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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) November 6, 2003
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)
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)
1
Item 7. Financial Statements and Exhibits
(c) Exhibits
99 Press Release of Berry Petroleum Company dated
November 6, 2003.
Item 12. Results of Operations and Financial Condition
The information in this Current Report, including the attached
Exhibit,shall not be deemed "filed' for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that Section, nor shall it be deemed
incorporated by reference into any filing under the Securities
Act of 1933, as amended.
On November 6, 2003, Berry Petroleum Company, a Delaware
corporation, issued a press release announcing the Company's
financial results for the three months and nine months ended
September 30, 2003, a copy of which is attached as Exhibit 99.
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
November 7, 2003
2
News Release
Berry Petroleum Company Phone (661) 616-3900
5201 Truxtun Avenue, Suite 300 E-mail: ir@bry.com
Bakersfield, California 93309-0640 Internet:www.bry.com
Contacts: Jerry V. Hoffman, Chairman, President and CEO
Ralph J. Goehring, SVP & CFO
BERRY PETROLEUM EARNS $.36 PER SHARE IN THIRD QUARTER 2003
Bakersfield, CA - November 6, 2003 - Berry Petroleum Company
(NYSE:BRY) announced net income of $8 million, or $.36 per diluted
share for the third quarter ended September 30, 2003, up 5% compared
to net income of $7.6 million, or $.35 per diluted share for the same
period in 2002. Earnings were higher due to increased production and
higher crude oil prices.
Oil and gas production, including the recent Brundage Canyon
acquisition, was a record 16,482 barrels of oil equivalent per day
(BOE/day) in the third quarter of 2003, up 14% from 14,464 BOE/day in
the same 2002 period. The third quarter production, before any benefit
from Brundage Canyon, was 15,782 BOE/day, also a record, and up
slightly from the second quarter 2003 production of 15,397 BOE/day.
Berry expects to average approximately 16,600 BOE/day for the year,
which is a 15% increase over 2002.
Jerry V. Hoffman, Chairman, President and Chief Executive Officer,
stated, "The third quarter results benefited from increased production
on our California properties and our first month of production from
Brundage Canyon. We anticipate an excellent fourth quarter based on
the expected results of our drilling program currently underway at
this new core property, with 11 of our 26 planned wells already
drilled as of October 26. The integration of the Brundage Canyon asset
is going well with current production at 2,100 BOE/day. Our current
company-wide production is 19,000 BOE/day. In 2004 we are targeting
average production of above 20,000 BOE/day which approximates a 20%
increase over 2003."
Total operating costs in the third quarter were $10.90 per BOE, up
from $8.57 per BOE in the same 2002 period, but down from $11.15 per
BOE in the second quarter of 2003. Operating costs were higher in the
third quarter of 2003 compared to the same period in 2002 due to
higher steam costs caused by higher natural gas prices and higher
injected steam volumes. Natural gas, the largest cost component of
steam costs, averaged $4.75 per MMBtu (millions of British thermal
unitss) in the third quarter of 2003, down slightly from the second
quarter of 2003, but 57% higher than the average cost of $3.02 per
MMBtu in the third quarter of 2002. The Company expects operating
costs per BOE to decrease slightly in the fourth quarter and to trend
below $10.00 in 2004 assuming natural gas prices remain at current
levels.
The average sales price received, including hedging gains or losses,
per BOE for the third quarter of 2003, was $22.07, up 5% from the
$21.03 received in the comparable 2002 period.
Hoffman added, "We are formulating our capital budget for 2004, but
preliminarily, we anticipate a budget between $45 and $55 million for
development and an unspecified amount for acquisitions. We continue to
pursue growth opportunities in California, the Rockies and the Mid-
Continent."
Nine-Month Results
Net income rose to $23.7 million, or $1.08 per diluted share, for the
nine months ended September 30, 2003, up 3% compared to $23 million,
or $1.05 per diluted share, for the same period in 2002. Results in
2003 include the pre-tax write-off of $2.5 million for the cost of a
pilot project and associated leasehold acreage in Kansas, while
results in 2002 include a pre-tax gain on the recovery of $3.6 million
in receivables for electricity sales that were written off by the
Company in 2001.
Production volumes rose 13% to 15,874 BOE/day in the nine months ended
September 30, 2003 from 14,110 BOE/day in the comparable 2002 period.
The average sales price received per BOE was $22.45 for the nine
months ended September 30, 2003, up 18% from $19.02 per BOE received
in the comparable 2002 period. Operating costs rose 33% from $7.89/BOE
to $10.46/BOE due to a 79% increase in the cost of natural gas and a 6
% increase in steam injection volumes.
Ralph J. Goehring, Senior Vice President and Chief Financial Officer,
said, "Our nine-month earnings are very strong, and after considering
non-recurring items in both 2002 and 2003, our 2003 earnings
performance is much improved over 2002. Our pre-tax cash margin per
BOE for the nine months ended September 30, 2003 was $10.26, up 10%
from $9.31 in the comparable 2002 period. We define 'pre-tax cash
margin per BOE' as the average realized price received less total
operating costs, G&A and interest expenses. Given that crude oil and
natural gas prices stay near the current levels, Berry is on track to
achieve strong results in 2003."
