- Earnings call transcript Q3 2022

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Operator

Good day and thank you for standing by. Welcome to the Berry Corporation Third Quarter 2022 Earnings Call. At this time, participants are in listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. to Investor conference Relations. like Crabtree, to now of Director would hand over the Todd I Please ahead. go

Todd Crabtree

Thank you, earnings Kurt, third for Berry joining and an quarter welcome to for issued third everyone. results. Berry’s quarter release XXXX earnings teleconference. today, us Earlier highlighting Thank you

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

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

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

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

later XX-Q We today. our will file

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

Trem Smith

joining thank and for you everyone, Welcome, us.

discretionary $XX made of quarterly share. gas opportunistically, the flow free discretionary $X.XX quarter the XXXX, current first returned of generate, regular which capital variable we be capitalization. calculated quarter’s We million shareholder as variable $X.XX the XX, flow and model the and the This -- flow, of strong share, X, less share inclusive of Currently, we equating and the the record per third our variable record XX% cash track paid XXXX, our flow, Compared prices, this simple per in the our and quarter, than we on and In and continued of is repurchases, per generated free clear cash return this remaining market shareholder have close This November semiannual of needed $XXX our primarily solid to fixed per million in January discretionary of $X.XX of form be quarter, shareholder cash returns. the share more return on of November the used is dividends with as production our Board well the oil flow XX% the fixed which XXXX quarter’s flat. Through quarters value model will XX% from of our as delivering allocates XXXX. the reflects to three the shareholders of share of of is initiated including dividends of second form cash July lower quarter’s creating declared form and dividend. in oil interest producing This and discretionary is drives XX, shareholders. payment to which hold of on based variable operations return capital repurchases. share to to at totaling cash cash the that dividend dividends which in model the to $X.XX business free of we

we X% Berry’s total of is common August as million shares X public, of XX, have September representative largest outstanding which X shares back total our In our repurchased for were of X $XX of outstanding million we of bought September Since of also The XX shares XX% stock have outstanding total of this repurchased million bought long-term our nearly back from of We of XXXX. one XXXX. private the as shares million. in year, shares million shares, going XX, outstanding Berry’s shareholders. or

to performance, than address value program addition to This our we continue focused which Fernando our we few our operational which our performance, a significant of total generate is base, in robust optimizing and In have year, currently financial will protecting on production. moments. capital through more our XX%

external focus factors as I be on conclude our current comments market on return saying always, to by plus our production the proactively we over flat oil strip control. capitalization of year-over-year, and mitigating expect remains and and we can maintain we control, value will three my current to outside years. based to shareholders to what Our opening strategy able are our managing of pricing our that those

We expectations Fernando. are dividends model return in of $X.XX to range it shareholder year. based confident this the performance for per that will $X.XX on turn the I will to now over our share deliver fiscal

Fernando Araujo

Trem. you, Thank

to details QX, earnings release refer performance in the operational XX-Q. our For please of and

are I’d Here like essentially from to Production flat highlight few QX. QX. was QX to from achievements a

levels of an our increased from our contribution of driven activity This primarily base production development currently is the by California. and highest production year. are in We experiencing the timing

XX% which production that injection We production the from which We are fields. base California optimizing enhanced comes our efficient activity, will most account expect data that production, capital. is workover which is is production to currently QX, additional through of gathering producing allocated year. improving our existing our steam resources for and use our our of our activity, strategy surveillance wells oil our for In from we total the

higher of seasonal the with Non-energy quarter-on-quarter, mainly for has expense Also increased completed have XXX% had operating this program. increased pressures. driven XXX and our by inflationary in power surveillance QX, return we far to jobs So year, rate expenses workover due to related campaign. a than greater expenses we rates

that the and focus as enhanced months realized price head now essentially current To been operating gas continue expect QX. have per be gas prices our strong flat we gas from QX, mainly we in results pass volatility in the our initiatives which we the remain production up capacity levels. operating Also, which production the Cary. quarter, it commodity margins additional a decreased And Pipeline, we guidance gas OpEx current be is XX% covers less by summarize, in $X and continue I markets. the helping positive continued historically was at of supply to winter unchanged Both on demand. We on mitigate November BOE. expensive. at performance, during brings Green physical our Energy pipeline our the in are have base delivering by quarter-on-quarter us Rockies to -- expenses into to California of to This This our remains reliable driven based in hedges total to River our hedged fully will will December.

