St. Mary Land & Exploration Sees Increased 2005 Results

St. Mary Land & Exploration Company (NYSE: SM) reported earnings of $151.9 million, or $2.33 per diluted share, for the year ended December 31, 2005. The full year 2004 earnings were $92.5 million, or $1.44 per diluted share. All per-share numbers reflect the 2-for-1 stock split that occurred on March 31, 2005. Revenues for 2005 were $739.6 million compared to $433.1 million for 2004. St. Mary's discretionary cash flow(1) increased 66% to $462.0 million in 2005 from $279.1 million in 2004. Net cash provided by operating activities increased to $409.4 million in 2005 from $237.2 million in 2004.

Oil and gas production for 2005 was 87.4 billion cubic feet of gas equivalent (BCFE) compared to 75.4 BCFE for 2004. The average realized price per MCFE increased $2.66 to $8.14 in 2005, a 49% increase from the average price realized in 2004.

Earnings for the fourth quarter of 2005 were $51.2 million, or $0.78 per diluted share, compared to $26.6 million, or $0.42 per diluted share, for the fourth quarter of 2004. Revenues for the fourth quarter of 2005 were $227.9 million compared to $126.4 million for the same period in 2004. Discretionary cash flow for the fourth quarter of 2005 increased 64% from the same period in 2004 to $137.0 million. Net cash provided by operating activities increased to $107.2 million in the fourth quarter of 2005 from $80.0 million in the fourth quarter of 2004. Average daily oil and gas production during the fourth quarter 2005 totaled 237.6 MMCFE, up 10% from 216.3 MMCFE in the comparable 2004 period. Average prices realized during the quarter were $10.74 per Mcf and $53.46 per barrel, which were 75% and 45% higher, respectively, than the realized prices in the fourth quarter of 2004.

Mark Hellerstein, Chairman, President and CEO, commented: "We realized record earnings per share for the year 2005 as a result of a 16% increase in production as well as higher commodity prices. We grew our reserves 21% in 2005 and replaced 256% of our production, with 199% through the drill bit. We begin 2006 with a strong balance sheet and the largest prospect inventory in the Company's history, including our multi-year development programs in the Middle Bakken, the Hanging Woman Basin, the Centrahoma field, the Atoka/Granite Wash program at Northeast Mayfield and the Elm Grove field in northern Louisiana. We increased our 2006 drilling capital expenditure budget 50% to $500 million. We are looking forward to continued growth in 2006."

Operations and Guidance Update

Since our operations update on January 26, 2006, we have had the following significant developments:

  • In the ArkLaTex region, the Colquitt #1 (SM 60% WI) well was recently completed in the Terryville field. The well had an initial production rate of 2,400 MCFED. The favorable results from this well will lead to additional drilling at the Terryville field.
  • In the Gulf Coast region, the SM 24-1 ST is currently producing 15,000 MCFED, up from the 8,000 MCFED previously reported. St. Mary has a 21% royalty interest in this well.

The Company's updated forecast for the first quarter and the full year of 2006 is as follows:

                               1st Quarter                 Year
                            -------------------    -------------------
Oil and gas production        21.5 - 22.5 BCFE       96.0 - 98.0 BCFE
Lease operating expenses,
 including transportation    $1.16 - $1.22/MCFE     $1.18 - $1.24/MCFE
Production taxes             $0.55 - $0.60/MCFE     $0.55 - $0.60/MCFE
General and administrative 
 exp.                        $0.50 - $0.55/MCFE     $0.45 - $0.50/MCFE
Depreciation, depletion & 
 amort.                      $1.67 - $1.73/MCFE     $1.92 - $1.98/MCFE
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