Berry (bry)(US:BRY)2025-08-07 20:55Part I – Financial Information Financial Statements Berry Corporation's Q2 and H1 2025 financial statements reflect a decrease in total assets to $1.43 billion, a $63.1 million H1 net loss driven by a $157.9 million impairment, and $74.5 million in operating cash flow Condensed Consolidated Balance Sheets Total assets decreased to $1.428 billion by June 30, 2025, from $1.518 billion at year-end 2024, driven by reduced oil and gas property values, while stockholders' equity declined to $665 million Condensed Consolidated Balance Sheet Highlights (in thousands USD) | Account | June 30, 2025 (Unaudited) (USD) | December 31, 2024 (USD) | | :--- | :--- | :--- | | Total Current Assets | $158,048 | $149,643 | | Total Oil and Natural Gas Properties, net | $1,110,600 | $1,240,152 | | Total Assets | $1,428,115 | $1,517,686 | | Total Current Liabilities | $190,927 | $187,880 | | Long-term Debt, net | $364,602 | $384,633 | | Total Liabilities | $763,174 | $787,047 | | Total Stockholders' Equity | $664,941 | $730,636 | | Total Liabilities and Stockholders' Equity | $1,428,115 | $1,517,686 | Condensed Consolidated Statements of Operations Q2 2025 saw a net income of $33.6 million, a turnaround from Q2 2024's $8.8 million loss due to derivative gains, but H1 2025 recorded a $63.1 million net loss, impacted by a $157.9 million impairment charge Statement of Operations Summary (in thousands USD, except per share amounts) | Metric | Q2 2025 (USD) | Q2 2024 (USD) | H1 2025 (USD) | H1 2024 (USD) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues and Other | $210,078 | $199,634 | $392,729 | $335,714 | | Oil, Natural Gas & NGL Sales | $125,637 | $168,781 | $273,499 | $335,099 | | Gains (Losses) on Derivatives | $56,423 | $(5,844) | $61,898 | $(77,044) | | Impairment of Oil & Gas Properties | $0 | $43,980 | $157,910 | $43,980 | | Net Income (Loss) | $33,604 | $(8,769) | $(63,076) | $(48,853) | | Diluted EPS | $0.43 | $(0.11) | $(0.81) | $(0.64) | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity declined from $730.6 million at year-end 2024 to $664.9 million by June 30, 2025, primarily due to net losses and $6.1 million in dividend payments - Stockholders' equity decreased by $65.7 million in the first six months of 2025, driven by a cumulative net loss and dividend payments13 - Dividends declared on common stock totaled $0.06 per share ($0.03 in Q1 and $0.03 in Q2) for the six months ended June 30, 2025, amounting to approximately $6.1 million13 Condensed Consolidated Statements of Cash Flows Net cash from operating activities for H1 2025 was $74.5 million, down from $98.2 million in H1 2024, with $53.9 million used in investing and $30.6 million in financing, leading to a $10.1 million net cash decrease Cash Flow Summary (in thousands USD) | Activity | Six Months Ended June 30, 2025 (USD) | Six Months Ended June 30, 2024 (USD) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $74,510 | $98,164 | | Net Cash Used in Investing Activities | $(53,932) | $(61,147) | | Net Cash Used in Financing Activities | $(30,636) | $(35,164) | | Net (Decrease) Increase in Cash | $(10,058) | $1,853 | Notes to Condensed Consolidated Financial Statements Notes detail the company's $427.5 million term loan, commodity hedging, a $158 million Q1 2025 impairment charge, and segment performance for E&P and well servicing operations - The company operates in two business segments: exploration and production (E&P) in California and Utah, and well servicing and abandonment services in California18 - As of June 30, 2025, the company had $427.5 million outstanding under its 2024 Term Loan and no borrowings under its 2024 Revolver25 - In the first quarter of 2025, the company recorded a non-cash pre-tax asset impairment charge of $158 million ($113 million after-tax) on a non-thermal diatomite property in California due to changes in reserve estimates and market volatility101102 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses operations in California and Utah, commodity price volatility, a $158 million Q1 2025 impairment, capital program focus, and $101 million liquidity as of June 30, 2025 - The company's 2025 capital program focuses on thermal diatomite sidetrack wells in California and the development of its first operated four-well horizontal pad in the Uinta Basin, Utah130134 - Market uncertainty, influenced by OPEC+ actions and U.S. executive orders, contributed to oil price declines and a Q1 2025 non-cash pre-tax asset impairment charge of $158 million on a California property147148149 - As of June 30, 2025, the company had $101 million of liquidity, consisting of $20 million in cash, $49 million in available borrowing capacity, and $32 million in available commitments under its Delayed Draw Term Loan292 Production and Prices Average daily production decreased to 23.9 mboe/d in Q2 2025 from 25.3 mboe/d in Q2 2024, with realized oil prices falling to $61.26/bbl due to market conditions Average Daily Production (mboe/d) | Period | Q2 2025 (mboe/d) | Q1 2025 (mboe/d) | Q2 2024 (mboe/d) | | :--- | :--- | :--- | :--- | | Total (mboe/d) | 23.9 | 24.7 | 25.3 | Weighted-Average Realized Sales Prices (without hedges) | Product | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Oil ($/bbl) | $61.26 | $69.48 | $78.18 | | Natural Gas ($/mcf) | $2.30 | $3.95 | $1.78 | Results of Operations Q2 2025 revenues rose 5% to $210.1 million due to derivative gains, resulting in a $33.6 million net income, while H1 2025 saw a $63.1 million net loss due to a $158 million impairment charge - Q2 2025 vs Q2 2024: Oil, natural gas, and NGL sales decreased by $43.1 million (26%) due to lower prices and volumes. This was more than offset by a $62.3 million positive swing in gains on oil and gas sales derivatives, leading to a 5% increase in total revenues215216219 - H1 2025 vs H1 2024: A $113.9 million increase in impairment charges was the primary driver of the wider net loss. Total revenues increased by $57.0 million (17%), again due to a significant positive swing in derivative gains of $138.9 million236239242 - Q2 2025 vs Q1 2025: Total revenues increased by $27.4 million (15%), mainly due to a $50.9 million increase in gains on oil and gas sales derivatives, which masked a $22.2 million drop in commodity sales from lower prices and volumes196197199 Non-GAAP Financial Measures Adjusted EBITDA for Q2 2025 was $52.9 million and $121.4 million for H1 2025, both down year-over-year, while Free Cash Flow was negative $8.1 million for H1 2025 Adjusted EBITDA Reconciliation (in thousands USD) | Period | Q2 2025 (USD) | Q2 2024 (USD) | H1 2025 (USD) | H1 2024 (USD) | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $33,604 | $(8,769) | $(63,076) | $(48,853) | | Adjustments | $19,311 | $83,098 | $184,441 | $191,716 | | Adjusted EBITDA | $52,915 | $74,329 | $121,365 | $142,863 | Free Cash Flow Reconciliation (in thousands USD) | Period | H1 2025 (USD) | H1 2024 (USD) | | :--- | :--- | :--- | | Net cash provided by operating activities | $74,510 | $98,164 | | Capital expenditures | $(82,638) | $(59,261) | | Free Cash Flow | $(8,128) | $38,903 | Liquidity and Capital Resources As of June 30, 2025, the company had $101 million in liquidity, $428 million outstanding on its Term Loan, an active hedging program, and $190 million remaining in its share repurchase authority - The company's debt structure includes a 2024 Term Loan with $428 million outstanding and a 2024 Revolver with a $95 million borrowing base and $49 million of available capacity as of June 30, 2025292297299 - The company has an active hedging program, with significant volumes of crude oil production and natural gas purchases hedged through 2028 to reduce price volatility300304 - The company declared cash dividends of $0.03 per share in both March and May 2025. The stock repurchase program has $190 million of remaining authority, though no shares were repurchased in the first half of 2025310313314 Quantitative and Qualitative Disclosures About Market Risk The company manages commodity price volatility through hedging, with a net asset of $69 million in hedge positions as of June 30, 2025, sensitive to 10% price changes resulting in $147 million net asset or $8 million net liability - The most significant market risk is from volatile energy prices, which the company mitigates using derivative instruments like swaps, calls, and collars351352 - A sensitivity analysis on the company's hedge portfolio shows that a 10% decrease in oil and gas prices from June 30, 2025 levels would result in a net asset of approximately $147 million, while a 10% increase would result in a net liability of approximately $8 million354 Controls and Procedures As of June 30, 2025, the CEO and CFO concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during Q2 2025 - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective358 - No material changes were made to the company's internal control over financial reporting during the second quarter of 2025360 Part II – Other Information Legal Proceedings The company is involved in routine legal proceedings with no material changes, though a new CalGEM notification regarding injection well testing may result in an immaterial civil penalty - There have been no material changes to previously reported legal proceedings363 - A new matter arose on April 4, 2025, where CalGEM notified the company about overdue mechanical integrity testing on certain injection wells. The company has since brought the wells into compliance and expects any potential civil penalty to be immaterial364 Risk Factors No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K have occurred - No material changes to the risk factors disclosed in the Annual Report have occurred366 Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Purchases of Equity Securities No shares were repurchased during H1 2025, with $190 million remaining under the company's board-authorized share repurchase program as of June 30, 2025 - No shares were repurchased during the six months ended June 30, 2025367 - The company has $190 million of remaining authority under its stock repurchase program as of June 30, 2025368 Other Information No Rule 10b5-1 trading arrangements were adopted, modified, or terminated, and the Key Employee Agreement for Jeffrey Magids was amended effective August 5, 2025 - The company amended and restated the Key Employee Agreement for Jeffrey Magids, effective August 5, 2025, modifying the initial term, restrictive covenants, and severance provisions371 Exhibits This section lists exhibits filed with Form 10-Q, including credit agreement amendments, key employee agreements, and SEC certifications