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) January 24, 2001
Berry Petroleum Company
(Exact name of registrant as specified in its charter)
Delaware 1-9735 77-0079387
(State or other (Commission IRS Employer
jurisdiction of File Number) Identification No.
incorporation)
28700 Hovey Hills Road, P.O. Box 925, Taft, CA 93268
(Address of principal executive offices)
Registrant's telephone number, including area code (661) 769-8811
N/A
(Former name or former address, if changed since last report)
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Item 5. Other Events
Berry Petroleum Company ("Berry" or "Company") owns three gas-fired
co-generation facilities located on its oil producing properties. These
facilities generate electricity (of which a small portion is used by Berry
in its oil producing operations) and steam (which the Company uses for
injection into the oil reservoir to produce its heavy oil). The majority of
its electricity is sold under contract to either Southern California Edison
Company (Edison) or Pacific Gas and Electric Company (PG&E), collectively the
"Utilities". The Company is paid for its electricity approximately 30 to
35 days after the end of each delivery month.
As of January 24, 2001, the Company is owed $1.7 million by Edison for
November power deliveries. The Company has notified Edison that Edison is
in breach of the Power Purchasing Agreements (PPA's) as a result of this
delinquent payment. For December electricity sales, the Company is owed
$4.4 million from Edison and $6.6 million from PG&E for a combined total of
$11 million. These funds are due to the Company in early February and the
timely receipt thereof is very doubtful. The Company continues to supply power
under its PPA's and under the current pricing formula (which is cost-based)
anticipates electricity sales for January to approximate $12 million in total
(PG&E - $7.0 million and Edison - $5.0 million). The Company is a member of
a group of qualifying facility generators (QFs) which is currently negotiating
an agreement with the Utilities whereby the QFs forbear their power payment
collections until April 1, 2001 for power generated and delivered, but unpaid,
in 2000 and for January 2001. The agreement is subject to a number of
conditions, including legislative and regulatory actions. There is no
assurance that such conditions will be met nor that any negotiated agreement
will be executed.
Both Utilities have recently filed Form 8-Ks and/or press releases which
have described their liquidity shortfall related to California's electricity
crisis. If either, or both, Edison or PG&E file for bankruptcy or are unable
to ultimately meet their financial obligations, the non-receipt of funds due
from power sales could result in measures that would significantly and
adversely affect Berry Petroleum Company's operational and financial results
for 2001, and possibly the financial results for the fourth quarter of 2000
and for the year ended December 31, 2000. Presently, the Company has
significant financial resources available to endure this crisis. Due to
significant uncertainty as to the scope and timing of a resolution of the
credit crisis of the Utilities and the resulting impact to the Company, it
may become necessary for the Company to postpone the release of its fourth
quarter and year end 2000 financial results.
The Company has consistently and reliably delivered power under its
existing PPA's and at prices solely based on costs required to generate power.
While numerous outcomes to this electricity crisis in California are possible,
Berry cannot predict what outcomes may materialize, when they may materialize
or the effects they may have on Berry's operations. Berry will continue to
coordinate all aspects of its business to maximize the economics of its oil
production, including, but not limited to, constantly monitoring the
continuing viability of its cogeneration operations.
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The Company is hereby providing the following summary of its cogeneration
facilities:
Average Average
Run Time megawatts barrels of
Date Placed Contract under Berry delivered steam
Location Contract(1) Territory In Service Expiration Ownership(2) for sale(3) delivered(3)
Placerita
Placerita I SO2 Edison 3-1990 3-2009 > 97% 16.7/hour 6,112/day
Placerita II SO2 Edison 5-1990 5-2002 > 96% 16.4/hour 6,404/day
South Midway-Sunset
Cogen 18 SO2 PG&E 12-1987 1-2002 > 98% 14.3/hour 6,350/day
Cogen 38 SO1 PG&E 12-1986 1-2012 > 95% 34.5/hour 15,115/day
(1) SO is for "Standard Offer".
(2) Placerita since February, 1999; Cogen 18 since November, 1996; Cogen 38
since August, 1995.
(3) Approximate average for 2000 based on 366 day year.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on their behalf by the
undersigned hereunto duly authorized.
Date: /s/January 24, 2001 Berry Petroleum Company
By: /s/ Ralph J. Goehring
Ralph J. Goehring
Senior Vice President &
Chief Financial Officer
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