EXHIBIT 99.1

DRILLING, FINDING COSTS AND PRODUCTION REPLACEMENT

From January 1, 1999 through December 31, 2001, we participated in the
drilling and recompletion of 622 gross wells with an average success rate of
84%. From January 1, 1999 through December 31, 2001, we added estimated proved
reserves of 347 BCFE at an average finding cost of $1.15 per MCFE. Our average
annual production replacement was 251% during this three-year period. Our
production has grown at an average rate of 18% per year over the same time
period.

OPERATION OF PROPERTIES

At December 31, 2001, we operated 58% of our properties on a volume basis
and 54% on a PV-10 value basis. We are the operator of properties representing
approximately 73% of our 2002 drilling capital budget.

RATIO OF EARNINGS TO FIXED CHARGES (UNAUDITED)

The following table shows our unaudited ratio of earnings to fixed charges
for the periods shown. The ratio of earnings to fixed charges has been computed
by dividing earnings available for fixed charges (earnings from continuing
operations before income taxes) by fixed charges (interest expense plus
capitalized interest). Interest expense includes the portion of operating rental
expense that we believe is representative of the interest component of rental
expense.

<Table>
<Caption>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
- ----------------- --------------------------------
2001 2000 2000 1999 1998 1997 1996
- -------- ------ ---- ---- ---- ---- ----

116.2 74.9 86.1 0.6 (6.7) 27.6 7.7
</Table>

Earnings in 1999 and 1998 were inadequate to cover fixed charges, with a
deficiency of $0.6 million and $14.3 million, respectively. Our unaudited pro
forma ratio of earnings to fixed charges which gives effect to our intended use
of proceeds from the intended offering to repay outstanding debt under our
revolving credit facility would be 128.2 for the nine months ended September 30,
2001 and 104.9 for the year ended December 31, 2000.

CAPITAL AND EXPLORATION EXPENDITURES FOR THE YEAR ENDED DECEMBER 31, 2001

<Table>
(In thousands)

Development.................................. $ 98,617
Exploration.................................. 24,506
Acquisitions:
Proved..................................... 41,188
Unproved................................... 18,552
--------
Total........................................ $182,863
========
</Table>

St. Mary's total costs incurred for capital and exploration activities in
2001 increased $57.7 million or 46% compared to 2000. We spent $141.7 million in
2001 for unproved property acquisitions and domestic exploration and development
compared to $71.7 million for the comparable period in 2000. Unproved property
acquisitions increased by $12.9 million as a result of general leasing activity
and our acquisition of prospective coalbed methane development leases in the
Hanging Woman Basin of Montana and Wyoming. We have drilled an 18-well pilot
program and are evaluating its results.

ESTIMATED PROVED RESERVES, PV-10 VALUES AND RESERVE LIFE

Information concerning each of our major areas of operations, based on our
estimated proved reserves as of December 31, 2001, is shown below.

<Table>
<Caption>
ESTIMATED PROVED RESERVES
-------------------------------------
MMCFE PV-10 VALUE
OIL GAS ----------------- ------------------------
(MBBLS) (MMCF) AMOUNT PERCENT (IN THOUSANDS) PERCENT
------- ------- ------- ------- -------------- -------

Mid-Continent Region............... 1,203 119,062 126,281 33.0% $126,219 34.7%
ArkLaTex Region.................... 1,295 40,940 48,711 12.7% 37,978 10.4%
Gulf Coast and Gulf of Mexico...... 1,025 44,126 50,274 13.1% 63,594 17.5%
Williston Basin.................... 16,248 24,376 121,867 31.8% 101,930 28.0%
Permian Basin...................... 3,898 12,727 36,114 9.4% 34,074 9.4%
------ ------- ------- ----- -------- -----
Total............................ 23,669 241,231 383,247 100.0% $363,795 100.0%
====== ======= ======= ===== ======== =====
</Table>

Values of our reserves at December 31, 2001 were estimated starting with a
calculated weighted average sales price of $19.84 per barrel of oil (NYMEX) and
$2.65 per MMBtu of gas (Gulf Coast spot price), then adjusted for quality and
basis differentials. During 2001, our realized gas prices were as high as $7.86
per Mcf and as low as $2.21 per Mcf.

