BRY - Earnings call transcript Q4 2021

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Operator

Good day, and thank you for standing by. Welcome to the Berry Corporation's Q4 and Full Year 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]. today's being that advised be conference recorded. is Please Instructions]. [Operator hand over to I would speaker, conference to like now your the Mr. Todd Crabtree, Investor Relations. Please ahead. go

Todd Crabtree

Dennis, Yesterday year afternoon, and everyone. to issued an for and and quarter highlighting for Berry year you, full release full teleconference. us quarter Berry's results. thank earnings XXXX fourth earnings joining fourth Thank you welcome

Speaking Araujo, Cary and President. Officer President; and Chief Baetz, Executive this Financial Executive morning and will be Trem Smith, Operating Chairman and CEO; Officer Chief Fernando Vice Vice

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

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

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

of call week. file Smith. the turn and a this link call now transcript website. replay Relations a and XX-K to our to the post post We will Trem our also plan will the We I over within on Investor

Trem Smith

expect for XXXX return at deliver to With in cash to in is mid high us joining nicely our new we teens. and by Welcome, returns and to be our you this performance. everyone, for up thank a place, oil prices, year great set XXXX stock the going Berry, today's model shareholder morning. and

approximately have million of of the be dollars, returned XXXX means XXX% is $XX share. expected years to per public ago. a to three terms the and since translates XXX% $X.XX we half to $X.XX to In going this cash This

reminder, discretionary Its year a production our comes wells, in that transparency, which cash implemented ever before model of and principles return XX% our is for cash dividends. we out The just terminal year and our our variable a are QX model the XX% producing foundation rate is well. of primarily to our production, XX% simplicity, accounts the predictability, business model. As have year. is of shareholder production our approximately base XXXX, on form new and our existing governing allocates base production, in of new flow, from of starting decline The business our production average, and total drill per low, like

we and is and or business. requires Our why base permits which production, predictable, modeled no production business, that D&P is our development a can manufacturing industrial be our new say like

XXXX Our our production, means maintain production keep to year-on-year. which flat we plan goal is to

me briefly we how do Let summarize this.

wells of decline XX% remaining requires existing wells for in permits, flows come wells. doing by our workovers remaining X% production new production achieved The low of for new cash from out which the line, XX%, accounts Bottom by is XX% of drilling the production Our X%. and of production, our for needs. existing producing

ESG our as tons, is well operational by and million, our carbon shareholder mainly efficiencies forecast, is than to So, return to run and operating we early and reduced through returns predictable. more production and activity, XXXX shareholders and footprint metric by initiatives. with model, reduced due current XXX,XXX when combine our expected price on XX%, XXXX, our as costs $XX calculating you easy the our profile In that which focus new our A&D

reduces standard provide Well the Services, XXXX, and emissions line, of well services and in to plugging methane Additionally, wells accelerate industry potential power California. quarter years over C&J XX fugitive reduction the emission. and orphan purchased we of the across idle than This the emissions, by carbon profitable the actual first to of which abandoning fourth to in to dioxide times XX warming and produce a of is more California, known business

and my water operations. The commenced help highlight several some which concluding will also remarks. development in of solar will come Hill I ultimately projects reduction in back initiatives fourth We XXXX a we to quarter of with functional reuse project the and be water in at expect property, our that fully of the to our ESG XXXX, the started

who Fernando, to of over results a operational it successful turn year. I'll will highlight the Now,

Fernando Araujo

with Trem. of you, responsible. core values, one Thank I want our begin to

We unwavering our employees to commitment, have and and XXXX, results. guarantee achievement. our the safety best protect history the had we not are of of It in This for, our excellent environment, safeguard in responsible In to infrastructure. we the is year. of and the and a incident all lost integrity health contractors, to or is as recordable and reflected safety have respect time did safety the company, an best-in-class performance the

results, performance production for QX, the release we of divestment year, want to I'm highlight reached but I refer that In expectations. happy despite as peak operational can details, of October. report to in you in met do we the for terms earnings a our QX Placerita to all the production

months. an Placerita field gas our only was focus This had to last the In of Utah asset, property density and outside our our QX strategic field a we've population drilled densely in in low January, our our was divested Kern Piceance lowest In last and California LA marginal active sold well California. in A&D field divestments, The return few Placerita Piceance XXXX. remaining County. of XXX% in campaign highest decision cost we a asset. in County. gas in Colorado, was XXXX, populated activity of and we the Speaking

production Utah significant this acquired Uinta basin. Creek and existing Finally, property upside. a This with we month, bolt-on earlier Antelope the in is in

with achieved a activity and our we of terms rate workover as completed planned greater return delays, pricing. of strip program XXX% at in In XXXX, than no and drilling

