·	Quarterly production of 26.4 BCFE within guidance of 25.5 – 27.0 BCFE

·	Costs largely within or below guidance for the quarter

·	Adjusted net income of $14.7 million or $0.23 per diluted share

·	Non-cash charges and impairments result in a GAAP net loss of ($4.4 million), or ($0.07) per diluted share

·	Borrowing base re-determined at $900 million

 

2

 

 

 

3

 

4

 

 

 

 

6

ST. MARY LAND & EXPLORATION COMPANY
FINANCIAL HIGHLIGHTS
September 30, 2009
Production Data	For the Three Months								For the Nine Months
	Ended September 30,								Ended September 30,
	2009			2008			Percent Change		2009			2008			Percent Change
Average realized sales price, before hedging:
Oil (per Bbl)	$	61.93		$	111.97		-45%		$	49.82		$	108.04		-54%
Gas (per Mcf)		3.37			9.96		-66%			3.49			9.78		-64%
Average realized sales price, net of hedging:
Oil (per Bbl)	$	62.65		$	83.30		-25%		$	54.32		$	82.61		-34%
Gas (per Mcf)		4.95			9.51		-48%			5.44			9.39		-42%
Production:
Oil (MMBbls)		1.5			1.6		-3%			4.8			4.9		-2%
Gas (Bcf)		17.2			18.2		-5%			54.1			55.2		-2%
BCFE (6:1)		26.4			27.7		-5%			83.0			84.6		-2%
Daily production:
Oil (MBbls per day)		16.6			17.2		-3%			17.6			17.9		-1%
Gas (MMcf per day)		187.1			198.0		-5%			198.0			201.6		-2%
MMCFE per day (6:1)		286.7			301.2		-5%			303.8			308.8		-2%
Margin analysis per MCFE:
Average realized sales price, before hedging	$	5.79		$	12.94		-55%		$	5.16		$	12.63		-59%
Average realized sales price, net of hedging		6.86			11.01		-38%			6.70			10.91		-39%
Lease operating expense		1.30			1.57		-17%			1.34			1.41		-5%
Transportation		0.20			0.24		-17%			0.19			0.19		0%
Production taxes		0.34			0.81		-58%			0.33			0.83		-60%
General and administrative		0.79			0.87		-9%			0.67			0.79		-15%
Operating margin	$	4.23		$	7.52		-44%		$	4.17		$	7.69		-46%
Depletion, depreciation, amortization, and
asset retirement obligation liability accretion	$	2.54		$	2.61		-3%		$	2.76		$	2.59		7%

ST. MARY LAND & EXPLORATION COMPANY
FINANCIAL HIGHLIGHTS
September 30, 2009
NOTE: On January 1, 2009, new authoritative accounting guidance under FASB ASC Topic 470-20, “Debt with Conversion and Other Options” (“ASC Topic 470”)
required retrospective application. As a result, prior period balances presented have been adjusted to reflect the period-specific effects of applying ASC Topic
470.
Consolidated Statements of Operations
(In thousands, except per share amounts)	For the Three Months						For the Nine Months
	Ended September 30,						Ended September 30,
		2009			2008			2009			2008
				(As adjusted)						(As adjusted)
Operating revenues and other income:
Oil and gas production revenue	$	152,651		$	358,508		$	428,347		$	1,068,901
Realized oil and gas hedge gain (loss)		28,331			(53,491	)		127,230			(145,837	)
Gain (loss) on divestiture activity		(11,277	)		(4,992	)		(10,632	)		54,063
Marketed gas system and other operating revenue		16,082			24,063			45,260			66,005
Total operating revenues and other income		185,787			324,088			590,205			1,043,132
Operating expenses:
Oil and gas production expense		48,634			72,724			153,928			205,825
Depletion, depreciation, amortization,
and asset retirement obligation liability accretion		66,958			72,362			229,061			219,070
Exploration		15,733			10,669			48,821			42,378
Impairment of proved properties		91			564			153,183			10,130
Abandonment and impairment of unproved properties		4,761			1,231			20,294			4,295
Impairment of materials inventory		2,114			-			13,449			-
General and administrative		20,790			24,145			55,349			67,149
Bad debt expense		-			6,650			-			16,592
Change in Net Profits Plan liability		6,804			(34,867	)		(14,038	)		46,901
Marketed gas system expense		14,360			22,960			41,352			60,918
Unrealized derivative (gain) loss		4,117			(4,429	)		17,251			802
Other expense		968			7,753			12,424			9,155
Total operating expenses		185,330			179,762			731,074			683,215
Income (loss) from operations		457			144,326			(140,869	)		359,917
Nonoperating income (expense):
Interest income		90			239			217			395
Interest expense		(7,565	)		(7,026	)		(21,324	)		(20,862	)
Income (loss) before income taxes		(7,018	)		137,539			(161,976	)		339,450
Income tax benefit (expense)		2,603			(50,542	)		61,616			(125,010	)
Net income (loss)	$	(4,415	)	$	86,997		$	(100,360	)	$	214,440
Basic weighted-average common shares outstanding		62,505			62,187			62,420			62,254
Diluted weighted-average common shares outstanding		62,505			63,078			62,420			63,327
Basic net income (loss) per common share	$	(0.07	)	$	1.40		$	(1.61	)	$	3.44
Diluted net income (loss) per common share	$	(0.07	)	$	1.38		$	(1.61	)	$	3.39

