BRY - Earnings call 4 2023 | Berry Corporation

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Operator

Good day, and thank you for standing by. Welcome to Berry Corporation Q4 and Full Year 2023 Earnings Call. [Operator Instructions] Please note that today's conference is being recorded. I would now like to pass the call over to Todd Crabtree with Investor Relations.

Todd Crabtree

Thank you, Carmen, and welcome, everyone, and thank you for joining us for Berry's fourth quarter and full year 2023 earnings teleconference. Earlier today, Berry issued an earnings release, highlighting full year 2023 and fourth quarter results.

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

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

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

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

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

Fernando Araujo

X and production successfully with and opportunities generated shareholders. goal CapEx California's returns environment. committed we joining essentially delivering acquisitions. In $XX held cash we of regulatory we is and More We flow everyone, attributable free million year, all CEO, compromising that quarter have expanded million accretive to the highlighted our was for the that navigate we earnings cash adjusted flow returned updated our million $XX Total was the year team planned, which highlighted free adjusted on safety less with flow, we're thank and during the priorities: XX% you cash fourth fronts. to end California. XXXX quarter technical top-tier call ago, Two, and being the by and shareholders. in bolt-on annual to to a I largest than producer, flat year cost-effective optimizing Todd. year. our financially achieved Welcome, compared production XXXX, increase of than half by cash generated of quarter, One, my Thanks, third top flow for pursue with delivered $XX base as achieve during shareholder we zero and future free Berry's accretive top-tier We production to a safety. us. A was strong X and we the that a our adjusted first of And three, to without the at assets returns the performance, lost time a strong guidance, or $XX would production million. represents typically Berry, incidents

quarter. Also barrels through management our fourth successful of day. proved a We thermal XXX% production year full the reservoir XX,XXX drilling bolt-on and reservoir by acquisitions reservoir acquisitions. had our in barrels Berry innovative to extensions additional in and barrels drilling daily without At asset's overall million reserves a XXX year-end, practices that QX, base average Our increase our of performance improved X% production the increased benefited management and was of driven replaced by and production campaign workover XX,XXX activity. practices, and day a diatomite California assets

reservoirs without steam. to of produced stacked be test field, encouraged deeper oil North gas be We by continue Midway-Sunset can results and our which in

than low We digits new triple California. is are day, average reservoirs in from well production producing oil into our from higher per light which shallow X wells

appraise area We additional with will continue to the wells.

accretive identifying bolt-on producing our for opportunities. XXXX was priorities One of

Berry cash focus California. consolidator positioned and in acquisition acquired Macpherson flow working the the a of year, production. remains seeing the end and that in benefits smaller the With at are to the we well interest both be of

maximize and that, and corporate pursue call continue aggressively I operational turn acquisitions over to support will that We cash production, Mike. flow increase value. With generate shareholder to future the synergies,

Michael Helm

a Thank highlight I takeaways. few Fernando. will financial additional you,

full and I this and in-depth to quarter the our year XXXX fourth be earlier results, this morning to For refer week. on earnings XX-K you information filed more the release to issued our

million financial XXXX million and through repurchases. cash returns million $XX strong dividends $XX results in Our provided to shareholders in $XX variable fixed our share and in

XX% For a share the variable resulted we share the shareholders. top-tier total a per dividends, for for fourth sector this $X.XX total of declared of resulting yield in Combined, quarter, $X.XX dividend fixed and dividend year. of our per

X% We million. stock for our in $XX also the second of purchased quarter

borrowings in the the some funding million year-end at to we of late of strategy, acquisition, second quarter, another free acquisitions. put the Additionally, repaid funding adjusted our the the balance X. work we $XX In The from generated fourth accretive tenet acquisition to we flow brought RBL Macpherson was cash RBL in revolver December. which the of on to of due our the

show we intend XXXX our flow as doing. in to low acquisitions, commitment accretive which actions continue to Our leverage making cash as keeping our well

our mid-XXXX. Throughout and we operating G&A, to to in as we Berry's We revolvers, also early than which refinance expected reductions adjusted be our which guidance. driven meaningful of clear mature will our our renew on primarily focus reduction both XXXX, by notes, to energy was opportunistically in operating expense included XXXX another XXXX are will The lower X% expire a C&J's In lower and reduce approximately XXXX. as which cost. G&A G&A make by expenses, reduced XXXX, also in well expect our of and about in X% had both look initiatives executing

the beyond unexpected project taxes -- of noncash is and in $X power greenhouse our carbon prices our income and our our We an having to explore about net annual An XXXX fully impact offsetting not EPS. project cost became this compared Solar reduces long-term rise This delivers only investments on savings but annual in XX% expectations. operational $XXX,XXX. Fourth of property. business. This XXXX. XX% our the adjusted XXXX at our Consequently, that of capable exceeded revised will continue value demand create million EBITDA gas guidance, footprint, that taxes is to of for continue other increased to 'XX quarter our example Hill

to would in our slide remind the free royalty the earnings I expect use the our of expected of items our cash and of cash adjusted did flow note payments hedged. In XX% few oil historically, first quarter deck, we adjusted semiannual just large our our have year to on lower. A revolver typically payment. Overall, we lowest cash that in the therefore, free of flow. highest second and of As quarter for annual of first notes than the shown In capital to XXXX, used XXXX a interest to will our 'XX other -- items have we of flow generate our most XXXX. adjusted our in Much is like year, production will half working free few each we in example, you note. for XXXX, manage be more the

hedge per oil consisting XX% they production. crude the our position year, at barrel will oil make mostly expected than swaps up of Our have XXXX in about $XX more of pricing attractive last of midpoint

first on will it consequential While the it we in as quarter have recent the last of not first has various an in production as year. that been expect quarter, was impact the storms

expenditures our morning. annual production, issued our your important Additionally, this published expected for ranges release reference, capital guidance we other our metrics and for press in

million cash capital $X C&J calculation capital Finally, flow. We our business than some generally of Services approximate the per Well corporate our are maintaining really essential amounts free believe adjusted housekeeping about and our Berry's no and maintenance These expense expenditures are for different on to production. year.

these capital forward, Going free I'll calculated cash adjusted for return you. all expenditures. Thank And now will it to now back be flow after Fernando. of accounting

Fernando Araujo

Thanks, Mike.

to XXXX demonstrate shareholder top-tier returns Our results our deliver operational on ability excellence.

