Berry Corporation operates in two segments: Exploration and Production (E&P), and Well Servicing and Abandonment (CJWS). Berry's E&P assets are primarily located in California and Utah, focusing on onshore, low geologic risk, and long-lived conventional oil and gas reserves. The company completed the acquisition of Macpherson Energy in September 2023 and acquired additional working interests in Kern County, California in December 2023. In the well servicing and abandonment segment, Berry operates one of the largest upstream well servicing and abandonment businesses in California, providing services to oil and natural gas production companies.
In terms of financial performance, Berry's Adjusted Free Cash Flow in 2023 was $97 million, of which $19 million was used for variable cash dividends, $10 million for share repurchases, and $51 million for bolt-on acquisitions, including the Macpherson Acquisition. Since the initial public offering in July 2018, the company has demonstrated its commitment to maximizing shareholder value and returning a substantial amount of free cash flow to shareholders through dividends and share repurchases. The company's shareholder return model allocates 80% of the Adjusted Free Cash Flow primarily for debt repurchases, stock repurchases, strategic growth, and acquisitions of producing bolt-on assets, and 20% for variable dividends.
Berry uses various metrics to manage and assess the performance of its operations, including Adjusted EBITDA, production from its E&P business, E&P field operations measures, HSE results, general and administrative expenses, and the performance of its well servicing and abandonment operations based on activity levels, pricing, and relative performance for each service provided. Adjusted EBITDA is the primary financial and operating measurement used to analyze and monitor the operating performance of both the E&P business and CJWS. The company also utilizes its shareholder return model to determine the allocation of Adjusted Free Cash Flow, aiming to optimize free cash flow allocation and long-term returns to shareholders, including deleveraging through enhanced cash flows and debt reduction.
Today the company's shares have moved 0.3% to a price of $7.11. For the full picture, make sure to review Berry's 10-K report.
