St. Mary Reports Record Quarterly Net Income, Discretionary Cash Flow, and Production Results

St. Mary Land & Exploration Company today reports earnings for the third quarter 2006 of $55.9 million, or $0.88 per diluted share.

“In the third quarter, we had record quarterly net income, discretionary cash flow, and production. We are pleased that we were able to accomplish these results both in absolute terms as well as on a per share basis. Increasing stockholder value is the primary focus for us at St. Mary, and this quarter is one more data point in a long line demonstrating that commitment,” commented Mark Hellerstein, Chairman and CEO.

St. Mary announces third quarter 2006 earnings of $55.9 million or $0.88 per diluted share. Third quarter 2005 earnings were $27.3 million or $0.42 per diluted share. Earnings for the third quarter 2006 period include a non-cash, after-tax gain of $0.5 million, or $0.01 per diluted share, for post closing adjustments on the previously announced Section 1031 exchange of oil and gas properties that closed in the second quarter of 2006. The non-cash, after-tax benefit related to the quarterly change in the Company’s Net Profits Plan liability was $2.4 million, or $0.04 per diluted share, for the third quarter of 2006. The third quarter 2005 charge, net of tax, for the Net Profits Plan was $35.4 million, or $0.53 per diluted share. The direction and magnitude of this item reflects commodity prices and movements during each respective measurement period. Revenues for the third quarter of 2006 were $198.0 million compared to $203.3 million for the third quarter of 2005. Discretionary cash flow(1) increased to $140.5 million in the third quarter of 2006 from $125.0 million in the same period of the preceding year. Net cash provided by operating activities was $101.2 million in the third quarter of 2006 compared to $116.6 million in the comparable period for the year prior.

Daily oil and gas production during the third quarter 2006 averaged 252 million cubic feet of gas equivalent (MMCFE), an increase from 251 MMCFE in the comparable 2005 period. Since December 31, 2004, the Company has increase production in six of the last seven quarters, including the impacts of hurricanes Katrina and Rita in 2005. Average prices realized, inclusive of hedging activities, during the quarter were $7.14 per Mcf and $61.28 per barrel, 9% lower and 10% higher, respectively, than the realized prices in the third quarter of 2005. Average prices excluding hedging activities were $6.41 per Mcf and $65.02 per barrel during the quarter, which are 20% lower and 9% higher, respectively, than the same quarter last year.



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