This between outlook year-on-year million and acquisitions. We and $XXX of in $XXX XXXX, to us net continue divestments flat ranges a will hold significant million. will production have to with allow our activity that capital

of XXXX, that These what intensity to A&D I highlighted, XXXX, strategic we we just of by by range. the XX% XXXX pressures expenses year. year-on-year, know quarter like best, financial production result decisions increased every development profitable we but the are in our on everybody safely in oil estimated be from will summarize delivered activity reservoirs. into a increase enhance X% to long-term As focus decreased conventional the operating in just We returns to XXXX, oil be inflationary predictable will currently XX%. going our that our X% In case, affected produce great program. else, our our from low-declining, our To

the We preparation results continued company. with for safety in of to At the decrease best history XXXX. our total and time, optimized we the activity base our the OpEx, a asset we great same achieved in A&D strategic

will to Cary. turn over it Now, I

Cary Baetz

Thank you, Fernando.

of our approximately C&J $XXX budget $XXX you We As million operating Well steady was million excluding XXXX, performance spend XXXX stated, Services. million for to throughout and to same. projects capital, plan the $X our

production that generate as capitalization our of the from structure Remember, remarks. discretionary on our that be strip, quarterly million four projects is growth, as retention. current the Our Trem model our debt capital and expect hedge fixed and/or outer well $XXX share total amount closing new for years, seems spending XXXX. in current to regular through with $XXX to dividends discretionary $XXX needed to the as less cashflow repurchases, Based in impressive including in and ESG cashflow predominantly like million the flat. operations flat, XX% about remaining strip allocate it detail steep generate to market little as repurchases, million XX% our in an designed current cost hold I to we which expect maintain based opportunistic cashflow, of capital think years, the used upon defined also opportunistic backwardation oil a capital shareholders return includes our position, distributions, his of over the to in product budgeted in with will to budget our more and and discuss we If number, is, current

to fall. see Our pleased the description are be and reported. we will are in oil to believe are made hedged included are adequately on be our is under planned past predominantly solid oil, after our we More prices global first required pricing. the Investor strong that first we fundamentals Since quarter results this rise for closed model was Currently, new distribution RBL as continued quarterly deck. Relations

of Fernando to strong However, to will as returns prices rise, opportunistically pricing expect cycle. that an and excellent done controlling trend lock we job model non-energy team to to in throughout have more continue ensure our OpEx, and his shareholder return we continue. the

area natural gas we seen have by one energy OpEx, prices. increased is impacted as the is exposure heavily However, it

expect For up natural prices be XXXX, we per $X.XX MMBtu. to gas

the We the we minimize gas term, hedge less cash us gas through end our in pipeline that with strong gas needs. that which XXXX. a receive impact steadily Rockies. Berry our haven't return platform provide to to two should improved on gases of gives had reiterating work our for a consistent energy account That Long natural access development, to historically shareholders results in will structure remaining from and as attractively deploy has we same capital May, and gaining rational giving by we have predictable industry-leading approximately access This opportunity posted did cost. optionality in energy expensive natural the will way of to that will being to continue the interstate will cost said, an We cashflow. visibility full to flows. thirds returns prices our us to generate I by to

you. We for Trem, value-adding for portfolio. to back our search opportunities will continue to

Trem Smith

Thanks, Fernando, and Cary.

the we heard, in ESG for our some to we want close, you of position great And initiatives I for before As are year. XXXX. highlight a

operations. projects these positive a our will on economic of have All impact

the service abandoning other new reduce advancing profitably C&J for will of emissions Services, and X,XXX business, Our wells methane ourselves by continue to X,XXX and Well plugging operators. to

estimated is risks is orphan has help reported are California the populated capture its $XXX wells, is and orphan to the In the for federal uniquely communities. highly also million GHG reduces over many competency idle million health into C&J ability and liable. orphan to plug and of core funds abandon County. next leakage and communities. a years, which addition, of $XXX state XX,XXX C&J potentially complex wells remediate This are the to distressed wells be nearby to populated, densely positioned These often in atmosphere, to two to in state reduces which A LA wells.

projects carbon costs. our We working further to footprint reduce are on also operating our and

sequestration a to an capture pursue dioxide We carbon LOI have signed and project.

