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Berry Petroleum doubles profits in first quarter
| Tuesday, Apr 29 2008 10:40 AM
Last Updated: Wednesday, Apr 30 2008 10:18 AM
Berry Petroleum Co. more than doubled profits in the first quarter, the Bakersfield-based — for now — oil company announced Tuesday morning.
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The publicly traded oil and gas producer — which last month said it is moving corporate headquarters to Denver this summer — earned net income of $43 million, or 95 cents per diluted share, for the first three months of 2008.
That’s an increase of 128 percent compared to a year ago, when Berry earned $18.9 million, or 42 cents per diluted share.
High oil prices played a part in Berry’s profits.
“In the current price environment, the economic returns from Berry’s oil projects are exceptional,” said Berry’s chief executive, Robert Heinemann, in the earnings release.
Income gains from oil and gas sales far outpaced increases in production costs, numbers show, fetching Berry a record-breaking quarter for discretionary cash flow.
In a conference call, Heinemann called Berry’s $102 million in discretionary cash — more than double its $48 million a year ago — the “highlight of the quarter.”
Cash earned in 2008 is expected to more than pay for equipment and other investments, including the corporate move, that had been planned for the year, Heinemann said.
The nearly 100-year-old company, which incorporated in 1985, focuses on oil and natural gas production in California, Colorado and Utah.
In the Bakersfield area, operations include heavy oil production in the Poso Creek and Midway-Sunset fields. Recent investments in recovery methods using steam helped boost heavy oil production, Heinemann said during the conference call.
Natural gas operations are located mostly in the Rocky Mountains and have been a target of major investment by Berry in the last four years.
In June, Berry will move corporate headquarters to Denver but expects local operations to continue with little change. Berry’s long-time chief financial officer, Ralph Goehring, who announced his summer retirement in December, bid farewell to market analysts during his final conference call.
“This is my last official report; I am retiring in June,” said Goehring, who has held the top finance post since 1992. Goehring called his time with Berry a “fantastic journey” and said the company was in “excellent financial shape.”
Berry is one of just two companies headquartered in Kern County traded on the New York Stock Exchange.
The other is Tejon Ranch Co., which will be the only local firm listed on the so-called “Big Board” after Berry’s corporate move.
Berry Petroleum is traded under the symbol BRY.
Shortly after noon California time, stock prices were down 95 cents a share at $49.86.
Berry’s annual shareholders’ meeting will be held at 10 a.m. May 14 at Four Points by Sheraton on California Avenue.