Berry Corporation (bry)

Thank you for standing by. The Berry Corporation Q4 and full year 2021 earnings conference call will begin momentarily. Again, please stand by. Your conference will begin momentarily. Thank you. Thank you. Thank you. Good day and thank you for standing by. Welcome to the Berry Corporation Q4 in full year 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require assistance during the conference, please press star 0. I would now like to hand the conference over to your speaker, Todd Crabtree, Investor Relations. Please go ahead.

Thank you, Dennis, and welcome to everyone. Thank you for joining us for Barry's fourth quarter and full year 2021 earnings teleconference. Yesterday afternoon, Barry issued an earnings release highlighting full year 2021 and fourth quarter results. Speaking this morning will be Trem Smith, Chairman and CEO, Fernando Araujo, Chief Operating Officer and Executive Vice President, and Kerry Bates, Chief Financial Officer and Executive Vice President. Before we begin, I want to call your attention to the safe harbor language found in our earnings release. The earnings release and today's discussion contain certain projections and other forward-looking statements within the meaning 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, vry.com, has a link to the earnings release. Any information, including forward-looking statements made on this call or contained in the earnings release, reflect our analysis as of the date made. We have no plans or duty to update them except as required by law. Please refer to the tables in our earnings release for reconciliation between all adjusted measures mentioned in today's call and the related gap measures. We will also post the replay link of this call and the transcript on our website. We plan to file our 10-K and post the investor relations deck within a week. I will now turn the call over to Trim Smith.

Welcome, everyone, and thank you for joining us this morning. 2022 is going to be a great year for Barry, set up nicely by our 2021 performance. With our new shareholder return model in place and at today's oil and stock prices, we expect to deliver cash returns in the mid to high teens. In terms of dollars, this means that 2022 cash return is expected to be 160 to 190 percent of the 82 million we have returned since going public three and a half years ago. This translates to approximately $1.60 to $1.90 per share. As a reminder, our new shareholder return model implemented starting Q1 2022 allocates 60% of our discretionary cash flow primarily in the form of cash variable dividends. Its governing principles are predictability, transparency, and simplicity, just like our business model. The foundation of our business model is our base production, which is the production that comes from our existing producing wells and on average accounts for 90% of our total production year in and year out before we ever have to drill a new well. The terminal decline rate of our base production is low, approximately 13% per year. Our base production requires no new permits and is predictable. which is why we say that our development and production, our D&P business, can be modeled like a manufacturing or industrial business. Our 2022 goal is to maintain our production, which means we plan to keep production flat year on year. Let me briefly summarize how we do this. Our low-decline production accounts for 90%. of our production needs. The remaining 10%, which requires new permits, is achieved by drilling new wells for 6% of the production and by doing workovers in existing wells for the remaining 4%. Bottom line, 90% of our cash flows come from production out of existing producing wells. So when you combine our production profile with the current price forecast and run that through our new shareholder return model, Calculating our expected returns to shareholders is easy and predictable. In 2021 and early 2022, we reduced our carbon footprint by 13%, which is more than 205,000 metric tons, and reduced our operating costs by $14 million, mainly due to our focus on operational efficiencies and A&D activity, as well as ESG initiatives. Additionally, in the fourth quarter of 2021, we purchased C&J Well Services, a profitable business line, to provide standard well services to the industry in California and to accelerate the reduction of fugitive emissions by plugging and abandoning idle and orphan wells across California. This reduces actual and potential methane emissions, which is known to produce more than 80 times the warming power of carbon dioxide over the first 20 years of emission. We also commenced a solar project at the Hill property, which we expect to be fully functional in the fourth quarter 2022, and started the development of several water projects that will ultimately help with the reuse and reduction of water in our operations. I will come back to highlight some of our 2022 ESG initiatives in my concluding remarks. Now I'll turn it over to Fernando, who will highlight the operational results of a successful year.