the fourth quarter and full year of 2002 as
follows:
4th Quarter Year
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Production 14.5 BCFE 55 BCFE
Lease operating expenses,
including production taxes and
transportation $.95-$1.00/MCFE $ .93-$.96/MCFE
General and administrative exp. $ .22-$.24/MCFE $ .23-$.27/MCFE
Depreciation, depletion & amort. $.95-$1.00/MCFE $.95-$1.00/MCFE
Exploration expense $3.5 - $4.5 MM $19.0 - $20.0 MM
Pipeline curtailments caused by the flurry of new completions in NE Mayfield in
the Anadarko Basin resulted in a loss of approximately 500 MMCFE for the
quarter. Work is in progress to increase pipeline capacity to accommodate the
new production.
St. Mary currently has the following hedges in place:
Average Equivalent
Daily NYMEX
Year Volume Price
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Gas Swap 2003 41,215 MMbtu $4.25
Collar 2003 4,581 MMbtu $3.85-$7.28
Swap 2004 17,564 MMbtu $4.05
Oil Swap 2003 6,779 Bbls $25.94
Swap 2004 4,752 Bbls $23.72
The Company's forecast for the first quarter and the full year of 2003 is as
follows:
1st Quarter Year
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Production 17 - 19 BCFE 70 - 75 BCFE
Lease operating expenses,
including production taxes and
transportation $1.18-$1.28/MCFE $1.18-$1.28/MCFE
General and administrative exp. $.23 - $.27/MCFE $.21 - $.25/MCFE
Depreciation, depletion & amort. $ .95-$1.00/MCFE $ .95-$1.05/MCFE
During the fourth quarter St. Mary will realize a pre-income tax gain of $3.95
million resulting from the complete liquidation of the interest rate swap
agreement entered into during the first quarter of 2002 with respect to $50
million of the $100 million in St. Mary's 5.75% senior convertible notes due
2022. Prior to the fourth quarter the Company had recorded a $4.59 million
mark-to-market unrealized derivative gain on these swap agreements. St. Mary has
separately determined that for the period from September 15, 2002 to March 14,
2003 the notes will, subject to the terms of the indenture under which they were
issued, accrue additional contingent interest at a rate of 0.50% per annum.
The Company will recognize a pre-income tax loss of $2.6 million on the sale of
its interest in Flour Bluff, a non-operated field in Nueces County, Texas,
during the fourth quarter of 2002.
2002 EXPLORATION AND DEVELOPMENT PROGRAM
During 2002 St. Mary participated in the drilling of 126 wells with 81
successful completions, 18 dry holes, 23 wells being completed and 5 wells
drilling at year-end. The Company also participated in the recompletion of 63
wells, of which 43 were successful.
Mid-Continent
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In the Mid-Continent region there were 47 wells drilled with 41 successful
completions and 6 dry holes during 2002. Eleven wells were being completed and 3
wells were drilling at year-end. Completed wells in NE Mayfield during the
fourth quarter include the Anderson 1-19 (57%) completed at 5,300 MCFED, the
Legrand 2-32 (42%) completed at 3,200 MCFED and the Carlson 1-26 (58%) completed
at 2,000 MCFED. Subsequent to year end the Brothers 2-20 (34%) was completed in
the Atoka interval and is producing at a rate of 11,700 MCFED. The Haney 1-36
(100%) in the Terranova field was completed at 1,600 MCFED. Successful
recompletions in NE Mayfield include the Baker 1-28 (93%) in the Atoka interval
at a rate of 8,400 MCFED and the Benton 1X-21 (48%) in the Atoka interval at a
rate of 5,600 MCFED.
ArkLaTex
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In the ArkLaTex region 18 wells were drilled during 2002 with 15 successful
completions and 3 dry holes. Wells completed during the fourth quarter include
the Dupre #1 (90%) completed at a rate of 2,400 MCFED, the DSK #1 (39%)
completed at 2,000 MCFED and the JC Powell 32 #1 (30%) completed at 1,300 MCFED.
Permian Basin
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Fifteen wells were drilled in the Permian Basin region during 2002. Twelve wells
were successfully completed and 3 wells were plugged and abandoned. During the
fourth quarter the Towle Park #1 (45%) in the Kelly Snyder SE field was
completed at a rate of 220 BOPD and 191 MCFD.
Gulf Coast
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During the fourth quarter the Majors #4 (11.5%) was completed in the C-3
Tuscaloosa sand interval at Judge Digby and is producing at 36,000 MCFED. The
Wurtele #1 (15.6%) was successfully recompleted in the C-1 interval and is
producing at 16,000 MCFED
Duchesne Deep Prospect
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The Ute Tribal KMV # 1-28 (St. Mary 100%) in Duchesne Co., Utah was spud on
September 25, 2002. The 16,200 foot test, targeting basin centered gas
objectives in the tight sands of the Mesaverde formation in the Uinta Basin, is
currently drilling below 14,500 feet. St. Mary controls in excess of 12,000
acres in the prospect.
St. Mary has scheduled its year-end 2002 earnings conference call for Friday,
February 21, 2002 at 8:00 a.m. (MST) to discuss financial results that will be
released after the market closes on February 20. 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 until March 7 at
800-642-1687, conference number 10142. 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 10142. In addition the call will be
broadcast live online at www.stmaryland.com. An audio recording of the
conference call will be available at that site through March 7.
This release contains forward-looking statements, including forecasts and
projections for future periods. 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 uncertain nature of the expected benefits from the
acquisition of oil and gas properties, the pending nature of the reported
acquisition transaction and the ability to complete the transaction, the
volatility and level of oil and natural gas prices, production rates and reserve
replacement, reserve estimates, drilling and operating risks, market conditions
for the acquisition of oil and gas properties, competition, litigation,
environmental matters, the potential impact of government regulations, and other
matters discussed under the "Risk Factors" section of St. Mary's 2001 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.
PR-03-01
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