Teleconference Call
An earnings conference call will be held Friday, November 7, 2003 at
8:00 a.m. PT. Dial 1-800-218-0204 to participate. International
callers may dial 303-262-2075. For a digital replay available until
November 21, dial 1-800-405-2236 (passcode 556574#). Listen live or
via replay on the web at www.bry.com. 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, a limited marketplace
for electricity 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 regulations.
CONDENSED INCOME STATEMENTS
(In thousands, except per share data)
(unaudited)
Three Months Nine Months
9/30/03 9/30/02 9/30/03 9/30/02
------- ------- ------- -------
Revenues:
Sales of oil and gas $33,466 $28,044 $97,286 $73,289
Sales of electricity 11,120 7,172 34,385 20,963
Interest and other
income, net 350 71 597 1,616
------- ------- ------- -------
Total 44,936 35,287 132,268 95,868
Expenses:
Operating costs - oil
and gas 16,533 11,402 45,343 30,381
Operating costs -
electricity 11,120 7,172 34,385 20,631
Depreciation, depletion
& amortization 5,167 4,126 14,350 12,396
General and
administrative 2,002 2,277 6,663 6,171
Recovery of electricity
receivables - - - (3,631)
Dry hole and abandonment - - 2,487 -
Interest 368 179 845 863
------- ------- ------- -------
Total 35,190 25,156 104,073 66,811
Income before income taxes 9,746 10,131 28,195 29,057
Provision for income taxes 1,711 2,544 4,473 6,023
------- ------- ------- -------
Net income $ 8,035 $7,587 $23,722 $23,034
------- ------- ------- -------
------- ------- ------- -------
Basic net income per share $ .37 $ .35 $ 1.09 $ 1.06
Diluted net income per $ .36 $ .35 $ 1.08 $ 1.05
share
Cash dividends per share $ .11 $ .10 $ .36 $ .30
Weighted average common
shares:
Basic 21,776 21,746 21,766 21,738
------- ------- ------- -------
Diluted 22,065 21,945 21,917 21,927
------- ------- ------- -------
CONDENSED BALANCE SHEETS
(In thousands)
(unaudited)
9/30/03 12/31/02
-------- --------
Assets
Current assets $36,174 $28,705
Property, buildings & equipment,
net 283,038 228,475
Other assets 2,228 893
-------- --------
$321,440 $258,073
-------- --------
-------- --------
Liabilities & Shareholders' Equity
Current liabilities $34,015 $32,394
Deferred taxes 37,367 33,866
Long-term debt 55,000 15,000
Other long-term liabilities 7,641 4,755
Shareholders' equity 187,417 172,058
-------- --------
$321,440 $258,073
-------- --------
-------- --------
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Nine Months
9/30/03 9/30/02
-------- --------
Cash flows from operating activities:
Net income $23,722 $23,034
Depreciation, depletion & 14,350 12,396
amortization
Dry hole and abandonment 2,517 (474)
Deferred income tax liability 3,501 1,414
Other, net (291) 216
Net changes in operating assets and
liabilities (3,810) 5,368
-------- --------
Net cash provided by operating
activities 39,989 41,954
Net cash used in investing activities (70,375) (22,571)
Net cash provided by (used in)
financing activities 31,088 (18,760)
-------- --------
Net increase in cash and cash
equivalents 702 623
Cash and cash equivalents at
beginning of year 9,866 7,238
-------- --------
Cash and cash equivalents at end of
period $10,568 $7,861
-------- --------
-------- --------
COMPARATIVE OPERATING STATISTICS
(unaudited)
Three Months Nine Months
9/30/03 9/30/02 Change 9/30/03 9/30/02 Change
------- ------- ------ ------- ------- ------
Oil and gas:
Net production-BOE 16,482 14,464 +14% 15,874 14,110 +13%
per day
Per BOE:
Average realized $22.07 $21.03 +5% $22.45 $19.02 +18%
sales price
Operating costs 10.21 8.06 +27% 9.88 7.35 +34%
Production taxes .69 .51 +35% .58 .54 +7%
------- ------- ------ ------- ------- ------
Total operating 10.90 8.57 +27% 10.46 7.89 +33%
costs
Depreciation & 3.41 3.10 +10% 3.31 3.22 +3%
depletion
General & admin.
expenses 1.32 1.71 -23% 1.54 1.60 -4%
Interest expense .24 .13 +85% .19 .22 -14%
Electricity:
Electric power produced
Megawatt hours/day 2,127 2,088 +2% 2,100 2,025 +4%
Electric power sold -
Megawatt hours/day 1,937 1,918 +1% 1,912 1,852 +3%
Average sales price - 60.12 37.59 +60% 65.38 38.54 +70%
$/Mwh
Natural gas cost -
$/MMBtu 4.75 3.02 +57% 5.06 2.83 +79%
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