BRY - Earnings call transcript Q3 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day. And thank you for standing by. Welcome to the Berry Corporation's Q3 2021 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question-and-answer session. Instructions]. [Operator that being advised conference today's be recorded. is Please Instructions]. [Operator hand over to I would speaker conference to like now your the today, Mr. of Todd Manager Investor Crabtree, Relations. Please ahead. go

Todd Crabtree

you results. Berry's Kathleen joining issued teleconference. an you, and highlighting to Berry And Thank third release quarter welcome Yesterday afternoon us quarter third thank for earnings XXXX earnings everyone. for

quarter will Baetz, Chief and well Executive Trem Vice of Speaking our further this Smith, our for XXXX. Trem Vice are Officer be discuss Officer Chairman and Executive financial expectations and Fernando Operating how share and addressing on performance, will aspects Cary Chief as as business. morning the will of the operational and CEO; Financial remainder then and Fernando Araujo, details third our President; President. we Cary

make over concluding Before to few will Trem questions, a it remarks. turning

I Before in to meaning The contain Safe within forward-looking attention Harbor earnings SEC. to release These statements risks found your projections include to and or the filings and call results may release. Laws. actual in today's Federal those cause from factors materially the differ discussion Securities in to our other earnings are other outlined and these we with language begin, and of statements. implied subject want the risks uncertainties These that statements our expressed

the are in presentation. date made. recent website, the including Our contained release our earnings release forward-looking this bry.com, analysis has presentation a Any reflect information, investor call of made the our most and link and as to statements that on earnings

by today's the to adjusted reconciliation tables website law. or measures and for all duty to a refer related in We mentioned on them, the release update as plans in measures. and have required our except GAAP call no our between earnings Please

call transcript over the post the will our link Trem will I turn to replay and on call website. now of this Smith. We also a

Trem Smith

Todd. Good for joining today. us thanks you, Thank and morning, everyone,

exceptional of sale view is production oil fundamental successfully. opportunity Berry change in impossibly reasons. business, different for the believe affordable our upturn key for industry California which execute our several an and to cycles, is The core continue we most presents is for energy as We in the previous recent primarily for than prices it

First oil and globally global of decades. increasing is to long-term while to years investment. and to is after continuing supply demand for grow be over expected is will continue The limited under continue

getting where reported invest need is Saudi CEO world companies Bloomberg fact, there's said, output and production. dropping last In oil more supply. week, to the capacity limited situation across to quickly a is now in Aramco It the

delayed the as Second, projects third few means are numerous and been in the major have exploration is last or market at oil sources few new onto coming been very has new of delays in the least the major low there projects The canceled. years. lack in of decades. few And discoveries, it as next

to capital time have board been return continue position an we a excited returner that were Berry value some to more shareholders. box announce to approved to We For approach outside that model, to tier now even the the top shareholders. shareholder return a our as working of will on

it fact, sizes. all in put companies E&P the of In top tier Berry of should firmly

organic free balance available model, dividends implementing a pricing, in of which and we bolt-on look XXXX. highlight annually, is cash unveiling flow. collectively such extension flow proven our generates mixed cost a The model uniquely model later sheet, should cash pricing, which the including will be strip. decline the exciting acquisitions. rent our define predictable simple consist to of with the after current development to structure significant implement model simple new strategic a is dividend Based current remarks. additional flat. items corporate cash levered in all and this This extensive to in our for production through interest, years beginning to already low keep I Again, elements our of industry quarter abundance of free an levered cash our that cost price come for and returns a could an clean my considerable place more business fundamentals, we flow on and the model, our repurchases inventory, forward share generate debt and currently in Berry model unique for retirement, come. variable XX% creating is are industry. while all to levered provides portion stock current as paying positioned We as the rate, concluding dividend, our addition returns, free the than cashflow fixed has We growth enjoying, this Berry shareholders, on we are which and many the our to have some keeping and will We it, successfully. obvious and business details in based full in back costs, increased and critical a of

will Now of highly results over quarter. a the I turn will successful it to highlight Fernando, who operational

Fernando Araujo

Thank you, Trem.