We matures. as will it share more details

I that in lease the completion comments, Creek in to another mentioned solar project addition on Hill field. solar In the our on project working my of Poso earlier The we’re

We reduce are executing leakage a the further of future. significant other the mechanical possibility to spills program integrity in and methane

equipment, upgrading a hour treat low C&J XX% party rigs use We're Finally, emission with to with our helping less extreme our emissions is with also tier working produced and per water four reduce fuel, cope Californians XX%. and gallons service for engines, drought four by ancillary to which third reuse, conditions.

and for significant own distributing reducing we XX% almost robust I'll $X.XX per to therefore provide to to other our transition resource Going it to conclusion, which year, shareholder economic by operating Valley, and Together, offsets - part their forward California. projects, we value, up our a XXXX purchase have being reduce GHG is looking open are return taxes taxes. the which income model, $X.XX carbon solution precious by shareholders for further forward, are XXX,XXX our returns and now are thrilled than per prospects, could to our an or costs. fulfilling expected Central we new equivalent to our In reduce need XXXX footprint with to commitment reduce and our an energy our all in this And our the through be need amount, share. additional questions. these of metric our to could tons

Operator

the from Johnson line go [Operator Charles Rice. Meade Instructions]. with ahead. And of questions your first Please

Michael Ferro

is for in filling Hi. Ferro Michael This morning. Good Charles.

a was similar So, and from appears to a and Berry previously, E&Ps mode on that that maintenance production a, hold the flat. guide, more other towards trying are a Berry's following, more CapEx trajectory playbook growth it moving towards

did of could So, some drivers all plan what decide that the this to this as why provide were made And or considerations you ultimately details all some change? you now?

Cary Baetz

question. Michael, I’ll start. Yes, good

back think right space. drawing thinking now, investor about base I we're the and into investors the

holding Berry, I think the capital. discipline it's a show returning as around the the important whole, for production industry including and to

point that. can showing the the maintenance, If have growth, the plan into again, but discipline we time, year, the do of itself it we the to our back from half second at the view, in right returning we is investors to, want holding to do I maintenance, have think able of and point in and be optionality and that add to we capital has the now industry discipline space. attract this

Trem Smith

this Trem. is Michael,

we specifying, different a think on always least maintain grow oil know gas generously the me are circumstances capital need production arise, about talked Let add year-on-year, workover remember, our cash this other more and that our we the to opportunities than we to do the our more that, throughout at little And returns, returns the year, we of clearly We've companies. can quickly - add focus to very but year. more. which drilling production. maintain to opportunities business shareholders, always volumes to were can we is some If and

Michael Ferro

Great. me. pricing, related to of That more production, quarter, details the the inventory on potential A&D sense could Colorado divestiture you or maybe a makes and Also, plenty Utah operations? all this forward. going specifically some to Just little detail gas the provide past

Fernando Araujo

a start February. Uinta Michael. I'll Utah. we early textbook fields existing Creek, right Antelope This just In in the Antelope It's Hi, Fernando. in our in with a days asset bolt-on Creek. is ago closed to next It's Okay. basin. few

very that in predictable have geology. to is that and already low and XX%. asset, decline, again, of much savings asset expect It an is OpEx had production property a significant infrastructure connected the asset We And existing from about terms in our to the some has Utah.

In of process ducks currently in we in that of the potential, terms XX have that property completing. we’re

the activity type asset, exactly those that be to also the have completing going So, workover be Creek. there's to currently we realize upside potential in good up and a And our the in asset ramping And Utah we'll same a again, Antelope in wells, in very, we're activity. significant it's Utah. workover very of

as end high Now, we Piceance, production. the of several for as we fact. not in very about is January. in a drilled Colorado, It It had in well. gas much years, growth, with of terms gas. OpEx practices producing field, Piceance at it was opportunity Piceance hadn't gas And in the for XXX% And I mentioned, gas divested there, was years seven - marginal, as well had low

a XXX also had wells. - abandonment avoided about the in of avoided $XX million we that also a poor the integrity upgrading abandoning we cost that, with in shape. So, in which was That’s cost huge the fairly future infrastructure was we the future. And in

was around. all it deal a great So,

Michael Ferro

questions. Great. for you thank my taking

Cary Baetz

thing Hey, know. just to Michael, one you more that, let on

we're one basically acquisition asked, I of of Antelope selling view. Creek. you think a of point by considering net-net, production all the it Placerita probably the the Placerita, set is from things of

Piceance. And neutral. asset, Colorado sale X,XXX the the we're day are So, about net-net about those with then BOE of a down

forma wanted pro give about mix again, forma pointed around forward. on that's to But a you're just pro oil some from a going we net-net a we've moved XX% thinking basis, that. around when to context basis, on So, you out, as XX% kind of

a So, context. more just little

Operator

Instructions]. [Operator

Trem Smith

I don't see there. any questions

to I I forward thank talking us all. thank to think look today to joining everybody. - for quarter. want to next I That's you want everybody and

Operator

conclude for today's you conference call. joining. This does Thank

disconnect. now may You

Berry (BRY) 23 Feb 222021 Q4 Earnings call transcript