As of December 31, 2001, our proved reserves, if produced constantly at the
2001 rate of production, would produce for approximately 7.1 years.

ACQUISITION FROM MERCHANT RESOURCES #1 L.P.

In February 2002 we acquired oil and gas properties and an 89-mile gas
gathering system in the Arkoma Basin from Merchant Resources #1 L.P. of Houston,
Texas for $7.75 million in cash. The properties include undrilled locations and
are expected to complement other St. Mary properties in the area. The properties
currently produce an estimated 1,200 Mcf of gas and 65 barrels of oil per day.

JUDGE DIGBY FIELD

We have interests in the Judge Digby Field ranging from 11.5% to 20% in
nine wells that are producing a total of 130 MMcf per day on a gross basis as of
February 12, 2002. Production from the Judge Digby Field accounted for
approximately 16% of our total oil and gas production volumes during 2001.

DRILLING ACTIVITY

The following table sets forth the wells drilled and recompleted in which
St. Mary participated during the year ended December 31, 2001:

2001
-------------
GROSS NET
----- -----

Development:
Oil..................................... 48 14.49
Gas..................................... 154 33.28
Non-productive.......................... 31 7.13
--- -----
233 54.90
--- -----
Exploratory:
Oil..................................... 3 1.55
Gas..................................... 9 1.84
Non-productive.......................... 7 2.56
--- -----
19 5.95
--- -----
Farmout or non-consent.................... 9 --
--- -----
Total(1).................................. 261 60.85
=== =====
</Table>

- ----------

(1) Does not include 12 gross wells completed on St. Mary's fee lands during
2001.

All of our drilling activities are conducted on a contract basis with
independent drilling contractors. We do not own any drilling equipment.

ACREAGE

The following table sets forth the gross and net acres of developed and
undeveloped oil and gas leases, fee properties, mineral servitudes and lease
options held by St. Mary as of December 31, 2001. Undeveloped acreage includes
leasehold interests that may already have been classified as containing proved
undeveloped reserves.

<Table>
<Caption>
DEVELOPED ACRES(1) UNDEVELOPED ACRES(2) TOTAL
------------------- --------------------- -------------------
GROSS NET GROSS NET GROSS NET
-------- -------- --------- --------- --------- -------

Arkansas.......................... 2,255 399 167 28 2,422 427
Louisiana......................... 98,588 33,493 41,837 13,818 140,425 47,311
Montana........................... 43,135 21,869 191,747 144,870 234,882 166,739
New Mexico........................ 7,280 2,196 1,320 913 8,600 3,109
North Dakota...................... 55,464 22,080 136,511 67,592 191,975 89,672
Oklahoma.......................... 193,443 44,728 53,883 18,940 247,326 63,668
Texas............................. 136,460 48,080 119,252 38,896 255,712 86,976
Wyoming........................... 12,209 3,318 48,415 38,693 60,624 42,011
Other(3).......................... 2,501 346 8,083 4,884 10,584 5,230
------- ------- ------- ------- --------- -------
551,335 176,509 601,215 328,634 1,152,550 505,143
------- ------- ------- ------- --------- -------
Louisiana Fee Properties.......... 10,357 10,357 14,557 14,557 24,914 24,914
Louisiana Mineral Servitudes...... 9,845 5,360 4,768 4,241 14,613 9,601
------- ------- ------- ------- --------- -------
20,202 15,717 19,325 18,798 39,527 34,515
------- ------- ------- ------- --------- -------
Total........................... 571,537 192,226 620,540 347,432 1,192,077 539,658
======= ======= ======= ======= ========= =======
</Table>

- ----------

(1) Developed acreage is acreage assigned to producing wells for the spacing
unit of the producing formation. Developed acreage in certain of St. Mary's
properties that include multiple formations with different well spacing
requirements may be considered undeveloped for certain formations, but have
only been included as developed acreage in the presentation above.