and health, As excellence priorities. that our environmental This in usual, safety reflected my I QX reaffirming and comments excellent results. want regulatory begin safety remain protection to the compliance is of operational environment, for top

time approaching XXX and recordable this are incidents, day in mark we lost with best our is fact, class. In

performance; as with equivalent in per done on an operational quarter, XX,XXX QX to of of oil it day barrels quarter all production. to continue grow year has production of average Moving

average we day. drilling projects and rigs for producers QX connecting QX, in and to In continued at we XX,XXX experienced shift and In challenges In our fact, a did operated into from QX, XX with wells. horizontal was half drilling activity delineation focused a plans combination the giant of drilling drilling, September California, in We in chain a to of our production on causing production. QX. the completing an two supply the due in industries, flood wells wells it field. drilling to QX grow Midway-Sunset two our delays steam issues. for highest similar expansion our And high-impact We year barrels to to other

this technical the to to and order additional teams better in data drilled in wells beyond. However, drill QX in time QX delineation give wells evaluate from also

XX opportunities horizontal QX barrel date our further company's order the development now in are The high-impact in on continue an in yielding these wells. wells QX. year range. return strip. a is QX, based that drilling production very expand the to of current which day to of tiers emphasize rate first process successful, we're IPs workover to development we another rate are XX% top yielding program XXX which testing return with six on Most in has entire currently from concepts excellent drilling step-out been strip robust results to Also exceeding We XXX want I of to are and of new attractive horizontal Furthermore, base. in based activity, the a inventory unhedged of realize current our excess our XXX%. greater on the our in in than

As rate for a year we mentioned year. the in to to exit compared plateau our reach production expect in last higher and with QX past calls,

rigs operational of X the rigs to company the still workover, trillion in dedicated maintenance California are We're addition terms most in operating our currently P&A to activity. active We in activities. with and

work drilled XXX as overs having year wells, the XXX finish performed approximately to approximately and planned. expect We

as months $XX QX QX capital. Now within for let's nine the was slightly turn in to This was CapEx year. the million our and than budget planned. first of

Our for of full-year capital outlook XXXX unchanged. remains

This per operating we an boe. of is X% $XX.XX OpEx of average in expenses QX. QX, terms lower than In

materially and achieving We throughout have compared years. outstanding to previous summarize, keep been operating able XXXX To consistently results. lower expenses to safety flat we're

expect strong all within expenditures. production QX. since plan Our has beginning of to a have with the our We grown year, and sequentially the we capital

sustainably I to since And have our per out boe Cary. We of over OpEx $X will that, turn taken with XXXX. structure it

Cary Baetz

of Fernando. simple thoughts will on did our Thanks, the model, return of introduce and calculate. returns a to to job shareholder will and are model The the new be be that great we implement. excited capital Trem easy outlining

plan announcing this and fully approved quarter. the are later forward finalizing We the currently details to look

As of presentation. on cashflow cashflow Berry this and further we fact, investor exemplifies return that machine The know, XX quick math you model believe referencing model simple illustrative is Slide our a new today's cap. And market show generating million $XXX XXXX, levered math in flow current almost XX% simple price cash that free our beyond that us strip is the XXXX. our of of would works more than

completed maintained our the During our commitment to we new RBL base the $XXX third a $XXX quarter, HedgeX. commitment and and of RBL We million, a XXXX. has with of the electric which extensive extends million condition borrowing new terms facility,

year years which three. hedged of XX% a are of our then PDP the XX% drops to in first have We for the of agreement, the two required oil hedges minimum

Our deck. highlighted Slide new hedges of are XX investor on our

day, we some be today, lines day, prices. the downside focused gaining physical per hedge our current of while natural we short as a hours remain about in daily and years to the leaving lower connects when our us hedge. effectively capacity. will which agreements, us creating have XX,XXX which on the gas the oil Rockies place is mmbtu access assets, increases gas upside Our line, gain other from which And mmbtu to allows we in the oil operations have long-term with are additional These XX of day to the states. purchase full of X,XXX recent XX,XXX store in line move We we access Further, XXXX. midstream XX in gas current up per May sell Kern a of about are access to to Placerita only currently river to almost and supply program demand California, been mmbtu for protecting on bullish

prices XXXX to winter we on roughly in inbounds, per $X hedged the couple improvement months, high a our softens market the west next fuel our mmbtu. the see then If coast, gas to months, at protected that natural exposure natural expect through April demand especially cost. we Over of said should maximum of over supply of due we some the gas remain

very and said, the busy We with operations. we range of I divestiture production the year. to highlighted, XXXX total successfully we are our just And C&J A&D the trajectory mentioned, the to on production pleased the the Placerita range. the are as we front. into due the close we with mmbtu our out XX,XXX XX,XXX our That timing services be primarily purchased divested we Placerita have and Lastly, well integrated Fernando refined in current coupled asset asset business narrowed for as delays, of to

