BRY - Berry Corporation Reports First Quarter 2024 Financial and Operating Results Declares Dividend | Benzinga
DALLAS, May 01, 2024 (GLOBE NEWSWIRE) -- Berry Corporation (bry) (NASDAQ:BRY) ("Berry" or the "Company") announced first quarter 2024 results and declared a fixed dividend. The details for today's earnings call and webcast are listed below.
Quarterly Highlights & Recent Announcements
- Produced 25,400 boe/d, above the midpoint of 2024 annual guidance of 25,200 boe/d
- Declared first quarter fixed dividends of $0.12 per share
- Acquired all necessary 2024 California Greenhouse Gas allowances at a 7% discount to the projected cost
- Signed agreement to farm into four horizontal wells immediately offsetting our Uinta Basin, UT acreage; wells expected to be on production by June 2024
- Follow-on working interest acquisition of ~100 boe/d in Kern County, CA in process
- Reported zero recordable incidents, zero lost-time incidents, and no reportable spills for the second consecutive quarter
- Issued 2023 Sustainable Business Report; includes setting an 80% reduction goal for methane emissions associated with our existing operations by the end of 2025
"In the first quarter, we delivered solid financial and operational results. The results are in line with projections, and we expect to deliver full-year results consistent with the production, capital and cost guidance we provided in March. Our teams have shown a remarkable ability to deploy their ingenuity and demonstrate resiliency in the face of a dynamic California regulatory environment. We continue to see strong base production, especially from our thermal diatomite reservoirs. By June 2024, we are also expecting first production from four horizontal well farm-in in Utah; an upside potential that could change our development outlook for the basin in future years. I want to emphasize that our 2024 development activity and production plan does not depend on the issuance of new drill permits, and so is not impacted by the ongoing Kern County EIR litigation which essentially has restricted the issuance of new drill permits," said Fernando Araujo, Berry's Chief Executive Officer.
He continued, "We are focused on maximizing enterprise value by generating sustainable free cash flow through operational excellence. Operational excellence includes keeping production flat, acquiring accretive, producing bolt-on assets, efficiently allocating capital, managing our cost structure, and prioritizing safety and compliance. We are confident we can continue to rise to the challenge to sustain production and maintain our enterprise value for the long-term."
Selected Comparative Results
| Three Months Ended |
| March 31, 2024 |
| December 31, 2023 |
| March 31, 2023 |
| (unaudited) (in millions, except per share amounts) |
| Oil, natural gas & NGL revenues(1) |
| $ |
| 166 |
| $ |
| 172 |
| $ |
| 166 |
| Net (loss) income |
| $ |
| (40 |
| ) |
| $ |
| 63 |
| $ |
| (6 |
| ) |
| Adjusted Net Income |
| $ |
| 11 |
| $ |
| 10 |
| $ |
| 5 |
| Cash flow from operations |
| $ |
| 27 |
| $ |
| 79 |
| $ |
| 2 |
| Adjusted EBITDA(2) |
| $ |
| 69 |
| $ |
| 70 |
| $ |
| 59 |
| Earnings (loss) per diluted share |
| $ |
| (0.53 |
| ) |
| $ |
| 0.81 |
| $ |
| (0.08 |
| ) |
| Adjusted earnings per diluted share(2) |
| $ |
| 0.14 |
| $ |
| 0.13 |
| $ |
| 0.07 |
| Adjusted free cash flow(2) |
| $ |
| 1 |
| $ |
| 55 |
| $ |
| (27 |
| ) |
| Capital expenditures |
| $ |
| 17 |
| $ |
| 17 |
| $ |
| 21 |
| Production boe/d |
| 25.4 |
| 25.9 |
| 24.3 |
__________
(1) Revenues do not include hedge settlements.
(2) Please see "Non-GAAP Financial Measures and Reconciliations" later in this press release for reconciliation and more information on these Non-GAAP measures.
"We finished the first quarter with Adjusted EBITDA of $69 million despite slightly lower oil prices and production than the fourth quarter of 2023. We demonstrated resilience through strategic cost management, resulting in a 10% reduction in lease operating expenses. Our proactive approach has also led to significant savings of 7% in greenhouse gas credit purchases compared to projected costs, underscoring our commitment to both fiscal responsibility and environmental stewardship. With capital expenditures anticipated to increase in the second and third quarters of 2024 and an expected uptick in our well services business, we expect our results for the year to be in-line with our previously reported guidance. We will also maintain focus on debt reduction and look to opportunistically refinance our notes, which mature in early 2026," stated Mike Helm, Berry's CFO.
