Berry (bry)(BRY) - 2024 Q4 - Annual Results

Financial and Operational Highlights Summarizes Berry Corporation's key financial and operational performance for 2024 and its 2025 outlook Full Year 2024 Highlights Berry Corporation reported positive net income and significant free cash flow for FY2024, alongside stable production and increased proved reserves Full Year 2024 Key Metrics | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Net Income | $19 million | Down from $37 million in 2023 | | Adjusted Net Income | $52 million | Up from $39 million in 2023 | | Adjusted EBITDA | $292 million | Up from $268 million in 2023 | | Free Cash Flow | $108 million | Down from $126 million in 2023 | | Production | 25.4 MBoe/d | Flat YoY | | LOE (net of hedges) | - | Reduced by 12% | | Proved Reserves | 107 MMBoe | Up 4% | | Reserve Replacement Ratio | 147% | - | - The company achieved significant operational improvements, including a 12% year-over-year reduction in Lease Operating Expenses (LOE) and an over 80% reduction in methane emissions[6] Fourth Quarter 2024 Highlights Q4 2024 reported a net loss, offset by positive Adjusted Net Income and Free Cash Flow, with production increasing sequentially Fourth Quarter 2024 Key Metrics | Metric | Value | Change (QoQ) | | :--- | :--- | :--- | | Net (Loss) | $(2) million | Down from $70 million income | | Adjusted Net Income | $17 million | Up 55% | | Adjusted EBITDA | $82 million | Up 22% | | Free Cash Flow | $24 million | Down 47% | | Production | 26.1 MBoe/d | Up 5% | - A fixed quarterly dividend of $0.03 per share was declared, representing an annualized yield of 3% based on the share price as of February 28, 2025[6] 2025 Outlook Highlights Berry anticipates stable 2025 production and a significant capital program, with a strategic shift in allocation towards Utah assets - Full-year 2025 production is estimated to be 24.8 - 26.0 MBoe/d, with oil comprising approximately 93% of the total[6] - The capital expenditure program is set at $110 - $120 million, with flexibility to adjust based on commodity prices[6] - There is a notable strategic shift in capital allocation, with 40% of the 2025 budget directed to Utah, up from 25% in 2024[6] Management Commentary Management highlighted success in generating sustainable free cash flow, improving capital efficiency, and reducing costs, alongside strategic expansion and acquisition efforts - Successfully drilled 28 sidetracks in the thermal diatomite asset with a rate of return exceeding 100%, unlocking potential for an additional 115 sidetracks[7] - Expanded development in the Uinta Basin through two farm-ins/acreage exchanges, gaining technical data from 6 horizontal wells with peak rates up to 2,000 Boe/d[7] - The company is actively evaluating accretive deals, both large and small, to pursue scale and diversification, enhance cash flows, and expand its inventory[7] Financial and Operating Results Detailed overview of Berry Corporation's financial and operating performance for Q4 and full year 2024 Fourth Quarter 2024 Financial and Operating Summary Q4 2024 production increased, with a net loss offset by positive Adjusted Net Income and Free Cash Flow Q4 2024 Selected Comparative Results ($ in millions, except per share) | Metric | Q4 2024 | Q3 2024 | Q4 2023 | | :--- | :--- | :--- | :--- | | Production (mboe/d) | 26.1 | 24.8 | 25.9 | | Net (Loss) Income | $(2) | $70 | $63 | | Adjusted Net Income | $17 | $11 | $10 | | Adjusted EBITDA | $82 | $67 | $70 | | Cash Flow from Operations | $41 | $71 | $79 | | Free Cash Flow | $24 | $45 | $62 | Full Year 2024 Financial and Operating Summary FY2024 production remained flat, with net income decreasing but Adjusted Net Income increasing, while Free Cash Flow decreased due to higher capital expenditures Full Year 2024 Selected Comparative Results ($ in millions, except per share) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Production (mboe/d) | 25.4 | 25.4 | | Net Income | $19 | $37 | | Adjusted Net Income | $52 | $39 | | Adjusted EBITDA | $292 | $268 | | Cash Flow from Operations | $210 | $199 | | Capital Expenditures | $102 | $73 | | Free Cash Flow | $108 | $126 | Capital Management and Shareholder Returns Details Berry Corporation's capital structure, liquidity, and shareholder return strategy, emphasizing debt reduction and dividend policy Capital Structure As of year-end 2024, Berry maintained a strong capital structure with significant liquidity and a manageable leverage ratio, expecting to fund its 2025 capital program from operating cash flow Liquidity and Debt as of Dec 