(2) Undeveloped acreage is lease acreage on which wells have not been drilled or
completed to a point that would permit the production of commercial
quantities of oil and gas regardless of whether such acreage contains
estimated proved reserves.

(3) Includes interests in Alabama, Colorado, Kansas, Mississippi, South Dakota,
Utah and Washington. St. Mary also holds an override interest in an
additional 44,388 gross acres in Utah.

MAJOR CUSTOMERS

During 2001 sales to Transok Gas Company accounted for 12.0% and sales to
BP Amoco accounted for 11.3% of our total oil and gas production revenue.

EMPLOYEES AND OFFICE SPACE

As of December 31, 2001, St. Mary had 176 full-time employees. None of our
employees is subject to a collective bargaining agreement. We consider our
relations with our employees to be good. We lease approximately 42,660 square
feet of office space in Denver, Colorado for our executive and administrative
offices, of which 7,600 square feet is subleased. We also lease approximately
15,000 square feet of office space in Tulsa, Oklahoma, approximately 11,700
square feet of office space in Shreveport, Louisiana, approximately 7,500 square
feet in Lafayette, Louisiana and approximately 15,830 square feet in Billings,
Montana.

LEGAL PROCEEDINGS

A lawsuit has been filed in the Federal District Court in Montana by an
environmental public interest group seeking the cancellation of all federal
leases related to coalbed methane development issued in the State of Montana
since January 1, 1997 on the grounds of an alleged failure of the federal Bureau
of Land Management to comply with federal environmental laws. The lawsuit
potentially affects 74,000 acres of the 115,000 acres in our Hanging Woman Basin
coalbed methane project. While we have not been made a party to the lawsuit and
while we believe upon the basis of information presently available to us that
the applicable environmental laws have been complied with, there is no assurance
of the outcome of the lawsuit and therefore there is no assurance that it will
not adversely affect our coalbed methane prospect. However, even if the Montana
federal leases become unavailable, we anticipate continuing with the Hanging
Woman Basin prospect in Wyoming and obtaining additional non-federal leases in
Montana.

BANK CREDIT FACILITY

In November 2001, the lenders under our bank credit facility agreement
agreed to an increase in the accepted borrowing base to $100 million and we
borrowed an additional $40.5 million to finance the acquisition of oil and gas
properties from Choctaw. As of February 28, 2002 $50 million was outstanding
under this facility. Outstanding balances accrue interest at rates determined by
our debt to total capitalization ratio.

We are in the process of negotiating an amendment to the facility to obtain
the banks' consent to the intended offering, which amendment will be subject to
the completion of the offering. Pursuant to this amendment, during the revolving
period of the loan, loan balances will accrue interest at our option of either
(1) the higher of the federal funds rate plus 1/2% or the prime rate, plus an
additional 1/4% when our debt to capitalization ratio is greater than 50%, or
(2) the London interbank offered rate plus (a) 1% when our debt to total
capitalization is less than 30%, (b) 1 1/4% when our debt to capitalization
ratio is greater than or equal to 30% but less than 40%, (c) 1 3/8% when our
debt to capitalization ratio is greater than or equal to 40% but less than 50%,
or (d) 1 5/8% when our debt to capitalization ratio is greater than 50%. Our
debt to total capitalization ratio as defined under the credit agreement was
4.8% as of September 30, 2001.

Amounts repaid under the revolving loan provision of the credit facility
will be available for reborrowing, subject to borrowing base limitations until
June 30, 2003. Our next borrowing base redetermination is scheduled to occur on
or before April 15, 2002.

Our current indebtedness under the revolving bank credit facility is
unsecured. We intend to repay the $50 million outstanding, as of February 28,
2002, under the facility with a portion of the net proceeds from the intended
offering. The amendment to the facility in connection with the intended offering
provides that we must within 30 days after the closing of the intended offering
provide a pledge of collateral in favor of the banks to secure repayment of any
future borrowings under the facility. Such collateral will consist primarily of
security interests in the oil and gas properties of St. Mary and its
subsidiaries. Accordingly, any future indebtedness to the banks under the
facility will be secured and senior to the offered notes, which will be
unsecured.