Monday after the bell, Oil and natural gas company St. Mary Land & Exploration Co. (SM), reported a loss for the third quarter versus a profit last year, as fall in oil and gas prices pushed revenues down 42% for the period. Excluding items, the company's earnings ,however, came in ahead of street expectations.
Denver, Colorado- based St. Mary's reported a net loss of $4.41 million or $0.07 per share for the third quarter, compared with net income of $86.99 million or $1.38 per share for the same period last year.
During the quarter, the company recognized a pre-tax non-cash charge of $6.8 million as a result of the increase in the Net Profits Plan liability, compared to a benefit of $34.9 million in the third quarter of 2008.
Excluding special items, the company's non-GAAP net income fell to $14.7 million or $0.23 per share, from $75.48 million or $1.20 per share in the comparable period one-year ago. On average, 13 analysts polled by Thomson Reuters expected the company to report profit of $0.20 per share for the quarter. Analysts' estimates typically exclude special items.
Total operating revenues and other income decreased to $185.79 million from $324.09 million a year ago, falling short of Wall street expectations of $186.90 million for the quarter. Revenues suffered from lower oil and gas prices for the period, which declined 38% year-on-year to $6.86 per Million Cubic Feet Equivalent or MCFE net of hedging from $11.01 per MCFE.
Quarterly production was 26.4 Billion Cubic Feet Equivalent or BCFE, down from 27.7 BCFE reported year-ago. Average realized prices, excluding hedging activities, were 66% lower at $3.37 per Million Cubic Feet of natural gas and 45% lesser at $61.93 per barrel of oil during the quarter.
Total operating expenses were higher at $185.33 million compared with $179.76 million, led by exploration charges which rose $5 million from last year, reflecting higher levels of geological and geophysical spending, including seismic and increased technical staff
The company recognized a pre-tax non-cash charge of $6.8 million as a result of the increase in the Net Profits Plan liability, compared to a benefit of $34.9 million last year. Income form operations declined to $457 thousand from $144 million in the year-ago period.
For the nine months, the company reported net loss of $100.36 million or $1.61 per share, compared with net income of $214.44 million or $3.39 per share last year. Adjusted net income was lower at $29.16 million or $0.47 per share, than $235.47 million or $3.72 in the same period one-year ago. Total revenues for the nine-month period declined to $590.21 million from $1.04 billion last year.
In its operations update, the company noted that it has drilled and completed many new wells on its fields, including three in Eagle Ford shale, two in Marcellus shale and one in Haynesville shale.
Looking ahead for the fourth quarter of 2009, the company anticipates production volumes of 24.75 to 26.25 BCFE and lease operating expenses to be around $1.35 to $1.40 per MCFE. Depreciation and amortization are expected to charge between $2.50 and $2.70 per MCFE in the quarter.
The company estimates the total capital expenditures for the full year to be around $450 million, including capital and exploration charges of $117 million in its Eagle Ford, Haynesville and Marcellus fields.
SM finished Monday's regular trading sessions down by a cent or $0.03% at $34.09 on 1.81 million shares, on the New York Stock Exchange.
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