Berry (bry)(US:BRY)2025-05-08 18:18Operational Performance - The company drilled 12 wells in California during Q1 2025, with 10 being thermal diatomite sidetracks, expecting increased production in the second half of the year [116]. - As of March 31, 2025, the company held approximately 100,000 net acres in the Uinta Basin, indicating high operational control and potential for additional development [117]. - The company acquired a 21% working interest in four lateral wells in the Uteland Butte reservoir, with initial production rates exceeding expectations [118]. - The 2025 capital program includes drilling a four-well horizontal pad in the Uinta Basin, with all wells expected to be online by Q3 2025 [120]. - Average daily production decreased by 5% to 24.7 mboe/d for the three months ended March 31, 2025, compared to 26.1 mboe/d in the previous quarter [166]. - The company reported total mboe (thousand barrels of oil equivalent) of 2,225 in Q1 2025, a decrease from 2,400 in Q4 2024 and an increase from 2,310 in Q1 2024 [236]. Financial Performance - The company uses Adjusted EBITDA as a primary financial measure to analyze operating performance and plan capital expenditures [123]. - Free Cash Flow is utilized to measure the company's ability to pay dividends, reduce debt, and pursue growth opportunities [124]. - Total revenues increased by $3.6 million, or 2%, to $182.7 million for the three months ended March 31, 2025, compared to $179.1 million in the previous quarter [169]. - Oil, natural gas, and NGL sales decreased by $10 million, or 6%, to approximately $148 million for the three months ended March 31, 2025, primarily due to lower oil volumes [170]. - Net loss for the three months ended March 31, 2025, was $96.7 million, compared to a loss of $1.8 million in the previous quarter [175]. - Adjusted EBITDA decreased by 16% to $68.5 million for the three months ended March 31, 2025, compared to $81.8 million in the previous quarter [175]. - The company reported a net loss of $96.7 million for the three months ended March 31, 2025, compared to a net loss of $40.1 million for the same period in 2024 [198]. - Adjusted Net Income for the three months ended March 31, 2025, was $9,370,000, with a diluted EPS of $0.12, compared to $16,531,000 and $0.21 for December 31, 2024 [228]. Capital Expenditures and Budget - Total capital expenditures for Q1 2025 were approximately $28 million, with 60% allocated to California operations and 40% to Utah [155]. - The 2025 capital expenditure budget is projected to be between $110 million and $120 million, with a focus on increasing horizontal development in Utah [156]. - The company plans to spend approximately $14 million to $20 million on plugging and abandonment activities in 2025, similar to the $15 million spent in 2024 [157]. - Capital expenditures for the three months ended March 31, 2025, were $28,389,000, compared to $17,217,000 for December 31, 2024 [225]. Market Conditions - Average oil prices were relatively flat in Q1 2025 compared to Q4 2024 but declined in Q2 2025, extending a downward trend that began in H2 2024 [131]. - OPEC+ has extended production cuts of 3.65 million barrels per day through the end of 2026, impacting oil prices [132]. - For Q1 2025, the average realized price for Brent crude oil was $69.56 per barrel, representing 93% of the benchmark price, while WTI averaged $71.51 per barrel [139]. - The average realized price for purchased natural gas was $4.70 per mmbtu in Q1 2025, which is 121% of the benchmark price, compared to $4.38 per mmbtu in Q4 2024 [139]. - Utah's average realized oil price for Q1 2025 was $56.20 per barrel, significantly lower than the average Brent price of $74.98 for the same period [143]. Expenses and Losses - Lease operating expenses increased by 3% to $57.3 million for the first quarter of 2025, primarily due to higher well servicing activity [177]. - General and administrative expenses increased by 10% to $20.3 million for the three months ended March 31, 2025, compared to $18.4 million in the previous quarter [175]. - Impairment of oil and gas properties amounted to $157.9 million for the three months ended March 31, 2025, marking a significant increase [175]. - The company recorded a non-cash pre-tax asset impairment charge of $158 million ($113 million after-tax) for one of its non-thermal diatomite proved properties in California for the three months ended March 31, 2025 [184][207]. Liquidity and Debt - As of March 31, 2025, the company had liquidity of $120 million, consisting of $39 million in cash and $49 million in available borrowing capacity [240]. - The 2024 Term Loan has $439 million in borrowings outstanding as of March 31, 2025, with an initial term loan facility of $450 million [244]. - The company prioritizes debt reduction in its capital allocation approach, aligning with covenants in the 2024 Term Loan [241]. - The company expects to fund its 2025 capital program from cash flow from operations based on current commodity prices and drilling success rates [156]. Shareholder Returns - The company declared a cash dividend of $0.03 per share in Q1 2025, with another dividend of the same amount expected in May 2025 [257][258]. - The company did not repurchase any shares during Q1 2025, with a total of 11.9 million shares repurchased for approximately $114 million to date [261]. - The remaining total share repurchase authority as of March 31, 2025, was $190 million [260]. Environmental and Regulatory Compliance - The company has entered into contracts to purchase GHG compliance instruments totaling $22 million [288]. - The fair value of emission allowances required by California's cap-and-trade program was $5 million as of March 31, 2025, with a 10% price change resulting in less than $1 million change in expense [302].