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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 5, 2004
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. Regulation FD Disclosure
(c) Exhibits
The following Exhibits are hereby filed as part of this Current Report on
Form 8-K:
Exhibit 99 - Press Release dated May 5, 2004 regarding the
Registrant's financial and operating results for the three months
ended March 31, 2004.
and
Item 12. Disclosure of Results of Operations and Financial Condition.
The information in this Form 8-K and the Exhibit attached hereto shall
not be deemed "filed" for purposes of Section 18 of the Securities Act
of 1934, nor shall it be deemed incorporated by reference in any filing
under the Securities Act of 1933, except as shall be expressly set forth
by specific reference in such filing.
On May 5, 2004, Berry Petroleum Company (Berry) announced financial
results for the three months ended March 31, 2004. A copy of the news
release announcing Berry's earnings results for three months ended
March 31, 2004 is attached hereto 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
May 5, 2004
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:
Robert F. Heinemann, Chairman, Interim President and Interim CEO
Ralph J. Goehring, Senior Vice President and CFO
BERRY PETROLEUM ACHIEVES RECORD QUARTERLY
EARNINGS AND PRODUCTION RESULTS
Bakersfield, CA - May 5, 2004 - Berry Petroleum Company (NYSE:BRY)
announced record net income of $12.1 million, or $.55 per diluted
share, for the first quarter of 2004, an increase of 32% compared to
prior-year first quarter net income of $9.2 million, or $.42 per
diluted share. Results for 2003 included an after-tax charge of $1.4
million, or $.06 per diluted share, attributable to an unsuccessful
coalbed methane pilot project and associated leasehold acreage in
Kansas. Net cash provided by operating activities increased to $19.6
million during the first quarter of 2004, up 133% from $8.4 million
for 2003's first quarter.
Robert F. Heinemann, Chairman, Interim President and Interim Chief
Executive Officer said, "Our strategy of growth through exploitation
of our existing assets and the establishment of a sizeable new core
area in the Rockies has given Berry a solid foundation for
significant production increases for many more quarters. We are on
target in the first quarter with a 23% production increase to an
average of approximately 19,400 barrels of oil equivalent (BOE) per
day. This record production, combined with strong crude prices, was
the catalyst in achieving record quarterly net income of $12.1
million. Our Brundage Canyon asset is performing beyond our
expectations as we continue to define the productive extent of the
field. At Brundage Canyon, we averaged approximately 3,200 BOE per
day in the first quarter and are currently producing in excess of
3,700 BOE per day."
The Company's production of oil and gas (BOE per day) in the first
quarter of 2004 improved to 19,395, up 23% from 15,736 in the first
quarter of 2003 and up 5% from 18,550 in the fourth quarter of 2003.
Increased production is due primarily to the acquisition of the
Brundage Canyon property in Utah in August 2003 and its subsequent
development. At Brundage Canyon, the Company drilled 27 new wells
during 2003 and 14 new wells during the first quarter of 2004. The
Company plans to drill, at a minimum, an additional 30 wells at
Brundage Canyon during 2004. Production from the Company's California
properties in the first quarter of 2004 remained strong and was
within 1% of the record production of 16,164 BOE per day achieved in
the fourth quarter of 2003. The Company plans to drill a total of 44
wells on its California properties during 2004. With production
increases projected for both the Company's Brundage Canyon and
California properties, management is targeting total production in
2004 to exceed 20,500 BOE per day, which is approximately a 24%
increase over 2003.
Revenues for the first quarter were $57.3 million, up $10.5 million
or 22% from $46.8 million in the first quarter of 2003. The average
realized sales price, net of hedges, for the first quarter of 2004
was $25.58 per BOE, a 6% gain over the $24.23 per BOE received in the
same 2003 period. Total operating costs from oil and gas operations,
on a per BOE basis for the first quarter of 2004, increased 10% to
$10.21 from $9.31 in the same 2003 period. This was primarily due to
higher steam costs resulting from a 10% increase in injected steam
volumes. General and administrative costs per BOE rose 18% in the
first quarter of 2004 to $1.87 from $1.59 in the first quarter of
2003, due primarily to higher compensation related costs.
As of March 31, 2004, the Company has spent $18.4 million or 35% of
its projected 2004 capital budget of approximately $53 million.
Activity through March includes 21 wells drilled and 9 workovers
performed in California, and 14 wells drilled and 8 workovers
performed in Utah.
