Berry Corporation has recently released its 10-Q report, revealing its operations as an independent upstream energy company in the western United States. The company operates through two segments: Exploration and Production (E&P), and Well Servicing and Abandonment. 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's well servicing and abandonment segment provides services to oil and natural gas production companies in California.
In the 10-Q report, Berry Corporation discussed Item 2, "Management’s Discussion and Analysis of Financial Condition and Results of Operations." The company reported a non-cash pre-tax asset impairment charge of $44 million, $33 million after-tax on unproved oil and gas properties in certain California locations during the second quarter of 2024. The impairment represents approximately 2% of the total oil and natural gas properties in the E&P segment. Berry Corporation also evaluated its proved properties using fair value techniques and forward price curves to assess projects.
The company uses several 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, health, safety & environmental results, general and administrative expenses, and the performance of its well servicing and abandonment operations. Adjusted EBITDA is a non-GAAP financial measure used by management to analyze and monitor operating performance, while Adjusted Free Cash Flow is allocated for debt repurchases, stock repurchases, strategic growth, acquisitions of producing bolt-on assets, and variable dividends.
Berry Corporation also provided insights into its production, E&P field operations, lease operating expenses, electricity generation expenses, transportation expenses, marketing expenses, electricity revenue, transportation sales, and marketing revenues. The company highlighted that its operations are subject to complex federal, state, and local laws and regulations governing health and safety, environmental protection, and land use, which may restrict its properties and operations, increase costs, or lower demand. The market has reacted to these announcements by moving the company's shares -2.6% to a price of $5.91. For the full picture, make sure to review Berry's 10-Q report.
