Berry Petroleum Reports First Quarter 2005 Results.BAKERSFIELD Bakersfield, city (1990 pop. 174,820), seat of Kern co., S central Calif., at the southern end of the San Joaquin valley; inc. 1898. It is an oil, mining, and agricultural center and one of the fastest-growing U.S. cities. , Calif. -- 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 BRY could refer to:
Bry ) announced net income of $22.5 million, or $1.00 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the first quarter of 2005, up 116% from net income of $10.4 million, or $.47 per diluted share in the first quarter of 2004. Revenues rose to a record $88 million in the quarter, up 54% from $57.3 million in the first quarter of 2004. The Company's average daily production of 22,047 barrels of oil equivalent (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 ) increased by 14% over a year ago and the average realized sales price of $37.81 per BOE was up 48% from the $25.58 per BOE achieved in the first quarter of 2004, 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 Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. F. Heinemann Heinemann may refer to:
Mr. Heinemann continued, "Berry reported another excellent quarter of earnings. We continue our strategy of growing production and reserves from existing assets through development, while seeking acquisitions with significant upside potential Upside potential The amount by which analysts or investors expect the price of a security may increase. upside potential The potential price or gain that may be expected in a security or in a security average, generally stated as the dollar . In the first quarter, we drilled 35 development wells, performed 19 workovers and completed the purchase of our first Mid-Continent asset in Yuma County Yuma County is the name of two counties in the United States:
The proportional ownership interest by the owner of oil and gas rights in income produced by the asset. See also overriding royalty interest. into a working interest on one of our California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). properties in December December: see month. 2004. Natural gas production averaged 17 million cubic feet (MMcf) per day in the first quarter of 2005, mostly due to our Yuma County Niobrara Niobrara (nīəbrâr`ə), river, c.430 mi (690 km) long, rising in the High Plains, E Wyo., and flowing E across N Nebraska to the Missouri River on Nebraska's northeast border. gas production, which brings our production mix to 87% oil and 13% gas. This asset is a great fit for Berry as it offers long-lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. , proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. , enhances our development drilling inventory with low geologic ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. risk and provides opportunities to increase our asset position in the region. We have drilled five new gas wells to-date in Yuma County, have 80 wells permitted and plan to drill at least 60 wells in 2005. "Our assets in California, the Rockies and Mid-Continent are all performing well and we are excited about our appraisal drilling planned for the summer of 2005. This program includes drilling our Green River oil prospects at Lake Canyon, drilling our Ferron This article is about Canadian artist. For other uses, see Ferron, Utah. Ferron (born Debbie Foisy on June 2, 1952) is a Canadian folk singer/songwriter and poet. gas wells at Coyote Flats and expanding our diatomite pilot at North Midway Midway, island group (2 sq mi/5.2 sq km), central Pacific, c.1,150 mi (1,850 km) NW of Honolulu, comprising Sand and Eastern islands with the surrounding atoll. Discovered by Americans in 1859, Midway was annexed in 1867. A cable station was opened in 1903. Sunset. We have started the appraisal drilling of our Tri-State acreage, located adjacent to the Yuma County Niobrara asset. The first well in Sherman County Sherman County is the name of four counties in the United States:
