Berry Petroleum Reports Year-to-Date Earnings of $17.9 Million.Business Editors TAFT, Calif.--(BUSINESS WIRE)--Nov. 6, 2001 Berry Petroleum Co. (NYSE NYSE See: New York Stock Exchange :BRY) today announced net income for the nine months ended Sept. 30, 2001, of $17.9 million, or 81 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , down 34 percent from net income of $27.3 million, or $1.24 per share, for the nine months ended Sept. 30, 2000. Key nine-month 2001 figures as compared with the nine months of 2000: -- Revenues of $111 million, down 6 percent from $118 million; -- Discretionary cash flow (cash flow before changes in working capital) declined 21 percent to $32.6 million, or $1.48 per share, from $41.5 million, or $1.88 per share; -- Net production, barrels of oil equivalent (BOE) per day, averaged 13,938, down 5 percent from 14,680; -- Average realized sales price per BOE was $21.43, down 6 percent from $22.73; and -- Fuel gas cost per Mmbtu increased 105 percent to $7.99 from $3.90. For the third quarter ended Sept. 30, 2001, net income was $5.9 million, or 27 cents per share, down 39 percent from $9.6 million, or 43 cents per share, in the same 2000 period. Key third quarter 2001 figures as compared with the third quarter of 2000: -- Revenues of $33.1 million, down 28 percent from $46.1 million; -- 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. declined 22 percent to $11.2 million, or 51 cents per share, from $14.4 million, or 65 cents per share; -- Net production (BOE/day) averaged 12,940, down 15 percent from 15,244; and -- Average realized sales price per 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 was $19.91, down 19 percent from $24.57. The current posted price for California 13 degrees API (Application Programming Interface) A language and message format used by an application program to communicate with the operating system or some other control program such as a database management system (DBMS) or communications protocol. 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. is $13.50 per barrel, although the company has 3,000 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 at approximately $20 per barrel. Jerry V. Hoffman, chairman, president and chief executive officer, stated: "Lower crude oil prices and lower production caused a decline in our third quarter earnings, although operationally we experienced improvement. We believe that the difficult environment we faced earlier this year, i.e. the electricity crisis and extremely high natural gas prices, has abated Abated, an ancient technical term applied in masonry and metal work to those portions which are sunk beneath the surface, as in inscriptions where the ground is sunk round the letters so as to leave the letters or ornament in relief. From 1911 Encyclopædia Britannica with prices both moderating and stabilizing which should benefit our operations. "As we anticipated, our production volumes declined further in the third quarter due to the lingering effects of our reduction of steam injection volumes in the first six months of 2001. This steam curtailment Curtailment The act of contracting or reducing operations of a company in the hope of bringing it financial or operational stability. This management technique is often used when a company has grown too fast and is unable to effectively manage its operations. was a result of nonpayment by two California utilities for our electricity sales. However, we have resumed full steam injection, both cogeneration and conventional, in the third quarter and our production is now increasing. "In addition, we began our capital drilling program in August, and have drilled 19 wells to date and expect to drill a total of 38 wells by year-end of which 22 are vertical and 16 horizontal. With the contribution of these two factors, we are targeting a production exit rate for 2001 in excess of 14,000 BOE/day." Hoffman added: "Our operating cost improved to $8.20/bbl in the third quarter of 2001, down 19 percent and 9 percent from $10.10/bbl and $9.01/bbl in the third quarter of 2000 and the second quarter of 2001, respectively. Lower natural gas prices and higher electricity prices are the key drivers to achieve significantly lower operating costs operating costs npl → gastos mpl operacionales , thus we are pursuing various strategies related to these cost inputs." Hoffman commented: "Despite the current weakness in oil prices, we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the company's future. Our extremely strong balance sheet, with net debt of approximately $15 million, is enabling us to advantageously pursue sizable growth opportunities." Ralph J. Goehring, senior vice president and chief financial officer, stated: "In the third quarter, we received $11.3 million related to our past due electricity receivables. We sold our Pacific Gas and Electric Co. receivable for cash to avoid a prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. and uncertain outcome due to their bankruptcy. "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. Co. (Edison) owes Berry $13.5 million on electricity deliveries from November 2000 through March 2001. Edison has recently entered into an agreement with 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, , whereby Edison believes they will be creditworthy cred·it·wor·thy adj. Having an acceptable credit rating. cred  it·wor soon and able to pay their debts in the first quarter of 2002."
