Earnings call transcript Q4 2022

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Operator

Good day, and thank you for standing by. Welcome to the Berry Corporation Quarter Four and Full Year 2022 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Todd Crabtree with Investor Relations. Todd, please go ahead.

Todd Crabtree

welcome, fourth thank XXXX quarter and us for earnings Amber, Berry's for and you, everyone, you and joining teleconference. Thank full year year results. Berry and today, issued earnings highlighting Earlier an fourth full quarter release XXXX

Officer; Speaking this Fernando Helm, be morning Chief Officer. and Chief Financial Araujo, our Mike our will Executive

and to contain and statements I The the forward-looking are that to in was laws. subject other that SEC, this your morning. which we including other the factors week. actual certain to our safe meaning from and or we begin, security call risks in release Before risks harbor and results earnings materially discussion today's to our release implied XX-K, projections those would like outlined include expressed next the federal uncertainties within differ filed in with attention cause language found statements filings issued of These statements. these These may our

most release has bry.com, a website, our Our presentation. the link earnings and recent to investor

Any as information, and our statements, reflect or call made. presentation, that earning this analysis in on the the contained release date including of made forward-looking

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

replay this and call of the a our link also website. on post We will transcript

to call the Fernando. I over turn will now

Fernando Araujo

and everyone, Welcome, for us. Todd. Thanks, you joining thank

as for years. navigate the assets showed our to XXXX both regulatory and of the environment was financially we Once remarkable operationally. good quality we and so a again, our Berry, done year ability many have California for

view shareholder quality, the continue returns our enhancements including on value-creating Board approved model of quarter and plan certain to return the these with our XXXX, fixed cash declining starting our their $X.XX per to is announce changes of yesterday executing quarterly shareholders. our our shareholder first low visibility generate the expand in to ability long-term business our This to a will I'm to testament pleased dividend minutes. model, showing to return reserves, confidence to few to high share to doubling Directors our our significant Mike a in flows.

at XXXX, highlight and $XXX generated of key we the I'd Looking free in we performance of XXXX, delivered adjusted our our to returns promised. some like cash strong In accomplishments flow. as that million

As of a record we to for shareholder efficiently manage our have in This returned capitalization of believe returns. to have we XX% share market cash form have and the flows, is year. consistently can proven company. variable will significant current and free repurchases deliver fixed the and the March, dividends one we shareholders $XXX shareholders. ability we assets industry-leading million returned and the in That's and of we to And the strong to business that generate

assets. those applying of flat of to maintaining and delivered activity our net while technology, workover activity production levels we the returns Notably, access tools management oil resources the A&D right increasing sidetrack more amount reservoir tremendous in and of by

also reserve a achieved of ratio We replacement XXX%.

our through increase of by our flat our production is other of example we XX on we thermal showed XXXX optimizing Without Our continues thermal in Slide and diatomite permits. which A drilling to for steam kept innovative operations to February diatomite, our strategy. well great recompletions without injection look team new on presentation. additional XXXX development this investor in production and relying asset, opportunities base

strategy South from a applying results Belridge We property. similar have strong to seen our

a competitive energy advantage We oil companies. believe gives our quality the of other including assets, in place, the of tremendous amount over us

XXXX, low total existing annual our our production from base in We teens. production. decline And wells, achieved our of curves we in have XX%

performance generated and remarks. We and my we year Services year full steady I first is believe by its regulatory upside performance. potential C&J's in solid Finally, healthy discuss a in of another benefited will environment, concluding outlook C&J margins. Well expect XXXX as growth company, the Berry-owned our

the turn will to over I that, call Mike. with So

Michael Helm

Thank Fernando. you,

join getting you. to to opportunity earlier fourth I'll today the week Berry our comments I'm year to earnings refer brief call all and Berry's for about XXXX regarding do the the excited new look full to filed I'm tell information and And to glad story. results. next forward a and morning the and of my more keep you role the this be my know quarter to and release XX-K our in-depth issued of performance,

flow, $XXX million we XXXX, attributable was quarter. cash fourth the $XX For million in free which adjusted produced of fiscal to or XX%

morning. we For dividends related to a we the and the year, dividends, per in for of of shareholder of That inclusive million $X.XX amount repurchased variable fixed shares million release of quarter is share earnings this and total returns. in $XXX $XX the our returned announced million $XXX fourth

cap. to returns market on industry-leading based proud have are delivered our We

results and by quarter lower oil much impacted Our higher fourth prices prices. gas were natural weather,

are and As weather natural steam XXXX, operations. we in California. prices gas caused much December poor a higher reminder, of In challenges, California operational consumer in our a unusually gas production downtime

