ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware (State of incorporation or organization) | 81-5410470 (I.R.S. Employer Identification Number) |
Large accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer x | Smaller reporting company ¨ | |||
Emerging Growth Company ý |
Page | ||
Item 1. | Financial Statements (unaudited) | |
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 5. | ||
Item 6. | ||
Berry Corp. (Successor) | ||||||
June 30, 2018 | December 31, 2017 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 3,600 | $ | 33,905 | ||
Accounts receivable, net of allowance for doubtful accounts of $950 at June 30, 2018 and $970 at December 31, 2017 | 56,860 | 54,720 | ||||
Restricted cash | 19,710 | 34,833 | ||||
Other current assets | 14,981 | 14,066 | ||||
Total current assets | 95,151 | 137,524 | ||||
Noncurrent assets: | ||||||
Oil and natural gas properties | 1,382,777 | 1,342,453 | ||||
Accumulated depletion and amortization | (88,548 | ) | (54,785 | ) | ||
1,294,229 | 1,287,668 | |||||
Other property and equipment | 112,618 | 104,879 | ||||
Accumulated depreciation | (8,928 | ) | (5,356 | ) | ||
103,690 | 99,523 | |||||
Other noncurrent assets | 22,086 | 21,687 | ||||
Total assets | $ | 1,515,156 | $ | 1,546,402 | ||
LIABILITIES AND EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable and accrued expenses | $ | 113,170 | $ | 97,877 | ||
Derivative instruments | 11,447 | 49,949 | ||||
Liabilities subject to compromise | 19,710 | 34,833 | ||||
Total current liabilities | 144,327 | 182,659 | ||||
Noncurrent liabilities: | ||||||
Long-term debt | 457,333 | 379,000 | ||||
Derivative instruments | 3,563 | 25,332 | ||||
Deferred income taxes | — | 1,888 | ||||
Asset retirement obligation | 88,575 | 94,509 | ||||
Other noncurrent liabilities | 12,862 | 3,704 | ||||
Commitments and Contingencies-Note 5 | ||||||
Equity: | ||||||
Series A Preferred Stock ($.001 par value, 250,000,000 shares authorized and 37,669,805 shares issued at June 30, 2018 and 35,845,001 shares issued at December 31, 2017) | 335,000 | 335,000 | ||||
Common stock ($.001 par value, 750,000,000 shares authorized and 33,087,889 shares issued at June 30, 2018 and 32,920,000 issued at December 31, 2017 | 33 | 33 | ||||
Additional paid-in-capital | 536,188 | 545,345 | ||||
Treasury stock, at cost | (20,006 | ) | — | |||
Accumulated deficit | (42,719 | ) | (21,068 | ) | ||
Total equity | 808,496 | 859,310 | ||||
Total liabilities and equity | $ | 1,515,156 | $ | 1,546,402 |
Berry Corp. (Successor) | Berry LLC (Predecessor) | |||||||||||||||
Three Months Ended | Three Months Ended | Six Months Ended | Four Months Ended | Two Months Ended | ||||||||||||
June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | February 28, 2017 | ||||||||||||
Revenues and other: | ||||||||||||||||
Oil, natural gas and natural gas liquids sales | $ | 137,385 | $ | 101,884 | $ | 263,010 | $ | 135,562 | $ | 74,120 | ||||||
Electricity sales | 5,971 | 5,712 | 11,423 | 6,603 | 3,655 | |||||||||||
(Losses) gains on oil and natural gas derivatives | (78,143 | ) | 23,962 | (112,787 | ) | 48,085 | 12,886 | |||||||||
Marketing revenues | 518 | 809 | 1,302 | 1,090 | 633 | |||||||||||
Other revenues | 251 | 2,355 | 317 | 3,037 | 1,424 | |||||||||||
65,982 | 134,722 | 163,265 | 194,377 | 92,718 | ||||||||||||
Expenses and other: | ||||||||||||||||
Lease operating expenses | 41,517 | 45,726 | 85,819 | 58,790 | 28,238 | |||||||||||
Electricity generation expenses | 3,135 | 4,465 | 7,725 | 5,613 | 3,197 | |||||||||||
Transportation expenses | 2,343 | 9,404 | 5,321 | 13,059 | 6,194 | |||||||||||
Marketing expenses | 407 | 730 | 987 | 1,000 | 653 | |||||||||||
General and administrative expenses | 12,482 | 22,257 | 24,466 | 31,800 | 7,964 | |||||||||||
Depreciation, depletion, amortization and accretion | 21,859 | 20,549 | 40,288 | 27,571 | 28,149 | |||||||||||
Taxes, other than income taxes | 8,715 | 10,249 | 16,972 | 13,330 | 5,212 | |||||||||||