Our XX-Q will the you to be filed later into take dive financials. want a deeper today if

turn I'll remarks. final it Trem back Now over for to

Trem Smith

As you business executing our Berry on is plan. heard,

company, shareholder return and rate now first successful exceptional have by a simple We model. a an driven and model business

like we Before our recent more I'd go, to a few of highlight successes.

on the area our with growth all strong XX emissions Kern reduce ESG to fruitful, C&J our times opportunities the low abandon than it gas gases First mile. with our of benefits, were A&D our in property wells. at operations. in orphan significant governments and to transaction new The by base, and methane, people C&J the only population and goals adding which greenhouse producing vision customers Kern in goals helping the acquisition existing regulatory of of was with plugging federal abandoning last in adding its strategic state importantly, LA we and aligns county, all, to that at statewide With and damaging fundamentals, other C&J was governance California per X,XXX and rural mile, Placerita fugitive of orphan County value per LA And industry, which more concentrated competitive with environment appreciate and services, are services well of technology. wells environmental, efforts a most challenges Among today people provided about operations pose fulfill can their square proven square and compared the and our price. by sale our the County. also than quarter has risk value XXX underlying that idle emissions, does social primarily reduce political building has it a to and is With more safely a the purchased today. California, primarily remaining now are greenhouse County business plug Not customer less well

relates we on [hone] six own and gas the Right greenhouse as the months to end ESG. we'll of to compared next to XXXX, solar be new the are continuing year, projects XX% our track In the it We XXXX. at reduce lease carbon least at Bakersfield priorities by by our a intensity to and office. implementing in long-term to emissions our now medium reduce are environmental to

are agriculture we locations other solar reuse maximize and in our evaluating currently of and Additionally, through opportunities projects avenues. to reuse our water other

a storage, storage. because the evaluating of we carbon significant are feasibility We capture COX have number CCS suitable of for reservoirs and

implement effective Our capacity. goal and to areas others storage is significant the and viable learn have economically from CCS we in

We if of CCS for our will extremely only In sense performance shareholders. with our it conclusion, pleased am all our pursue aspects business. makes I in

We by have with our simple model. model, company enhanced which proven an further a return and being is great exceptionally new shareholder business

As for look shareholder just model I turn a our please return in few it rollout over now weeks. questions. reminder, will for a

Operator

[Operator Instructions].

line question first the of KeyBanc. Our comes Mariani from Leo from

open. is line Your

Leo Mariani

depends I a are Good out fit just details, a base. significant and base component formulaic to shareholders. but then to quarter, might going throwing of very sense, this that of quarterly there's to oil in folks wanted the terms certainly And look sounds touch be though shareholder end model? XX% on how additionally, bit production a future sounds there. forthcoming, to here, growth it wanted return touch of the just get I check as model is that'd model, prices. returns And you be in, morning to be just on to of does a wanted kind each these know at number the the this that into like it

Cary Baetz

is Good question, This Leo. Cary. Yeah.

want we make You're very to right, formulaic. it

cost We our have predictable as investor a lay very out in presentation. structure we

And free what going as idea share such set retained and will will oil paid out what for that for cash use for cash, then in cost have company the be that usage be. levered from structure, percentage be of So hedged flow to and is we it percentage discretionary reduction. percentage growth. be used bolt-ons And the what the out to by and have strip our will to excess used there, organic then what debt repurchases for predictability price people will is

least probably be I So those then people be value. create for our more we stock return quarterly create portion will think larger out the it at needs be are in a looking Again, from idea the getting to want will the And other, on of conceptually. well. capital move that basis will value it keeping other each and a think as the cash well. two three, at equal I fairly uh, in think and basis makes this on as to And to shareholders and price. in time the order also sense I It to keeping lot to quarterly and a

own formulae, very their predictable can Is are. and helpful? that right, exactly but very there So, then people and pricing in what capabilities strip truly understand return put the

Leo Mariani

impact, and as And Absolutely, might setback that a Kern regulatory I and sort I just calling was hoping that bouncing in was update wanting guys obviously a state, great. might you around new high-level provisions thoughts are you thoughts what hoping, on large great. only, I And from at then and of any be a there's they're have back you in X,XXX County feet, now might on it also the That's impact a if more the that. get get Kern current on on the you Okay. could the County? to from just little could Appreciate comment this guys when for was sense bit of are think dynamite. study any folks on updated here result that

Trem Smith

take you Trem. is I'll this to Leo, hear Good that always. as from one.

over and of manage regulatory demonstrated the and half the a last regulatory extremely the On we've we continue first front, all, four front well, to that years.