First Quarter 2024 Financial and Operating Results
Oil, natural gas and NGL revenues (excluding hedging settlements) for the first quarter of 2024 decreased 3% from the fourth quarter of 2023, driven by lower oil prices and a 1% decrease in oil volumes. The net loss for the first quarter of 2024 included unrealized hedge losses, while the Company recognized savings in lease operating expenses, mostly due to lower fuel gas prices. Adjusted EBITDA and Adjusted Net Income were essentially flat in the first quarter of 2024, compared to the prior quarter. Typical first quarter usage of working capital resulted in decreased cash flows from operations and Adjusted Free Cash Flow compared to the fourth quarter of 2023. Capital expenditures were $17 million in both the first quarter of 2024 and fourth quarter of 2023. At March 31, 2024, the Company had liquidity of $149 million, consisting of $3 million cash and $146 million available for borrowings under its revolving credit facilities.
Compared to the first quarter of the prior year, oil, natural gas and NGL revenues (excluding hedging settlements) were flat as production was higher and natural gas prices were lower in the first quarter of 2024. Adjusted EBITDA for the first quarter of 2024 increased 15% and Adjusted Net Income increased 106% compared to the first quarter of 2023, driven by a 19% decrease in expenses from field operations. Cash flow from operations and Adjusted Free Cash Flow increased in the first quarter of 2024 compared to the first quarter of 2023 due to the higher earnings and improved working capital impacts. Capital expenditures for the first quarter of 2024 were $17 million and decreased 19% compared to the first quarter of 2023. The Company was able to increase year over year production by nearly 5% largely due to the impact of bolt-on acquisitions in late 2023, allowing Berry to meet production targets while reducing drilling, workover and other activities on the legacy Berry assets.
Quarterly Dividends
The Company's Board of Directors declared dividends totaling $0.12 per share on the Company's outstanding common stock. There was no variable dividend declared based on the cumulative Adjusted Free Cash Flow results for the three months ended March 31, 2024 in accordance with the Company's Shareholder Return Model. The fixed dividend is payable on May 24, 2024 to shareholders of record at the close of business on May 15, 2024.
Earnings Conference Call
The Company will host a conference call to discuss these results:
| Call Date: |
| Wednesday, May 1, 2024 |
| Call Time: |
| 11:00 a.m. Eastern Time / 10:00 a.m. Central Time / 8:00 a.m. Pacific Time |
| Join the live listen-only audio webcast at https://edge.media-server.com/mmc/p/93zafnyz or at https://bry.com/category/events |
If you would like to ask a question on the live call, please preregister at any time using the following link:
https://register.vevent.com/register/BIa0fc2994657d43219ff18597216ccb2e
Once registered, you will receive the dial-in numbers and a unique PIN number. You may then dial-in or have a call back. When you dial in, you will input your PIN and be placed into the call. If you register and forget your PIN or lose your registration confirmation email, you may simply re-register and receive a new PIN.
A web based audio replay will be available shortly after the broadcast and will be archived at
https://ir.bry.com/reports-resources or visit https://edge.media-server.com/mmc/p/93zafnyz or
https://bry.com/category/events
About Berry Corporation (bry)
Berry is a publicly traded (NASDAQ:BRY) western United States independent upstream energy company with a focus on onshore, low geologic risk, long-lived oil and gas reserves. We operate in two business segments: (i) exploration and production ("E&P") and (ii) well servicing and abandonment. Our E&P assets are located in California and Utah, are characterized by high oil content and are predominantly located in rural areas with low population. Our California assets are in the San Joaquin basin (100% oil), while our Utah assets are in the Uinta basin (60% oil and 40% gas). We operate our well servicing and abandonment segment in California. More information can be found at the Company's website at bry.com.
Forward-Looking Statements
The information in this press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can typically identify forward-looking statements by words such as aim, anticipate, achievable, believe, budget, continue, could, effort, estimate, expect, forecast, goal, guidance, intend, likely, may, might, objective, outlook, plan, potential, predict, project, seek, should, target, will or would and other similar words that reflect the prospective nature of events or outcomes. All statements, other than statements of historical facts, included in this press release that address plans, activities, events, objectives, goals, strategies, or developments that the Company expects, believes or anticipates will or may occur in the future, such as those regarding our financial position; liquidity; cash flows (including, but not limited to, Adjusted Free Cash Flow); financial and operating results; capital program and development and production plans; operations and business strategy; potential acquisition and other strategic opportunities; reserves; hedging activities; capital expenditures; return of capital; our shareholder return model and the payment of future dividends; future repurchases of stock or debt; capital investments; our ESG strategy and the initiation of new projects or business in connection therewith, recovery factors; and other guidance are forward-looking statements. Actual results may differ from anticipated results, sometimes materially, and reported results should not be considered an indication of future performance. For any such forward-looking statement that includes a statement of the assumptions or bases underlying such forward-looking statement, we caution that while we believe such assumptions or bases to be reasonable and make them in good faith, assumed facts or bases always vary from actual results, sometimes materially.