31, 2024 | Item | Amount ($ millions) | | :--- | :--- | | Term Loan Outstanding | $450 | | Revolver Borrowings | $0 | | Cash and Cash Equivalents | $15 | | Revolver Availability | $63 | | Delayed Draw Term Loan | $32 | | Total Liquidity | $110 | - The company's leverage ratio was 1.49x as of year-end 2024[12] Shareholder Returns The company shifted its capital allocation strategy to prioritize debt reduction, while maintaining a fixed quarterly cash dividend - The company's capital allocation approach now prioritizes debt reduction[13] - A fixed cash dividend of $0.03 per share was approved, payable on April 1, 2025, to shareholders of record as of March 22, 2025[14] 2025 Outlook and Strategy Outlines Berry Corporation's 2025 production and capital expenditure guidance, risk management strategies, and proved reserves analysis 2025 Guidance Berry's 2025 guidance projects average daily production and capital expenditures, reflecting a strategic pivot in capital allocation Full Year 2025 Guidance | Metric | Low | High | | :--- | :--- | :--- | | Average Daily Production (boe/d) | 24,800 | 26,000 | | % Oil Production | 91% | 95% | | Non-energy LOE ($/boe) | $13.00 | $15.00 | | Energy LOE (unhedged) ($/boe) | $12.70 | $14.50 | | Capital Expenditures ($ millions) | $110 | $120 | - Capital allocation for 2025 is split with approximately 60% directed to California and 40% to Utah[21] Risk Management Berry actively manages commodity price risk through hedging a significant portion of its estimated 2025 oil production and natural gas demand, aligning with debt refinancing requirements - 75% of estimated 2025 oil production is hedged at an average strike price of $74.24 per barrel of Brent[18] - Approximately 70% of expected 2025 gas demand is hedged with an average swap price of $4.25 per MMBtu[18] - The company is required by its debt agreement to hedge a minimum of 75% of PDP volumes for the first 24 months on a rolling basis[18] Proved Reserves As of year-end 2024, Berry's proved reserves totaled 107 MMBoe, with a high percentage of proved developed and oil, and a significant PV-10 value Year-End 2024 Proved Reserves | Metric | Value | | :--- | :--- | | Total Proved Reserves | 107 MMBoe | | % Proved Developed | 58% | | % Oil | 96% | | Standardized Measure | $1.8 billion | | PV-10 Value | $2.3 billion | - Only 5% of the company's California PUD reserves are in areas where new drill permits are currently constrained[19] Detailed Financial Statements and Operational Data Presents detailed financial statements and operational data, covering consolidated results, cash flow, balance sheet, commodity pricing, production, and capital expenditures Summary of Results FY2024 total revenues decreased from 2023, primarily due to lower service revenue and derivative losses, resulting in a lower net income Consolidated Statement of Operations Data (Year Ended, $ in thousands) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | Total revenues and other | $776,501 | $903,460 | | Total expenses and other | $709,443 | $812,386 | | Income before income taxes | $28,079 | $55,425 | | Net income | $19,251 | $37,400 | | Diluted EPS | $0.25 | $0.48 | Cash Flow and Balance Sheet Data FY2024 net cash from operating activities increased, while net cash used in investing activities decreased significantly, with total assets of $1.52 billion at year-end Cash Flow Data (Year Ended, $ in thousands) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $210,220 | $198,657 | | Net cash used in investing activities | $(105,556) | $(175,272) | | Net cash used in financing activities | $(79,463) | $(64,800) | Balance Sheet Data (As of Dec 31, $ in thousands) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | Total current assets | $149,643 | $140,800 | | Total property, plant and equipment, net | $1,320,380 | $1,406,612 | | Long-term debt | $384,633 | $427,993 | | Total stockholders' equity | $730,636 | $757,976 | Commodity Pricing In 2024, the weighted average realized sales prices for oil and natural gas, both before and after hedges, are presented for comparative analysis Weighted Average Realized Sales Prices (Year Ended) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Oil without hedges ($/bbl) | $73.70 | $75.05 | | Oil with hedges ($/bbl) | $72.11 | $71.67 | | Natural gas ($/mcf) | $2.70 | $6.94 | | Purchased Natural Gas, after hedges ($/mmbtu) | $4.53 | $6.42 | Production Statistics Q4 2024 total production increased from Q3, driven by California oil, while full-year 2024 total production remained flat Net Production Per Day | Production (MBoe/d) | Q4 2024 | Q3 2024 | Q4 2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Oil (MBbl/d) | 24.3 | 22.8 | 24.0 | 23.5 | 23.5 | | Total Natural Gas (Boe/d) | 1.4 | 1.6 | 1.3 | 1.5 | 1.5 | | Total NGLs (MBbl/d) | 0.4 | 0.4 | 0.6 | 0.4 | 0.4 | | Total Production (MBoe/d) | 26.1 | 24.8 | 25.9 | 25.4 | 25.4 | Capital Expenditures Full-year 2024 capital expenditures significantly increased from 2023, while fourth-quarter expenditures remained consistent year-over-year Capital Expenditures ($ in thousands) | Period | 2024 | 2023 | | :--- | :--- | :--- | | Q4 | $17,217 | $17,003 | | Full Year | $102,352 | $73,127 | Non-GAAP Financial Measures and Reconciliations Provides reconciliations for key non-GAAP financial measures, including Adjusted EBITDA, Free Cash Flow, Leverage Ratio, Adjusted Net Income, and E&P Operating Costs Adjusted EBITDA Reconciliation Adjusted EBITDA for Q4 and full year 2024 increased, with the reconciliation from net income including adjustments for various non-recurring items Adjusted EBITDA Reconciliation (Year Ended, $ in thousands) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | Net income | $19,251 | $37,400 | | Add: Interest, Taxes, DD&A, etc. | $272,513 | $230,857 | | Adjusted EBITDA | $291,764 | $268,257 | Free Cash Flow Reconciliation Full-year 2024 Free Cash Flow decreased from 2023, calculated as net cash from operations less capital expenditures Free Cash Flow Reconciliation (Year Ended, $ in thousands) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $210,220 | $198,657 | | Subtract: Capital expenditures | $(102,352) | $(73,127) | | Free Cash Flow | $107,868 | $125,530 | Leverage Ratio As of year-end 2024, Berry's leverage ratio was 1.49x, calculated based on net debt and trailing twelve-month Adjusted EBITDA Leverage Ratio Calculation (as of Dec 31, 2024, $ in thousands) | Line Item | Value | | :--- | :--- | | 2024 Term loan borrowings | $450,000 | | Subtract: Unrestricted cash | $(15,336) | | Net Debt | $434,664 | | Trailing twelve month Adjusted EBITDA | $291,764 | | Leverage Ratio | 1.49x | Adjusted Net Income (Loss) Reconciliation Full-year 2024 Adjusted Net Income increased from 2023, with primary adjustments to GAAP net income including derivative effects and impairment charges Adjusted Net Income Reconciliation (Year Ended, $ in thousands) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | Net income | $19,251 | $37,400 | | Total additions (subtractions), net | $45,657 | $2,522 | | Income tax expense of adjustments | $(12,473) | $(692) | | Adjusted Net Income | $52,435 | $39,230 | E&P Operating Costs Full-year 2024 lease operating expenses (LOE) per-boe significantly improved from 2023, both unhedged and hedged, primarily driven by lower energy costs Lease Operating Expenses (Year Ended, per boe) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | Energy LOE - unhedged | $11.21 | $21.16 | | Non-energy LOE | $13.10 | $13.05 | | Lease operating expenses (unhedged) | $24.31 | $34.21 | | Gas purchase hedges - realized | $2.63 | $(3.76) | | Lease operating expenses - hedged | $26.94 | $30.45 | Proved Reserves Analysis Provides an analysis of Berry Corporation's proved reserves, including breakdown by location, PV-10 reconciliation, and changes in 2024 Proved Reserves by Location As of year-end 2024, total proved reserves were 107 MMBoe, with California assets comprising the majority and a significant portion being proved developed Proved Reserves as of December 31, 2024 (MMBoe) | Category | California | Utah | Total | | :--- | :--- | :--- | :--- | | Proved Developed | 54 | 8 | 62 | | Proved Undeveloped | 41 | 4 | 45 | | Total Proved | 95 | 12 | 107 | PV-10 Reconciliation The total company PV-10 value of proved reserves as of year-end 2024 was significant, resulting in a substantial standardized measure after deducting future income taxes PV-10 Reconciliation (as of Dec 31, 2024, $ in millions) | Line Item | Value | | :--- | :--- | | California PV-10 | $2,143 | | Utah PV-10 | $110 | | Total Company PV-10 | $2,253 | | Less: present value of future income taxes | $(442) | | Standardized measure of discounted future net cash flows | $1,811 | 2024 Reserve Changes In 2024, the company added significant reserves through various categories, achieving a strong total reserve replacement ratio of 147% 2024 Reserve Changes (in MMBoe) | Category | Total Company | | :--- | :--- | | Extensions and discoveries | 1 | | Revisions of previous estimates | 11 | | Purchases of minerals | 1 | | Total reserves changes | 13 | | Production | (9) | | Reserve replacement ratio | 147% |