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): August 9, 2005 (August 9, 2005)
BERRY PETROLEUM COMPANY
(Exact Name of Registrant as Specified in its Charter)
| DELAWARE (State or Other Jurisdiction of Incorporation or Organization) |
1-9735 (Commission File Number) |
77-0079387 (IRS Employer Identification Number) |
| 5201 TRUXTUN AVE., STE. 300, BAKERSFIELD,
CA (Address of Principal Executive Offices) |
93309 (Zip Code) |
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))
| Item 2.02 | Results of Operations and Financial Condition |
On August 9, 2005,
Berry Petroleum Company issued a news release announcing its financial results
for its second fiscal quarter ended June 30, 2005. The information contained in
the press release is incorporated herein by reference and furnished as Exhibit
99.1.
The information in this Current Report on Form 8-K and
Exhibit 99.1 is being furnished and shall not be deemed "filed" for the purposes
of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that Section.
| Item 9.01 | Financial Statements and Exhibits |
(c) Exhibits
99.1 Press release dated August 9, 2005 announcing the Registrant's financial
results for the quarter ended June 30, 2005.
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.
| BERRY PETROLEUM COMPANY |
||||
| By: |
/s/ Shawn M. Canaday |
|||
| Shawn M. Canaday | ||||
| Treasurer/ Assistant Corporate Secretary | ||||
Date: August 9, 2005
Page 2 of 2
|
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 |
||
|
Contacts:
Robert F. Heinemann, President and CEO - - Ralph J. Goehring, Executive
Vice President and CFO | |||
BERRY
PETROLEUM'S SECOND QUARTER NET INCOME CLIMBS 65% TO $1.13 PER
SHARE
Bakersfield,
CA - August 9, 2005 - Berry
Petroleum Company (NYSE:BRY) announced net income of $25.3 million, or $1.13 per
diluted share, for the second quarter of 2005, up 65% from net income of $15.3
million, or $.68 per diluted share in the second quarter of 2004. Revenues rose
to a record $92.7 million in the quarter, up 45% from $64.1 million in the
second quarter of 2004. The Company's average daily production of 22,668 barrels
of oil equivalent (BOE), which consists of 18,986 barrels of crude oil and
22.1 million cubic feet of natural gas, was a record and an increase of 12%
over the 20,315 BOE achieved a year ago. The average realized sales price of
$39.09 per BOE was up 37% from the $28.55 per BOE received in the second quarter
of 2004.
For the
six months ending June 30, 2005, Berry's net income was a record $47.8 million,
or $2.13 per diluted share, up 87% from net income of $25.6 million, or $1.15
per diluted share for the six months ending June 30, 2004. Revenues were $181
million in the first six months of 2005, up 50% from $121 million in the first six
months of 2004, according to Robert F. Heinemann, president and chief executive
officer.
Mr.
Heinemann continued, "Berry's excellent second quarter and first half earnings
are a result of higher crude oil prices, increased production and successful
execution of our strategies. For the six months ending June 30, 2005,
Berry's average daily production of 22,359 BOE increased by 12% and our
average realized sales price of $38.50 per BOE was up 43% from the first six
months of 2004. The Company's increased natural gas production coupled with
its electricity sales from Berry's existing cogeneration plants now allow us
to benefit from higher natural gas prices. Also, as part of Berry's ongoing
transformation to a more geographically and resource diverse company, in
June 2005, the Company made an acquisition by securing interests in
approximately 20,000 gross acres in the emerging Bakken light oil play in
the Williston Basin in North Dakota. We anticipate closing on interests in
another 100,000 gross acres in the area within the next 60 days. Our goal is
to begin exploiting the acreage within the next six months with an industry
partner."
Mr.
Heinemann added, "The second half of 2005 will be very exciting for Berry as we
appraise eight of our exploitation projects. In the Rockies, Berry will
drill, or participate in two shallow Green River oil wells and one Mesaverde
deep gas well at Lake Canyon, two Ferron gas wells and the initial wells of
a coal bed methane pilot program at Coyote Flats and a Mesaverde deep gas
well on a unit that includes a portion of our Bureau of Land Management
acreage near Brundage Canyon. In the Mid-Continent, Berry will be involved
in drilling several exploratory gas wells on the Tri-State acreage, and at
least one exploratory deep Bakken oil well in North Dakota. Finally, in
California we will begin an expansion of our diatomite pilot based on
progressive positive results. We now have interests in approximately 800,000
gross acres in the Rockies and Mid-Continent for development and
exploitation. We believe we will achieve our production target of 23,000 BOE
per day in 2005, and are gaining confidence that in 2006 production will
approach 25,000 BOE per day from our existing asset base without any
positive impacts from the growth projects identified above. Our existing
high quality producing assets will allow us to achieve strong growth next
year, but clearly, any success on just one of these exploitation programs
could set up significant additional development and add considerable value
to Berry."
