EXHIBIT 99.1
For Information
---------------
Mark A. Hellerstein
Robert T. Hanley
303-861-8140
ST. MARY REPORTS RESULTS FOR THE FULL YEAR AND 4TH QUARTER 2004
DENVER, February 24, 2005 - St. Mary Land & Exploration Company (NYSE: SM)
today reported earnings of $92.5 million or $2.88 per diluted share for the year
ended December 31, 2004. Year 2003 earnings were $95.6 million or $2.80 per
diluted share. Revenues for 2004 were $433.1 million compared to $393.7 million
for 2003. St. Mary's discretionary cash flow(1) increased 19% to $275.2 million
in 2004 from $232.1 million in 2003. Net cash provided by operating activities
increased from $204.3 million in 2003 to $237.2 million in 2004.
Oil and gas production for 2004 was 75.4 billion cubic feet of gas equivalent
(BCFE) compared to 76.9 BCFE for 2003. The average realized price per MCFE
increased $0.73 to $5.48 in 2004, a 15% increase from the average price realized
in 2003.
Earnings for the fourth quarter of 2004 were $26.6 million or $0.83 per diluted
share compared to $24.7 million or $0.72 per diluted share for the fourth
quarter of 2003. Revenues for the fourth quarter of 2004 were $126.4 million
compared to $98.0 million for the same period in 2003. Discretionary cash
flow(1) for the fourth quarter of 2004 increased 32% from the same period in
2003 to $82.9 million. Net cash provided by operating activities increased to
$80.0 million in the fourth quarter of 2004 from $53.4 million in the fourth
quarter of 2003. Average daily oil and gas production during the fourth quarter
2004 totaled 216.3 MMCFE, up 4% from 207.6 MMCFE in the comparable 2003 period.
Average prices realized during the quarter were $6.14 per Mcf and $36.75 per
barrel, which were 34% and 37% higher, respectively, than the realized prices in
the fourth quarter of 2003.
Mark Hellerstein, Chairman, President and CEO, commented, "We realized record
earnings per share for the year 2004 as we enjoyed higher commodity prices and
we repurchased 3.9 million common shares during the year. Our production is
showing good growth, primarily through the drill bit, as fourth quarter
production was up 5% over the third quarter and 9% over the second quarter. We
begin 2005 with a strong balance sheet and a large prospect inventory. We
increased our drilling capital expenditures budget 24% over our 2004
expenditures and have multi-year development plans in the Bakken and Red River
plays in the Williston Basin, Northeast Mayfield in the Anadarko Basin and our
Hanging Woman coalbed methane play in the Powder River Basin."
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The Company's previously announced forecast for the first quarter and the full
year of 2005 remains unchanged, except for a $0.05 per MCFE increase for the
first quarter and the year in estimated depreciation, depletion and
amortization, and is as follows:
1st Quarter Year
----------- ----
Production 19 - 21 BCFE 81 - 85 BCFE
Lease operating expenses,
including production taxes and
transportation $1.35 - $1.45/MCFE $1.37 - $1.47/MCFE
General and administrative exp. $0.30 - $0.35/MCFE $0.30 - $0.35/MCFE
Depreciation, depletion & amort. $1.30 - $1.35/MCFE $1.35 - $1.45/MCFE
As previously announced, 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 web site at www.stmaryland.com and the earnings
press release and financial highlights 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.
Also as previously announced, Mark Hellerstein is scheduled to appear on an
interview by Bloomberg Television on February 24, 2005 beginning at
approximately 2:39 pm (MST). The interview is expected to cover St. Mary's
results for 2004 and outlook for the future. To access specific program
information for Bloomberg Television, please visit Bloomberg's website at
www.bloomberg.com.
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," "plan"
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 and the 2004 Annual Report on Form 10-K
-2-
expected to be filed with the SEC on or about February 25, 2005. 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.
(1) Discretionary cash flow is computed as net income plus
depreciation, depletion, amortization, impairments, deferred
taxes, exploration expense and non-cash changes related to the Net
Profits Plan, less the cumulative effect of change in accounting
principle and unrealized derivative gain/loss. See the attached
financial highlights for a reconciliation of discretionary cash
flow to net cash provided by operating activities, a presentation
of other cash flow information, and a statement indicating why
management believes the presentation of the non-GAAP measure of
discretionary cash flow provides useful information to investors.
