Berry Corporation (bry)

Good day, and thank you for standing by. Welcome to the Berry Corporation Q3 2023 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker, Todd Crabtree with Investor Relations. Todd, the floor is yours.

Thank you, Liz, and welcome, everyone. Thank you for joining us for Barry's third quarter 2023 earnings webcast. Earlier today, Barry issued an earnings release highlighting 2023 third quarter results. Speaking this morning will be Fernando Araujo, our chief executive officer, and Mike Helm, our chief financial officer. Before we begin, I would like to call your attention to the safe harbor language found in our earnings release that was issued this morning. The 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, including our 10-Q, which will be filed later today. 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 reflects 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 and on our website for reconciliation between all adjusted measures mentioned in today's call and 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 Fernando.

Thanks, Todd. Welcome, everyone, and thank you for joining us. In the third quarter, we continue to deliver strong financial and operational results, generating $70 million in adjusted EBITDA and producing 25,300 barrels a day. We execute on our strategy to maximize shareholder value and generate meaningful and sustainable cash flow. In line with our shareholder return model, the board declared total dividends of 21 cents per share, a 50% increase compared to the prior quarter. We are currently on track to meet our goal to deliver 2023 cash return in the high single digits based on our current stock price. On September 15th, we closed our $70 million acquisition of McPherson Energy Corporation, delivering on our strategy to acquire accretive producing bolt-on assets. We have integrated the McPherson assets and people into BERI and have identified and already started implementing several initiatives that will reduce long-term costs and improve free cash flow. When we announced this acquisition, we said that we expected these assets to enhance BERI's free cash flow by 15 to 25% in 2024. Based on our cost savings opportunities implemented so far, we now expect to exceed these free cash flow estimates. An average daily production in Q3 was higher than the average for the first half of 2023. This is an outstanding achievement considering that we are on track to spend approximately 30% less capital in 2023 than originally planned due to our reallocation of capital to fund a portion of the MacPherson transaction. Base production continues to outperform our expectations for the year. especially in the thermal diatomite reservoir, where we have optimized our steam injection strategy, the results of which are shown on slide 12 of our investor deck. We expect our 2023 production to be in the mid-range of guidance, which has increased in connection with the closing of the MacPherson transaction. Our ongoing initiatives to lower operating and G&A expenses continue to bear fruit. Operating expenses on a BOE basis were about 10% lower in the third quarter than the first half of the year. Similarly, we reduced adjusted GNA by more than 2 million or 12% quarter over quarter. We are still focused on lowering our cost structure in Q4 and into 2024. In Q3, we had promising test results from a well targeting light oil and gas reservoirs, which do not require steam to produce. in an undeveloped block in the Midway Sunset field. We are still executing the testing program. Initial production results are exceeding our expectations and are being sold via existing infrastructure. This project highlights the quality of our oil-rich assets in the San Joaquin Basin, even after 100 years of production. There are still meaningful opportunities remaining across our acres. I'm excited about these new development opportunities. I look forward to providing further updates in the coming months. I will now turn the call over to Mike.