Berry cautions you that these forward-looking statements are subject to all of the risks and uncertainties incident to acquisition transactions and the exploration for and development, production, gathering and sale of natural gas, NGLs and oil most of which are difficult to predict and many of which are beyond Berry's control. These risks include, but are not limited to, commodity price volatility; legislative and regulatory actions that may prevent, delay or otherwise restrict our ability to drill and develop our assets, including with respect to existing and/or new requirements in the regulatory approval and permitting process; legislative and regulatory initiatives in California or our other areas of operation addressing climate change or other environmental concerns; investment in and development of competing or alternative energy sources; drilling, production and other operating risks; effects of competition; uncertainties inherent in estimating natural gas and oil reserves and in projecting future rates of production; our ability to replace our reserves through exploration and development activities or strategic transactions; cash flow and access to capital; the timing and funding of development expenditures; environmental, health and safety risks; effects of hedging arrangements; potential shut-ins of production due to lack of downstream demand or storage capacity; disruptions to, capacity constraints in, or other limitations on the third-party transportation and market takeaway infrastructure (including pipeline systems) that deliver our oil and natural gas and other processing and transportation considerations; the ability to effectively deploy our ESG strategy and risks associated with initiating new projects or business in connection therewith; our ability to successfully integrate the Macpherson assets into our operations; we fail to identify risks or liabilities related to Macpherson, its operations or assets; our inability to achieve anticipated synergies; our ability to successfully execute other strategic bolt-on acquisitions; overall domestic and global political and economic conditions; inflation levels, including increased interest rates and volatility in financial markets and banking; changes in tax laws and the other risks described under the heading "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent filings with the SEC.
Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no responsibility to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise except as required by applicable law. Investors are urged to consider carefully the disclosure in our filings with the Securities and Exchange Commission, available from us at via our website or via the Investor Relations contact below, or from the SEC's website at www.sec.gov.
Contact
Contact: Berry Corporation (bry)
Todd Crabtree - Director, Investor Relations
(661) 616-3811
ir@bry.com
Tables Following
The financial information and certain other information presented have been rounded to the nearest whole number or the nearest decimal. Therefore, the sum of the numbers in a column may not conform exactly to the total figure given for that column in certain tables. In addition, certain percentages presented here reflect calculations based upon the underlying information prior to rounding and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers, or may not sum due to rounding.
SUMMARY OF RESULTS
| Three Months Ended |
| March 31, 2024 |
| December 31, 2023 |
| March 31, 2023 |
| (unaudited) ($ and shares in thousands, except per share amounts) |
| Consolidated Statement of Operations Data: |
| Revenues and other: |
| Oil, natural gas and natural gas liquids sales |
| $ |
| 166,318 |
| $ |
| 172,439 |
| $ |
| 166,357 |
| Service revenue |
| 31,683 |
| 40,746 |
| 44,623 |
| Electricity sales |
| 4,243 |
| 2,905 |
| 5,445 |
| (Losses) gains on oil and gas sales derivatives |
| (71,200 |
| ) |
| 83,918 |
| 38,499 |
| Other revenues |
| 67 |
| 319 |
| 45 |
| Total revenues and other |
| 131,111 |
| 300,327 |
| 254,969 |
| Expenses and other: |
| Lease operating expenses |
| 60,697 |
