Mr. Heinemann continued, "Berry's performance in the third quarter was outstanding. Our quarterly earnings were a Company record as was our average daily production, which increased 4% over the second quarter of 2005 and 14% over last year's third quarter. We are continuing our growth strategy by investing record cash flows into our core producing assets and new exploitation opportunities. Berry raised its capital budget for 2005 by $29 million, or 27%, to $136 million to take advantage of these investment opportunities.
"Additionally, in August the board approved an 8% increase in the quarterly dividend beginning with the September 2005 payment, and issued a one-time special dividend of $.10 per share to allow shareholders to fully participate in the Company's success.
"Berry is currently appraising several of its new prospects, including the Company's Lake Canyon shallow oil and deep gas projects and the Coyote Flats Ferron gas and coal bed methane projects in the Uinta Basin of Utah. We are launching a five-well development program on our Tri-State Niobrara acreage in Kansas. The 25-well expansion of our California diatomite heavy oil project is well underway. Success on any of these projects could be very significant to the Company. In the fourth quarter, Berry increased its acreage position and now holds an interest in approximately 900,000 gross acres in the Rockies and Mid-Continent. We completed a `bolt-on' acquisition of a 50% working interest in 60,000 net acres adjacent to and immediately north of our Yuma County Niobrara gas properties in Colorado. We also closed on previously announced acreage in the North Dakota Bakken play. Berry intends to appraise all these opportunities in a decisive and expedient manner. To that end, the Company has purchased two drilling rigs and is working to secure the additional equipment needed to complete the drilling of our inventory over the next several years."
For the nine months ending September 30, 2005, net income was a record $82.0 million, or $3.65 per diluted share, up 87% from net income of $43.9 million, or $1.97 per diluted share, for the nine months ending September 30, 2004. Revenues were $291 million in the first nine months of 2005, up 50% from $194 million in the first nine months of 2004. For the nine months ending September 30, 2005, average daily production of 22,793 BOE increased by 13%, and the average realized sales price of $40.48 per BOE was up 41% from the first nine months of 2004.
Mr. Heinemann added, "We are accomplishing our diversification strategy as witnessed by our third quarter production volumes, which were 71% heavy oil, 14% light oil and 15% natural gas. Our reserves and production are moving toward a more balanced mix which will result in a portfolio less vulnerable to commodity price swings. It is our goal to continue to diversify our asset base."
Ralph J. Goehring, executive vice president and chief financial officer, said, "Our financial performance in the third quarter is unparalleled in the Company's history. The combination of record production and record high oil prices allows Berry to generate outstanding cash flow and returns on our investments. Net cash provided by operating activities was a record $122 million in the first nine months of 2005, up 56% from $78 million in the same period in 2004. In the first nine months of 2005, the Company invested $78 million in capital projects, $119 million in property acquisitions, retired debt of $44 million and paid dividends of $10 million.
"Our 2005 fourth quarter looks like it will be a very strong quarter for Berry. Likewise, 2006 is shaping up to be another record year in production as we target 25,000 BOE/D from existing producing assets, or 9% over our 2005 target of 23,000 BOE/D. We anticipate our 2006 capital program, excluding acquisitions, to be at least $150 million and funded out of cash flow."
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