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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) May 8, 2003
Berry Petroleum Company
(Exact name of registrant as specified in its charter)
Delaware 1-9735 77-0079387
(State or other (Commission File IRS Employer
jurisdiction of Number) Identification No.
incorporation)
5201 Truxtun Avenue, Suite 300 Bakersfield, CA 93309
(Address of principal executive offices)
Registrant's telephone number, including area code (661) 616-3900
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events
On May 8, 2003, Berry Petroleum Company, a Delaware
corporation, issued a press release, a copy of which is attached
hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 7. Financial Statements, Proforma Financial Information
and Exhibits
(c) Exhibits
99.1 Press Release of Berry Petroleum Company dated
May 8, 2003.
SIGNATURE
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 thereunto duly
authorized.
BERRY PETROLEUM COMPANY
By /s/ Kenneth A. Olson
Name: Kenneth A. Olson
Title: Corporate Secretary
and Treasurer
May 8, 2003
News Release
Berry Petroleum Company
5201 Truxtun Avenue, Suite 300
Bakersfield, California 93309-0640
Phone (661) 616-3900
E-mail: ir@bry.com
Internet: www.bry.com NYSE:BRY
Contacts: Jerry V. Hoffman, Chairman, President
and Chief Executive Officer
Ralph J. Goehring, Sr. Vice President
and Chief Financial Officer
May 8, 2003 For Immediate Release
BERRY PETROLEUM EARNS $9.2 MILLION
IN FIRST QUARTER 2003
Bakersfield, California - Berry Petroleum Company (NYSE:BRY)
today announced net income for the first quarter ended March 31,
2003 of $9.2 million, or $.42 per share, on revenues of $47.3
million, up 7% from net income of $8.6 million, or $.40 per share
in the first quarter of 2002 and up 31% from net income of $7.0
million, or $.32 per share in the fourth quarter of 2002.
Results in the first quarter of 2003 included the pre-tax write-
off of $2.5 million for the cost of a pilot project and
associated leasehold acreage, while the first quarter of 2002
included the pre-tax gain from the recovery of a $3.6 million
receivable for electricity sales which had been written off by
the Company in 2001.
Jerry Hoffman, Chairman, President and Chief Executive
Officer, stated, "The first quarter of 2003 showed continued
improvement, with increased production and solid results. On
April 8, 2003 the Company announced that the Board of Directors
had approved a special one-time dividend of $.04 per share,
payable May 2, 2003, and a 10% increase in future dividends from
$.10 to $.11 per share per quarter. The Board determined an
adjustment to the dividend level was warranted based on
consistently improved operational results."
Oil and gas production on a BOE/day basis averaged 15,736 in
the first quarter of 2003, which was 3% higher than 15,208 in the
fourth quarter of 2002, and 14% higher than the first quarter of
2002 average of 13,799. Management has targeted average
production for calendar year 2003 of approximately 16,400 BOE/day
before any impact from 2003 acquisitions.
Ralph Goehring, Senior Vice President and Chief Financial
Officer, stated, "Operating income from oil and gas operations,
at $14.3 million for the quarter, compared very favorably to
$7.7 million in the first quarter of 2002 and $10.5 million in
the fourth quarter of 2002."
Mr. Goehring continued, "World crude oil prices were
significantly higher in the 2003 first quarter compared to 2002
and our average selling price for our heavy crude oil increased
53% to $24.23 per BOE from $15.87 in the first quarter of 2002.
However, the average posting for our heavy crude oil has
subsequently declined to approximately $19.75/Bbl on May 6, 2003
from $24.00/Bbl at March 31, 2003. Natural gas prices spiked in
the first quarter of 2003 with fuel cost per MMBtu averaging
$5.40 versus $2.49 for the first quarter of 2002. The Company
has hedged a portion of its natural gas demand to protect
ourselves from future natural gas price increases."
Mr. Hoffman added, "The fundamentals of our business have
continued to improve, so we continue to vigorously pursue
opportunities for significant growth. The Company is proceeding
with a capital budget plan for 2003 of approximately $27.6
million. This plan includes the drilling of 98 new wells, of
which 13 will be horizontal. We anticipate that most of these
new wells will be online by the end of the third quarter and
should allow the Company to achieve an exit rate for 2003 of
approximately 17,700 BOE/day. As of March 31, 2003, five new
wells have been drilled, three
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Berry Petroleum Company News Release - May 8, 2003 Page 2 of 4
of which were horizontal. On the acquisition front, in the first
quarter of 2003, the Company completed the acquisition of a Poso
Creek area property in Kern County, California for $2.5 million.
We estimate that this property includes approximately 2.5 million
barrels of proved reserves. This property, which has minimal
current production, will be developed in late 2003 and throughout
2004."
Mr. Hoffman continued, "In April 2003, the Company entered
into a Purchase and Sale Agreement for the acquisition, for
approximately $49 million, of producing properties and leasehold
acreage in the Brundage Canyon field in the Uinta Basin in Utah.
The Company anticipates the acquisition will close in the third
quarter of 2003. The Brundage Canyon properties consist of
approximately 43,500 net acres, and are currently producing
approximately 2,200 net BOE/day of light crude oil and natural
gas and we estimate the proved reserves at 8.6 million BOE (75%
light oil and 25% natural gas). The Company believes the Uinta
Basin and the surrounding area offer numerous opportunities for
the Company to achieve its growth goals."
