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Berry Corp. reported a net loss of $45 million for the third quarter of 2023, compared to a net income of $26 million for the second quarter.
It had posted $191.6 million in net income for the third quarter of 2022.
“In the third quarter, we generated meaningful free cash flow and returned it to our shareholders through dividends and closing an acquisition that we expect will enhance our financial results going forward,” Fernando Araujo, Berry’s CEO, said in the company’s earnings release. “We have successfully integrated the Macpherson business and have identified and already started implementing cost reduction initiatives which we expect will enhance our free cash flows even more than originally indicated. Moreover, we are aggressively pursuing scale through accretive M&A, especially outside of California, in all cases to enhance our ability to generate sustainable free cash flow”.
The company’s average daily production in the third quarter was 25,300 barrels of oil equivalent per day (boepd), down two percent from the 25,900 boepd recorded for the second quarter. Oil production in the third quarter was 23,200 barrels per day, accounting for 92 percent of the total company production, with California production contributing 20,500 boepd or 81 percent of total production.
The quarter-on-quarter decrease in production was principally due to lower drilling and workover activities and accumulated inventory from first quarter production sold in the second quarter due to weather issues, the company said.
The company-wide realized oil price, including hedging effects, was $73.13 per barrel for the third quarter, compared to $69.87 per barrel for the second quarter.
Capital expenditures during the latest review period were approximately $12 million, excluding acquisitions, asset retirement obligation spending and well servicing and abandonment capital of $2 million. This represented a 43 percent decrease compared to the second quarter, mainly due to a decrease in workover and drilling costs, according to the company.
The slowdown in development activity was generally due to capital expenditure reductions made in connection with the Macpherson acquisition in September, it said. The company said it expects to reallocate approximately $30–35 million of its initial 2023 capital expenditure budget to fund a portion of the acquisition purchase price, of which approximately $53 million was paid at closing.
“We delivered another quarter of strong financial and operational results and declared $0.21 per share in variable and fixed dividends combined for the quarter,” stated Mike Helm, Berry’s CFO. “We generated Adjusted EBITDA totaling $70 million and Adjusted Free Cash Flow of $35 million, each a slight increase quarter-over-quarter. With the enhanced cash flows from the Macpherson assets, we expect to concentrate on improving our leverage, including through debt reduction”.
To contact the author, email andreson.n.paul@gmail.com
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