Berry Corporation (bry)

Welcome to the Barrier Corporation Q3 2024 earnings call. At this time, all speakers are in a 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, one, one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star, one, one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Todd Crabtree, Investor Relations. Please go ahead.

Thank you, Corrine, and welcome everyone. And thank you for joining us for BERI's third quarter 2024 earnings conference call. Earlier today, BERI issued an earnings release highlighting 2024 third quarter results and other exciting developments. Speaking this morning will be Fernando Araujo, BERI's 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 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 shortly. 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, 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 addition to covering some of the operational highlights for the third quarter, including recent results in California and Utah that surpassed expectations, we have exciting news to report about our successful debt refinancing and our plans to unlock the significant value we are seeing in the Uinta Basin. We are excited about the road ahead and the value creation levers we have. First, turning to our third quarter performance, we delivered strong financial and operational results as we remain focused on optimizing our operations and managing our world-class assets with the highest health, safety, and environmental standards, all in an effort to drive sustainable free cash flow, maintain a healthy balance sheet, and generate long-term shareholder value. Total production for the quarter averaged 24,800 barrels of oil equivalent per day, a slight decrease from the prior quarter, mainly due to the timing of connecting new wells to production in our midway sunset field. These wells were put online at the end of the quarter with production increasing as we exited Q3, and this operational momentum continues. As a result, we are on track to reach the midpoint of a full year production guidance and once again demonstrate our proven ability to sustain production levels year over year. Year to date, we have drilled a total of 48 wells, including 10 new wells in California. Production from our drilling activity has exceeded expectations. We are excited about the exceptional results from the Sitrack wells drilling thermals in the thermal dynamite reservoir, which are yielding returns greater than 100%. These returns underscore the quality of our world-class California assets and the strength of our technical teams, whose experience and expertise have consistently created value. We have significant running room for similar Sitrack activity in 2025 and beyond, and these permits have continued to be available. For the past six years, we have been able to achieve our goal of maintaining stable production year-over-year net of divestments, despite the challenging and the changing regulatory and permitting environment. We have done so by drilling new wells and sidetracks and performing workovers, all of which are capital efficient, high return activities. As we plan for 2025, Based on current permitting processes and our healthy California inventory, we are confident that we can continue to successfully execute this strategy and maintain production for the next few years while generating sustainable free cash flow. Switching gears, we have signed a new commitment for a $545 million term loan credit facility that will enable Barry to redeem all of our outstanding notes that are due in February 2026. and replace our current RBL facility that matures next year. This refinancing marks a pivotal moment in our company's journey and positions as well to pursue strategic opportunities and drive long-term shareholder value. Mike will share more details on this momentarily. Finally, I want to update you on our Uinta Basin opportunity that continues to build momentum and we believe has the potential to drive significant value for years to come. The four Uinta Basin horizontal wells we farmed into earlier this year continue to perform better than expected, with an average gross peak production rate of approximately 1,100 barrels of oil equivalent per day per well. These wells are producing from the prolific Eutlen Butte Reservoir, which is one of several reservoirs being targeted for horizontal well development in the basin. Also, we just signed a second farming agreement covering nearly 5,800 gross acres and currently contemplating around 12 horizontal wells. The first two wells should be online by year end, and the remainder will be drilled in 2025 and 2026. Among other benefits, these two farmlands help accelerate the appraisal of our nearly 100,000 acres, which is almost entirely held by production. In addition to the performance of those farmland wells, Increased activity by our neighbors across the basin and adjacent to our existing acreage confirms the significant value potential in our Utah acreage. As a result, we are actively evaluating potential JV partners to help accelerate the development with horizontal wells. We would likely begin by drilling two multi-well paths starting in 2025. We have a unique, low-cost advantage position in Utah. We are in the shallow end of the basin with no additional entry cost. And we have significant infrastructure in place, including access to fuel gas that would lower drilling and completion costs, which will further drive long-term capital deficiencies. In sum, I want to emphasize that the opportunity and value potential we see in Utah has increased significantly over the last few months. There's still a lot of work ahead of us to delineate and realize the full potential of this asset. Based on what we know today, we believe Utah could, over the long term, be a transformational value creator that would accrete directly to our shareholders. With that, let me turn it over to Dan.