Net cash
provided by operating activities was a record $66.2 million in the first six
months of 2005, up 76% from $37.6 million in the same period in 2004. In the
first six months of 2005, the Company invested $48.2 million in capital
expenditures and $116 million in property acquisitions ($105 million on the Yuma
County producing assets, $5 million on the Tri-State acreage, and $6 million on
the North Dakota acreage). The Company is re-evaluating its current capital
budget of $107 million for a possible increase for the remainder of 2005 in
light of current crude oil and natural gas prices and the Company's significant
opportunities.
-
more -
| Berry Petroleum Company News Release - August 9, 2005 |
Page of
2 of 4 |
Ralph J.
Goehring, executive vice president and chief financial officer said, "Berry
posted another excellent quarter supported by high crude prices and increasing
production. Although our quarter-over-quarter production increased by 3% and was
a record, we expect our third and fourth quarter production volumes to be up
approximately another 1,000 BOE per day. In June 2005, the Company entered into
crude oil hedges for approximately 10,000 barrels per day beginning January 1,
2006 and going through December 31, 2009 with a floor of $47.50 and a ceiling of
$70.00 based on WTI crude oil futures prices. This action locks in significant
revenues, cash flow, and, under normal operating conditions, earnings over the
next four years such that we can develop our long-lived assets and pursue
exploitation opportunities with improved confidence. Additionally, we have
retained substantial upside to increasing crude oil prices." The Company's hedge
position can be viewed at: www.bry.com/index.php?page=hedging.
Mr.
Goehring continued, "Also, during the second quarter, the Company entered into a
new $500 million five-year unsecured credit facility that will assist in lowering Berry's borrowing costs and is generally more
favorable to Berry as compared to the previous facility. At June 30, 2005
the Company had $125 million of borrowings under the facility, so we have
significant financial capacity and flexibility to continue to grow Berry."
Teleconference
Call
A
conference call will be held Tuesday, August 9, 2005 at 11:00 a.m. Eastern Time
(8:00 a.m. Pacific Time). Dial 1-800-798-2884 to participate, using passcode
74596038. International callers may dial 617-614-2704. For a digital replay
available until August 16, 2005, dial 1-888-286-8010 (passcode 72939905). 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
"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;
exploration, exploitation, drilling, development and operating risks; a limited marketplace
for electricity sales within California; counterparty risk; acquisition risks;
competition; environmental risks; litigation uncertainties; the availability of
drilling rigs and other support services; pipeline capacity constraints;
legislative and/or judicial decisions and other government or Tribal
regulations.
-
more -
| Berry Petroleum Company News Release - August 9, 2005 |
Page of
3 of 4 |
CONDENSED
CONSOLIDATED INCOME STATEMENTS
(In
thousands, except per share data)
(unaudited)
|
Three
Months
|
Six
Months
|
||||||||||||
|
6/30/05
|
6/30/04
|
6/30/05
|
6/30/04
|
||||||||||
|
Revenues
|
|||||||||||||
|
Sales
of oil and gas
|
$
|
80,825
|
$
|
52,755
|
$
|
156,196
|
$
|
97,960
|
|||||
|
Sales
of electricity
|
11,514
|
11,291
|
23,970
|
23,225
|
|||||||||
|
Interest
and other income, net
|
350
|
90
|
518
|
293
|
|||||||||
|
Total
|
92,689
|
64,136
|
180,684
|
121,478
|
|||||||||
|
Expenses
|
|||||||||||||
|
Operating
costs - oil & gas production
|
26,374
|
19,451
|
49,781
|
36,677
|
|||||||||
|
Operating
costs - electricity generation
|
10,923
|
10,590
|
24,281
|
22,993
|
|||||||||
|
Exploration
costs
|
225
|
-
|
786
|
-
|
|||||||||
|
Depreciation,
depletion & amortization - oil & gas
|
9,461
|
7,643
|
17,988
|
13,997
|
|||||||||
|
Depreciation,
depletion & amortization - electricity
|
839
|
861
|
1,611
|
1,716
|
|||||||||
|
General
and administrative
