BRY

Berry Corporation's 10-Q Report Highlights Upstream Energy Focus

Berry Corporation has recently released its 10-Q report, providing a detailed insight into its financial condition and results of operations. The company operates as an independent upstream energy company in the western United States, with a focus on onshore, low geologic risk, and long-lived oil and gas reserves. Berry Corporation operates through two business segments: Exploration and Production (E&P), and Well Servicing and Abandonment.

In the E&P segment, Berry Corporation focuses on the development and production of onshore, low geologic risk, and long-lived conventional oil and gas reserves primarily located in California and Utah. The company's assets in California are situated in the San Joaquin basin, while its assets in Utah are located in the Uinta basin. The company's Well Servicing and Abandonment segment provides wellsite services in California to oil and natural gas production companies, including well servicing, well abandonment services, and water logistics.

In the recently released 10-Q report, Berry Corporation highlighted its strategy to create value by generating significant free cash flow in excess of operating costs, while optimizing capital efficiency. The company aims to maximize enterprise value through overall returns and has demonstrated its commitment to maximizing enterprise value and returning free cash flow to shareholders through dividends and share repurchases since its initial public offering in July 2018.

As part of its strategy, Berry Corporation also considers bolt-on acquisitions to maintain or moderately grow production volumes. The company has updated the definition of Adjusted Free Cash Flow, a non-GAAP measure, to better align with the full capital expenditure requirements. Berry Corporation believes that the successful execution of its strategy across its low-declining, oil-weighted production base will support its objectives to generate free cash flow, optimize capital efficiency, and maximize enterprise value.

In April 2024, Berry Corporation purchased a 21% interest in four lateral wellbores in Utah, adjacent to its existing operations. The company plans to evaluate opportunities on its own acreage based on the results from these wells.

The company uses various metrics to manage and assess the performance of its operations, including Adjusted EBITDA, Adjusted Free Cash Flow, 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.

Berry Corporation defines Adjusted EBITDA as the primary financial and operating measurement used to analyze and monitor the operating performance of both its E&P business and well servicing and abandonment operations. Adjusted Free Cash Flow is utilized by the company to determine the allocation of its free cash flow, with 80% primarily allocated to debt repurchases, stock repurchases, strategic growth, and acquisitions of producing bolt-on assets, and 20% in the form of variable dividends.

The company closely monitors its oil and gas production, measures the efficiency of its E&P field operations, and tracks its health, safety, and environmental performance as part of its commitment to conducting operations in an ethical, safe, and responsible manner.

Today the company's shares have moved -6.3% to a price of $7.96. For the full picture, make sure to review Berry's 10-Q report.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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