The Company's operating costs operating costs npl → gastos mpl operacionales in the first quarter of 2005 were up 6% on a per BOE basis to $11.80 from $11.09 in the fourth quarter of 2004, due to higher severance taxes severance tax n. A tax imposed by a state on the extraction of natural resources, such as oil, coal, or gas, that will be used in other states. and higher well servicing costs. The Company anticipates operating costs to average between $11.75 and $12.75 per BOE for all of 2005. In the first quarter, the Company had a $2 million charge from two dry holes, one at the Midway-Sunset field in California and one at the Coyote Flats prospect in Utah. Ralph J. Goehring, executive vice president and chief financial officer said, "Berry's performance in the first quarter was excellent and reflects a continued improvement in the price of crude oil. We believe our cash from operations for 2005 will well exceed our projected capital expenditures of $107 million. Our 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. increased in the first quarter to $138 million as we closed on the Niobrara gas assets ($105 million purchase price) and the Tri-State acreage ($5 million purchase price). Our financial position remains very strong and we expect to put our cash to work where we can generate excellent returns to our shareholders. In 2004 we achieved an excellent 26% return on capital employed Return on capital employed (ROCE) Indicator of profitability of the firm's capital investments. Determined by dividing Earnings Before Interest and Taxes by (capital employed plus short-term loans minus intangible assets). and will attempt to surpass that in 2005. Our excess cash is first earmarked for acquisition opportunities and second for debt reduction. We have in place for 2005 an attractive sales agreement for our California heavy crude. The Company has approximately 7,750 barrels per day Barrels per day (abbreviated BPD, bbl/d, bpd, bd or b/d) is a measurement used to describe the amount of crude oil (measured in barrels) produced or consumed by an entity in one day. hedged for calendar 2005 at approximately WTI WTI West Texas Intermediate WTI Western Transportation Institute (Montana State University) WTI World Tribunal on Iraq WTI With The Idea (used in chess to point to the idea behind a specific move) NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). $40.75 per barrel. In the first quarter we added hedges on 2,000 barrels per day for the first nine months of 2006 at an average WTI price of $47.00. The Company's hedge position can be viewed at: www.bry.com/index.php?page=hedging." Regional Activity Update Excluding future acquisitions, the Company plans to spend approximately $107 million in 2005 on drilling 177 net wells and performing 92 workovers. In the first quarter of 2005, the Company spent $15.7 million on capital expenditures and intends to fund 100% of its capital program out of internally generated cash flow. Continuing areas of focus in 2005 will be:
-- California production -- The Company drilled 17 wells in
California in the first quarter of 2005, and has completed all
of the eight planned infill horizontal wells at Midway-Sunset.
Other California drilling will include expanding the thermal
development of the Poso Creek field, where production has
reached over 500 BOE per day, and at the Company's diatomite
exploitation at North Midway-Sunset, where production has
ramped up to 100 BOE per day.
-- Rockies & Mid-Continent production -- In 2005 the Company will
continue to develop the Brundage Canyon asset on 80-acre
spacing, test the potential of 40-acre infill drilling and
appraise the northern and southern limits of the field. On the
recently acquired Yuma County Niobrara gas assets, the Company
has drilled five wells and plans to drill approximately 60
wells as part of its ongoing development program and to begin
the 40-acre infill program on the existing 80-acre
development.
-- Rockies & Mid-Continent prospects -- The Company has two Green
River oil wells permitted for May 2005 drilling at its Lake
Canyon acreage. These initial drill sites will be
approximately three miles west of the Company's Brundage
Canyon field. Berry will participate in the acquisition of 50
square miles of 3D seismic at Lake Canyon this summer. This
seismic will aid in determining the location for the drilling
of the first deep Mesaverde natural gas test well in Lake
Canyon scheduled for late 2005.
In summer 2005 the Company intends to drill an offset well at
Coyote Flats (45 miles southwest of Brundage Canyon) about one
mile from the Scofield-Thorpe gas discovery well drilled in
2002 to a depth of 6,800 feet in the Ferron sands. The
discovery well tested for 30 days with a peak rate of 1.1 MMcf
per day. Successful completion of this offset well will allow
the Company to begin designing new infrastructure in the area.
The Company will participate in the drilling of the first
horizontal well in the Niobrara gas formation later this month
at the recently acquired Tri-State acreage in Colorado,
Nebraska and Kansas. Berry also plans to participate in the
acquisition of approximately 530 miles of 2D seismic in this
region beginning in the second quarter of 2005.