|
5,204
|
4,844
|
10,023
|
11,744
|
|||||||||
|
Dry
hole, abandonment & impairment
|
601
|
-
|
2,622
|
-
|
|||||||||
|
Interest
|
1,740
|
534
|
2,902
|
1,064
|
|||||||||
|
Total
|
55,367
|
43,923
|
109,994
|
88,191
|
|||||||||
|
Income
before income taxes
|
37,322
|
20,213
|
70,690
|
33,287
|
|||||||||
|
Provision
for income taxes
|
12,062
|
4,935
|
22,925
|
7,644
|
|||||||||
|
Net
income
|
$
|
25,260
|
$
|
15,278
|
$
|
47,765
|
$
|
25,643
|
|||||
|
Basic
net income per share
|
$
|
1.14
|
$
|
.70
|
$
|
2.17
|
$
|
1.17
|
|||||
|
Diluted
net income per share
|
$
|
1.13
|
$
|
.68
|
$
|
2.13
|
$
|
1.15
|
|||||
|
Cash
dividends per share
|
$
|
.12
|
$
|
.11
|
$
|
.24
|
$
|
.22
|
|||||
|
Weighted
average capital stock outstanding:
|
|||||||||||||
|
Basic
|
22,067
|
21,873
|
22,024
|
21,845
|
|||||||||
|
Diluted
|
22,451
|
22,416
|
22,464
|
22,337
|
|||||||||
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
(unaudited)
|
6/30/05 |
12/31/04 |
||||||
Assets |
|||||||
|
Current
assets |
$ |
82,037 |
$ |
61,001 |
|||
|
Properties,
buildings & equipment, net |
487,220 |
338,706 |
|||||
|
Other
assets & deposits |
6,052 |
12,397 |
|||||
$ |
575,309 |
$ |
412,104 |
||||
|
Liabilities
& Shareholders' Equity |
|||||||
|
Current
liabilities |
$ |
91,246 |
$ |
64,841 |
|||
|
Deferred
income taxes |
53,588 |
47,963 |
|||||
|
Long-term
debt |
125,000 |
28,000 |
|||||
|
Other
long-term liabilities |
19,285 |
8,214 |
|||||
Shareholders'equity |
286,190 |
263,086 |
|||||
$ |
575,309 |
$ |
412,104 |
||||
-
more -
| Berry Petroleum Company News Release - August 9, 2005 |
Page of
4 of 4 |
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In
thousands) | |||||||
(unaudited) | |||||||
|
Six
Months Ended |
|||||||
|
6/30/05 |
6/30/04 |
||||||
Cash
flows from operating activities: |
|||||||
|
Net
income |
$ |
47,765 |
$ |
25,643 |
|||
|
Depreciation,
depletion & amortization (DD&A) |
19,599 |
15,713 |
|||||
|
Deferred
income taxes |
10,064 |
6,142 |
|||||
|
Stock-based compensation expense |
969 |
2,808 |
|||||
|
Other,
net |
194 |
528 |
|||||
|
Net
changes in operating assets and liabilities |
(12,400 |
) |
(13,201 |
) | |||
|
Net
cash provided by operating activities |
66,191 |
37,633 |
|||||
|
Net
cash used in investing activities |
(164,221 |
) |
(31,838 |
) | |||
Net
cash provided by (used in) financing activities |
90,901 |
(4,646 |
) | ||||
|
Net
(decrease) increase in cash and cash equivalents |
(7,129 |
) |
1,149 |
||||
Cash
and cash equivalents at beginning of year |
16,690 |
10,658 |
|||||
Cash
and cash equivalents at end of period |
$ |
9,561 |
$ |
11,807 |
|||
COMPARATIVE
OPERATING STATISTICS
(unaudited)
|
Three
Months Ended |
Six
Months Ended |
||||||||||||||||||
|
6/30/05 |
6/30/04 |
Change |
6/30/05 |
6/30/04 |
Change |
||||||||||||||
Oil
and gas: |
|||||||||||||||||||
|
Net production-BOE
per day |
22,668 |
20,315 |
+12 |
% |
22,359 |
19,949 |
+12 |
% | |||||||||||
|
Per
BOE: |
|||||||||||||||||||
|
Average
sales price before hedging |
$ |
43.41 |
$ |
30.83 |
+41 |
% |
$ |
42.21 |
$ |
29.46 |
+43 |
% | |||||||
|
Average
sales price after hedging |
39.09 |
28.55 |
+37 |
% |
38.50 |
27.00 |
+43 |
% | |||||||||||
|
Operating
costs |
12.79 |
10.52 |
+22 |
% |
12.30 |
10.10 |
+22 |
% | |||||||||||
|
DD
& A |
4.59 |
4.13 |
+11 |
% |
4.44 |
3.86 |
+15 |
% | |||||||||||
|
General
& administrative expenses |
2.52 |
2.62 |
-4 |
% |
2.48 |
3.23 |
-23 |
% | |||||||||||
|
Interest
expense |
$ |
.84 |
$ |
.29 |
+190 |
% |
$ |
.72 |
$ |
.29 |
+148 |
% | |||||||
|
Electricity: |
|||||||||||||||||||
|
Electric
power produced - |
|||||||||||||||||||
|
Megawatt
hours/day |
1,897 |
2,045
|
-7 |
% |
2,006 |
2,118
|
-5 |
% | |||||||||||
|
Electric
power sold - |
|||||||||||||||||||
|
Megawatt
hours/day |
1,702 |
1,843
|
-8 |
% |
1,810 |
1,900
|
-5 |
% | |||||||||||
|
Average
sales price - $/MWh |
$ |
74.52 |
$ |
67.51 |
+10 |
% |
$ |
71.55 |
$ |
67.34 |
+6 |
% | |||||||
|
Fuel
gas cost - $/MMBtu |
$ |
6.15 |
$ |
5.44 |
+13 |
% |
$ |
5.94 |
$ |
5.26 |
+13 |
% | |||||||
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