the first, is we shorter in announced, two well-established public the the rule-making is, the to a that, is a they involves modeled do final take over while population some have that currently actually is -- as the and that's is which intend written said to and concerns so public started. high in they or Colorado, in input were setbacks the again, to likely handle or health hearings areas which it's even timeframe, density. through, a more, setbacks truly allow thing their have work given let and regulators over process, from state, so modified will and start And where the is of industry but are and way year very, the half no come And X,XXX government the after and to which as feet the it me addressing intent

if it. it So work case, that's positioned to we're and the will we work do that and well,

the if the density taken mentioned point in Kern on and I numbers numbers, Berry obviously it verbatim. Now is, population were County the always population impact it blank does impact us

actually by minimal becomes two We two, a expect so. it to impact, or in the time have years it rule

Okay.

high and nothing as to have occurring. that remains to steam the the that, it governor keep there's priority it industry a to office, cyclic pressure the governor's with On from the remind continues

you As as we the reminder, from a know, produce currently thermal dynamite.

advantage a to can test use wells inject see, that's and hopefully to We that without enhance it dynamite to here, quarter to moratorium actually take creative in steam ways in is. to the what in some which really thermal there. the continue reservoir the produce great is the the existing for us, injecting we're we heat doing new of and reservoir It's heat, steam, fourth

creative opportunity to there. the be that taken we've So

So.

Leo Mariani

get any maybe going a these you -- maybe be there? kind some understanding to under was hoping walk It identified wanted Okay. CCS bit potential already to than a on a color XXXX? little through provide assets the study maybe like projects. helpful. to you're see we deeper price me something thoughts could Placerita very And the reservoirs, more sounds so this my have big on just of Is you the the that could in That's guys, on that's undertake sell if and here

Cary Baetz

for around On the again, a barrel, I real a We by flowing barrels Placerita we million. little got less do parties. Placerita that that take transaction quarter, both think in a flowing less a right a barrel below It's down XXX XX,XXX about annually. and opportunity reduced third I'll a little good about on year $XX quick. XXX than area. than ARO Leo,

the was kind CCS around kind then Trem, of of So the kind and thoughts and talk I'll and that that. of parameters strategies around what about let

Trem Smith

steam had as also in amount significant by decrease We well. company of the the a required

Cary Baetz

XX,XXX going to modeling for Leo XX,XXX about mmbtu of becoming usually forward. Placerita Yeah, down well, reduction without to burn as purposes, to with we XX,XXX XX,XXX the about today mmbtu

about again, kind primary was the that about, natural SoCalGas to the line you natural what talking access gas it's well. as significantly. can because short they're I reduced see demand So talking our that's current gas expensive And especially and and we've of

that's So good.

Leo Mariani

And great that's great. Okay, to hear.

Trem Smith

the question, the on are don't we dioxide understood of sources. your CCS, we have, we cogens generally, us are we for biggest And carbon point the --if are generators I have the those

COX capture will from we looking So to at be reduce COX and always them. ways

CCS cogens, existing, of that is in efforts are, is definition. the So But the generally below have providing dioxide intensity below in that our generating our amount existing reservoirs other reducing parts. which by One the storage come we fields. carbon two reduces by carbon our

I is, feet X,XXX cutoff think that. point or liquid becomes below a something like the what it

have storage represent lots it. there. happy to but many that we've we calculate of to be storage, down different can of you that refined we Leo, have number as So a And a going I'm lot ways,

ESG eventually in quarterly. our file I see we report it you'll that think

on follow is other in but that's look on from other economic is that error to big, huge something COX, I a our also again, the So project or by to to generated forward, got big make goal both don't available would it. And what want bars just an it operators, and project operators to through a oil now It's be it's and to would the but learn number. store that industries state. other state I others make

Leo Mariani

Thank you, Take care. guys.

Trem Smith

Okay. Thanks, Leo.

Operator

Meade Our Rice. of next question comes Charles from the line from Johnson

open. line is Your

Michael Ferro

pretty Mead. activity provide, the appreciate count spending the and Ferro Leo couple you any good way well based questions is levels all know details there we you to filling the years? for hit can over Hi, further like ask, we in and at pricing. upon on there maybe Placerita good details, a This Charles like some Placerita were last morning. capital or to trying the relating Michael volumes the Is of

Cary Baetz

returning been Capital a, in our it assets. spending basically it's not has a was at decline. is Placerita been, It not best

our try to most So structure, move capital returning that based in basically its to, assets we upon cost location, was decline in our of Placerita Michael all higher node.

is co-generation that wells largest facility. may beyond But that So have top head. it the the thing number off of his other did Fernando of Michael our expertise active my know

that comes was that also that megawatt So well. down natural and as goes usage but the XX facility gas that's tremendously reason

Michael Ferro

got. Great. Thank That's it. I appreciate all you. I

Cary Baetz

Michael. Thanks,

Trem Smith

Tell Charles, hi.