While we the weather improvement, have did seen carry into and XXXX. the impact related bad

access of midstream Additionally, prices on impact coupled hedging mitigate high our gas strategy, gas helped the with from to the Rockies, natural costs. our our the

and capital. the investor cost for a effective of targeting of shareholder of of lowering shares dividend first We're XXXX. feedback increasing soliciting are of goal value the yield and the and we our creation community, our model allocations high single-digit return the now shareholders the analyzing value from with adjusting After the our year

Effective XX% variable repurchases allocated remaining be will share reduction, debt that XX% will flow and January dividends. such allocated be while towards free primarily to the will X, go cash adjusted

fixed to share $X.XX And as are Fernando mentioned, doubling $X.XX per $X.XX our share quarterly we also or from per annually. dividend to

adjusted the as payments interest, low aren't and cash these keep quarter in of typically quarter for free quarterly, of Please due the is changes bonuses. with such point mind, to effect royalties our You'll see year that first take results. first flow each our timing

But we to costs, how discuss we I item from point call housekeeping we operating expenses. OpEx like used receiving have to the comments operating or have out. our that modified I'd one After SEC, what

changed We of We've just have not disclosure the altered the associated the structure the operations. of items.

on this investor can and and You in change XX the XX of see the our Pages demonstrated of deck release. earnings tables

business. not in Again, or way the the a this does reflect manage change we view

Thank you. And now Fernando. to I'll turn call back the

Fernando Araujo

Thanks, Mike.

efforts find are we bolt-on production in XXXX, our opportunities California. In to sharpening strategic

of environment we drill be deploying will regulatory an we are clear, bolt-on pursuing which, strategy current to continue to permits, the to Given drill also bit, alternative as a new the pursue.

believe and opportunities bolt-on production. improving, opportunistic positioned protect of We is to California producing can well production to the Bolt-ons universe even be grow consolidator. used base in is an Berry our be and

guidance permitting issued release in production earnings process. slight Our year-over-year in current challenges an annual reflect to due to recent Kern plan legal decline ongoing and a the County's developments the in

has drills Kern In process been CEQA the responsibility has be to experience, Accordingly, EIR County expect CalGEM. the short, again for and permitting to reverted on lengthy. new stayed, we based

reminder, delay historically, we have received for under a wellbores utilizing permitting As permits environment. without similar workovers, sidetracks a and existing

is will to the valid. could County prior advantage. CalGEM do we so. unknowns change, environment Kern stay the permitting are work are are that Should ready recognize One well There that to several Kern permits whether to pivot as and to we positioned quickly, out we our received

that near in chance stay Additionally, there lifted term. the a will the is be

production expect lower fully to needs we cash offset the are While than slightly impact by flow capital XXXX permitting will the be issues XXXX, lower be until resolved.

adjusted shareholder working deliver is returns significant cash of generate compared free in the ability strong the flow of We free based in XXXX to are strip of current primarily and cash doubling our and difference XXXX driven confident as expected fixed pricing. capital dividend. timing price the by to the flow The oil, our on

averaged per plan based pricing oil per Brent for and barrel XXXX. our XXXX, barrel $XX Brent $XX on is current in

cash generate XXXX. the to our nearly which, or after adjusted have the about to of return million XX% in expect market $XXX cap almost $XXX investors free means current of we million dividend, potential fixed to We flow,

due slight decline cash lower remain in production controlling impacted requirements. To capital be expected is not flow focused free control. clear, can we by adjusted XXXX to what the on We

manage in of employ -- us spend will will we our be we and and expenses, means strategically the cover cost business. help the This fixed prudent to of our hedging how we

plan also our lower or maintain to profile. We leverage

compromising Our without or goal we is to of be operations. our where the the most operate quality cost-effective -- producers producer safety

and strategy can of priorities same: significant production shareholders. that flow and generating The Berry optimizing cash remain adjusted return to the we free

challenges demonstrated ability produce has our we those the navigate deploying innovation and to capabilities people While of to necessary oil-rich California. and the with efficiently for technical oil by have safely its California challenges,

