Earnings Call Excerpt
Berry Petroleum Co. (BRY)
Q4 2008 Earnings Call
February 25, 2009 3:00 pm ET
Executives
Robert F. Heinemann – President and Chief Executive Officer
Michael Duginski – Chief Operating Officer
David D. Wolf – Chief Financial Officer
Analysts
David Tameron – Wachovia Capital Markets
Brian Singer – Goldman Sachs
Mike Jacobs – Tudor, Pickering, Holt & Co.
Philip McPherson – Global Hunter Securities
[Rocky Rasley] – Vaquero Energy
Gregg Boddy – JP Morgan
Duane Grubert – CRT Capital
Presentation
Operator
Welcome to the fourth quarter 2008 Berry Petroleum Company earnings conference call. (Operator Instructions) I would now like to turn the call over to your host for today’s call, Mr. Bob Heinemann, President and CEO. Please proceed, sir.
Robert F. Heinemann
I’d like to remind everyone we are conducting this call under Safe Harbor provisions. Joining me today are Michael Duginski our Chief Operating Officer, and David Wolf our Chief Financial Officer.
Today, Berry Petroleum has posted its 2008 results. The company earned $134 million of net income or $2.94 a share. This result is 3% higher than last year’s number of $130 million or $2.89 a share. The full year results for 2008 include a $12 million loss in the fourth quarter due to a $38.5 million write-off of receivables from the bankruptcy of Bay West of California, a subsidiary of Flying J Incorporated.
We also wrote off certain rig related charges and dry hole expense in the fourth quarter. For the full year 2008, these write-offs reduced our net income by approximately $25 million or $0.56 a share. The Flying J bankruptcy accounted for about 85% of this loss.
Overall, 2008 was another year of growth for Berry. Our operating cash flow increased by 71% to $410 million supported by the commodity prices of last year and due to the company’s production growth. Production averaged right at 32,000 barrels a day supported by increases from the developments in our diatomite, Poso Creek and Piceance assets, as well as the east Texas acquisition.
Obviously, our proved reserves of the third leg of the growth story from last year. Proved reserves increased 45% to 246 million barrels and we replaced 756% of the 11.7 million barrels equivalent produced last year. The oil and F&D cost, including the East Texas acquisition, was $12.30 a barrel. Our proved reserves now stand at 51% oil and 49% natural gas, 55% of the proved reserves are classified as proved developed. The reserve to production ratio increased to 19 years.
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