Berry Corporation (bry)

Thank you for standing by and welcome to the Berry Corporation Q4 and full year 2020 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a questions and answers session. If you would like to ask a question during that time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. Mr. Todd Crabtree of Investor Relations, you may begin.

Thank you, Andrea, and welcome to everyone. Thank you for joining us for Barry's fourth quarter and 2020 full year earnings teleconference. Yesterday afternoon, Barry issued an earnings release highlighting full year 2020 and fourth quarter results, as well as our ongoing response to the COVID-19 uncertainties. Addressing these and other issues this morning will be Trem Smith, Board Chair and CEO, Fernando Araujo, Chief Operating Officer and Executive Vice President, and Kerry Bates, Chief Financial Officer and Executive Vice President. Trem will discuss our 2020 performance as well as our expectations for 2020. Fernando and then Kerry will share further details on how we are addressing the operational and financial aspects of our business. Before turning it over to questions, Trem will make a few concluding remarks. Before we begin, I want to call your attention to the safe harbor language found in our earnings release. The earnings release and this discussion today contains certain projections and other forward-looking statements within the meanings of federal securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements. These include risks and other factors outlined in our filings with the SEC. Our website, bry.com, has a link to the earnings release and our most recent investor presentation. Any information, including forward-looking statements made on this call or contained in the earnings release and that presentation, reflect our analysis as of the date made. We have no plans or duties to update them except as required by law. Please refer to the tables in our earnings release and on our website for reconciliation between all adjusted measures mentioned during today's call and the related gap measures. We will also post the replay link of this call and the transcript on our website. I will now turn the call over to Trent Smith.

Thank you, Todd. Good morning, everyone, and thank you for joining us today. As you all know, 2020 was a year unlike any other. We faced numerous challenges, including the economic issues spurred by the COVID-19 pandemic and the OPEC Plus created oversupply as well as a fraught political environment. But despite these remarkably difficult and ever-evolving headwinds, Barry delivered on its commitment it made in early 2020 to all of its stakeholders that we would enter 2021 in a strong position poised for growth. In 2020, as planned, our production for the year was essentially flat compared to 2019, with California production up for the year. We generated $131 million in levered free cash flow for the year, and currently we have more than $100 million in the bank and no debt. Part of this is due to the significant sustainable cost reductions we achieved in both non-energy OPEX, which was down about 9% year on year, and energy OPEX, which was down about 13% year on year. We are confident we will continue to reduce our OPEX through 2021 and this is fully integrated into our budget. As OPEC Plus was making its decision to oversupply the market in March of last year, we had deftly hedged 100% of our oil production for the remainder of 2020 at slightly less than $60 per barrel. Brent. Quick, data-driven decision-making is a hallmark of Berry. Even in a downturn, our fundamental principle of living out of levered free cash flow did not change. nor will it change in the future. The health and safety of our employees and the environment have always been critically important, and the COVID-19 pandemic highlighted its importance even more. We never shut down operations throughout this difficult year. I'm thrilled to report that in 2020, our total recordable incident rate, or TRIR, was 0.5, our lowest rate ever. This is well below the United States average for all industries which is a TRIR of 3.0. Turning to 2021 now, with the oil price strip well above $50 per barrel rent and our drive to return value to our shareholders, a key financial tenet for Berry, we are pleased to announce that the Berry Board recently approved reinstituting a quarterly dividend at $0.04 per share beginning in the first quarter. Operationally, we remain focused on our value-adding California portfolio. We are planning to keep company-wide year-over-year production flat and anticipate a very strong fourth quarter exit rate compared to 2020. We have realized month-to-month production improvements following our fall reorganization that included the addition of our new COO, Fernando Araujo. Our current plans include a total capital budget of 120 to 130 million in 2021. Included in the budget is our renewed focus on work over activity on existing wells. This activity is something that is extremely judicious in California and is a highly efficient use of our capital dollars. In addition, as mentioned, we are continuing to reduce costs across the organization. I am confident we will be successful. Fernando will expand on all of this more in a moment. Finally, and importantly, we are laser-focused on increasing our scale. Our growth strategy continues to be directed toward conventional, low corporate decline assets with strong cash flow. I'll now turn it over to Fernando.