UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of
Report (Date of earliest event reported): December 4, 2007
BERRY
PETROLEUM COMPANY
(Exact
Name of Registrant as Specified in its Charter)
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DELAWARE
(State
or Other Jurisdiction of
Incorporation
or Organization)
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1-9735
(Commission
File Number)
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77-0079387
(IRS
Employer
Identification
Number)
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5201
TRUXTUN AVE., STE. 300, BAKERSFIELD, CA
(Address
of Principal Executive Offices)
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93309
(Zip
Code)
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Registrant’s
telephone number, including area code: (661)
616-3900
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item
7.01 Regulation FD Disclosure
On
December 4, 2007, Berry Petroleum Company issued a news release
announcing a capital budget for 2008 of $295 million. The specifics
are discussed in the news release attached hereto as Exhibit 99.1, which is
incorporated by reference in its entirety.
Berry’s
announcement shall not constitute an offer to sell or the solicitation of
an
offer to buy any securities. Any offers, solicitations of offers to buy,
or any
sales of securities will only be made in accordance with the registration
requirements of the Securities Act of 1933 or an exemption
therefrom.
In
accordance with general instruction B.2 to Form 8-K, such information is being
“furnished” and shall not be deemed “filed” with the Securities and Exchange
Commission for purposes of Section 18 of the Securities Exchange Act of 1934
or
otherwise subject to the liabilities of that section, nor shall such information
be deemed incorporated by reference in any other filing under the Securities
Act
of 1933.
Item
9.01
Financial
Statements and Exhibits
(d)
Exhibits
99.1
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News Release by Berry Petroleum Company dated December 4, 2007, titled
"Berry
Petroleum Sets 2008 Capital Budget at $295 Million; Targets Production
and
Reserve Growth Greater Than 10%."
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereto
duly authorized.
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BERRY
PETROLEUM COMPANY
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By:
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/s/ Kenneth
A. Olson
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Kenneth
A. Olson
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Corporate
Secretary
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Date: December
4, 2007
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Berry
Petroleum Company News
Contact:
Berry Petroleum Company
5201
Truxtun Ave., Ste.
300
Bakersfield,
CA 93309
1-661-616-3900
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Contacts:
Robert F. Heinemann, President and CEO - - Ralph J. Goehring, Executive
Vice President and CFO
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Berry
Petroleum Company Sets 2008 Capital Budget at $295 Million; Targets
Production
and Reserve Growth Greater Than 10%
Budget
Focuses on Capturing Oil Economics by Accelerating Key Oil
Projects
Bakersfield,
Calif. -- December 4, 2007-- Berry Petroleum
Company (NYSE:BRY) today announced a 2008 capital budget
of $295 million, according to Robert F. Heinemann, president and chief
executive
officer. At this level of investment in 2008, the Company expects to
drill over 390 producing wells and is targeting 2008 production to
average
approximately 30,000 BOE/d. Total proved reserve additions are projected
to be
approximately 30 million BOE which will result in an estimated finding
and
development cost of under $10.00 per BOE.
Highlights
of the 2008 budget include:
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$173
million for heavy oil projects including the full-scale development
of the
North Midway diatomite, continued expansions at Poso Creek,
South Midway
and Brundage Canyon as well as appraisal drilling at Lake
Canyon in the
Uinta basin.
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$122
million targeting natural gas production growth in the Piceance
and DJ
assets, including infrastructure investments to aid in the
long-term
development of these assets.
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Mr.
Heinemann continued, “The 2008 budget was designed to invest in drill-ready oil
projects to capture unprecedented crude oil prices. Our return on investment
from our heavy oil assets is exceptional and we plan to capture these
strong oil
economics through exploitation of several California opportunities
on existing
acreage. We also plan to expand the resource potential of the Brundage
Canyon
field in Utah and other areas through step-out drilling. The capital
program assumes West Texas Intermediate crude prices of $70/Bbl and
Henry Hub
natural gas prices of $7.50/MMcf. We anticipate the capital expenditures
will be
fully funded through cash flow from operations.”
Oil
Investments
In
its
North Midway diatomite asset, Berry will drill approximately 115 of
the
remaining 600 well locations and will invest in the steam generation
and other
infrastructure necessary for its five-year development plan. The
Company will continue development at Poso Creek by drilling over 30
new wells
and expanding the facilities needed for subsequent production
increases. Berry is now exploiting the deeper down-dip flanks at
South Midway and plans to drill 15 horizontal producing wells and 10
vertical
wells for continuous steam injection into these flanks. At Brundage
Canyon, the Company will drill its remaining 40-acre locations, assess
the
potential of additional downspacing and extend the southern development
of the
field into the Ashley Forest. Berry also intends to do additional appraisal
drilling of the Green River oil trend in the adjacent Lake Canyon area
to better
define its development potential.
1
Gas
Investments
Berry
has
significantly improved its drilling performance in its Piceance assets
over the
course of 2007 and is currently adding a fourth rig for year-round
operations. In 2008, the Company plans to drill and complete 60 wells
at depths ranging from 9,500 to 12,000 feet on its Garden Gulch and
N. Parachute
Ranch acreage. Berry will also continue to invest in infrastructure
here to improve access and to capture operational efficiencies. In
its DJ assets
Berry will add approximately 70 new wells and install 150 pumping units
to
maintain production near the current level of 19 MMcf/d.
As
the
Company has previously noted, its 2008 net income is relatively insensitive
to
natural gas prices company-wide, given its significant natural gas
consumption
for steaming operations in California and the existing 2008 natural
gas hedges.
In 2008, the Company estimates that a $1.00 per MMBtu change in NYMEX
Henry Hub
natural gas price would result in less than a $3 million change in
annual net
income.
Ralph
J.
Goehring, executive vice president and chief financial officer said,
“Based on
our commodity price assumptions, we expect cash flow from operating
activities
to be in the $315 to $330 million range, and would be higher at the
current
NYMEX 2008 futures price for crude oil. Excess cash flow will be applied
to debt
reduction, acceleration of additional capital projects and/or towards
potential
acquisitions. The targets and forward-looking results in this news
release do
not reflect the impact of our plans to form a master limited partnership
with
certain of our crude oil and natural gas producing assets."
This
announcement shall not constitute an offer to sell or the solicitation
of an
offer to buy any securities, nor shall there be any sale of any securities
in
any state or jurisdiction in which the offer, solicitation or sale
of securities
would be unlawful. Such securities will only be offered and sold pursuant
to a
registration statement filed under the Securities Act of 1933, as
amended.
About
Berry Petroleum Company
Berry
Petroleum Company is a publicly traded independent oil and gas production
and
exploitation company with its headquarters in Bakersfield,
California.
Safe
harbor under the “Private Securities Litigation Reform Act of
1995”
Any
statements in this news release
that are not historical facts are forward-looking statements that involve risks
and
uncertainties including
among other things,
that the
MLP
will not be formed, will not complete
an offering of securities and will not complete such actions on the
timetable
indicated. Words such as
“target,” "plans,”
“anticipates,"
"will," "expect,"“intends,”
and forms of those words and others
indicate forward-looking statements. Important factors
which could affect
actual results are discussed in PART 1, Item 1A. Risk Factors of Berry's
2006
Form 10-K filed with the Securities and Exchange Commission on February 28,
2007 under the heading
"Other Factors
Affecting the Company's Business and Financial Results" in the section
titled
"Management's Discussion and Analysis of Financial Condition and Results
of
Operations and
all material changes are updated in
Part II, Item 1A within our Form
10-Qs filed subsequent
to that
date."
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