Tony Best, President and CEO, commented, "We have recently completed a review of our asset base and determined that now is the appropriate time to pursue the divestiture of selected non-core oil and gas properties. The valuation metrics of selected sales packages are attractive in the current market environment. In addition, our employees will be better able to concentrate their efforts on the larger scale development programs that make up the majority of our drilling inventory and that provide the highest growth opportunities for St. Mary.
"With respect to the stock repurchases, we routinely assess our net asset value per share against the value reflected in the market price for our shares. When we see the market value fall below our internal assessment of net asset value per share, we will often move to buy back our shares at that accretive price. By hedging a proportionally commensurate amount of production related to the reserves associated with the repurchased shares in a manner consistent with our approach to acquisitions, we have locked in the value being offered by the market."
St. Mary has engaged Albrecht & Associates, Inc. to handle a planned property divestiture of certain non-core oil and gas properties. The package represents non-strategic properties located primarily in the Rockies and Mid-Continent regions. Based on a preliminary reserve estimate prepared by Albrecht and Associates, these properties represent approximately 74 BCFE of proved oil and gas reserves. A competitive bidding process will determine the sales price for these properties. Provided the Company believes it receives an offer that it believes represents appropriate value and is accretive to net asset value per share, the divestiture is currently expected to be completed in late December 2007. Accordingly, there is no anticipated impact to the Company's previously announced 2007 production guidance. Inquiries related to the sale should be directed to Albrecht & Associates, Inc. at 713-951-9586.
Throughout the month of August, St. Mary repurchased a total of 790,816 shares of outstanding common stock at an average weighted cost of $32.82 per share in the open market. The shares were repurchased under the Company's existing Board-authorized stock repurchase program. The Company is authorized to repurchase 5,209,184 additional shares of common stock under its current authorization. The stock repurchases were funded with cash on hand and borrowings under the Company's existing credit facility.
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