Berry (bry)(BRY) - 2025 Q2 - Quarterly Results

Overview and Highlights This section summarizes management's strategic commentary and key financial and operational achievements for the quarter Management Commentary Management emphasized the completion of the full-year drilling program, anticipating sequential production growth and strong free cash flow generation - Full-year drilling activity is complete, with production expected to grow sequentially through year-end[4] - Positive regulatory developments in California could create new drill permitting opportunities by year-end[4] - All four Uinta wells in Utah are expected online in August, contributing to production growth in H2 2025[4] - The company anticipates strong free cash flow generation through the remainder of the year[4] Key Highlights Berry Corporation achieved 23.9 MBoe/d production, $34 million net income, and $53 million Adjusted EBITDA in Q2 2025, while reducing debt and maintaining strong hedge positions Q2 2025 Key Metrics | Metric | Value | | :--- | :--- | | Production (MBoe/d) | 23.9 (92% oil) | | Net Income ($ millions) | $34 | | Diluted EPS ($/share) | $0.43 | | Adjusted EBITDA ($ millions) | $53 | | Operating Cash Flow ($ millions) | $29 | | Total Debt Paid Down ($ millions) | ~$11 | - Reaffirmed full-year 2025 guidance and declared a quarterly dividend of $0.03 per share[1][5] - Maintains a strong hedge book, with 71% of remaining 2025 oil volumes hedged at $74.59/Bbl and 63% of 2026 volumes hedged at $69.55/Bbl[5] Financial Performance This section details the company's financial results, capital structure, and comprehensive financial statements for the reporting period Second Quarter 2025 Financial and Operating Summary Berry reported $34 million net income in Q2 2025, a turnaround from prior losses, with Adjusted EBITDA of $53 million and negative free cash flow of $26 million due to increased capital expenditures Selected Comparative Financial Results (in millions, except per share) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Production (MBoe/d) | 23.9 | 24.7 | 25.3 | | Net Income (Loss) ($ millions) | $34 | $(97) | $(9) | | Adjusted EBITDA ($ millions) | $53 | $68 | $74 | | Earnings per Diluted Share ($/share) | $0.43 | $(1.25) | $(0.11) | | Cash Flow from Operations ($ millions) | $29 | $46 | $71 | | Capital Expenditures ($ millions) | $54 | $28 | $42 | | Free Cash Flow ($ millions) | $(26) | $17 | $29 | Capital Structure and Shareholder Returns As of June 30, 2025, Berry maintained $101 million in total liquidity, reduced debt by $11 million in Q2, and approved a $0.03 per share quarterly dividend - As of June 30, 2025, total liquidity was $101 million, including $20 million in cash and $81 million in available borrowing capacity[8] - Paid down approximately $11 million of debt during Q2 2025, with a year-to-date total debt reduction of $23 million[9] - The Board of Directors approved a quarterly cash dividend of $0.03 per share[9] Detailed Financial Statements This section presents the consolidated statement of operations, cash flow, balance sheet, and segment results, highlighting $210.1 million in total revenues and $33.6 million net income for Q2 2025 Consolidated Statement of Operations Q2 2025 total revenues reached $210.1 million, driven by derivative gains, resulting in $33.6 million net income or $0.43 diluted EPS, a significant improvement from prior losses Consolidated Statement of Operations Highlights (in thousands) | Line Item | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Oil, natural gas and NGL sales ($ thousands) | $125,637 | $147,862 | $168,781 | | Gains (losses) on oil and gas sales derivatives ($ thousands) | $56,423 | $5,475 | $(5,844) | | Total revenues and other ($ thousands) | $210,078 | $182,651 | $199,634 | | Impairment of oil and gas properties ($ thousands) | $0 | $157,910 | $43,980 | | Net income (loss) ($ thousands) | $33,604 | $(96,680) | $(8,769) | | Diluted EPS ($/share) | $0.43 | $(1.25) | $(0.11) | Cash Flow and Balance Sheet Data Q2 2025 saw net cash from operating activities at $28.6 million, with long-term debt decreasing to $364.6 million and total stockholders' equity at $664.9 million Cash Flow Data (in thousands) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities ($ thousands) | $28,638 | $45,872 | $70,891 | | Net cash used in investing activities ($ thousands) | $(34,162) | $(19,770) | $(42,486) | | Net cash used in financing activities ($ thousands) | $(13,760) | $(16,876) | $(25,174) | Balance Sheet Data (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets ($ thousands) | $158,048 | $149,643 | | Long-term debt ($ thousands) | $364,602 | $384,633 | | Total stockholders' equity ($ thousands) | $664,941 | $730,636 | Segment Results The E&P segment generated $130.8 million in revenue and $81.0 million in pre-tax income in Q2 2025, with the majority of capital expenditures directed to this segment Q2 2025 Segment Performance (in thousands) | Segment | Revenues ($ thousands) | Net income (loss) before income taxes ($ thousands) | Capital expenditures ($ thousands) | | :--- | :--- | :--- | :--- | | E&P | $130,831 | $81,001 | $53,350 | | Well Servicing and Abandonment Services | $31,082 | $(296) | $333 | Operational Performance and Outlook This section reviews the company's production, capital expenditures, commodity