Ralph J. Goehring, Senior Vice President and Chief Financial Officer,
stated, "We are reviewing our drilling opportunities for acceleration
into 2004 to capture the benefits of the current strong crude price
environment. We intend to put our excess cash flow to work via
acquisitions and additional drilling opportunities. On the
acquisition front, we continue to pursue acreage opportunities in the
Rockies that will either complement our existing operations or
establish a new core area for our continued growth."
Teleconference Call
- -------------------
An earnings conference call will be held Wednesday, May 5, 2004 at
11:00 a.m. Eastern Time (8:00 a.m. Pacific Time). Dial 1-800-299-
8538 to participate, using passcode 67534663. International callers
may dial 617-786-2902. For a digital replay available until May 19,
2004, dial 1-888-286-8010 (passcode 28760221). 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 through the "Investor Center"
link.
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 the commodity prices for oil,
natural gas and electricity, a limited marketplace for electricity
sales within California, counterparty risk, competition,
environmental and weather risks, litigation uncertainties, drilling,
development and operating risks, uncertainties about the estimates of
reserves, the availability of drilling rigs and other support
services, legislative and/or judicial decisions and other
governmental regulations.
CONDENSED INCOME STATEMENTS
(In thousands, except per share data)
(unaudited)
Three Months
03/31/04 03/31/03
Revenues:
Sales of oil and gas $ 45,205 $ 34,354
Sales of electricity 11,934 12,418
Interest and other income, net 203 20
------- --------
Total 57,342 46,792
------- --------
Expenses:
Operating costs - oil and gas 18,020 13,184
Operating costs - electricity 11,934 12,418
Depreciation, depletion & amortization 7,209 4,454
General and administrative 3,301 2,257
Dry hole, abandonment & impairment - 2,487
Interest 531 209
------- -------
Total 40,995 35,009
------- -------
Income before income taxes 16,347 11,783
Provision for income taxes 4,198 2,606
------- -------
Net income $ 12,149 $ 9,177
======= =======
Basic net income per share $.56 $.42
======= =======
Diluted net income per share $.55 $.42
======= =======
Cash dividends per share $.11 $.10
======= =======
Weighted average common shares:
Basic 21,817 21,758
======= =======
Diluted 22,273 21,920
======= =======
CONDENSED BALANCE SHEETS
(In thousands)
3/31/04 12/31/03
Assets
Current assets $ 43,777 $ 41,286
Property, buildings & equipment, net 306,545 295,151
Other assets 2,174 1,755
-------- --------
$352,496 $338,192
======== ========
Liabilities & Shareholders' Equity
Current liabilities $ 48,441 $ 46,652
Deferred taxes 40,797 38,168
Long-term debt 50,000 50,000
Other long-term liabilities 7,369 7,654
Shareholders' equity 205,889 195,718
-------- --------
$352,496 $338,192
======== ========
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months
3/31/04 3/31/03
Cash flows from operating activities:
Net income $12,149 $ 9,177
Depreciation, depletion & amortization 7,209 4,454
Dry hole, abandonment & impairment ( 105) 2,487
Change in deferred taxes 2,372 913
Other, net 146 59
Net changes in operating assets and
liabilities (2,205) ( 8,731)
-------- --------
Net cash provided by operating
activities 19,566 8,359
Net cash used in investing activities (18,440) ( 4,871)
Net cash used in financing activities ( 2,401) ( 2,175)
-------- --------
Net (decrease) increase in cash
and cash equivalents ( 1,275) 1,313
Cash and cash equivalents at
beginning of year 10,658 9,866
-------- --------
Cash and cash equivalents at end of period $ 9,383 $11,179
======== ========
COMPARATIVE OPERATING STATISTICS
(unaudited)
Three Months
3/31/04 3/31/03 Change
Oil and gas:
Net production-BOE per day 19,395 15,736 +23%
Per BOE:
Average realized sales
price, net of hedges (1) $25.58 $24.23 +6%
Operating costs (2) 9.24 8.78 +5%
Production taxes .97 .53 +83%
Total operating costs 10.21 9.31 +10%
Depreciation, depletion
& amortization 4.08 3.15 +30%
General & administrative
expenses 1.87 1.59 +18%
Interest expense $ .30 $ .15 +100%
Electricity:
Electric power produced -
Megawatt hours/day 2,167 2,137 +1%
Electric power sold -
Megawatt hours/day 1,956 1,951 -
Average sales price, net
of hedges - $/MWh $67.05 $70.71 -5%
Natural gas cost - $/MMBtu $ 5.09 $ 5.40 -6%
(1)Comparative average West Texas
Intermediate (WTI) crude price $35.25 $33.80 +4%
(2)Includes monthly expenses in
excess of monthly revenues from
cogeneration operations $1.81 $1.72 +5%
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