ST. MARY LAND & EXPLORATION COMPANY
FINANCIAL HIGHLIGHTS
September 30, 2009
Consolidated Balance Sheets
(In thousands, except share amounts)	September 30,			December 31,
ASSETS	2009			2008
				(As adjusted)
Current assets:
Cash and cash equivalents	$	20,517		$	6,131
Short-term investments		-			1,002
Accounts receivable, net of allowance for doubtful accounts
of $16,919 in 2009 and $16,788 in 2008		98,709			157,690
Refundable income taxes		2,821			13,161
Prepaid expenses and other		16,802			22,161
Accrued derivative asset		41,428			111,649
Total current assets		180,277			311,794
Property and equipment (successful efforts method), at cost:
Land		1,371			1,350
Proved oil and gas properties		2,804,559			2,969,722
Less - accumulated depletion, depreciation, and amortization		(1,063,232	)		(947,207	)
Unproved oil and gas properties, net of impairment allowance
of $51,511 in 2009 and $42,945 in 2008		147,825			168,817
Wells in progress		56,958			90,910
Materials inventory, at lower of cost or market		30,411			40,455
Oil and gas properties held for sale less accumulated depletion,
depreciation, and amortization		148,937			1,827
Other property and equipment, net of accumulated depreciation
of $16,617 in 2009 and $13,848 in 2008		14,516			13,458
		2,141,345			2,339,332
Other noncurrent assets:
Accrued derivative asset		4,614			21,541
Restricted cash subject to Section 1031 Exchange		-			14,398
Other noncurrent assets		17,523			10,182
Total other noncurrent assets		22,137			46,121
Total Assets	$	2,343,759		$	2,697,247
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	215,363		$	254,811
Accrued derivative liability		25,370			501
Deferred income taxes		8,424			41,289
Total current liabilities		249,157			296,601
Noncurrent liabilities:
Long-term credit facility		235,000			300,000
Senior convertible notes, net of unamortized
discount of $22,716 in 2009, and $28,787 in 2008		264,784			258,713
Asset retirement obligation		68,682			108,755
Asset retirement obligation associated with oil and gas properties held for sale		23,711			238
Net Profits Plan liability		163,328			177,366
Deferred income taxes		285,042			354,328
Accrued derivative liability		46,315			27,419
Other noncurrent liabilities		11,623			11,318
Total noncurrent liabilities		1,098,485			1,238,137
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par value: authorized - 200,000,000 shares;
issued: 62,638,839 shares in 2009 and 62,465,572 shares in 2008;
outstanding, net of treasury shares: 62,511,946 shares in 2009
and 62,288,585 shares in 2008		626			625
Additional paid-in capital		151,620			141,283
Treasury stock, at cost:  126,893 shares in 2009 and 176,987 shares in 2008		(1,230	)		(1,892	)
Retained earnings		850,593			957,200
Accumulated other comprehensive income (loss)		(5,492	)		65,293
Total stockholders' equity		996,117			1,162,509
Total Liabilities and Stockholders' Equity	$	2,343,759		$	2,697,247