Cary Baetz

Fernando. you, Thank

We significant expect generating flow, to cash which free drives continue model. return top our shareholder tier

low model a and for perfect have asset our is decline we visible sound our demonstrated, highly structure. cost fit and it’s As base

visibility our side the through On impact to operations hedging. of the natural the volatility work we on minimize of gas equation,

Our based November fundamentals. hedge remain can upon position found be slide current oil our gas global on XX on We Investor bullish deck. of

be generating our on production oil as and hedges However, is These can deck. found of of required flow discretionary slide oil RBL. our hedges our cash free our are XXXX XX by current Investor Brent into hedged some

driven upon and fuel changes The are as to than inflation began cost activity experience we operating costs. changes We midyear. experiencing we some certain budgeted and well steel updating ranges guidance include natural of are prices, as cost based higher our annual gas field

XXXX, the $XXX range expect from production third quarter is $XXX responsible Our to and fourth a million guidance rate are to we of the development production will largely grow momentum keep change our full we year guidance year into full program, our for be our quarter. accelerating To within capital the our to to which up million.

revising activities. to increased slightly also inflation labor G&A are professional and We due service

fall Going XXXX into increases expect currently the we to these of away. in some XXXX, G&A

a on release updated outage manage the said, impact gas be distributed on in cash the guidance, to our earnings and control. of is only continue you, shareholders visibility our flow to the sold. this a had capital has earlier clear our not negative note, today. can quarter. into to continue We during leader differentials expected deliver quarter, that of now Please today return XXXX. we QX third provide please in received and third-party All to we For be impacts unplanned an production -- oh, XX% production, dollars and Trem. production we what to This oil on we pipeline our resolved earlier of the space. In quarter promise experienced the our to third California about in see in Back

Trem Smith

and delivering focus call. Thank creating for be shareholder our From continues should returns. to joining value on quarter comments, it for clear third our you earnings be our us at Berry again that strong collective

of managing our continue that will mitigating external proactively factors out control. We and to prioritize are

in ago, capitalization we Speaking commodity based return and strip as going part prices, frankly, $XXX our that plan especially we public than a of being good just California, will we over and have going this years. is XXXX market four as returned plus shareholders. million in anywhere oil years Since for well current current more being fiduciary on July good a and producer forward, anticipate over our three

shareholder strategy of maximize is excellent effective. success. maintain tested track an indeed We have record Our and returns production to and

season. And take am a questions. happy I all Finally, holiday you to wish we of safe and with pleased that,

Operator

Michael from sir. from [Operator Thank Rice Furrow ahead, Go & And question Johnson comes first Instructions] Company. you. our

Michael Furrow

Hi. Good questions. and morning thanks my taking for

Trem Smith

Good morning.

Michael Furrow

development the third see quarter XXXX? growth is trickle this So result just on that expect first should accelerated Is should that fourth to quarter. in we my versus something plan question the growth the production in into

Fernando Araujo

in will in wells. of going drill Yes, question. most which XXXX, be better going seen Michael. that XXXX executing be QX, Actually, This drilling to the than so of didn’t is if production we those our we base, is is to that most accelerated to Fernando. of part Good be be

Michael Furrow

team Diatomite Great. horizontal the question that if helpful. that just status were on wondering could activity. of and the I Thermal you is Thank your drilled was an you. activity the My on and two update last wells That’s provide next quarter?

Fernando Araujo

give on No. Yeah. will update you I an that.

excited confirming are proven our success wells, wells. that we Diatomite produce reserves we with horizontal in technical Thermal have to and produce We of -- ability the are those

time, a obviously, we in So the currently evaluation the At success. same still are phase. that’s

direction, landing additional be same time, Diatomite well. permits in to the resource, we We issues and to be also that have we secured And we which zone huge our at other additional produce around a have wells as will field. theories the lateral evaluating able then next is testing are to different technologies resource year Thermal drill and

results those next the will up we so good far results So be following year. with activity are and very

Michael Furrow

I the you. Great. color. appreciate Thank

Operator

Thank you, Michael.

We now. go from Incorporated. ahead, caller is Steve will next [Operator queue Instructions] Our up caller Resources our Please Steve. Busch next Everglades

Steve Busch

morning, for Thank call. Good guys. you my taking

So…

Trem Smith

morning. Good

Steve Busch

described. just you plans the listen the with happy Pretty

won’t but ending that much cause that, I or us on in California any the their with could we various problems what’s too California spend oil time with or So aware situation there on now XXXX should less by plans? permitting more of are be

Fernando Araujo

All that getting the resolved no issues back permits to the expect been At right. better saying for of basically That’s county on matter really at for the all. of me we starting of the the That goes current activity the of process let EIR also response from coverage days. county. has a once CalGEM the CEQA been permits with take that workover question be changed. start restoration not and -- approval the CEQA CEQA that getting matter time, sidetrack and approval approval will permitting. by I same areas the in get have and pace we have to to rest permits with want we Steve, in activity

meantime, have we we for really our are California. permits XXXX XX really, In in received activity, optimistic the about So over that.

we few on next got over So that will those weeks months. CalGEM we be to of that, in have approved have XXX and addition the order secured. by And permits submitted the