(Gains) losses on sale of assets and other, net | 123 | 5 | 123 | 5 | (183 | ) | ||||||||||
90,581 | 113,385 | 181,701 | 151,168 | 79,424 | ||||||||||||
Other income and (expenses): | ||||||||||||||||
Interest expense | (9,155 | ) | (4,885 | ) | (16,951 | ) | (6,600 | ) | (8,245 | ) | ||||||
Other, net | (239 | ) | 2,916 | (212 | ) | 2,916 | (63 | ) | ||||||||
(9,394 | ) | (1,969 | ) | (17,163 | ) | (3,684 | ) | (8,308 | ) | |||||||
Reorganization items, net | 456 | 713 | 9,411 | (593 | ) | (507,720 | ) | |||||||||
Income (loss) before income taxes | (33,537 | ) | 20,081 | (26,188 | ) | 38,932 | (502,734 | ) | ||||||||
Income tax expense (benefit) | (5,476 | ) | 7,961 | (4,537 | ) | 15,435 | 230 | |||||||||
Net income (loss) | (28,061 | ) | 12,120 | (21,651 | ) | 23,497 | $ | (502,964 | ) | |||||||
Dividends on Series A Preferred Stock | (5,650 | ) | (5,404 | ) | (11,301 | ) | (7,196 | ) | n/a | |||||||
Net income (loss) attributable to common stockholders | $ | (33,711 | ) | $ | 6,716 | $ | (32,952 | ) | $ | 16,301 | n/a | |||||
Net income (loss) per share attributable to common stockholders: | ||||||||||||||||
Basic | $ | (0.84 | ) | $ | 0.17 | $ | (0.82 | ) | $ | 0.41 | n/a | |||||
Diluted | $ | (0.84 | ) | $ | 0.16 | $ | (0.82 | ) | $ | 0.31 | n/a |
Series A Preferred Stock | Common stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Total equity | |||||||||||||
Balance, December 31, 2017 | $ | 335,000 | $ | 33 | $ | 545,345 | $ | (21,068 | ) | $ | — | $ | 859,310 | |||||
Stock-based compensation | — | — | 2,320 | — | — | 2,320 | ||||||||||||
Share repurchase for payment of taxes on equity awards | — | — | (176 | ) | — | — | (176 | ) | ||||||||||
Cash dividends declared on Series A Preferred Stock | — | — | (11,301 | ) | — | — | (11,301 | ) | ||||||||||
Purchase of rights to common stock | — | — | — | — | (20,006 | ) | (20,006 | ) | ||||||||||
Net (loss) income | — | — | — | (21,651 | ) | — | (21,651 | ) | ||||||||||
Balance, June 30, 2018 | $ | 335,000 | $ | 33 | $ | 536,188 | $ | (42,719 | ) | $ | (20,006 | ) | $ | 808,496 |
Berry Corp. | Berry LLC | ||||||||
(Successor) | (Predecessor) | ||||||||
Six Months Ended | Four Months Ended | Two Months Ended | |||||||
June 30, 2018 | June 30, 2017 | February 28, 2017 | |||||||
Cash flow from operating activities: | |||||||||
Net income (loss) | $ | (21,651 | ) | $ | 23,497 | $ | (502,964 | ) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||
Depreciation, depletion, amortization and accretion | 40,288 | 27,571 | 28,149 | ||||||
Amortization of debt issuance costs | 2,651 | 7 | 416 | ||||||
Stock-based compensation expense | 2,320 | — | — | ||||||
Deferred income taxes | (4,537 | ) | 14,268 | 9 | |||||
(Decrease) increase in allowance for doubtful accounts | (20 | ) | — | — | |||||
Derivative activities: | |||||||||
Total (gains) losses | 112,787 | (48,085 | ) | (12,886 | ) | ||||
Cash settlements | (46,110 | ) | 5,856 | 534 | |||||
Cash settlements on early-terminated derivatives | (126,949 | ) | — | — | |||||
(Gains) losses on sale of assets and other, net | 123 | (25 | ) | (25 | ) | ||||
Reorganization items, net | (10,763 | ) | (1,385 | ) | 501,872 | ||||
Changes in assets and liabilities: | |||||||||
(Increase) decrease in accounts receivable | (2,120 | ) | 16,543 | (9,152 | ) | ||||
(Increase) decrease in other assets | (1,859 | ) | (5,657 | ) | (2,842 | ) | |||
Increase (decrease) in accounts payable and accrued expenses | 8,421 | 2,461 | 18,330 | ||||||
Increase (decrease) in other liabilities | (2,129 | ) | 9,886 | 990 | |||||
Net cash (used in) provided by operating activities | (49,548 | ) | 44,937 | 22,431 | |||||
Cash flows from investing activities: | |||||||||
Capital expenditures: | |||||||||
Development of oil and natural gas properties | (37,609 | ) | (23,258 | ) | (859 | ) | |||
Purchases of other property and equipment | (7,760 | ) | (9,620 | ) | (2,299 | ) | |||