PR-05-04
###
-3-
ST. MARY LAND & EXPLORATION COMPANY
FINANCIAL HIGHLIGHTS
December 31, 2004
(Unaudited)
PRODUCTION DATA Three Months Ended Year Ended
- --------------- December 31, Percent December 31, Percent
------------------------- -------------------------
2004 2003 Change 2004 2003 Change
------------ ------------ ------------ ------------
Average realized price:
Gas (per Mcf) $ 6.14 $ 4.59 34% $ 5.52 $ 4.89 13%
Oil (per Bbl) $ 36.75 $ 26.85 37% $ 32.53 $ 26.96 21%
Production:
Gas (MMcf) 12,383 11,966 3% 46,598 49,663 -6%
Oil (MBbls) 1,253 1,189 5% 4,799 4,541 6%
MMCFE (6:1) 19,899 19,101 4% 75,393 76,909 -2%
Daily production:
Gas (Mcf per day) 134,603 130,066 3% 127,316 136,062 -6%
Oil (Bbls per day) 13,615 12,925 5% 13,113 12,441 5%
MCFE per day (6:1) 216,293 207,617 4% 205,992 210,709 -2%
Margin analysis per MCFE:
Average realized price, net of hedging $ 6.13 $ 4.55 35% $ 5.48 $ 4.75 15%
Oil and gas production costs 1.32 1.06 25% 1.27 1.15 10%
General and administrative costs 0.28 0.29 -3% 0.29 0.28 4%
------------ ------------ ------------ ------------
Operating margin $ 4.53 $ 3.20 42% $ 3.92 $ 3.32 18%
------------ ------------ ------------ ------------
Depletion, depreciation & amortization $ 1.48 $ 1.08 37% $ 1.22 $ 1.07 14%
INCOME STATEMENT
- ----------------
(In thousands, except per share amounts) Three Months Ended Year Ended
December 31, December 31,
------------------------- -------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Revenues:
Oil and gas production $ 139,316 $ 89,550 $ 463,617 $ 387,553
Oil and gas hedge loss (17,243) (2,672) (50,299) (22,439)
Marketed gas revenue 4,456 2,419 15,551 13,438
Gain (loss) on sale of proved properties (711) 7,499 1,803 7,278
Other revenue 570 1,194 2,427 7,878
------------ ------------ ------------ ------------
126,388 97,990 433,099 393,708
------------ ------------ ------------ ------------
Operating expenses:
Oil and gas production costs 26,239 20,205 95,518 88,509
Depletion, depreciation, amortization
and abandonment liability accretion 29,454 20,709 92,223 81,960
Exploration 8,489 4,986 28,560 25,318
Impairment of proved properties - 185 494 185
Abandonment and impairment of
unproved properties (1,212) (207) 1,420 3,796
General and administrative 5,545 5,568 22,004 21,197
Change in net profits interest
bonus plan liability 10,386 2,911 24,398 5,317
Derivative (gain)loss 306 668 260 310
Marketed gas operating expense 4,016 2,188 14,230 12,229
Other 217 205 2,077 1,576
------------ ------------ ------------ ------------
83,440 57,418 281,184 240,397
------------ ------------ ------------ ------------
Income from operations 42,948 40,572 151,915 153,311
Interest income 78 70 557 717
Interest expense (1,720) (1,542) (6,244) (7,958)
------------ ------------ ------------ ------------
Income before income tax expense 41,306 39,100 146,228 146,070
Income tax expense (benefit)- current 7,664 6,345 31,217 32,238
Income tax expense - deferred 7,013 8,080 22,532 23,692
------------ ------------ ------------ ------------
Income from continuing operations 26,629 24,675 92,479 90,140
Cumulative effect from change
in accounting principle - - - 5,435
------------ ------------ ------------ ------------
Net income $ 26,629 $ 24,675 $ 92,479 $ 95,575
============ ============ ============ ============
Basic weighted avg shares outstanding 28,462 31,552 28,851 31,233
Diluted weighted avg shares outstanding 33,248 35,858 33,447 35,534
Basic earnings per common share:
Income before accounting change $ 0.94 $ 0.78 $ 3.21 $ 2.89
Cumulative effect of accounting change - - - 0.17
------------ ------------ ------------ ------------
Basic net income per common share $ 0.94 $ 0.78 $ 3.21 $ 3.06
============ ============ ============ ============
Diluted earnings per common share:
Income before accounting change $ 0.83 $ 0.72 $ 2.88 $ 2.65
Cumulative effect of accounting change - - - 0.15
------------ ------------ ------------ ------------
Diluted net income per common share $ 0.83 $ 0.72 $ 2.88 $ 2.80
============ ============ ============ ============
ST. MARY LAND & EXPLORATION COMPANY
FINANCIAL HIGHLIGHTS
December 31, 2004
(Unaudited)
BALANCE SHEET
- -------------
(In thousands) Dec 31, Dec 31,
2004 2003
-------------------------
Working capital $ 12,035 $ 3,101
Long-term debt $ 136,791 $ 110,696
Stockholder's Equity $ 484,455 $ 390,653
Shares outstanding - permanent equity 28,479 28,242
Shares outstanding - temporary equity - 3,381
Note receivable from Flying J (contra-equity) $ - $ 71,594
PROVEN RESERVES
- ---------------
Dec 31, Dec 31,
2004 2003
------------ ------------
Oil (MBbls) 56,574 47,787
Gas (MMcf) 319,196 307,024
------------ ------------
MMCFE (6:1) 658,638 593,744
============ ============
CASH FLOW
- ---------
(In thousands)
Reconciliation of Discretionary Cash Flow to Net Cash
Provided by Operating Activities:
Three Months Ended Year Ended
December 31, December 31,
------------------------- -------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Discretionary Cash Flow (1) $ 82,940 $ 63,005 $ 275,240 $ 232,053
(Gain) loss on property sales 711 (7,499) (1,803) (7,278)
Exploration exp, excluding
exploratory dry hole exp (6,857) (5,000) (24,398) (18,171)
Minority interest & other 1,550 3,576 (1,948) 2,088
Changes in working capital and deferred taxes 1,686 (677) (9,929) (4,373)
------------ ------------ ------------ ------------
Net Cash Provided by Operating Activities $ 80,030 $ 53,405 $ 237,162 $ 204,319
============ ============ ============ ============
Net Cash Used in Investing Activities $ (137,953) $ (43,291) $ (247,006) $ (196,939)
============ ============ ============ ============
Net Cash Provided by (Used in)
Financing Activitie $ 39,653 $ (2,401) $ 1,435 $ (3,707)
============ ============ ============ ============
(1) Discretionary cash flow is computed as net income plus depreciation,
depletion, amortization, impairments, deferred taxes, exploration expense,
stock-based compensation expense, and changes in the net profits interest
bonus plan liability less the change in accounting principle and unrealized
derivative gain/loss. The non-GAAP measure of discretionary cash flow is
presented since 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.