Goehring added: "In the first nine months of 2001, cash was used for $9.1 million in capital expenditures, an acquisition of $2.3 million, dividends of $6.6 million and share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. of $.7 million. 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. was reduced by $12 million in the third quarter to $33 million and another $8 million of debt was repaid in October 2001. The company anticipates capital expenditures in the fourth quarter to be approximately $5 million." An earnings conference call will be held Wednesday, Nov. 7, 2001, at 8 a.m. PT. Dial 800/218-0204 to participate. For a digital replay dial 800/405-2236 (passcode 400008). Transcripts of this and previous calls may be viewed at www.bry.com/tele.htm. Berry Petroleum Co. is a publicly traded independent oil and gas production company with three cogeneration facilities providing steam for use in its enhanced oil recovery Enhanced Oil Recovery (EOR) is a generic term for techniques for increasing the amount of oil that can be extracted from an oil field. Using EOR, 30-60 %, or more, of the reservoir's original oil can be extracted [1] compared with 20-40% [2] operations and 100 megawatts of electrical capacity Noun 1. electrical capacity - an electrical phenomenon whereby an electric charge is stored capacitance, capacity electrical phenomenon - a physical phenomenon involving electricity . Visit www.bry.com for more information. "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, So Cal border pricing for natural gas, pipeline capacity for natural gas to and within California, a limited marketplace for electricity purchases and sales within California, 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. , uncertainties about the estimates of reserves, the prices of goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. , 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 and government actions in the form of judicial decisions, legislation, and decisions and regulations of the California Public Utilities Commission, Federal Energy Regulatory Commission The Federal Energy Regulatory Commission (FERC) is the United States federal agency with jurisdiction over electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. and other government agencies.
CONDENSED INCOME STATEMENTS
(In thousands, except per share data)
(unaudited) (unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2001 2000 2001 2000
Revenues:
Sales of oil and gas $22,440 $32,731 $80,868 $85,235
Sales of electricity 9,555 13,208 28,088 32,288
Interest and other
income, net 1,127 118 2,106 395
Total 33,122 46,057 111,062 117,918
Expenses:
Operating costs --
oil and gas 9,761 14,177 31,567 31,420
Operating costs --
electricity 9,555 13,208 27,890 30,090
Depreciation, depletion
& amortization 3,864 3,542 12,538 10,248
General and
administrative 1,543 1,695 5,482 6,003
Write-off of electricity
receivables -- -- 6,645 --
Interest 959 784 3,271 2,575
Total 25,682 33,406 87,393 80,336
Income before income taxes 7,440 12,651 23,669 37,582
Provision for income taxes 1,548 3,073 5,780 10,251
Net income $ 5,892 $ 9,578 $17,889 $27,331
Basic net income
per share $ 0.27 $ 0.43 $ 0.81 $ 1.24
Diluted net income
per share $ 0.27 $ 0.43 $ 0.81 $ 1.23
Cash dividends per share $ 0.10 $ 0.10 $ 0.30 $ 0.30
Weighted average common shares:
Basic 22,034 22,033 22,035 22,027
Diluted 22,200 22,313 22,113 22,239
CONDENSED BALANCE SHEETS
(In thousands)
(unaudited)
Sept. 30, Dec. 31,
2001 2000
ASSETS
Current assets $ 45,922 $ 34,923
Property & equipment, net 201,548 201,643
Other assets 949 1,793
$248,419 $238,359
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities $ 27,659 $ 36,076
Long-term debt 33,000 25,000
Deferred taxes 30,707 32,059
Fair value of derivatives 8,162 --
Shareholders' equity 148,891 145,224
$248,419 $238,359
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Nine Months Ended
Sept. 30, Sept. 30,
2001 2000
Cash flows from operations:
Net income $17,889 $27,331
Depreciation, depletion & amortization 12,538 10,248
Increase in deferred income taxes 1,913 4,005
Other, net 285 (102)
Discretionary cash flow 32,625 41,482
Net changes in operating assets and liabilities (3,736) 5,268
Net cash provided by operations 28,889 46,750
Net cash used in investing activities (11,218) (20,431)
Net cash provided by (used in) financing
activities 675 (25,610)
Net increase in cash & cash equivalents 18,346 709
Cash & cash equivalents, beginning of year 2,731 980
Cash & cash equivalents, end of period $21,077 $ 1,689
COMPARATIVE OPERATING STATISTICS
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Change Sept. 30, Sept. 30, Change
2001 2000 2001 2000
Net production --
BOE per day 12,940 15,244 -15% 13,938 14,680 -5%
Electric power
produced --
Megawatt
hours/day 1,835 1,992 -8% 1,052 1,983 -47%
Per BOE:
Average realized
sales price(a) $19.91 $24.57 -19% $21.43 $22.73 -6%
Operating costs 7.63 9.67 -21% 7.71 7.39 +4%
Production taxes .57 .43 +33% .47 .45 +4%
Total operating
costs 8.20 10.10 -19% 8.18 7.84 +4%
Depreciation &
depletion 3.25 2.53 +28% 3.30 2.55 +29%
General &
administrative
expenses 1.30 1.21 +7% 1.44 1.49 -3%
Interest expense
per BOE .81 .56 +45% .86 .64 +34%
Fuel gas cost
per Mmbtu 3.75 5.37 -30% 7.99 3.90 +105%
(a) Excludes
effects of the
SFAS 133
unrealized
hedging gains
and losses -.99 -- -.01 --
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