Proceeds from sale of property, plant, equipment and other | 3,022 | — | 25 | ||||||
Deposit on acquisition of properties | — | (39,450 | ) | — | |||||
Net cash used in investing activities | (42,347 | ) | (72,328 | ) | (3,133 | ) | |||
Cash flows from financing activities: | |||||||||
Proceeds from sale of Series A Preferred Stock | — | — | 335,000 | ||||||
Repayments on pre-emergence credit facility | — | — | (497,668 | ) | |||||
Borrowings on emergence credit facility | — | 36,000 | — | ||||||
Repayments on emergence credit facility | — | (51,000 | ) | — | |||||
Proceeds from issuance of senior unsecured notes | 400,000 | — | — | ||||||
Repayments on new credit facility | (409,800 | ) | — | — | |||||
Borrowings on new credit facility | 96,800 | — | — | ||||||
Dividends paid on Series A Preferred Stock | (11,301 | ) | — | — | |||||
Purchase of treasury stock | (20,006 | ) | — | — | |||||
Share repurchase for payment of taxes on equity awards | (176 | ) | — | — | |||||
Debt issuance costs | (9,050 | ) | — | — | |||||
Net cash provided by (used in) financing activities | 46,467 | (15,000 | ) | (162,668 | ) | ||||
Net decrease in cash, cash equivalents and restricted cash | (45,428 | ) | (42,391 | ) | (143,370 | ) | |||
Cash, cash equivalents and restricted cash: | |||||||||
Beginning | 68,738 | 85,034 | 228,404 | ||||||
Ending | $ | 23,310 | $ | 42,643 | $ | 85,034 |
• | Linn Acquisition Company, LLC transferred 100% of the outstanding membership interests in Berry LLC to Berry Corp. pursuant to an assignment agreement, dated February 28, 2017 between Linn Acquisition Company, LLC and Berry Corp. (the “Assignment Agreement”). Under the Assignment Agreement, Berry LLC became a wholly-owned operating subsidiary of Berry Corp. |
• | The holders of claims under the Company’s Second Amended and Restated Credit Agreement, dated November 15, 2010, by and among Berry LLC, as borrower, Wells Fargo Bank, N.A., as administrative agent, and certain lenders, (as amended, the “Pre-Emergence Credit Facility”), received (i) their pro rata share of a cash paydown and (ii) pro rata participation in the new facility (the “Emergence Credit Facility”). As a result, all outstanding obligations under the Pre-Emergence Credit Facility were canceled and the agreements governing these obligations were terminated. |
• | Berry LLC, as borrower, entered into the Emergence Credit Facility with the holders of claims under the Pre-Emergence Credit Facility, as lenders, and Wells Fargo Bank, N.A, as administrative agent, providing for a new reserve-based revolving loan with up to $550 million in borrowing commitments. |
• | The holders of Berry LLC’s 6.75% senior notes due 2020, issued by Berry LLC pursuant to a Second Supplemental Indenture, dated November 1, 2010, and 6.375% senior notes due 2022, issued by Berry LLC pursuant to a Third Supplemental Indenture, dated March 9, 2012 (collectively, the “Unsecured Notes”), received a right to their pro rata share of either (i) 32,920,000 shares of common stock in Berry Corp. or, for those non-accredited investors holding the Unsecured Notes that irrevocably elected to receive a cash recovery, cash distributions from a $35 million cash distribution pool (the “Cash Distribution Pool”) and (ii) specified rights to participate in a two-tranche offering of rights to purchase Series A Preferred Stock at an aggregate purchase price of $335 million (as further defined in the Plan, the “Berry Rights Offerings”). As a result, all outstanding obligations under the Unsecured Notes were canceled and the indentures and related agreements governing these obligations were terminated. |
