Berry Petroleum Earns $7.6 Million in Third Quarter 2002, up 29% from Third Quarter 2001.Business Editors BAKERSFIELD, Calif.--(BUSINESS WIRE)--Nov. 12, 2002 Berry Berry, former province, France Berry (bĕrē`), former province, central France. Bourges, the capital, and Châteauroux are the chief towns. Petroleum Company (NYSE NYSE See: New York Stock Exchange :BRY) today announced net income for the third quarter ended September 30, 2002 of $7.6 million, or $.35 per share, on revenues of $35.3 million, up 29% from $5.9 million, or $.27 per share, on revenues of $33.1 million in the third quarter of 2001. Net income for the nine months ended September 30, 2002 was $23.0 million, or $1.06 per share, on revenues of $95.9 million, up 28% from $17.9 million, or $.81 per share, on revenues of $111.1 million for the nine months ended September 30, 2001. Pre-tax income in the first nine months of 2002 included the recovery of $3.6 million of the $6.6 million in electricity receivables which were written off in the first quarter of 2001. Jerry V. Hoffman, Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , stated, "Results for the third quarter were very good. Oil prices were strong and relatively stable in the third quarter with an average realized price per barrel of $21.03, up from $19.99 in the second quarter of 2002 and $19.91 in the third quarter of 2001. Although we have experienced some price declines in October, postings for the Company's heavy crude oil Heavy crude oil or Extra Heavy oil is any type of crude oil which does not flow easily. It is a relative term, compared to light crude oil, but relates to specific technical issues of its own on production, transportation, and refining. remain strong at an average of $20.81 through October and the Company has approximately 40% of its heavy oil production hedged for the next 18 months to guard against a dramatic crude price decline. Our production has recovered much of the decline that we endured in 2001 as a result of the electricity crisis and we are also experiencing positive production contribution from this year's development program. As of October 31, 2002, we have drilled 36 vertical and 14 horizontal producing wells on our California properties. Production for the third quarter averaged 14,464 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, which represented a 12% increase from the third quarter of 2001. We are targeting an exit rate for 2002 of approximately 15,500 BOE per day. We have also drilled a five well coal bed methane methane (mĕth`ān), CH4, colorless, odorless, gaseous saturated hydrocarbon; the simplest alkane. It is less dense than air, melts at −184°C;, and boils at −161.4°C;. (CBM CBM Commodore Business Machines CBM Coalbed Methane CBM Christoffel Blindenmission CBM Condition Based Maintenance CBM Confidence-Building Measures CBM Curriculum Based Measurement (education) CBM Cubic Meter ) pilot in Illinois and are currently drilling the first of two pilots on our Kansas acreage and expect to drill the second pilot by year-end. It is anticipated that our pilot programs will verify the gas content and permeabilities of the coal, and thus its economic potential. Our goal is to determine by mid-to-late 2003 if full development is commercial, at which time we could begin full exploitation." Total operating costs operating costs npl → gastos mpl operacionales for the third quarter of 2002 were $8.57 per BOE, slightly higher than $8.20 per BOE for the same period in 2001. Non-steam operating costs have stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. in recent quarters through improved field efficiencies such as oil treating consolidations and the conversion of most of the power consumed con·sume v. con·sumed, con·sum·ing, con·sumes v.tr. 1. To take in as food; eat or drink up. See Synonyms at eat. 2. a. on the Company's leases to electricity generated by the Company's cogeneration cogeneration In power systems, use of steam for both power generation and heating. High-temperature, high-pressure steam from a boiler and superheater first passes through a turbine to produce power. facilities. Controlling steam costs remains a high priority for the Company. On August 22, 2002, the California Public Utilities Commission The California Public Utilities Commission (CPUC; also often commonly referred to as simply the PUC) [1] is a state Public Utilities Commission which regulates privately-owned utilities in the state of California, including electric power, mandated that investor owned utilities offer Standard Offer contracts to certain qualified facilities. The Company meets the requirements and is attempting to have these contracts with Southern California Edison Southern California Edison (or SCE Corp), the largest subsidiary of Edison International (NYSE: EIX), is the primary electricity supply company for much of Southern California. It provides 11 million people with electricity. Company and Pacific Gas and Electric Company
The Pacific Gas and Electric Company (PG&E) , (NYSE: PCG), is the utility that provides natural gas and electricity to most of Northern California. in effect by January 1, 2003. Once executed, these contracts should result in lower operating costs to the Company until their expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created which will be no later than December 31, 2003. Senior VP and CFO See Chief Financial Officer. Ralph Goehring said, "Cash from operations was $42 million for the nine months, up 45% from the first nine months of 2001. Thus far in 2002, we have used cash to pay for $22.5 million in capital expenditures and leasehold An estate, interest, in real property held under a rental agreement by which the owner gives another the right to occupy or use land for a period of time. leasehold n. acquisitions, repay $12 million of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and pay $6.5 million in dividends. We have also increased our total capital budget for 2002 to $31.5 million, with a significant development component on our California properties continuing in the fourth quarter. General and administrative expenses were higher in the third quarter of 2002 compared to the third quarter of 2001 due primarily to the hiring of additional technical employees to assist in property development and the pursuit of acquisition opportunities, and higher insurance and property evaluation costs." In early November, the Company began drilling several pilot wells in Kansas as part of the CBM project located in the Cherokee/Forest City basins. These wells are in addition to the four producers and one disposal well drilled in October in Illinois. In total, the Company has leased approximately 226,000 acres for potential CBM development. The Company continues to review opportunities that would add meaningful growth to the Company and that can assist the Company's goal of diversifying into light oil and natural gas. An earnings conference call will be held Wednesday, November 13, 2002 at 8:00 a.m. PT. Dial 1-800-218-0713 to participate. International callers may dial 303-262-2075. For a digital replay available until November 27, dial 1-800-405-2236 (passcode 50453#). A live and archived webcast will be available at www.bry.com. 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:" With the exception of historical information, the matters discussed in this news release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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, a limited marketplace for electricity sales within California, counterparty risk Counterparty Risk The risk to each party of a contract that the counterparty will not live up to their contractual obligations. Notes: In most financial contracts, counterparty risk is known as default risk. , competition, environmental risks, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. uncertainties, drilling, development and operating risks Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. , the availability of drilling rigs and other support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services , legislative and/or judicial decisions and other government regulations.
