Berry Petroleum Announces 2007 Targets for Capital Expenditures
Berry Petroleum announced budgeted capital expenditures of $320 million for 2007 with $267 million allocated for its development and appraisal activities and $53 million allocated to the Company's final acquisition payment related to its June 2006 Piceance acreage acquisition. The Company expects to end 2007 with 185 million barrels of oil equivalent (BOE) of proved reserves, a 25 percent increase compared to estimated year-end 2006 reserves of 148 million BOE. Berry's 2007 production target is 28,000 BOE per day, up 10% from the Company's estimated 2006 daily average of 25,400 BOE per day which has been recently impacted in the fourth quarter by a temporary refinery shutdown in the Rockies. The Company expects this shutdown will be rectified within the next month, enabling its Uinta basin crude production to begin to return to its pre-outage level, according to Robert F. Heinemann, president and chief executive officer.
Mr. Heinemann continued, "The execution of this capital program is the next step in Berry's growth plan, following our acquisition and appraisal of areas with significant development inventory. We have several key projects in this budget which provide us the ability to meet our reserve and production targets. In the gas-rich Piceance basin we expect to run four drilling rigs in 2007 to develop the Williams Fork member of the Mesaverde in the Grand Valley field. In California, the first phase of the full-scale diatomite development will concentrate on the central fairway, and in Utah, we will focus on the appraisal of Lake Canyon and Ashley Forest areas in the Uinta basin. Our projected significant reserve additions in 2007 demonstrate the impact of our Piceance acquisitions, the potential of our diatomite asset and ongoing development opportunities in our other core areas.
"Of the $267 million of development capital, we expect to spend $176 million (66%) and drill 300 wells in the Rockies and spend $91 million (34%) and drill 190 wells in California. We anticipate that our Piceance development will utilize two-thirds of our Rockies capital and our diatomite project will utilize just over half of our California capital. We have the rigs, equipment and services contracted or available to perform the work and expect our highest activity level in the second quarter following the winter season. Our 2007 plans are based on commodity prices consistent their level in 2006."
Berry Petroleum Company is a publicly traded independent oil and gas production and exploitation company with headquarters in Bakersfield, California.
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