St. Mary Land & Exploration announced the closing of its previously disclosed divestiture of non-core North Dakota properties.
Tony Best, President and CEO, remarked, "The divestiture of these non-core properties in North Dakota, combined with the sales of other properties in the Rocky Mountain region, is an important step in our transformation. It focuses our efforts in the Rocky Mountain region and provides funds that will be used to test and develop our emerging resource plays. In spite of these divestitures, our bank group maintained our borrowing base at $900 million in their recent re-determination process which speaks to the credit standing of the company. I am pleased with our efforts to concentrate our portfolio and believe we are well positioned financially to execute on our business plan for 2010."
St. Mary closed the previously announced divestiture of non-core North Dakota properties on March 12, 2010. Proceeds received at closing, before commission costs, were $120.0 million which reflects customary closing adjustments to account for activity between the effective and closing dates. The transaction had an effective date of November 1, 2009. The Company received an earnest money payment of roughly $7 million at the signing of the sales agreement.
The previously provided production guidance assumed that this divestiture, as well as the Wyoming package that was sold in mid-February, would close at the end of the first quarter and that the Company would recognize the full production contribution of these divested properties for the entire quarter. Despite closing these two transactions before the end of the first quarter, St. Mary is reiterating its production guidance of 255 to 278 MMCFE/d for the first quarter of 2010 as a result of strong production performance across the Company.
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