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Berry Corp (bry) (BRY)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered a clean operational beat versus Wall Street on revenue, EPS, and EBITDA, while GAAP results were impacted by a non-cash impairment; FY25 guidance was reaffirmed and hedging remains robust. Revenue (ex-derivative gains) was $177.2M vs S&P Global consensus $165.5M*, Adjusted EPS was $0.12 vs $0.083*, and Adjusted EBITDA was $68.5M vs $64M* .
  • Operational discipline: hedged LOE was $26.40/boe, 9% below FY25 midpoint; production of 24.7 Mboe/d (93% oil) was slightly lower QoQ due to planned downtime tied to thermal diatomite drilling .
  • Balance sheet improved: liquidity rose to $120M, leverage ratio decreased to 1.37x; the Board declared a $0.03 dividend and the company repaid $11M of debt .
  • Strategic catalysts: front-loaded California thermal diatomite program with >100% ROR at recent strip and first operated 4-well horizontal pad in Utah expected online in Q3 (August), positioning 2H volume and cash flow growth .
  • Key near-term stock driver: continued execution in thermal diatomite and visibility on Uinta pad completions, with hedge protection (~73% of 2025 oil at ~$74.69 Brent) mitigating downside from commodity volatility .

What Went Well and What Went Wrong

What Went Well

  • Strong execution and reaffirmed guidance: “We are confident in our ability to navigate current market volatility and our 2025 outlook remains unchanged,” supported by cost improvements and strong hedge coverage .
  • Thermal diatomite momentum: California program expanded (drilled 2x wells vs Q4) with project economics >100% ROR at current strip; permits in hand to execute the 2025 plan .
  • Capital discipline and safety: Liquidity increased to $120M; leverage ratio improved to 1.37x; “0 recordable incidents, 0 lost time incidents and no reportable spills” in E&P operations .

What Went Wrong

  • GAAP net loss driven by non-cash impairment: Recorded a pre-tax impairment of $158M ($113M after-tax) on a non-thermal diatomite California property, leading to GAAP diluted EPS of $(1.25) .
  • Slight QoQ production decline to 24.7 Mboe/d due to planned downtime associated with drilling in thermal diatomite reservoirs (short-term headwind to volumes) .
  • LOE increased QoQ on an unhedged basis ($25.74/boe unhedged vs $23.24 in Q4), though hedged LOE was managed to $26.40/boe and below guidance midpoint .

Financial Results

Core Financials vs Prior Periods

MetricQ1 2024Q4 2024Q1 2025
Revenue (ex-derivatives) ($USD Millions)$207.3 $184.8 $177.2
Oil, natural gas & NGL sales ($USD Millions)$166.3 $158.0 $147.9
GAAP Diluted EPS ($)$(0.53) $(0.02) $(1.25)
Adjusted Diluted EPS ($)$0.14 $0.21 $0.12
Adjusted EBITDA ($USD Millions)$68.5 $81.8 $68.5
Operating Cash Flow ($USD Millions)$27.3 $41.4 $45.9
Production (Mboe/d)25.4 26.1 24.7

Results vs S&P Global Consensus (Q1 2025)

MetricConsensusActualDelta
Revenue ($USD Millions)165.5*177.2 +11.7; Bold beat
Adjusted EPS ($)0.0825*0.12 +0.0375; Bold beat
Adjusted EBITDA ($USD Millions)64.0*68.5 +4.5; Bold beat

Values marked with * were retrieved from S&P Global.

Segment Breakdown

Segment MetricQ1 2024Q4 2024Q1 2025
E&P Revenues ($USD Thousands)$175,597 $161,254 $153,512
Well Servicing & Abandonment Revenues ($USD Thousands)$35,468 $29,468 $29,747
Corporate/Eliminations ($USD Thousands)$(3,785) $(5,913) $(6,083)
Consolidated Revenues (ex-derivatives) ($USD Thousands)$207,280 $184,809 $177,176
Net (Loss)/Income Before Taxes – Consolidated ($USD Thousands)$(53,984) $(137) $(135,353)
Capital Expenditures – Consolidated ($USD Thousands)$16,936 $17,217 $28,389

KPIs

KPIQ1 2024Q4 2024Q1 2025
LOE – Hedged ($/boe)$28.44 $24.57 $26.40
Non-Energy LOE ($/boe)$13.50 $11.74 $13.91
Energy LOE – Hedged ($/boe)$14.94 $12.83 $12.49
Oil realized price with hedge ($/bbl)$73.14 $70.72 $69.56
Brent Index ($/bbl)$81.76 $74.01 $74.98
Liquidity ($USD Millions)N/A$110 $120
Net Debt ($USD Thousands)N/A$434,664 $399,748
Leverage Ratio (Net Debt/TTM Adj. EBITDA)N/A1.49x 1.37x
Dividend per share ($)N/A$0.03 $0.03

Guidance Changes

MetricPeriodPrevious Guidance (Q4 2024)Current Guidance (Q1 2025)Change
Average Daily Production (boe/d)FY 202524,800–26,000 24,800–26,000 Maintained
Non-energy LOE ($/boe)FY 2025$13.00–$15.00 $13.00–$15.00 Maintained
Energy LOE (unhedged) ($/boe)FY 2025$12.70–$14.50 $12.70–$14.50 Maintained
Natural Gas Purchase Hedge Settlements ($/boe)FY 2025$1.00–$1.60 $1.00–$1.60 Maintained
Taxes, Other Than Income Taxes ($/boe)FY 2025$5.50–$6.50 $5.50–$6.50 Maintained
Adjusted G&A – E&P & Corp ($/boe)FY 2025$6.35–$6.75 $6.35–$6.75 Maintained
Capital Expenditures ($M)FY 2025$110–$120 $110–$120 Maintained
Oil % of mixFY 2025~93% ~93% Maintained
Dividend ($/share)FY 2025Fixed $0.03/qtr $0.03 declared for Q2 payment Maintained

