Berry Petroleum Earns $1.16 Per Share in Second Quarter 2007.Record Production of 27,195 BOE/D is Up 10% Over Second Quarter 2006 BAKERSFIELD, Calif. -- Berry Petroleum Company (NYSE NYSE See: New York Stock Exchange :BRY) earned net income of $52 million, or $1.16 per diluted share, for the three months ending June 30, 2007, up from net income of $34.2 million, or $.76 per diluted share in the second quarter of 2006, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Robert F. Heinemann, president and chief executive officer. Excluding a net gain related to the disposition of non-core assets, net income for the three months ended June 30, 2007 was $23.2 million or $.52 per diluted share. Revenues increased by 46% to $179 million for the second quarter of 2007 compared to the second quarter of 2006. Excluding the asset disposition gain of $50.4 million, revenues for the three months ended June 30, 2007 are $129 million, or a 5% increase. Discretionary cash flow Discretionary cash flow Cash flow that is available after the funding of all positive net present value (NPV) capital investment projects; it is available for paying cash dividends, repurchasing common stock, retiring debt, and so on. totaled $59 million in the second quarter of 2007, down from $66 million in the comparable 2006 period, but higher than the $53 million achieved in the first quarter of 2007. (Discretionary cash flow is a non-GAAP measure; see reconciliation below.) For the second quarter of 2007, net production averaged a record 27,195 barrels of oil equivalent per day (BOE/D), an increase of 10% from the 24,768 BOE BOE Based on Experience BOE Board of Education BOE Boletín Oficial del Estado (Spanish) BOE Bank of England BOE Board of Equalization BOE Board of Elections BOE Barrel of Oil Equivalent BOE Bind on Equip per day achieved in the second quarter of 2006 and an increase of 7% compared to first quarter 2007 production of 25,490 BOE/D. Natural gas production in the second quarter of 2007 was up 26% over the second quarter of 2006. Mr. Heinemann stated, "The crude marketing issues related to our Brundage Canyon black wax crude in Utah have been resolved and production there has increased to over 6,300 BOE/D in the second quarter, from a low of 3,800 BOE/D in January of 2007. We are now intensifying our focus on our western Colorado Piceance asset where we are making good progress on our mesa drilling program during the summer months. Drilling activities included 31 gross (8 net) wells in the Piceance during the quarter and production increased 31% over the first quarter of 2007 to 8.3 MMcf/D. Drilling performance on the vertical mesa wells has improved, and we are working to reduce drilling time on the directional holes. We continue to be encouraged by the reservoir productivity and are targeting third quarter net production of 12.5 MMcf/D as a significant number of wells are brought on-line. "In California we achieved a 50% production increase from the diatomite asset without drilling additional wells during the quarter. This is a result of more aggressive steam cycling and improved well performance. Average daily production was over 900 BOE/D in the second quarter of 2007, compared to 600 BOE/D in the first quarter. Production continues to increase and we anticipate producing over 1,000 BOE/D in the third quarter. We will begin a 50-well drilling program in the latter part of the third quarter and will add facilities as needed as needed prn. See prn order. . "Based on encouraging results from our Poso Creek asset we continue with our accelerated drilling program there. We drilled 49 wells during the second quarter and we secured additional capacity to meet the demand for expanded steam requirements. In the DJ basin we have been able to increase production from our Niobrara natural gas assets over 10% from the first quarter to record levels with modest capital outlays capital outlay See capital expenditure. ." The average realized sales price per barrel of oil equivalent The barrel of oil equivalent (bboe, sometimes BOE) is a unit of energy based on the approximate energy released by burning one barrel of crude oil. The US Internal Revenue Service defines it as equal to 5.8 × 106 BTU [1]. 5. (BOE), net of hedging, for the second quarter of 2007 was $45.43 per BOE, down 9% from the $49.75 per BOE received in the same 2006 period but was 4% higher than the $43.84 per BOE received in the first quarter of 2007. In the second quarter of 2007, Berry sold its non-core West Montalvo asset in Ventura County, California Ventura County is a county in the southern part of the U.S. state of California (Southern California). It is located on California's Pacific coast, and forms the northwestern part of the Greater Los Angeles Area. for a pre-tax gain of $50.4 million. Berry also incurred an impairment charge of $2.9 million to reduce the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of its Bakken asset in the Williston Basin, North Dakota North Dakota, state in the N central United States. It is bordered by Minnesota, across the Red River of the North (E), South Dakota (S), Montana (W), and the Canadian provinces of Saskatchewan and Manitoba (N). to estimated fair market value. Six Months Results Net income for the six months of 2007 