risk management, and provides full-year guidance Production and Capital Expenditures Q2 2025 total production averaged 23.9 MBoe/d, with oil at 22.0 MBbl/d, while capital expenditures significantly increased to $54.2 million due to the Utah drilling program Average Daily Production | Production Type | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Total Oil (MBbl/d) | 22.0 | 23.0 | 23.4 | | Natural Gas (MMcf/d) | 9.1 | 7.9 | 8.9 | | NGLs (MBbl/d) | 0.4 | 0.4 | 0.4 | | Total (MBoe/d) | 23.9 | 24.7 | 25.3 | Capital Expenditures (in thousands) | Period | Amount ($ thousands) | | :--- | :--- | | Q2 2025 | $54,249 | | Q1 2025 | $28,389 | | Q2 2024 | $42,325 | Commodity Pricing and Risk Management Berry's Q2 2025 realized oil price was $67.54/bbl (with hedges), actively managing price risk by hedging 71% of remaining 2025 oil production and 80% of natural gas demand Weighted Average Realized Prices (Q2 2025) | Commodity | Price without Hedge ($/bbl or $/mmbtu) | Effect of Hedges ($/bbl or $/mmbtu) | Price with Hedge ($/bbl or $/mmbtu) | | :--- | :--- | :--- | :--- | | Oil ($/bbl) | $61.26 | $6.28 | $67.54 | | Purchased Natural Gas ($/mmbtu) | $2.80 | $1.89 | $4.69 | - The company has hedged 71% of its estimated oil production for the remainder of 2025 at an average Brent price of $74.59/Bbl[13] - Approximately 80% of expected natural gas demand for the rest of 2025 is hedged with an average swap price of $4.22/MMBtu[13] Total Gains (Losses) on Derivatives (in thousands) | Period | Amount ($ thousands) | | :--- | :--- | | Q2 2025 | $53,293 | | Q1 2025 | $11,166 | | Q2 2024 | $(8,486) | 2025 Full Year Guidance Berry reaffirmed its full-year 2025 guidance, projecting average daily production between 24,800 and 26,000 boe/d and capital expenditures of $110 to $120 million Reaffirmed Full Year 2025 Guidance | Metric | Low | High | | :--- | :--- | :--- | | Average Daily Production (boe/d) | 24,800 | 26,000 | | Non-energy LOE ($/boe) | $13.00 | $15.00 | | Capital Expenditures ($ millions) | $110 | $120 | - Approximately 60% of the 2025 capital program is directed to California, with the remaining 40% allocated to Utah[18] Non-GAAP Financial Measures and Reconciliations This section provides reconciliations for non-GAAP financial measures, including Adjusted EBITDA, Free Cash Flow, Adjusted Net Income, and E&P Operating Costs Adjusted EBITDA Reconciliation Q2 2025 Adjusted EBITDA was $52.9 million, reconciled from $33.6 million net income by adjusting for non-cash items and derivative gains Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net income (loss) ($ thousands) | $33,604 | $(96,680) | $(8,769) | | Interest expense ($ thousands) | 15,513 | 15,172 | 10,050 | | Income tax expense (benefit) ($ thousands) | 13,188 | (38,673) | (3,326) | | Depreciation, depletion, and amortization ($ thousands) | 35,294 | 40,392 | 42,843 | | Impairment of oil and gas properties ($ thousands) | — | 157,910 | 43,980 | | (Gains) losses on derivatives ($ thousands) | (53,293) | (11,166) | 8,486 | | Net cash received (paid) for scheduled derivative settlements ($ thousands) | 4,908 | (1,312) | (19,115) | | Adjusted EBITDA ($ thousands) | $52,915 | $68,450 | $74,329 | Free Cash Flow and Leverage Ratio Q2 2025 Free Cash Flow was negative $25.6 million, resulting from $28.6 million operating cash flow and $54.2 million capital expenditures, with a Leverage Ratio of 1.51x Free Cash Flow Reconciliation (in thousands) | Line Item | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities ($ thousands) | $28,638 | $45,872 | $70,891 | | Capital expenditures ($ thousands) | (54,249) | (28,389) | (42,325) | | Free Cash Flow ($ thousands) | $(25,611) | $17,483 | $28,566 | Leverage Ratio as of June 30, 2025 | Metric | Value (in thousands) | | :--- | :--- | | Net Debt ($ thousands) | $407,772 | | Trailing twelve month Adjusted EBITDA ($ thousands) | $270,266 | | Leverage Ratio (x) | 1.51x | Adjusted Net Income (Loss) Reconciliation Q2 2025 Adjusted Net Loss was $0.4 million or $0.00 per diluted share, primarily due to the removal of a $48.4 million net non-cash gain on derivatives Adjusted Net Income (Loss) Reconciliation (in thousands) | Line Item | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net income (loss) ($ thousands) | $33,604 | $(96,680) | $(8,769) | | (Gains) losses on derivatives ($ thousands) | (53,293) | (11,166) | 8,486 | | Net cash received (paid) for scheduled derivative settlements ($ thousands) | 4,908 | (1,312) | (19,115) | | Impairment of oil and gas properties ($ thousands) | — | 157,910 | 43,980 | | Income tax expense (benefit) of adjustments ($ thousands) | 12,742 | (39,783) | (8,617) | | Adjusted Net Income (Loss) ($ thousands) | $(364) | $9,370 | $14,155 | E&P Operating Costs (LOE) Analysis Q2 2025 unhedged Lease Operating Expenses (LOE) were $24.43 per Boe, with total hedged LOE at $27.97 per Boe after accounting for gas purchase hedges E&P Operating Costs (per Boe) | Line Item | Q2 2025 ($/Boe) | Q1 2025 ($/Boe) | Q2 2024 ($/Boe) | | :--- | :--- | :--- | :--- | | Energy LOE - unhedged | $10.32 | $11.83 | $9.52 | | Non-energy LOE | $14.11 | $13.91 | $13.91 | | Lease operating expenses (unhedged) | $24.43 | $25.74 | $23.43 | | Gas purchase hedges - realized | $3.54 | $0.66 | $4.05 | | Lease operating expenses - hedged | $27.97 | $26.40 | $27.48 |