CONDENSED INCOME STATEMENTS
(In thousands, except per share data)
(unaudited) (unaudited)
Three Months Ended Nine Months Ended
9/30/02 9/30/01 9/30/02 9/30/01
------- ------- ------- -------
Revenues:
Sales of oil and gas $28,044 $22,440 $73,289 $80,868
Sales of electricity 7,172 9,555 20,963 28,088
Interest and other income, net 71 1,127 1,616 2,106
Total 35,287 33,122 95,868 111,062
Expenses:
Operating costs - oil and gas 11,402 9,761 30,381 31,567
Operating costs - electricity 7,172 9,555 20,631 27,890
Depreciation, depletion &
amortization 4,126 3,864 12,396 12,538
General and administrative 2,277 1,543 6,171 5,482
Write-off (recovery) of
electricity receivables -- -- (3,631) 6,645
Interest 179 959 863 3,271
Total 25,156 25,682 66,811 87,393
Income before income taxes 10,131 7,440 29,057 23,669
Provision for income taxes 2,544 1,548 6,023 5,780
Net income $7,587 $5,892 $23,034 $17,889
Basic net income per share $.35 $.27 $1.06 $.81
Diluted net income per share $.35 $.27 $1.05 $.81
Cash dividends per share $.10 $.10 $.30 $.30
Weighted average common shares:
Basic 21,746 22,034 21,738 22,035
Diluted 21,945 22,200 21,927 22,113
CONDENSED BALANCE SHEETS
(In thousands)
(unaudited)
Sept. 30, 2002 Dec. 31, 2001
-------------- -------------
ASSETS
Current assets $27,945 $28,201
Property & equipment, net 214,026 203,413
Other assets 913 912
$242,884 $232,526
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities $29,574 $22,364
Long-term debt 13,000 25,000
Deferred taxes 33,422 32,009
Other long-term liabilities 278 --
Shareholders' equity 166,610 153,153
$242,884 $232,526
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Nine Months Ended
9/30/02 9/30/01
-------- --------
Cash flows from operations:
Net income $23,034 $17,889
Depreciation, depletion & amortization 12,396 12,538
Other, net 1,156 2,198
Net changes in operating assets and liabilities 5,368 (3,736)
Net cash provided by operations 41,954 28,889
Net cash used in investing activities (22,571) (11,218)
Net cash provided by (used in)
financing activities (18,760) 675
Net increase in cash & cash equivalents 623 18,346
Cash & cash equivalents, beginning of year 7,238 2,731
Cash & cash equivalents, end of period $7,861 $21,077
COMPARATIVE OPERATING STATISTICS
Three Months Ended Nine Months Ended
9/30/02 9/30/01 Change 9/30/02 9/30/01 Change
------- ------- ------ ------- ------- ------
Oil and gas:
Net production-BOE
per day 14,464 12,940 +12% 14,110 13,938 +1%
Per BOE:
Average realized sales
price (1) $21.03 $19.91 +6% $19.02 $21.43 -11%
Operating costs 8.06 7.63 +6% 7.35 7.83 -6%
Production taxes .51 .57 -11% .54 .47 +15%
Total operating costs 8.57 8.20 +5% 7.89 8.30 -5%
Depreciation & depletion 3.10 3.25 -5% 3.22 3.30 -2%
General & administrative
expenses 1.71 1.30 +32% 1.60 1.44 +11%
Interest expense per BOE .13 .81 -84% .22 .86 -74%
Electricity:
Electric power produced -
Megawatt hours/day 2,088 1,921 +9% 2,025 1,119 +81%
Average sales price -
$/Mwh 37.59 56.89 -34% 38.54 62.85 -39%
Fuel gas cost - $/Mmbtu 3.02 3.75 -19% 2.83 7.99 -65%
(1) Excludes effects of
the SFAS 133 -- -- -- --
unrealized hedging gain. .99 .01
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