was $70.8 million or $1.58 per diluted share, up 23% from $57.5 or $1.28 per diluted share in the comparable 2006 period. Excluding an asset sale and impairment of an asset held for sale for a combined net after-tax gain Net after-tax gain Capital gain after income taxes have been paid. of $28.8 million, net income for the six months ended June 30, 2007 was $42.0 million or $.94 per diluted share, compared to $57.5 million or $1.28 per diluted share for the first six months of 2006. This decrease is due to lower realized oil and gas prices and higher operating costs operating costs npl → gastos mpl operacionales , increased depreciation, depletion & amortization (DD&A) charges related to increased development activity and increased interest expense. Discretionary cash flow totaled $112 million for the first six months of 2007, down from $121 million in the comparable 2006 period. For the six months ended June 30, 2007, net production averaged 26,332 BOE/D, an increase of 9% from the 24,118 BOE/D achieved in the same period in 2006. The average realized sales price per BOE, net of hedging, for the six months ended June 30, 2007 was $44.72 per BOE, down 9% from the $48.92 per BOE received in the 2006 period. Mr. Heinemann continued, "Although we are enjoying strong crude oil prices for our increasing California production, Rockies gas prices continue to be volatile due to various factors, including takeaway pipeline capacity, supply volumes, and regional demand issues. We expect the Colorado Interstate Gas Colorado Interstate Gas is a major producer of natural gas, connected to major supply basins in the Rocky Mountains and production areas in the Texas Panhandle, western Oklahoma, western Kansas, and Wyoming. Originally an independent company, CIG is now a subsidiary of El Paso Corp. (CIG CIG Ceiling (height above ground level to base of clouds) CIG Conference Intergouvernementale (French: Intergovermental Conference) CIG Conservation Innovation Grants (USDA NRCS) ) basis differential to narrow upon the startup of the Rockies Express Pipeline (REX REX - The original name for Restructured EXtended eXecutor. ) which is anticipated in 2008. We have contracted 10,000 MMBtu/D on this pipeline to provide assurance of gas delivery. The CIG basis differential per MMBtu, based upon first-of-month values, averaged $3.78 below Henry Hub Henry Hub is the pricing point for natural gas futures contracts traded on the New York Mercantile Exchange (NYMEX). It is a point on the natural gas pipeline system in Erath, Louisiana. It is owned by Sabine Pipe Line LLC. (HH) and ranged from $2.92 to $4.37 below HH in the second quarter." Operations During the second quarter of 2007 the Company drilled 123 gross (88 net) wells with a success rate of 98 percent. For the second quarter of 2007 and 2006, average net production in BOE per day from each of Berry's operating regions was as follows: [TABLE OMITTED] The mix of average net oil and natural gas production was as follows: [TABLE OMITTED] Ralph J. Goehring, executive vice president and chief financial officer, stated, "We expect development capital to total from $250 million to $280 million for 2007 and for the first six months of 2007 we have spent $151 million of that amount. We also paid $54 million for the third and final payment of the Piceance acquisition out of the proceeds of the sale of our West Montalvo asset. At June 30, 2007, our debt level was $475 million, essentially flat from the end of the first quarter of 2007." Explanation and Reconciliation of Non-GAAP Financial Measures [TABLE OMITTED] Teleconference Call An earnings conference call will be held Wednesday, August 1, 2007 at 1:30 p.m. Eastern Time (10:30 a.m. Pacific Time). Dial 1-866-713-8307 to participate, using passcode 18450946. International callers may dial 617-597-5307. For a digital replay available through August 15, 2007 dial 1-888-286-8010 (passcode 70245564). Listen live or via replay on the web at www.bry.com. Transcripts of this and previous calls may be viewed at www.bry.com in the "Investor Center." About Berry Petroleum Company Berry Petroleum Company is a publicly traded independent oil and gas production and exploitation company with its headquarters in Bakersfield, California “Bakersfield” redirects here. For other uses, see Bakersfield (disambiguation). Bakersfield (pop. 323,213GR2) is one of the fastest-growing, large-population cities in the United States. . Safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. under the "Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995" Any statements in this news release that are not historical facts are forward-looking statements that involve risks and uncertainties. Words such as "targeting," "will," "anticipate," "expect," and forms of those words and others indicate forward-looking statements. Important factors which could affect actual results are discussed in PART 1, Item 1A. Risk Factors of our 2006 Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed with the Securities and Exchange Commission on February 28, 2007 and all material changes are updated in Part II, Item 1A within our Form 10-Qs filed subsequent to that date. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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