Earnings Call Themes & Trends

TopicQ3 2024 MentionsQ4 2024 MentionsQ1 2025 Current PeriodTrend
Hedging / Risk ManagementTerm loan covenant requires hedging; robust hedge book detailed 75% of 2025 volumes hedged at ~$74.24 avg strike 73% of 2025 oil at $74.69 Brent; increased 2026–2027 hedge floors via swaps Stable to stronger protection
California Regulatory NavigationN/AN/A“Constructive shift” in CA decision-maker messaging; permits in hand for 2025 Improving tone
Thermal Diatomite ExecutionSidetrack success; >100% ROR; expanded inventory 28 sidetracks in 2024 with >100% ROR; ~34 planned for 2025 Drilled 2x wells vs Q4; >100% ROR; front-loaded program Accelerating
Uinta Basin DevelopmentAdditional farm-in; JV evaluation for horizontals Expanded appraisal; 6 non-op wells peak up to 2,000 Boe/d Operated 4-well pad drilled ahead of schedule; frac in June; IP expected Aug Advancing to operated
Cost Discipline (LOE, G&A)LOE hedged ~24–27 $/boe range; cost optimization Adjusted G&A reduced vs prior year; hedged energy cost management Hedged LOE $26.40/boe; non-energy LOE $13.91/boe; adjusted G&A $7.19/boe Mixed QoQ but below guidance midpoint
Safety/ESGN/AMethane emissions reduced >80% Zero recordables/lost-time; expanded sustainability metrics Sustained improvement

Management Commentary

  • “Our cash flow is protected by our strong hedge position... We are confident in our ability to navigate current market volatility and our 2025 outlook remains unchanged.” – CEO Fernando Araujo .
  • “We strengthened our balance sheet by paying down $11 million of debt and returned $2 million in cash to shareholders... liquidity increased to $120 million, and we improved our leverage ratio to 1.37x.” – CEO Fernando Araujo .
  • “First quarter adjusted EBITDA was $68 million and operating cash flow was $46 million... total LOE per BOE was lower than our annual guidance as we optimize steam injection volumes while sustaining production.” – CFO Jeff Magids .
  • “We had 0 recordable incidents, 0 lost time incidents and no reportable spills during the first quarter.” – President Danielle Hunter .
  • “Economics of the thermal diatomite remain highly attractive... Most of these projects generate a rate of return in excess of 100%.” – CEO Fernando Araujo .

Q&A Highlights

  • Thermal diatomite scalability: Inventory depth with ~125 thermal diatomite sidetracks categorized as PUDs and ~1,000 future locations; received ~45 sidetrack permits YTD, enabling ramp pending Kern County EIR decision .
  • Uinta 4-well pad learnings and timeline: 3-mile laterals with 91% in-zone drilling; frac in June, clean-up and facility tie-ins, initial production expected late July with meaningful rates in August; cost savings of ~$90k per well by fueling rigs with produced gas .
  • California operating advantages: Extensive sidetrack PUD inventory (~225 of ~500 PUDs at YE2024), basin familiarity, and >100% ROR projects underpin resilience and growth .

Estimates Context

  • Q1 2025 beat across revenue, EPS, and EBITDA versus S&P Global consensus: Revenue $177.2M vs $165.5M*; Adjusted EPS $0.12 vs $0.0825*; Adjusted EBITDA $68.5M vs $64.0M* .
  • FY25 consensus implies EPS ~$0.14* and EBITDA ~$232M*; hedge protection and 2H volume uplift from thermal diatomite and Uinta horizontals may support upward revisions to EBITDA if LOE stays below guidance and volumes trend up. Values marked with * were retrieved from S&P Global.

Key Takeaways for Investors

  • Operational beat masked by impairment: Adjusted metrics and cash generation were solid; GAAP loss driven by $158M pre-tax non-cash impairment on non-thermal diatomite property .
  • Cost execution: Hedged LOE at $26.40/boe came in 9% below FY25 midpoint; adjusted G&A $7.19/boe; supports sustainable FCF at strip .
  • Hedge-supported downside protection: ~73% of 2025 oil hedged at ~$74.69 Brent and 80% of 2025 gas purchases hedged ($4.24/MMBtu), reducing earnings volatility .
  • Near-term catalysts: Q3 timing for first operated Uinta pad; 2H uplift from front-loaded thermal diatomite program; watch August production updates .
  • Balance sheet trajectory: Improved liquidity ($120M) and leverage ratio (1.37x); continued debt reduction and fixed dividend ($0.03) provide capital return visibility .
  • Discrepancy to note: Press release Free Cash Flow of $17.5M vs CFO comment on $7M after working capital changes—investors should reconcile cash flow definitions and working capital impacts .
  • Medium-term thesis: If regulatory tone in California continues improving and Uinta execution confirms type curves, BRY can compound FCF with low-capital-intensity projects, supported by robust hedges and improving leverage .
Values marked with * were retrieved from S&P Global.

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