ST. MARY LAND & EXPLORATION COMPANY
FINANCIAL HIGHLIGHTS
September 30, 2009
Consolidated Statements of Cash Flows
(In thousands)	For the Three Months						For the Nine Months
	Ended September 30,						Ended September 30,
	2009			2008			2009			2008
Cash flows from operating activities:				(As adjusted)						(As adjusted)
Reconciliation of net income (loss) to net cash provided
by operating activities:
Net income (loss)	$	(4,415	)	$	86,997		$	(100,360	)	$	214,440
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
(Gain) loss on divestiture activities		11,277			4,992			10,632			(54,063	)
Depletion, depreciation, amortization,
and asset retirement obligation liability accretion		66,958			72,362			229,061			219,070
Exploratory dry hole (benefit) expense		182			(23	)		4,849			6,583
Impairment of proved properties		91			564			153,183			10,130
Abandonment and impairment of unproved properties		4,761			1,231			20,294			4,295
Impairment of materials inventory		2,114			-			13,449			-
Stock-based compensation expense*		5,469			3,420			12,978			10,477
Bad debt expense		-			6,650			-			16,592
Change in Net Profits Plan liability		6,804			(34,867	)		(14,038	)		46,901
Unrealized derivative (gain) loss		4,117			(4,429	)		17,251			802
Loss related to hurricanes		1,153			6,980			8,273			6,980
Loss on insurance settlement		-			640			-			1,600
Amortization of debt discount and deferred financing costs		3,219			2,336			8,922			6,942
Deferred income taxes		(5,934	)		44,618			(69,082	)		99,380
Plugging and abandonment		(9,755	)		(308	)		(12,110	)		(1,355	)
Other		(187	)		(4,379	)		1,432			(3,416	)
Changes in current assets and liabilities:
Accounts receivable		9,695			32,399			58,844			(39,455	)
Refundable income taxes		(2,821	)		5,271			10,340			(3,650	)
Prepaid expenses and other		(1,569	)		8,599			(8,660	)		2,029
Accounts payable and accrued expenses		20,132			19,913			7,794			34,763
Excess income tax benefit from the exercise of stock options		-			(716	)		-			(10,281	)
Net cash provided by operating activities		111,291			252,250			353.052			568,764
Cash flows from investing activities:
Proceeds from insurance settlement		15,336			-			15,336			-
Proceeds from sale of oil and gas properties		56			606			1,137			155,203
Capital expenditures		(76,640	)		(165,489	)		(292,466	)		(495,155	)
Acquisition of oil and gas properties		(14	)		(20,506	)		(58	)		(83,433	)
Receipts from restricted cash		-			-			14,398			-
Deposits to restricted cash		-			25,266			-			-
Receipts from (deposits to) short-term investments		-			(12	)		1,002			161
Other		-			3			-			(9,984	)
Net cash used in investing activities		(61,262	)		(160,132	)		(260,651	)		(433,208	)
Cash flows from financing activities:
Proceeds from credit facility		132,500			194,000			1,898,500			832,000
Repayment of credit facility		(172,500	)		(319,000	)		(1,963,500	)		(947,000	)
Debt issuance costs related to credit facility		(14	)		-			(11,074	)		-
Excess income tax benefit from the exercise of stock options		-			716			-			10,281
Proceeds from sale of common stock		113			643			1,179			11,327
Repurchase of common stock		-			-			-			(77,202	)
Dividends paid		-			-			(3,120	)		(3,076	)
Net cash used in financing activities		(39,901	)		(123,641	)		(78,015	)		(173,670	)
Net change in cash and cash equivalents		10,128			(31,523	)		14,386			(38,114	)
Cash and cash equivalents at beginning of period		10,389			36,919			6,131			43,510
Cash and cash equivalents at end of period	$	20,517		$	5,396		$	20,517		$	5,396
*  Stock-based compensation expense is a component of exploration expense and general and administrative expense on the consolidated statements of
operations. For the three months ended September 30, 2009,and 2008, respectively, approximately $1.5 million and $1.6 million of stock based compensation was
included in exploration expense. For the nine months ended September 30, 2009, and 2008, respectively, approximately $4.4 million and $3.8 million of stock-based
compensation expense was included in exploration expense. For the three months ended September 30, 2009, and 2008, respectively, approximately $4.0 million
and $1.8 million of stock-based compensation was included in general and administrative expense. For the nine months ended September 30, 2009, and 2008,
respectively approximately $8.6 million and $6.7 million of stock-based compensation expense was included in general and administrative expense.