Michael Ferro

I will.

Operator

Our from the Pope last of question comes Research. line from Nicholas Seaport

Your line is open.

Nicholas Pope

me. hear Can you

Cary Baetz

Nick. Yeah,

Nicholas Pope

Hi, yeah.

Cary Baetz

Nick. morning, Good

Nicholas Pope

I like to numbers guys on sure trying And just get What I a that kind sure make EBITDA three business. final closing those get going of of what year. more was And on flow think kind -- through the statements. press looking I to to I in how was to a to make that? price I also understand company's trailing be right. well next financial the that's projection mentioned the little year the servicing want you detail would release the for want

Cary Baetz

times about closing was the million Great EBITDA. question. price, X.X and said we trailing $XX

quality So EBITDA what the the continued fairly see with last he's several at has and number that that dialogue years don't the upon on and doing, Jack idea level you kind of of based been EBITDA deteriorating. customers service gives we consistent and and, the that the

we're excited. again, So

heard and I Trem methane talk think methane the side. you and the P&A things capturing of also if kind of you, side about the if

I that. see think in we upside

he think benefits is of to finding units. But able and because good to good attract I rigs work part over be to those extremely days out else man will point growth I now with think really Jack's to excited company people. that like be everybody get on pinch there the Berry employees a these has snubbing strong

side of excited the we're on have do we think I about. business positive that some that trajectory So

other I can't you off my the Nick, asked and head. remember of one top So question,

Nicholas Pope

through? flow to going it's How

Cary Baetz

from Important here.

have are summaries business. the line So we in transparent also selective financials, the well. own very we'll financials will to with going be It within do that its as and

people So and how how truly is break Berry C&J is out doing. can doing

associated even we highlight the G&A We to with plan C&J. highlight, will that's

well. So people end just the confusing oil side. can as of out want that don't G&A to We cost up and you break with our of services operations corporate structure the gas

we So that give make not clarity happen. a will of lot sure to does

Nicholas Pope

towards is Yeah, that's is And great. there of much Berry, like kind how to their of activity it, the weighted business is related actually operation? current

Trem Smith

just Trem. do that. Nick, business customers, C&J, business back that not the -- accomplished assuring is a and crews be assure time Berry to guarantee And and couple acquire same I they has off customer same second keep people come confidence, that is now, I've appreciative on actually and the in does to it same would that Jack Cary's keeping a the the two and the the big we result a major had Jack and one people. industry, and the to major critical major opportunities, all team, of the of proven at have along able now and with excellent over the we of service well to the you the management, keep reasons service Berry satisfied, them And have and least we a going deal actually a this, the same their, business. But -- same confidence the We customers Jack comment was they're pleased lot that. and them we leaders you're of with the customers and with give to the then owner C&J. of without doubled being wall to, is and of get again. of talked E&P -- think workforce build I it, because the major his of and and track know anything, it get a people, spoken really this spent is crews Right are time who over quite with was guarantee over to will anything spent between of paths about job them keep that customers And And they Renshaw an record. the one keeping which which the the C&J and existing

going win-win So And for I be a great think think the to customer Berry. existing base. for it's it's I

about. of entities it And their in us, is on focused bring about business. reducing new but look We compete reading hopefully XX% strategic to for emissions current team a new not that, will a the business, as about to business that. as but that's started to talking as government Jack piece other growth business too and Fernando P&A then existing be And be for business, already and grow business, we will actually, which doing replace methane course of add and to so his and customers, into grows you that's may

Is Okay. helpful? that

Nicholas Pope

that's appreciate Thanks, I Yeah, great. the that's guys. Yeah, helpful. time. very

Trem Smith

Thanks, Nick.

Operator

questions [Operator for back I Instructions]. over the call to to this There remarks. Smith are at turn would no time. now further Trem like Mr. closing

Trem Smith

Thank time It's has time very Berry good a everyone want exciting Great. everybody to morning. for for the day. us hope and I for you today. thank taking I a this joining

Operator

conference This call. concludes today's

Thank you disconnect. now may for participating. You

Berry (BRY) 3 Nov 212021 Q3 Earnings call transcript