Berry's Q1 2025: Key Contradictions on California Operations, Uinta Basin Production, and Thermal Diatomite Expansion

Permitting timeline and impact on California operations, timing and expectations for Uinta Basin production, thermal diatomite production and expansion, capital allocation and budgeting, and thermal diatomite program scalability are the key contradictions discussed in Berry's latest 2025Q1 earnings call.



Strong Financial Performance and Shareholder Returns:
- Berry Corporation generated $17 million of free cash flow in Q1 and improved its leverage ratio to 1.37x.
- The company returned $2 million in cash to shareholders and paid down $11 million of debt, reflecting a commitment to shareholder value and financial stability.

Successful Development Projects in California:
- Berry drilled twice as many wells in California in Q1 compared to Q4 2024 and maintained production at 24,700 barrels per day.
- The company's thermal diatomite development program is progressing successfully, with expected production and cash flow growth in the second half of the year.

Operational Efficiency in the Uinta Basin:
- Berry completed a 4-well horizontal pad in the Uinta Basin ahead of schedule and on budget, achieving significant geologic results and cost savings.
- The use of produced gas as a fuel source for drilling operations resulted in a 25% reduction in fuel costs, contributing to overall operational efficiency.

Sustainability and Regulatory Compliance:
- Berry reported 0 recordable incidents, 0 lost time incidents, and no reportable spills in its E&P operations during Q1.
- The company is actively engaged in regulatory compliance and environmental stewardship, with a focus on enhancing stakeholder transparency through expanded performance metrics.

Hedging Strategy and Market Volatility Management:
- Berry has approximately 73% of its oil production hedged at an average price of $74.69 per barrel of Brent for 2025.
- The company's strategic hedging transactions have provided additional protection in the current volatile pricing environment, ensuring cash flow stability.