Mr. Hoffman further commented, "We are encouraged by the
increased activity by other operators in the general area of our
208,000 acres in Kansas and the opportunities our land position
may offer. We are discouraged by the low water production and
associated gas in our first pilot in Kansas which resulted in the
write-off of this pilot and associated leased acreage. However,
we are continuing to evaluate the locations and method of
drilling additional test wells on our substantial remaining
leasehold position in Kansas. As anticipated, our Illinois pilot
continues to dewater and the results are not yet conclusive."
In 2003, the Company plans to spend approximately $1 million
for improvements at its Poso Creek, California property and may
spend up to $15.5 million in Utah to drill up to 26 development,
step-out and exploitation wells, if that acquisition is completed
early enough in 2003. These expenditures will be in addition to
the $27.6 million capital budget approved earlier. The Company
anticipates funding property acquisitions and related capital
projects through both cash generated from operations and
borrowings from its credit facility.
An earnings conference call will be held Friday, May 9, 2003
at 8:00 a.m. PT. Dial 1-800-240-4186 to participate.
International callers may dial 303-205-0033. For a digital
replay available until May 23, dial 1-800-405-2236 (passcode
536586#). Transcripts of this and previous calls may be viewed at
www.bry.com/tele.htm.
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": With the exception of historical information, the
matters discussed in this news release are forward-looking
statements that involve risks and uncertainties. Although the
Company believes that its expectations are based on reasonable
assumptions, it can give no assurance that its goals will be
achieved. Important factors that could cause actual results to
differ materially from those in the forward-looking statements
herein include, but are not limited to, the timing and extent of
changes in commodity prices for oil, gas and electricity, gas
transportation availability, the non-existence of a liquid
marketplace for electricity purchases and sales within
California, competition, environmental risks, litigation
uncertainties, drilling, development and operating risks,
uncertainties about the estimates of reserves, the prices of
goods and services, the availability of drilling rigs and other
support services, legislative and/or judicial decisions and other
government regulation.
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Berry Petroleum Company News Release - May 8, 2003 Page 3 of 4
CONDENSED INCOME STATEMENTS
(In thousands, except per share data)
(unaudited)
Three Months Ended
3/31/03 3/31/02
Revenues:
Sales of oil and gas $ 34,354 $ 19,678
Sales of electricity 12,880 7,314
Interest and other income, net 20 378
-------- --------
Total 47,254 27,370
Expenses:
Operating costs - oil and gas
operations 13,184 8,086
Operating costs - electricity
generation 12,880 6,983
Depreciation, depletion &
amortization 4,454 3,992
General and administrative 2,257 1,862
Recovery of electricity
receivables - (3,631)
Dry hole and abandonment 2,487 -
Interest 209 423
-------- --------
Total 35,471 17,715
Income before income taxes 11,783 9,655
Provision for income taxes 2,606 1,035
-------- --------
Net income $ 9,177 $ 8,620
======== ========
Basic and diluted net income per
share $ .42 $ .40
Cash dividends per share $ .10 $ .10
Weighted average common shares:
Basic 21,758 21,732
Diluted 21,920 21,811
CONDENSED BALANCE SHEETS
(In thousands)
(unaudited)
3/31/03 12/31/02
Assets
Current assets $ 35,020 $ 28,705
Property, buildings &
equipment, net 226,814 228,475
Other assets 876 893
-------- --------
$ 262,710 $ 258,073
======== ========
Liabilities & Shareholders' Equity
Current liabilities $ 28,235 $ 32,394
Deferred taxes 34,779 33,866
Long-term debt 15,000 15,000
Other long-term liabilities
Shareholders' equity 5,187 4,755
179,509 172,058
-------- --------
$ 262,710 $ 258,073
======== ========
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Berry Petroleum Company News Release - May 8, 2003 Page 4 of 4
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Three Months Ended
3/31/03 3/31/02
Cash flows from operating
activities:
Net income $ 9,177 $ 8,620
Depreciation, depletion &
amortization 4,454 3,992
Dry hole and abandonment 2,487 -
Other, net 972 246
Net changes in operating assets
and liabilities (8,731) 3,629
------- -------
Net cash provided by operating
activities 8,359 16,487
Net cash used in investing
activities (4,871) (4,333)
Net cash used in financing
activities (2,175) (7,173)
------- -------
Net increase in cash and cash
equivalents 1,313 4,981
Cash and cash equivalents at
beginning of year 9,866 7,238
------- -------
Cash and cash equivalents at
end of period $ 11,179 $ 12,219
======= =======
COMPARATIVE OPERATING STATISTICS
(Unaudited)
Three Months Ended
3/31/03 3/31/02 Change
Oil and gas:
Net production - BOE/day 15,736 13,799 14%
Per BOE:
Average sales price $ 24.23 $ 15.87 53%
Operating costs 8.78 5.95 48%
Production taxes .53 .56 (5%)
Total operating costs 9.31 6.51 43%
Depreciation, depletion and
amortization 3.15 3.21 (2%)
General and administrative
expenses 1.59 1.50 6%
Interest expense .15 .34 (56%)
Electricity:
Electric power produced - Mwh/day 2,137 2,051 4%
Electric power sold - Mwh/day 1,951 1,890 3%
Average sales price - $/Mwh $ 73.39 $ 36.35 102%
Fuel gas cost - $/MMBtu 5.40 2.49 117%
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