We are delivering shareholder committed returns. to top-tier

operator the turn call will the to I that, With for questions. over

Operator

Charles, Rice. first Our with Charles open. Instructions] your is from & question comes line Johnson Meade [Operator

Charles Meade

to whole Good Berry the morning, team. Fernando you, and

Fernando Araujo

Good you. to Good morning, Charles. hear from

Charles Meade

go getting bolt-ons sporadic. to you back wanted but have plan. have the for, made about been during been ones success bigger I -- of the being I guys a XXXX looking attractive I'd a Fernando, always part to say, your bolt-ons know comments that you been something are you. -- prepared Thank remarks has your with

bolt-ons in So see what's more opportunities for and the this permits, to this driving in permitting that's getting and there new about perhaps market. permitting that's I'm if the wondering you changed of if -- difficulty if you to the change related -- talk what could that's assets

Fernando Araujo

especially And active. LALI Charles. been question, terms is that, the news market, in Good of M&A California, has the in Yes. activity good

As you here there's know, few the months. last been made transactions over several

of willing talking the and in terms future to listen. believe assets of So truly we are is consolidation. California people that people are And

the well. have becoming more the and environment, that's be people regulatory able why are an especially a to I beginning tighter now listen. under to to then at different industry, capture as we level corporate have and As more synergies important, we that's that and And think, operationally

replace accretive same drilling of we're be production, we're to operating our to us are can terms that transactions, or we're in close that replace for, looking as operational currently able looking necessary. help time, the areas transactions we're where At bolt-ons those capture us for Now what wedge our obviously for to help looking actually synergies.

surveillance successful our from assets to have, more with and same and those to our techniques want opportunities bolt-on create we assets. very apply value the those able been techniques and have we be that We to

Charles Meade

then That's question. Got I second is think And a question, two maybe a part this helpful. it.

you like well is in. new going So sounds guys it but slower. there that are be it permits But but forgive just for is be permits, new no on me the to will planning likelihood that squeezing

component. -- a on to it the in So smaller of asking part workovers you 'XX compare a no And second the to about rates new return be the can going of permits. are your then I'm versus is baseline tilted drills that is the the you're in question sounds sense, like one that well conservative new a

Fernando Araujo

the question we've good permits very on the been California to since getting the we've new year. of the take permits, industry that Again, second the we And permits our in same that quarter and any But permits. Charles. drilling is sidetrack Yes. beginning sidetracks. does hand current both wells into be remember us of Remember and permits. new year, and well California got not in getting workover assume plan time, we've been at drilling will that in And

year. In remember, an environment this permits really we to the last received workover seven additional the is because, you current we last the if that similar permits, sidetrack able today And were to year. and fact, that environment is throughout good capture news we year, workover have had which just morning, we really,

So the get this current that year. is additional the not we based well plan new permits on assumption will

from is it So perspective, conservative. that

Now again the... tell about me

Charles Meade

rates the compare of Yes, return.

Fernando Araujo

Question on return. the rates of

Charles Meade

workovers drills. Right, versus for new

Fernando Araujo

well. at for very, to the we've tends that's the wells, new in of of of pricing is are for the of California and year, good. environment throughout of have also, and rates also last The because wells XXX% rates capital to project return. workovers the be the It low And in drill very the of rate we what that's couple year XXX%, as years what because order and XXXX of low on of for cost the intensity north returns And because in assumed of the seen our the complete least. returns of

very good both return get rates and we So California. workovers, of for in drills sidetracks new

Charles Meade

for looking Thank was I what That's you. Fernando.

Fernando Araujo

you. Thank

Operator

Please for our next question. hold

is from with your next question line Our Nicholas, Seaport comes Nicholas Pope Research. open.

Nicholas Pope

everyone. morning, Good Thanks.

Fernando Araujo

you? Good morning, How're Nicholas.

Nicholas Pope

the respect inventory to how think the get things? was how the doing kind of -- focused size that I length, to is on? to I Great. about -- stuff doing mean that Is at? what's that -- you capital that that be you you the when the the guess, every in on going you're have side program guess, the what's workovers, well at on with of running looking what room near-term of I look sidetracks, resource -- opportunity do -- I this hoping

Fernando Araujo

Okay.

