EXHIBIT 99.1
For Information
---------------
Mark A. Hellerstein
Robert T. Hanley
303-861-8140
4
FOR IMMEDIATE RELEASE
ST. MARY UPDATES 2004 GUIDANCE, PROVIDES OPERATIONS UPDATE AND SCHEDULES 2004
EARNINGS CONFERENCE CALL FOR FEBRUARY 25, 2005
DENVER, January 12, 2005 - St. Mary Land & Exploration Company (NYSE: SM)
today updated its guidance for the fourth quarter and full year 2004 and
provided an update of its operations. In addition, St. Mary has scheduled its
year-end 2004 earnings conference call for February 25, 2005.
The Company updated its forecast for the fourth quarter and full year of 2004 as
follows:
4th Quarter Year
----------- ----
Oil and gas production 19.5 - 20.0 BCFE 75.0 - 75.5 BCFE
Lease operating expenses,
including production taxes and
transportation $1.35 - $1.40/MCFE $1.25 - $1.30/MCFE
General and administrative expense $0.26 - $0.31/MCFE $0.27 - $0.31/MCFE
Depreciation, depletion & amort. $1.37 - $1.43/MCFE $1.18 - $1.23/MCFE
Change in non-cash net profits
interest bonus plan liability $10.5 - $11.5 million
The Company increased its production guidance for the fourth quarter by five
percent due to better than expected drilling results.
St. Mary estimates its basis differential for the fourth quarter of 2004 will be
$1.25 to $1.35 per barrel for oil and $0.42 to $0.47 per MMbtu of gas.
The Company has closed the three previously announced agreements to acquire a
cash total of approximately $97.4 million of oil and gas properties. The $23.1
million acquisition of Goldmark Engineering, Inc. closed November 1, 2004, the
$37.2 million Nemours acquisition of oil and gas properties in northern
Louisiana and east Texas closed December 15, 2004, and the $37.1 million
acquisition of Agate Petroleum, Inc. closed January 5, 2005. Payment for each of
the acquisitions was made out of cash on hand and funds available under St.
Mary's existing credit facility. Additional information about the location of
and estimated oil and gas reserves associated with the acquired properties was
furnished in the Company's October 20, 2004 press release.
2004 EXPLORATION AND DEVELOPMENT PROGRAM
During the fourth quarter of 2004, St. Mary participated in the drilling of 85
conventional wells, of which 78 were completed as producers (92% success rate).
For the year 2004, the Company completed 177 wells as producers out of the 195
total wells drilled, for a 91% success rate. At year end St. Mary was completing
40 wells, and 18 wells were drilling. The Company also participated in the
drilling of 83 coalbed methane wells during 2004.
MID-CONTINENT REGION
In the Mid-Continent region there were 99 wells drilled with 91 successful
completions and eight dry holes during 2004. Eighteen wells were being completed
and 10 wells were drilling at year-end. Ten wells in NE Mayfield were completed
during the fourth quarter. The completed wells in NE Mayfield include the Dobson
Ranch 1-31 (SM 28%) completed at an initial rate of 6,200 MCFED, the Twin 1-32
(SM 32%) completed at an initial rate of 4,300 MCFED and the Theresa 1-35 (SM
46%) completed at a rate of 4,100 MCFED. At the end of 2004 there were 11 wells
completing and five wells drilling in NE Mayfield. In the Constitution field the
Paggi-Broussard 1 (SM 40%) is currently producing at a rate of 18,000 MCFD and
700 BOPD. The Douglas 6-10 in the Mocane Laverne field (SM 50%) was completed at
a rate of 4,200 MCFED.
ROCKIES REGION
Fifty-one conventional wells were drilled in the Rocky Mountain region during
2004. Forty-eight were successfully completed and three wells were plugged and
abandoned. Fifteen wells were being completed and four wells were drilling at
year-end.