| 67,342 |
| 134,835 |
| Cost of services |
| 27,304 |
| 32,783 |
| 36,099 |
| Electricity generation expenses |
| 1,093 |
| 1,827 |
| 2,500 |
| Transportation expenses |
| 1,059 |
| 1,260 |
| 1,041 |
| Acquisition costs |
| 2,617 |
| 284 |
| — |
| General and administrative expenses |
| 20,234 |
| 20,729 |
| 31,669 |
| Depreciation, depletion and amortization |
| 42,831 |
| 40,937 |
| 40,121 |
| Taxes, other than income taxes |
| 15,689 |
| 15,826 |
| 10,460 |
| Losses (gains) on natural gas purchase derivatives |
| 4,481 |
| 21,397 |
| (610 |
| ) |
| Other operating (income) expenses |
| (133 |
| ) |
| 36 |
| (286 |
| ) |
| Total expenses and other |
| 175,872 |
| 202,421 |
| 255,829 |
| Other expenses: |
| Interest expense |
| (9,140 |
| ) |
| (9,680 |
| ) |
| (7,837 |
| ) |
| Other, net |
| (83 |
| ) |
| (10 |
| ) |
| (75 |
| ) |
| Total other expenses |
| (9,223 |
| ) |
| (9,690 |
| ) |
| (7,912 |
| ) |
| (Loss) income before income taxes |
| (53,984 |
| ) |
| 88,216 |
| (8,772 |
| ) |
| Income tax (benefit) expense |
| (13,900 |
| ) |
| 25,665 |
| (2,913 |
| ) |
| Net (loss) income |
| $ |
| (40,084 |
| ) |
| $ |
| 62,551 |
| $ |
| (5,859 |
| ) |
| Net (loss) income per share: |
| Basic |
| $ |
| (0.53 |
| ) |
| $ |
| 0.83 |
| $ |
| (0.08 |
| ) |
| Diluted |
| $ |
| (0.53 |
| ) |
| $ |
| 0.81 |
| $ |
| (0.08 |
| ) |
| Weighted-average shares of common stock outstanding - basic |
| 76,254 |
| 75,667 |
| 76,112 |
| Weighted-average shares of common stock outstanding - diluted |
| 76,254 |
| 77,349 |
| 76,112 |
| Adjusted Net Income(1) |
| $ |
| 10,910 |
| $ |
| 10,426 |
| $ |
| 5,307 |
| Weighted-average shares of common stock outstanding - diluted |
| 77,373 |
| 77,349 |
| 79,210 |
| Diluted earnings per share on Adjusted Net Income(1) |
| $ |
| 0.14 |
| $ |
| 0.13 |
| $ |
| 0.07 |
| Three Months Ended |
| March 31, 2024 |
| December 31, 2023 |
| March 31, 2023 |
| (unaudited) ($ and shares in thousands, except per share amounts) |
| Adjusted EBITDA(1) |
| $ |
| 68,534 |
| $ |
| 70,036 |
| $ |
| 59,337 |
| Adjusted Free Cash Flow(1) |
| $ |
| 1,104 |
| $ |
| 54,824 |
| $ |
| (26,681 |
| ) |
| Adjusted General and Administrative Expenses(1) |
| $ |
| 18,943 |
| $ |
| 17,886 |
| $ |
| 19,737 |
| Effective Tax Rate |
| 26 |
| % |
| 29 |
| % |
| 33 |
| % |
| Cash Flow Data: |
| Net cash provided by operating activities |
| $ |
| 27,273 |
| $ |
| 79,018 |
| $ |
| 1,781 |
| Net cash used in investing activities |
| $ |
| (18,661 |
| ) |
| $ |
| (48,822 |
| ) |
| $ |
| (30,460 |
| ) |
| Net cash used in financing activities |
| $ |
| (9,990 |
| ) |
| $ |
| (42,561 |
| ) |
| $ |
| (3,454 |
| ) |
__________
(1) See further discussion and reconciliation in "Non-GAAP Financial Measures and Reconciliations".
| March 31, 2024 |
| December 31, 2023 |
| (unaudited) ($ and shares in thousands) |
| Balance Sheet Data: |
| Total current assets |
| $ |
| 139,373 |
| $ |
| 140,800 |
| Total property, plant and equipment, net |
| $ |
| 1,384,704 |
| $ |
| 1,406,612 |
| Total current liabilities |
| $ |
| 230,447 |
| $ |
| 223,182 |
| Long-term debt |
| $ |
| 448,121 |
| $ |
| 427,993 |
| Total stockholders' equity |
| $ |
| 688,844 |
| $ |
| 757,976 |
| Outstanding common stock shares as of |
| 76,939 |
| 75,667 |
The following table represents selected financial information for the periods presented regarding the Company's business segments on a stand-alone basis and the consolidation and elimination entries necessary to arrive at the financial information for the Company on a consolidated basis.
| Three Months Ended March 31, 2024 |
| E&P |
| Well Servicing and Abandonment |
| Corporate/ Eliminations |
| Consolidated Company |
| (unaudited) (in thousands) |
| Revenues(1) |
| $ |
| 170,628 |
| $ |
| 35,468 |
| $ |
| (3,785 |
| ) |
| $ |
| 202,311 |
| Net (loss) income before income taxes |
| $ |
| (24,836 |
| ) |
| $ |
| (1,269 |
| ) |
| $ |
| (27,879 |
| ) |
| $ |
| (53,984 |
| ) |
| Capital expenditures |
| $ |
| 15,417 |
| $ |
| 1,332 |
| $ |
| 187 |
| $ |
| 16,936 |
| Total assets |
| $ |
| 1,625,178 |
| $ |
| 65,948 |
| $ |
| (115,610 |
| ) |
| $ |
| 1,575,516 |