XXXX. will solid performance we year in that confident another are We of achieve

employ activity cover keep we expected fixed of energy hedging expenses. diligent will to XXXX, continue production business. we Our in is to managing XXXX to to help us planned cost flat Also will the the remain our levels and strategically

Regarding X is our participate drilled signed drill plan clear, horizontal been east will play time. expected in acreage. require The Uinta quarter. county and having acreage. acquisitions. returns. are the is resolved, commitment us tried on is the These an with and Berry's recently our and to true an litigation depend part that we for in farm believe court's execute adjust and subject the maximize accretive plan and consistent agreement positive. we successfully to horizontal is shareholder completion, closing that the have prospective. the emphasize it into monitoring the success, I to approximately late plan net the to been will We offset if to do will a some does Until for wells not operators current strategy a scheduled are and maintain we be immediately our priorities we've operating conditions, mid-April, acres play production our XXXX could But of issuance in production part on to on wells customary bolt-on of in new their Other and and our help portfolio, we which well. permits Basin successful, Right the process through XXXX and will the XXXX to not of define in wells now now, the important EIR. permitting north The gain plan our If acreage close be for that sidetracks activity ruling workovers, our California, the to appellate knowledge is acreage. ruling is development for a second development remain XX,XXX our activities want Overall,

We produce Our is and prolific business simple. gas basins. from model oil

and to record turn performance, track a operator we with questions. for the have sustainable of We that, over call deliver through returns. And proven I'll value the cash

Operator

it's And Rice. Johnson Instructions] from Meade Charles with [Operator

Charles Meade

in your up a of on remarks, number of X follow I Fernando, interesting you to dropped them. but want details just prepared

be the is questions plan to nothing response that perhaps respond? guess I the it there. if would is the on how And I appellate understand there's get just But quickly mid-April. that that dispute, if your guess, guidance get Supreme California. Or that X Court of the your likely ruling most that. mentioned assumes something a or you immediately you did did scenario you able to expected in to First, would I appealed permitting be favorable ruling anything you favorable, with favorable

Fernando Araujo

a get have -- do already submitted no, we If wells. several ruling we positive

CalGEM. on from pending the XX submitting I think it's approval wells other

-- their to through to have and would go be wells those process we'll get So approved. have

of it's additional take equipment been to just going activity. basin year. And possibly of up. But because wells. I dollars Now drilling in up activity affect the expect a would getting little some think operationally, lack of the just be Hunter, of some the ready because left to that going to wouldn't would is half our there's additional President, spend Danielle time second the If in have she's that's to terms capital anything, it this year. Danny follow It follow really much production going with comments. we additional

Danielle Hunter

have that Yes, I'll respond don't the second an appeal on or not, of would question. the that's if plaintiffs guess. any idea adverse anybody's part ruling We

whether there's would keep a In had take supreme based case. stay the the on in we place conversations XX% of the would during that to takes with typically, they terms time. that don't up they know it actually we've told, do, And chance court they Counsel, if up XX% if

that's So that's something not automatic.

would There's while effect appeal that time. it. court, it that during court up. it chance in let's do a say, supreme good still does The they the So take supreme be

Charles Meade

Midway zones And you Got at mean Fernando, still deeper elaboration. about important I that Are then -- those Sunset. the it. second, -- at can what talk these is? that's That's county. talked current you deeper test an about

because be attractive can't you are going on just and these deeper these down -- what wells? wells Are new are perhaps? So seems you least going Can can't are or elaborate and the you doing these production for -- there hole, it like are -- rates guys? or you -- at you're working over be sidetracking those

Fernando Araujo

Yes.

were And last Now the that's both sidetracked, deeper wells reservoirs. we of we right. end to and drilled at that year sidetrack

about They're encouraging. lowest wells that's were They're so my X from XX light digits, Charles, testing from is we XXc is it reservoir. good. to in And injection, that gas that the steam those triple As we far. Mcf we're actually is the remarks, day which producing from I've producing the XXX time, oil our wells, without oil, currently and same from very gas, testing capturing of in one which testing low And important a XX Santos formation. is steam thing generate in to we're API are to a note the very mentioned At recoverable facility.

Charles, little blocks. the a of And really block from north we blocks, it's that's There's X is, we're that's fold that on block into on So divided on remember, reservoirs. because it just good this several stacked is fuel fold and more undeveloped a that Midway-Sunset, end saving have color perspective. an

have for So upside a encouraging, future. it's very the potential it significant could and us in

Operator

[Operator Instructions] All right.

no comments. I will I conclude the see pass final Araujo Q&A session it As for over to back questions, further and Fernando

Fernando Araujo

much much very exciting very year. you And to Berry. for you for your an XXXX Thank And your for really let's just ahead good to be Thank Charles. another going have you question, interest. thank very much. forge It's

Operator

you. And Thank Thank call. concludes today's you joining. conference that for

You now disconnect. may

Berry (BRY) 6 Mar 242023 Q4 Earnings call transcript