Berry Corporation announced second quarter 2024 results and declared quarterly dividends totaling $0.17 per share. 

Quarterly Highlights & Recent Announcements

• Produced 25,300 Boe/d, flat to first quarter; above the midpoint of 2024 annual guidance of 25,200 boe/d
• Cost reductions on pace, highlighted by 11% sequential quarter decrease in Lease Operating Expenses
• Declared second quarter dividends of $0.17 per share, including $0.12/share fixed and $0.05/share variable
• Four horizontal farm-in wells from the Uinta Basin’s prolific Uteland Butte reservoir performing above pre-drill estimates
• Reported zero recordable incidents and zero lost-time incidents for the third consecutive quarter
• Reached 60% completion of, and on schedule to meet methane emissions reduction target associated with our existing operations,

“In the second quarter, we delivered strong financial and operational results. Our teams continue to execute reliably and with excellence, and we remain on track to deliver results in line with our full year guidance provided earlier this year. We are focused on creating value by generating sustainable free cash flow with high rates of return in low capital intensity projects, optimizing our cost structure, and maintaining balance sheet strength while meeting high compliance standards,” said Fernando Araujo, Berry’s Chief Executive Officer.

He continued, “The Uinta Basin has seen increased activity and consolidation. Development activity focused on drilling horizontal wells across the basin is moving towards our existing acreage. In April 2024, we purchased a 21% working interest in four, two-to-three mile lateral wells in the Uteland Butte reservoir, which were put on production in the second quarter of 2024. These wells are adjacent to our existing operations and their results will be used to evaluate similar horizontal opportunities on our own acreage. This four-well horizontal program is exceeding pre-drill estimates. With a high working interest in almost 100,000 acres and the majority of acreage held by production in multiple trends, we are strategically positioned to develop our own acreage horizontally at an optimal pace.”

“We generated Adjusted EBITDA of $74 million in the second quarter, a 7% increase over the first quarter of 2024, with Cash Flow from Operations totaling $71 million and Adjusted Free Cash Flow of $19 million. Compared to the first quarter of 2024, lease operating expenses per boe in the second quarter were down 11% to $23.47 per boe, due primarily to lower energy costs. We continued to drive cost savings throughout the organization and prioritize debt reduction, reducing our revolver balance by nearly 30% to $36 million at the end of the second quarter. This balance was further reduced to $28 million at the end of July even after the final deferred payment from last year’s Macpherson acquisition of $20 million. In the near term, we are also looking opportunistically to refinance our notes, which mature in early 2026,” stated Mike Helm, Berry’s CFO.

Q2 2024 Compared to Q1 2024

Oil, natural gas and NGL revenues (excluding hedging settlements) for the second quarter of 2024 increased from the first quarter of 2024, driven by slightly higher oil prices. The net loss for the second quarter of 2024 included a $33 million after-tax impairment of unproved oil and gas properties driven by the implementation of California’s SB 1137 set-back regulations. The improvement of the net loss compared to the first quarter of 2024 included lower lease operating expenses, driven by lower fuel gas volumes purchased, as a result of our cost savings initiatives to reduce steam, as well as a decline in fuel prices. The second quarter of 2024 also included improved hedging results. Adjusted EBITDA and Adjusted Net Income increased in the second quarter of 2024, compared to the prior quarter. Improved working capital for the second quarter drove increased cash flows from operations and Adjusted Free Cash Flow compared to the first quarter of 2024. Capital expenditures were $42 million in the second quarter of 2024 compared to $17 million in the first quarter of 2024, with the increase driven by accelerated development in California and facilities projects, as well as the Utah farm-in development program. At June 30, 2024, the Company had liquidity of $169 million, consisting of $7 million cash and $162 million available for borrowings under its revolving credit facilities.

Q2 2024 Compared to Q2 2023

Compared to the second quarter of the prior year, oil, natural gas and NGL revenues (excluding hedging settlements) increased, which were driven by higher oil prices, offset by lower production in the second quarter of 2024. Adjusted EBITDA for the second quarter of 2024 increased 8% and Adjusted Net Income increased 21% compared to the second quarter of 2023, driven by the increased commodity revenues, a 16% decrease in general and administrative costs and a 1% decrease in lease operating expenses. Cash flow from operations increased in the second quarter of 2024 and Adjusted Free Cash Flow decreased compared to the second quarter of 2023, due to higher capital expenditures in the second quarter of 2024. Capital expenditures for the second quarter of 2024 were $42 million and increased 93% compared to the second quarter of 2023. For the second quarter of 2024, we drilled 19 wells, of which 15 are in California, plus four vertical wells in Utah, with production from our drilling activity in California outperforming expected results.

KeyFacts Energy Industry Directory: Berry Corporation