Berry Petroleum Co. ramped up production during the second quarter of 2012 in its four major regions in Utah, West Texas, Colorado and California, the company said last week.
The Denver-based company said production was up 16 percent in the region that stretches from the Placerita Canyon on the south to the Midway-Sunset field in the San Joaquin Valley. In an investor conference call, chief operating officer Michael Duginski said Berry drilled 38 wells in that region during the second quarter.
The Placerita field is located northwest of Sierra Highway and Placerita Canyon Road. Various companies have pumped oil there since 1948. Now it’s under the sole ownership of Berry, which last year started flooding older wells with steam to squeeze out more oil.
In its annual report for 2011, Berry said steam injection boosted daily production levels at Placerita to 2,300 barrels at year’s end from less than 1,900 daily barrels three months earlier. It said it planned to drill six additional wells in Placerita in 2012, and continue flooding older wells with stream.
Some of the target dates for new steam flooding in the region from Placerita north into Kern County were missed due to equipment delays, Duginski said in the Aug. 2 conference call, but the production benchmarks should be realized in the second half of 2012, he said.
All told, Berry was pumping 35,340 barrels of oil equivalent per day across all of its properties, including 26,300 barrels of crude oil (74 percent of total production) and 54 million cubic feet per day of natural gas. Oil production was up 5 percent over the first quarter of 2012, while natural gas production fell by 3 percent, as expected.
Net income was $81 million for the quarter on oil and gas revenues of $222 million. Not counting several one-time items, adjusted net income was $41 million (73 cents per share).
But the delays in getting some of the stream injection going, coupled with other challenges in West Texas, prompted the company to lower its full-year guidance to 37,000 barrels per day. That would represent 13 percent growth on the year – but it’s less than the company previously told investors to expect. Global Hunter Securities downgraded its rating of Berry to “neutral” and set a target price of $40 (from a previous $62). Berry was trading just over $40 on Tuesday, up 4 percent on the day.