Berry Petroleum Co (BRY) said it has entered into an agreement with a private seller to acquire their interests in producing properties principally in the Wolfberry trend in West Texas for approximately $126 million in cash. The effective date of the transaction is January 1, 2010. Closing is expected in March 2010.
Berry's proved reserve estimates associated with the properties are 11.2 million barrels of oil equivalent, 92% of which are in the Wolfberry, 85% of which are oil reserves and 23% of which are proved developed reserves. In 2010, the acquisition is expected to add approximately thirteen hundred barrels of oil equivalent per day to Berry's production on a twelve month annual average.
Further, Berry is increasing its 2010 capital budget by an additional $30 million to range between $250 million and $290 million. The Company plans to drill approximately 27 wells on the Permian property and plans to fund the capital from internally generated cash flow. One rig is currently drilling and Berry expects the acquired properties to provide self-funded production growth over the coming years.
Berry expects its 2010 production to be between 32,250 and 33,000 barrels of oil equivalent per day, an increase of 8% to 10% over 2009. In addition, Berry's production from oil assets is expected to grow 20% by year-end 2010 driven by Diatomite and Wolfberry development.
Separately, Berry Petroleum Co said it intends to offer 7.0 million shares of its common stock in an underwritten public offering. Berry expects to grant the underwriters a 30-day option, solely to cover over-allotments, to purchase up to an additional 1.05 million shares of its common stock.
Net proceeds from the offering are expected to be used to fund the planned acquisition of certain properties in the Wolfberry trend of West Texas and for general corporate purposes. Pending the application of the proceeds for such purposes, Berry will use the net proceeds to reduce outstanding borrowings under its senior secured revolving credit facility.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.