Berry Corporation (bry)

You're standing by and welcome to Barry Corporation's second quarter 2024 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 this session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Todd Crabtree, Investor Relations. Please go ahead, sir.

Thank you, Jonathan, and welcome, everyone. Thank you for joining us for BERI's second quarter 2024 earnings teleconference. Earlier today, BERI issued an earnings release highlighting 2024 second quarter results. Speaking this morning will be Fernando Araujo, our chief executive officer, Danielle Hunter, our president, 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 of today's discussion contains 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 investor relations website, ir.bry.com, has a link to the earnings release, an investor deck aligned with this call, SEC filings, and our most recent investor presentation. Any information, including forward-looking statements made on this call or contained in the earnings release and those presentations, 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 and on our website for reconciliation between all adjusted measures mentioned in today's calls 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 Fernando.

Thanks, Todd. Welcome, everyone, and thank you for joining us. In the second quarter, we delivered strong financial and operational results. generating adjusted EBITDA of $74 million and producing 25,300 barrels of oil equivalent a day. Our teams continue to perform reliably and with excellence, and we remain on track to deliver results in line with the guidance provided earlier this year. We are focused on our strategy of creating value by generating sustainable free cash flow with high rates of return in low capital intensity projects optimizing our cost structure and maintaining balance sheet strength while meeting the highest compliance standards. Production quarter over quarter was sustained by a combination of strong results from our development activity and protecting base production. Our thermal dynamite reservoir is an example of protecting the base. Since 2019, exclusive of drilling activity in 2024, we have increased production in this reservoir by 19% through superior reservoir management and workovers. This is a testament to the ingenuity of our technical teams who continue to find capital efficient ways to increase production. In the second quarter, we drilled 19 wells, with 15 in California and four vertical wells in Utah, with production from our drilling activity outperforming expected results. We have the necessary drilling permits in hand that will allow us to complete our planned drilling program for 2024. And in the second quarter, we received new drill permits that will support our development plans in 2025. Turning to Utah, the Uinta Basin has seen increased activity and consolidation, and this is exciting. The four horizontal wells we farmed into earlier this year were put on production in the second quarter and are performing better than our pre-drill estimates. These four wells are adjacent to our existing acreage and operations. We believe the resource on Berry's nearly 100,000 net operated acres, which is almost entirely held by production, has the potential to be significant. Berry has a cost advantage position in this plane. We are in the shallow end of the basin, we have no entry cost, and have significant infrastructure in place which will drive our long-term capital efficiency. An example of this is our gas production and related infrastructure, which will help us reduce fuel costs in our drilling and completion operations. Based on what we know today, these wells are highly economical and would compete for capital with the rest of our portfolio. Our strategy with this play is consistent with our capital discipline and proven financial policy of living within free cash flow while increasing enterprise value. We've kicked off a process to farm out a portion of our 2025 and 2026 program, which we believe will allow us to better manage capital and could potentially bring additional technical insight. We are very excited about the resource potential we have in Utah and look forward to sharing our future development plans later this year. I will now turn the call over to Mike.