Berry Replaces 293% of 2007 Production, Increases Proved Reserves
Berry Petroleum Company reported that estimated proved oil and gas reserves increased by 13% to 169 million barrels of oil equivalent (BOE) as of December 31, 2007. In 2007, Berry added 35.4 million BOE at a finding and development cost of $10.07 per BOE and replaced 293% of the 9.8 million BOE (26,900 BOE per day) it produced in 2007.
Robert Heinemann, president and chief executive officer, stated, "Organic growth provided the increase in our proved reserves for 2007 as we had an extensive development program that added proved reserves in five of our six core asset areas. We booked an estimated 13.1 million BOE in proved reserves from our Piceance development, and given our large inventory there, we expect to add significant proved reserves for several years to this asset. In California, we added approximately 14.3 million BOE mostly from our N. Midway Diatomite, Poso Creek and Ethel D assets, and in the Rockies, our Uinta and DJ development activities added another 8.0 million BOE."
At year-end 2007, the Company's reserve mix includes 117 million barrels of crude oil, condensate and natural gas liquids, and 316 billion cubic feet of natural gas, or 69% oil and 31% natural gas. Geographically, 60% of proved reserves are in California and 40% in the Rocky Mountain region. The Company's year-end reserves-to-production ratio increased slightly to 16.5 years, based on annualized fourth quarter 2007 average daily production. Proved developed reserves represent 61% of total proved reserves.
Berry calculated its year-end 2007 proved reserves using year-end 2007 commodity prices of $95.98 per Bbl of oil (WTI) and a Henry Hub price of $7.48 per MMBtu of natural gas (both based on their respective NYMEX prices), adjusted by field differentials to arrive at the net price received by the Company as of December 31, 2007. Berry's average net price used in its reserve report is approximately $79.19 per Bbl of oil and liquids and $6.27 per Mcf of natural gas. The estimated discounted net present value using a 10% annual discount rate, or PV-10, of Berry's proved reserves at December 31, 2007, was $3.5 billion ($2.4 billion after-tax), compared to $1.6 billion ($1.2 billion after-tax) in 2006.
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