Teleconference Call A conference call will be held Tuesday, May 3, 2005 at 11 a.m. Eastern Time (8 a.m. Pacific Time). Dial 1-866-800-8651 to participate, using passcode 75154868. International callers may dial 617-614-2704. For a digital replay available until May 17, 2005, dial 1-888-286-8010 (passcode 82298538). 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/tele.htm. Berry Petroleum Company is a publicly traded independent oil and gas production and exploitation company with its headquarters in Bakersfield, Calif. 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. "Safe harbor 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; exploration, 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. ; 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. ; acquisition risks; 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; 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 , pipeline capacity restraints, legislative and/or judicial decisions and other government or Tribal regulations.
CONDENSED INCOME STATEMENTS
(In thousands, except per share data)
(unaudited)
Three Months
Ended
----------------
3/31/05 3/31/04
------- -------
Revenues
Sales of oil and gas $75,391 $45,205
Sales of electricity 12,456 11,934
Interest and other income, net 148 203
------- -------
Total 87,995 57,342
------- -------
Expenses
Operating costs -- oil & gas production 23,407 16,782
Operating costs -- electricity generation 13,358 12,403
Exploration costs 561 -
Depreciation, depletion & amortization -- oil &
gas 8,527 6,354
Depreciation, depletion & amortization --
electricity 772 855
General and administrative 4,820 7,344
Dry hole, abandonment & impairment 2,021 -
Interest 1,162 531
------- -------
Total 54,628 44,269
------- -------
Income before income taxes 33,367 13,073
Provision for income taxes 10,862 2,709
------- -------
Net income $22,505 $10,364
======= =======
Basic net income per share $1.02 $.48
Diluted net income per share $1.00 $.47
Cash dividends per share $.12 $.11
Weighted average capital stock outstanding:
Basic 21,981 21,817
======= =======
Diluted 22,470 22,083
======= =======
CONDENSED BALANCE SHEETS
(In thousands)
(unaudited)
3/31/05 12/31/04
-------- --------
Assets
Current assets $84,481 $61,001
Properties, buildings & equipment, net 462,407 338,706
Other assets & deposits 5,909 12,397
-------- --------
$552,797 $412,104
======== ========
Liabilities & Shareholders' Equity
Current liabilities $85,628 $64,841
Deferred income taxes 51,783 47,963
Long-term debt 138,000 28,000
Other long-term liabilities 12,139 8,214
Shareholders' equity 265,247 263,086
-------- --------
$552,797 $412,104
======== ========
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Three Months
Ended
----------------
3/31/05 3/31/04
------- -------
Cash flows from operating activities:
Net income $22,505 $10,364
Depreciation, depletion & amortization (DD&A) 9,299 7,209
Abandonment costs (213) (105)
Deferred income taxes 5,042 2,270
Deferred stock-based compensation expense 376 3,240
Other, net 89 147
Net changes in operating assets and liabilities (17,846) (3,559)
------- -------
Net cash provided by operating activities 19,252 19,566
Net cash used in investing activities (125,150) (18,440)
Net cash provided by (used in) financing activities 107,358 (2,401)
------- -------
Net (decrease) increase in cash and cash
equivalents 1,460 (1,275)
Cash and cash equivalents at beginning of year 16,690 10,658
------- -------
Cash and cash equivalents at end of period $18,150 $9,383
======= =======
COMPARATIVE OPERATING STATISTICS
In thousands (except Per BOE data)
(unaudited)
Three Months Ended
------------------------
3/31/05 3/31/04 Change
------- ------- ------
Oil and gas:
Net production-BOE per day 22,047 19,395 +14%
Per BOE:
Average sales price before hedging $40.89 $28.26 +45%
Average sales price after hedging 37.81 25.58 +48%
Operating costs 11.80 9.51 +24%
DD & A 4.30 3.60 +19%
General & administrative expenses 2.43 4.16 -42%
Interest expense $.59 $.30 +97%
Electricity:
Electric power produced --
Megawatt hours/day 2,117 2,167 -2%
Electric power sold --
Megawatt hours/day 1,918 1,956 -2%
Average sales price -- $/MWh $68.87 $67.05 +3%
Fuel gas cost -- $/MMBtu $5.74 $5.09 +13%
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