Company: Berry Petroleum
Symbol: BRY
Description: They are a California-based independent upstream energy company engaged primarily in the development and production of conventional oil reserves located in the western United States.
Trade Date: 7/26
Shares: 18.75 million
Price Range: $15.00-$17.00
Underwriter(s): Goldman Sachs, Wells Fargo, BMO, Evercore ISI, UBS investment Bank
Co-Manager(s): KeyBanc Capital Markets, Capital One Securities, Johnson Rice & Co., Simmons & Company. Tudor, Pickering, Holt & CO., ABN AMRO, ING, BOK Financial Securities, Citizens Capital Markets
Terms Added: 7-16-18
Business: Their long-lived, predictable and high margin asset base is uniquely positioned to support their objectives of generating top-tier corporate-level returns and positive free cash flow through commodity price cycles. They believe that executing their strategy across their low-declining production base and extensive inventory of identified drilling locations will result in long-term, capital efficient production growth as well as the ability to return excess free cash flow to stockholders.
They target onshore, low-cost, low-risk, oil-rich reservoirs in the San Joaquin basin of California and the Uinta basin of Utah, and, to a lesser extent, the low geologic risk natural gas resource play in the Piceance basin in Colorado. In the aggregate, the Company’s assets are characterized by:
- High oil content, which makes up approximately 81% of their production;
favorable Brent-influenced crude oil pricing dynamics; - Long-lived reserves with low and predictable production decline rates;
- stable and predictable development and production cost structures;
- a large inventory of low-risk identified development drilling opportunities with attractive full-cycle economics; and
- potential in-basin organic and strategic opportunities to expand their existing inventory with new locations of substantially similar geology and economics.
California is and has been one of the most productive oil and natural gas regions in the world. Their asset base is concentrated in the oil-rich San Joaquin basin in California, which has more than 100 years of production history and substantial remaining oil in place. As a result of these attributes, they have a strong understanding of many of the basin’s geologic and reservoir characteristics, leading to predictable, repeatable, low-risk development opportunities.
Financials: Berry LLC’s emerged from bankruptcy on February 28, 2017.In the 10 months subsequent to that date, they had oil, natural gas and NGL sales of $357.9 million, electricity sales of $23.0 million, $66.9 million in losses from oil and natural gas derivatives, $2.7 million in marketing revenues, and $4.0 million in other revenues. For that 10 month period, they had a $21.1 million loss.
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