So to in plenty of submitted got be XXXX of and we our and take have activity able care hand permits to beyond.

we issues our permits XXXX order to So with in execute in program. don’t expect any have to short

Steve Busch

good to hear. That’s Perfect.

a So couple I other things. guess of

myself next to same that as the is kind two? current the to you plan expect years market value current cap five-year return to to return such over three-year market Would capital to three over cap. or decade equal of to investors, Our shareholders

Cary Baetz

price based jump Hey, is comfortable we if that a I Cary. But costs right? current All how in at of obviously, say and Steve. easy range It’s an number. works same an that. And math over strip, the the the wash, I on goes are and and again. you rinse the say, This will repeat stay over would keep oil, with upon of in. $XX model

Steve Busch

about… well is cost The

Cary Baetz

once focus is… the again But

Steve Busch

I Okay. like, guess, what would the… be

Cary Baetz

Yeah.

Steve Busch

a to it term price oil it’s five $XX what a double low where years. at seven-year seven would every is to maybe …five-year -- -- like years we or be price oil that

Cary Baetz

Oh! Yeah.

probably and thinking are I probably sure, a closer it’s about looking look you everything, $XX make holding If about Brent. Brent, you are you on are number at that, think, still production not flat WTI,

Steve Busch

Yeah. Correct.

Okay. Perfect. That’s good know. to

Cary Baetz

Yeah.

Steve Busch

is back them when And and we traded why was goes ever realized in question charge Why I million buying? down, it explain me back $Xs I were buying guess you market just it kind to stock we in that. mean, I you the wasn’t are sell final $Xs, the But it’s I Oaktree. open down? bought who’s I buyback to and the at in Can it, you X the not buy I because do like make $X.XX and executing and low of my going housekeeping. program shares guess, aware do from, of

Cary Baetz

Yeah.

the over also is continue want have causing see to out time. one of market price large at to hit damage a as you well. round answer a of to that time, think shares the don’t the But period will program I we sum

of do we -- a with forward large see as we transactions purchases think will and I market go will program. open So the you combination

Steve Busch

two guess I quarter? from, right. there day traded briefly number one the because All days only where or $X.XX does on whole the during come it

Cary Baetz

done. I how it it’s look think historical back is a was

Steve Busch

Right.

Cary Baetz

It’s time. volume VWAP usually -- over done of a on period a

Steve Busch

$Xs going am see Right. -- prices? buy lower and what’s the just those in like, volume that we I I would blocks I market I share mean hope I blocks our daily XXX,XXX the watch could be, through of because ability the at and to these XXX,XXX, in kind

Cary Baetz

Yeah.

forward. market for is going objective on as and again, unrestricted idea, to forward open cash the us trades block we going we purchases combination again, based return the buy total of a and reduction. repurchase the and and share think to shareholder But see go I will open debt in focused upon is it’s be also market,

Steve Busch

it. Appreciate Yeah. Right.

Okay. Hey, listen, all looks me. good to

Thank it. at you. keep So

Trem Smith

sir. Appreciate Thanks, it.

Fernando Araujo

Steve. Thank you,

Operator

Thank you, on ahead, are next now. Steve. up Equity line. with [Operator go Carter queuing sir. And Please the Management caller our Dunlap Dunlap Instructions] we is right

Carter Dunlap

you -- worked been to sidetracks wells, had get had road trying non-deal notes clarified. wrote I over. of was I of California them gentlemen. producing Hi, worked two in September, the of X,XXX down show something my In late are them X,XXX that and and never the over

do those fall Assuming the in I where plans? got that future right,

Fernando Araujo

We have this is -- Fernando, Carter.

We of have California, a in lot wells as you know.

a wells a in to are but be P&A of significant to Some over going I of that going destined those but destined activities. number to it’s but or the have sidetracking hopefully don’t are activities, work yet it’s number. activities be them lot to hundreds,

Cary Baetz

both expenditures But going sidetracks part capital and of active capital be workover our will new forward on and wells. campaign the

existing look going workover for both of view. wells, permanent a production point it’s of be as think production our an we expense a capital growing point and view chest of is from I our So holding and part to of tool our from

Carter Dunlap

say you were So levels. that what talked those XXXX and to activity it’s beyond in incorporated about safe

Fernando Araujo

Yes. Correct. Yes.

Cary Baetz

Perfect.

Carter Dunlap

Okay. Thank you very much.

Trem Smith

you. Thank

Operator

sir. I That Thank will now Smith it comments. last to our turn closing was back question. Trem over for you,

Trem Smith

happy and in I fourth want season. thank year safe again quarter everybody and us and to great for a wish Thank a forward to I culminating everybody you. and joining very great XXXX a look holiday today

Operator

today’s you conference. your does for This program. in the Thank participation conclude

You now may disconnect.

Berry (BRY) 6 Nov 222022 Q3 Earnings call transcript