ST. MARY LAND & EXPLORATION COMPANY
FINANCIAL HIGHLIGHTS
September 30, 2009
Adjusted Net Income
(In thousands, except per share data)
Reconciliation of Net Income (Loss) (GAAP)	For the Three Months						For the Nine Months
to Adjusted Net Income (Non-GAAP):	Ended September 30,						Ended September 30,
	2009			2008			2009			2008
				(As adjusted)						(As adjusted)
Reported Net Income (Loss) (GAAP)	$	(4,415	)	$	86,997		$	(100,360	)	$	214,440
Adjustments:
Change in Net Profits Plan liability		6,804			(34,867	)		(14,038	)		46,901
Unrealized derivative (gain) loss		4,117			(4,429	)		17,251			802
(Gain) loss on divestiture activities		11,277			4,992			10,632			(54,063	)
Bad debt expense associated with Sem Group, L.P.		-			6,692			-			16,640
Loss related to hurricanes (1)		1,153			6,980			8,273			6,980
Loss on insurance settlement		-			640			-			1,600
Tax adjustment at effective rate for period		(8,661	)		7,347			(8,414	)		(6,946	)
Adjusted Net Income (Loss), before impairment adjustments		10,275			74,352			(86,656	)		226,354
Non-cash impairments:
Impairment of proved properties		91			564			153,183			10,130
Abandonment and impairment of unproved properties		4,761			1,231			20,294			4,295
Impairment of materials inventory		2,114			-			13,449			-
Tax adjustment for impairments at effective rate for period		(2,584	)		(660	)		(71,107	)		(5,312	)
Adjusted Net Income, non-recurring items
& non-cash impairments (Non-GAAP) (2)	$	14,657		$	75,487		$	29,163		$	235,467
Adjusted Net Income Per Share (Non-GAAP)
Basic	$	0.23		$	1.21		$	0.47		$	3.78
Diluted	$	0.23		$	1.20		$	0.47		$	3.72
Average Number of Shares Outstanding
Basic		62,505			62,187			62,420			62,254
Diluted		62,505			63,078			62,420			63,327
(1)   The loss related to hurricanes is included within line item other expense on the consolidated statements of operations.
(2)   Adjusted net income is calculated as net income (loss) adjusted for significant non-cash and non-recurring items. Non-cash charges and adjustments include
change in the Net Profits Plan liability, unrealized derivative (gain) loss, impairment of proved properties, abandonment and impairment of unproved properties, and
impairment of materials inventory. Non-recurring items include (gain) loss on divestiture activities, loss related to hurricanes, loss on insurance settlement,
and bad debt expense associated with Sem Group, L.P. The non-GAAP measure of adjusted net income is presented because management believes it provides
useful additional information to investors for analysis of St. Mary’s fundamental business on a recurring basis. In addition, management believes that adjusted net
income is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas
exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted net
income should not be considered in isolation or as a substitute for net income, income from operations, cash provided by operating activities or other income,
profitability, cash flow, or liquidity measures prepared under GAAP. Since adjusted net income excludes some, but not all, items that affect net income and may vary
among companies, the adjusted net income amounts presented may not be comparable to similarly titled measures of other companies.

ST. MARY LAND & EXPLORATION COMPANY
FINANCIAL HIGHLIGHTS
September 30, 2009
Discretionary Cash Flow
(In thousands)
Reconciliation of Net Cash Provided by Operating Activities	For the Three Months						For the Nine Months
(GAAP) to Discretionary Cash Flow (Non-GAAP):	Ended September 30,						Ended September 30,
	2009			2008			2009			2008
				(As adjusted)						(As adjusted)
Net cash provided by operating activities (GAAP)	$	111,291		$	252,250		$	353,052		$	568,764
Changes in current assets and liabilities		(25,437	)		(65,466	)		(68,318	)		16,594
Exploration		15,733			10,669			48,821			42,378
Less:  Exploratory dry hole benefit (expense)		(182	)		23			(4,849	)		(6,583	)
Less:  Stock-based compensation expense included in exploration		(1,533	)		(1,665	)		(4,397	)		(3,807	)
Discretionary cash flow (Non-GAAP) (3)	$	99,872		$	195,811		$	324,309		$	617,346
(3) Beginning in the third quarter of 2009 the Company changed its definition of discretionary cash flow. Prior periods have been conformed to the current
definition and the change in the definition did not result in a material variance to results under the prior definiton. Discretionary cash flow is computed as net cash
provided by operating activities adjusted for changes in current assets and liabilities and exploration benefit (expense), less exploratory dry hole expense, and
stock-based compensation expense included in exploration. The non-GAAP measure of discretionary cash flow is presented because management believes that it
provides useful additional information to investors for analysis of St. Mary's ability to internally generate funds for exploration, development, and acquisitions. In
addition, discretionary cash flow is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of
companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making
investment decisions. Discretionary cash flow should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by
operating activities or other income, profitability, cash flow, or liquidity measures prepared under GAAP. Since discretionary cash flow excludes some, but not all
items that affect net income and net cash provided by operating activities and may vary among companies, the discretionary cash flow amounts presented may not
be comparable to similarly titled measures of other companies. See the consolidated statements of cash flows herein for more detailed cash flow information.