EXHIBIT 99.1 For Information --------------- 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 ---------------- --------------- 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/MCFEMark 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 ------------------ release and financial highlights attachment will be available before the call at www.stmaryland.com under "News--Press Releases." An audio recording of the - ------------------ 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 ### 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 ---------------------- 101,204 42,773 ---------------------- 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, ------------------ Derivative loss - 352 2003 2002 -------- -------- Gas marketing expense 3,359 424 Discretionary Cash Flow $ 56,853 $ 24,262 Minority interest and other 196 377 ---------------------- 54,785 38,991 (Gain) loss on property sales (36) 36 ---------------------- 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 ---------------------- 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 ---------------------- 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 ---------------------- ------------------ 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 ====================== 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 $ - ---------------------- 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 ======== 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% ---------------------- Operating margin $3.81 $1.74 120% ---------------------- 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%