EXHIBIT 99.1
For Information
Mark A. Hellerstein
Robert T. Hanley
303-861-8140
FOR IMMEDIATE RELEASE
ST. MARY UPDATES GUIDANCE , PROVIDES OPERATIONS UPDATE AND
SCHEDULES FIRST QUARTER 2005 EARNINGS CONFERENCE CALL FOR MAY 4, 2005
DENVER, April 11, 2005 - St. Mary Land & Exploration Company (NYSE: SM)
today updated its guidance for the first quarter and full year 2005 and provided
an update of its operations. In addition, St. Mary has scheduled its first
quarter 2005 earnings conference call for May 4, 2005. St. Mary also announced
that it has entered into a five-year $500 million revolving credit facility.
Mark Hellerstein, Chairman, President and CEO, comments, "We are pleased with
solid first quarter drilling results and upgraded production forecast. In
particular, we believe the successful Cromwell horizontal well described below
will provide a significant multi-year drilling program for the Company. We plan
to test horizontal play ideas in two other field pays in the future."
FIRST QUARTER 2005 EXPLORATION AND DEVELOPMENT PROGRAM
During the first quarter of 2005, St. Mary participated in the drilling of 58
conventional wells, of which 54 were completed as producers (93% success rate).
At the end of the first quarter, St. Mary was completing 42 conventional wells
and 21 wells were drilling. The Company also completed 20 wells in its Hanging
Woman Basin coalbed methane program and participated in seven wells in the
Atlantic Rim coalbed methane play.
MID-CONTINENT REGION
In the Mid-Continent region there were 47 active wells during the first quarter
with 23 successful completions, no dry holes and 24 wells drilling or being
completed at the end of the quarter. There were eleven successful completions in
Northeast Mayfield during the first quarter. Nine wells were being completed and
five wells were drilling in Northeast Mayfield at the end of the quarter.
Completed wells in Northeast Mayfield during the first quarter include the
Clarence 1-28 (SM 25% WI) completed at 4,700 MCFED, the Parks #1 (SM 55% WI)
completed at an initial rate of 4,000 MCFED and the Daryl Cox 1-10 (SM 39% WI)
completed at a rate of 5,700 MCFED. The Wanda #1 (SM 44% WI), which was
completed after the close of the quarter, is currently producing at a rate of
8,800 MCFED from the Atoka. In the Constitution field the Paggi-Broussard 1 (SM
40%) is currently producing at a rate of 38,000 MCFD and 1,400 BOPD.
The Mowdy #1 (SM 100% WI) in the Centrahoma field was completed in March in the
Cromwell sand with an initial rate of 3,000 MCFED and is producing at a rate of
2,600 MCFED. The well was horizontally drilled and fracture stimulated. St. Mary
holds 36,000 gross and 20,000 net contiguous acres in the area and thus far has
been successful drilling vertical Cromwell producers in 11 sections. An
additional 19 sections to the east are also considered prospective in the
Cromwell as a result of vertical wells that had shows and/or production.
Approximately half of the acreage is held by existing production. The Company is
currently evaluating its future development plans with expectations of drilling
approximately four horizontal wells per section in the play. In addition, the
Wapanuka limestone, which has produced from vertical wells, may respond to this
completion technique and will be tested in the future.
ROCKIES REGION
During the first quarter there were 49 active wells in the Rockies region,
excluding coalbed natural gas wells. Nineteen wells were successful completions,
with no dry holes. 20 wells were being completed and 13 wells were drilling at
March 31. Included in the active wells were six completions in the middle Bakken
play in the Williston Basin. Six middle Bakken wells were being completed and
five middle Bakken wells were drilling at the end of the first quarter. The
completed middle Bakken wells include the Franz 2-15H (SM 100% WI) completed at
a rate of 490 BOPD and 200 MCFD, the State 4-16H (SM 83% WI) completed at an
initial rate of 600 BOPD and 240 MCFD and the Lowell Larson 12-22H completed at
an initial rate of 320 BOPD and 170 MCFD.
As anticipated, the Company completed 20 wells during the first quarter in its
Hanging Woman Basin coalbed natural gas program in the northern Powder River
Basin. The 77 wells completed to date in the program are currently producing
1,550 MCFD, of which 1,330 MCFD, net of compressor usage, is being sold. Current
production rates have exceeded the Company's expectations at this stage of the
program. Permitting is on schedule and the Company expects to be able to
complete the 150 wells included in its 2005 capital expenditures budget.
ARKLATEX REGION
Nine wells in the ArkLaTex region were completed as producing wells during the
first quarter, with one dry hole. Seven wells are currently being completed and
one is drilling. In the horizontal James Lime Spider field, the Weyerhaeuser 12
No 1 (SM 100% WI) was completed at a rate of 3,000 MCFED. The Annette Green No
2-Alt (SM 22% WI) in the Bethany-Longstreet field was completed at a rate of
3,000 MCFED.
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GULF COAST / PERMIAN REGION
During the first quarter the Ivy J. Major et al #5 (SM 11.5% WI) in the Judge
Digby field was completed at a rate of 8,000 MCFED. The JB Farm #1 well (SM 59%
WI) in Mermentau West was completed at a rate of 350 BOPD and 2,000 MCFD.
UPDATED FORECAST AND $500 MILLION CREDIT FACILITY
The Company updated its forecast for the first quarter and full year of 2005 as
follows:
1st Quarter Year
----------- ----
Oil and gas production 20.5 - 21.5 BCFE 83.0 - 87.0 BCFE
Lease operating expenses,
including production taxes and
transportation $1.45 - $1.55/MCFE $1.50 - $1.55/MCFE
General and administrative expense $0.29 - $0.34/MCFE $0.30 - $0.35/MCFE
Depreciation, depletion & amort. $1.40 - $1.45/MCFE $1.50 - $1.55/MCFE
St. Mary estimates its basis differential (the difference between estimated
realized oil and gas prices, before hedging, and the applicable NYMEX prices)
for the first quarter of 2005 will be $2.40 to $2.60 per barrel for oil and
$0.40 to $0.50 per MMbtu for gas.
The Company also announced it has entered into a new five-year, $500 million
credit facility agreement with Wachovia Bank and Wells Fargo Bank as Joint Lead
Arrangers, together with eight other participating banks. Wachovia is the
Administrative Agent for this facility. The initial borrowing base for this
facility has been set at $400 million and St. Mary has elected an initial
commitment of $200 million. At the closing of the new agreement on April 7, the
Company had $32 million of bank debt outstanding. Borrowings under this facility
are secured by the majority of the Company's oil and gas properties and a pledge
of the common stock of material subsidiary companies. Interest and commitment
fees are based on the following borrowing base utilization table:
Borrowing Base
Utilization Percentage <50% >50% <75% >75% <90% >90%
--------------------------- ------------ ------------- ------------ -------------
Eurodollar Loans 1.000% 1.250% 1.500% 1.750%
--------------------------- ------------ ------------- ------------ -------------
ABR Loans 0.000% 0.000% 0.250% 0.500%
--------------------------- ------------ ------------- ------------ -------------
Commitment Fee 0.250% 0.300% 0.375% 0.375%
--------------------------- ------------ ------------- ------------ -------------
St. Mary is scheduled to release first quarter 2005 earnings after the close of
trading on the NYSE on May 3, 2005. The teleconference call to discuss first
quarter results is scheduled for May 4, 2005 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 13 at 800-642-1687, conference number 5396566. 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 5396566. In
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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 May 13.
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 2004 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-05-07
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