With workover extensive have workovers, We can a have Let that me very at fail, in. very recompletion -- pool At workovers. probably to shut that wells XXX an opportunities, for that set time, extensive. opportunity we dynamic which opportunities, because we looking new over currently we're a now workover is have as opportunity of start remember and with number created. that are is same the very, wells wells the of right whole is you

so So every changes -- it it's day.

of of So solid potential, good, in workover opportunities. pool we terms a have

risky to also wells as wells for than as want sidetracks, do same shut-in from In well. more terms perspective, are drill we But you a more bit new new have sidetrack drilling that little also opportunities risky, the a -- pool bit sidetracks reservoir of wells. where you know, of mechanically

that terms the world Currently, that has some the in through. the best oil XX assets in place. identified oil asset that assets the in in place sidetrack some in the is But working California are our of world. to XX order of the that in have of on one have to best we're team additional opportunities we assets main remember in you is to comparable the the of of The thing

that the that's So advantage great have. we

a great have asset base. We

Nicholas Pope

flipping That the then is to And it. financial Got helpful. over side.

prepaid for like 'XX. and was tax. of you are much of might income maybe all on look at to looks it 'XX income I even projections XQ, in and at expecting about as all curious you what rate 'XX, in Looking you terms kind be how deferred tax

Michael Helm

tax we that Mike. have is all and take XXXX. We a -- This one. cover will other of think will amount still cover that NOLs in that Nick. needs credits our Yes, tax of significant I'll federal

do some don't the expect So projections. $X in to tax in should based expect taxpayer to to on based federally a have we be to pay the XXXX. probably taxes their in it but California We on million regime, state million current $X be

Nicholas Pope

is Got Appreciate I time, it. had. That the everyone. all

Fernando Araujo

Nicholas. you, Thank

Operator

our hold Please next question. for

LLC. Byrne Jefferies comes Our Lloyd question next from with

is line Your open.

Lloyd Byrne

Thank you, Fernando.

Fernando Araujo

morning, Lloyd. Good How're you?

Lloyd Byrne

forward you guys you I your just versus capital and something even into getting I you down at ask 'XX expectations. to the Nick am about Congratulations. is good. wanted at. XX% of were Charles and maybe kind that CapEx look But about, if efficiency almost look talked

production just maybe capital Can Your And only the kind question. way guess? sustainable, what And is that of to versus that able I trajectory forward? the X% efficiency what's down same replicate 'XX? thought. we you Nick -- are the asked of going Like you is in

Fernando Araujo

Yes. Okay.

is return of remember, this the have time good answer revert we'll happened. that me -- you really has a because this because, not and that with, process. in to that Let question. To this process we know way begin with the Lloyd, the confidence that courts that's will And County's favor EIR, first back Kern

process plenty we've potential California. of have the drill in got is in still new we opportunities once assets reverted, to wells that So that

to And the the they proven leading county, for the to that they've have be CEQA. courts the agency capability

wells And So it this time. the we production past. that some -- we've And our process just in like we're as talked able a has is for years new revert before. year, about be to is and like going matter next have and drill -- itself is levels this in previous with to this of hoping certainty keep should we

Lloyd Byrne

then And in that's return change the great. Okay, you. on just the Thank policy.

of going, on forward? going buybacks dividends Just and process you're your where kind versus thought

Michael Helm

we an size clear the Mike. the with return we would repurchases. We fixed market It to the a We returns, that did on owners. is little feedback to our and talk cash generate share I'll able did And were dividend. based that, important Again, our Yes, variable as community. the got this This the component bit investment that with are was towards appreciation important it's one. yields debt we to became was we investors, cap. that talk that feel to Lloyd. more be targeting to said, model. dividend, take high Yes, variable we also and in the of the single-digit leave

Lloyd Byrne

Okay. Thank you much. very

Operator

like over it for turn [Operator now would Fernando closing Instructions] back I Araujo to to remarks.

Fernando Araujo

everyone again, listening much. I and about you thank plan Yes. about Berry, want excited XXXX. executing of to to Thank for Once call. the very We're the we're future excited our in

Operator

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

You may now disconnect.

Berry (BRY) 22 Feb 232022 Q4 Earnings call transcript