Berry Petroleum Announces 2001 Capital Program.

Business Editors

TAFT, Calif.--(BUSINESS WIRE)--Dec. 8, 2000

Berry Petroleum Co. (NYSE:BRY) announced a capital spending program of $24 million for 2001, which is down about $2 million from the record 2000 capital program of approximately $26 million.

About $18 million, or 75 percent of next year's spending, is earmarked for development of reserves. The program includes 82 new wells, of which 14 will be horizontals, and remedial activities on another 50 wells.

The balance of the budget will be spent on facility improvements and cost reduction opportunities. Anticipated production volume increases at Placerita will require additional water disposal, steam generation and overall expansion to the general plant.

Brian L. Rehkopf, vice president of Engineering, stated: "We plan to get an early start to our 2001 program with our first drilling rig in service in February and by adding a second drilling rig in April. Next year's drilling program will be more complex, as we drill more wells at Placerita and intend to redrill a deep well at Montalvo.

"We continue to develop our 3-D visualization model for our Formax property and will expand this to Placerita. This new technology should allow us to maximize our long-term steam strategies, refine our development plans and locate any 'bypassed oil'."

Jerry V. Hoffman, chairman, president and chief executive officer, added: "Activities to be conducted in 2001 are anticipated to expand the company's proved developed reserve base, offset normal production declines and generate a year-over-year production increase of about 10 percent.

"However, we intend to monitor our capital program in light of surging natural gas prices in California, and may defer up to 50 percent of this budget if necessary."

Hoffman added: "To control operating costs, we have recently reduced our use of conventional steam generation boilers. This was necessary due to extremely high natural gas prices, which were in double-digits per MCF, at the California border in late November and early December.

"Throughout 2000, we increased our steam injection from approximately 50,000 barrels of steam per day (bspd) to 68,000 bspd, and for December and perhaps longer, are reducing this level back to about 45,000 bspd. This decision is designed to maximize our gross margins on each barrel of oil produced. The short-term impact on our oil production should not be material.

"However, if we operate at lower steaming levels for a protracted period of time, our oil production will be impacted. We believe that the current high California border natural gas price (which has now traded into the $20-$40 per MCF range) will decline sharply in the spring, if not before. In addition, we are closely monitoring ongoing developments in the California electrical market."

Berry Petroleum Co. is a publicly traded independent oil and gas production and exploitation company with its headquarters in Taft.

"Safe harbor under the Private Securities Litigation Reform Act of 1995": With the exception of historical information, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties. Although the company believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include, but are not limited to, the timing and extent of changes in commodity prices for oil, gas and electricity, competition, environmental risks, litigation uncertainties, drilling, development and operating risks, uncertainties about the estimates of reserves, the prices of goods and services, the availability of drilling rigs and other support services, legislative, California Public Utilities Commission, Federal Energy Regulatory Commission and/or judicial decisions and government regulation.