During the fourth quarter, the Company completed 10 wells in the middle Bakken
formation in the Williston Basin, bringing the total wells it completed in the
middle Bakken to 15 in 2004. Five middle Bakken wells were being completed and
three middle Bakken wells were drilling at year-end. Two of the wells being
completed and one of the wells drilling at year-end are the Company's initial
middle Bakken tests in North Dakota. North Dakota results to date have been
encouraging with unstimulated flow rates from reentry of existing well bores
with single laterals ranging from 150 to 300 BOPD. New wells will generally be
drilled with dual lateral completions. A fourth well in North Dakota is planned
to spud within the next 10 days. Horizontal well completions in the middle
Bakken during the fourth quarter include the Larson 14-26H (SM 100%), which had
an initial ten-day rate of 410 BOPD, the Johnson 15-5H (SM 75%) completed at a
rate of 270 BOPD and the Albin 13X-33 (SM 33%) completed at a rate of 440 BOPD.
At year-end the Company had 182,000 net acres leased in Richland County, Montana
and McKenzie and Billings Counties, North Dakota. The Company estimates that
2
approximately 80,000 of the net acres it has leased in these three counties are
within what the Company currently considers to be the middle Bakken area.
Fifty-seven wells were drilled and completed in the Company's Hanging Woman
coalbed methane program in the northern Powder River Basin in 2004. At year-end
2004, 42 wells were producing (dewatering) and 23 wells were being completed.
The pipeline and compression station to connect the wells to the main trunk line
became operational on December 15, 2004 and gas was being delivered to the
pipeline at year-end at 320 MCFD, which is an encouraging rate after such a
short dewatering period. The Company also participated in 26 coalbed methane
wells in the Atlantic Rim area in the Greater Green River Basin during 2004.
ARKLATEX REGION
In the ArkLaTex region, 32 wells were drilled during 2004 with 29 successful
completions and 3 dry holes. Five wells were being completed at year-end. Wells
completed during the fourth quarter include the Desoto Parish School B2 (SM
100%) completed at an initial rate of 3,500 MCFED and the Weyerhaeuser 11 No.
1-Alt (SM 100%) completed at 3,500 MCFED in the Spider field. The Enserch Proc.
10 (SM 21%) in the Trinidad field was completed at a rate of 3,400 MCFED.
GULF COAST / PERMIAN REGION
In the Gulf Coast / Permian region, 13 wells were drilled during 2004 with nine
successful completions and four dry holes. Two wells were being completed and
four wells were drilling at year-end. Wells completed during the fourth quarter
include the East Cameron 57 JA9 (SM 30%), completed at an initial rate of 5,000
MCFED, the East Cameron 56 JB5ST1 (SM 30%), completed at 4,100 MCFED and the
Dana L. Bradley #1 (SM 30%) in the Esther prospect, completed at a rate of 2,700
MCFED.
The Company plans to issue a separate press release in late January 2005 to
announce its planned 2005 Capital Expenditures Program, its estimated proved oil
and gas reserves as of December 31, 2004 and its 2005 guidance for production,
operating costs, general and administrative expenses and DD&A.
St. Mary is scheduled to release its year-end 2004 earnings after the close of
trading on the NYSE on February 24, 2005. The teleconference call to discuss
year-end results is scheduled for February 25, 2005 at 8:00 am (MST). 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 March 15 at 800-642-1687, conference number 3293322. 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 3293322. In
addition, the call will be broadcast live at St. Mary's website at
www.stmaryland.com and the earnings 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 March 31.
3
This release contains forward looking statements within the meaning of
securities laws, including forecasts and projections. 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 uncertain nature of
the expected benefits from the acquisition of oil and gas properties, the
volatility and level of oil and natural gas prices, unexpected drilling
conditions and results, the risks of various exploration strategies, production
rates and reserve replacement, the imprecise nature of oil and gas reserve
estimates, drilling and operating service availability, uncertainties in cash
flow, the financial strength of hedge contract counterparties, the availability
of economically attractive exploration and development and property acquisition
opportunities and any necessary financing, competition, litigation,
environmental matters, the potential impact of government regulations, and other
such matters discussed in the "Risk Factors" section of St. Mary's 2003 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-05-01
###
4