Berry Petroleum Expands Piceance Basin Asset Base


Piceance Basin
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Berry Petroleum Company has entered into a definitive agreement with EnCana Oil & Gas (USA) Inc. to jointly develop a portion of EnCana's North Parachute Ranch property in the Piceance Basin of western Colorado. Berry will fund the drilling of 90 natural gas wells on EnCana's valley lands and will acquire 4,300 gross acres elsewhere in the North Parachute Ranch property with a working interest of 95% and a net revenue interest of 79%.

Robert F. Heinemann, president and chief executive officer of Berry, said, "We are excited to have the opportunity to expand our reserves and drilling inventory in the prolific Piceance Basin. Berry's asset base is rapidly becoming balanced between natural gas and crude oil. The Company estimates it now has proved and probable reserves of almost 850 billion cubic feet of natural gas equivalent in this basin when combined with the Grand Valley field acquisition completed earlier this year. This project has the size and scale to materially grow Berry's natural gas production in the Rockies. With an inventory of 400 drilling locations, Berry plans to invest over $750 million of development capital over the next several years in this opportunity alone."

Dan Anderson, vice president of Rocky Mountain production, added, "We are pleased to partner with EnCana on this joint development project and look forward to maximizing the production and reserves from this new asset. In addition to the capital for the 90 participation wells, Berry will invest $24 million in 2006 to drill and complete wells on the Company's acquired acreage. We have two rigs available to start drilling in July and anticipate having a total of six rigs in 2006 as part of a continuous drilling program in the basin. We expect the productivity of the North Parachute Ranch wells to be comparable to wells in our adjacent Grand Valley project. Initial natural gas production from these wells ranges from 1.3 million to 2 million cubic feet per day."

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