• | The holders of unsecured claims against Berry LLC, other than the Unsecured Notes, (the “Unsecured Claims”) received a right to their pro rata share of either (i) 7,080,000 shares of common stock in Berry Corp. or (ii) in the event that such holder irrevocably elected to receive a cash recovery, cash distributions from the Cash Distribution Pool. As a result, all outstanding obligations under the Unsecured Notes and the indentures governing such obligations were canceled and the obligations arising from the Unsecured Claims were extinguished. |
• | Berry LLC settled all intercompany claims against LINN Energy and its affiliates pursuant to a settlement agreement approved as part of the Plan and the Confirmation Order. The settlement agreement provided Berry LLC with a $25 million general unsecured claim against LINN Energy which Berry LLC has fully-reserved. |
Berry Corp. (Successor) | Berry LLC (Predecessor) | ||||||||||||||
Three Months Ended | Three Months Ended | Six Months Ended | Four Months Ended | Two Months Ended | |||||||||||
June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | February 28, 2017 | |||||||||||
(in thousands) | |||||||||||||||
Return of undistributed funds from Cash Distribution Pool | $ | — | $ | — | $ | 9,000 | $ | — | $ | — | |||||
Refund of pre-emergence prepaid costs | — | — | 579 | — | — | ||||||||||
Gain on settlement of liabilities subject to compromise | — | — | — | — | 421,774 | ||||||||||
Fresh start valuation adjustments | — | — | — | — | (920,699 | ) | |||||||||
Legal and other professional advisory fees | (1,178 | ) | 713 | (1,802 | ) | 112 | (19,481 | ) | |||||||
Gain on resolution of pre-emergence liabilities | 1,634 | — | 1,634 | — | — | ||||||||||
Other | — | — | — | (705 | ) | 10,686 | |||||||||
Reorganization items, net | $ | 456 | $ | 713 | $ | 9,411 | $ | (593 | ) | $ | (507,720 | ) |
(in thousands) | |||||||||
June 30, 2018 | December 31, 2017 | Interest Rate | Maturity | Security | |||||
RBL Facility | $ | 66,000 | $ | 379,000 | variable rates of 4.5% (2018) and 4.8% (2017), respectively | June 29, 2022 | Mortgage on 85% of Present Value of proven oil and gas reserves | ||
2026 Notes | 400,000 | — | 7.00% | February 15, 2026 | Unsecured | ||||
Long-Term Debt- Principal Amount | 466,000 | 379,000 | |||||||
Less: Debt Issuance Costs | (8,667 | ) | — | ||||||
Long-Term Debt, net | $ | 457,333 | $ | 379,000 |
Q3 2018 | Q4 2018 | FY 2019 | FY 2020 | |||||||||
Sold Oil Calls (ICE Brent): | ||||||||||||
Hedged volume (MBbls) | 186 | — | — | — | ||||||||
Weighted average price ($/Bbl) | $ | 81.67 | $ | — | $ | — | $ | — | ||||
Purchased Put Options (ICE Brent): | ||||||||||||
Hedged volume (MBbls) | — | — | 2,835 | 455 | ||||||||
Weighted average price ($/Bbl) | — | $ | — | $ | 65.00 | $ | 65.00 | |||||
Fixed Price Swaps (ICE Brent): | ||||||||||||
Hedged volume (MBbls) | 966 | 966 | 900 | — | ||||||||
Weighted average price ($/Bbl) | $ | 75.13 | $ | 75.13 | $ | 75.66 | $ | — | ||||
Oil basis differential positions: | ||||||||||||
ICE Brent-NYMEX WTI basis swaps | ||||||||||||
Hedged volume (MBbls) | 92 | 92 | 182.5 | — | ||||||||
Weighted average price ($/Bbl) | $ | 1.29 | $ | 1.29 | $ | 1.29 | $ | — |
Berry Corp. (Successor) | ||||||||||
June 30, 2018 | ||||||||||
Balance Sheet Classification | Gross Amounts Recognized at Fair Value | Gross Amounts Offset in the Balance Sheet | Net Fair Value Presented in the Balance Sheet | |||||||
(in thousands) | ||||||||||
Liabilities | ||||||||||
Commodity Contracts | Current liabilities | $ | (11,447 | ) | $ | — | $ | (11,447 | ) | |
Commodity Contracts | Non-current liabilities | (3,563 | ) | — | (3,563 | ) | ||||
Total derivatives | $ | (15,010 | ) | $ | — | $ | (15,010 | ) |
Berry Corp. (Successor) | ||||||||||
December 31, 2017 | ||||||||||
Balance Sheet Classification | Gross Amounts Recognized at Fair Value | Gross Amounts Offset in the Balance Sheet | Net Fair Value Presented in the Balance Sheet | |||||||
(in thousands) | ||||||||||
Liabilities | ||||||||||
Commodity Contracts | Current liabilities | $ | (49,949 | ) | $ | — | $ | (49,949 | ) | |
Commodity Contracts | Non-current liabilities | (25,332 | ) | — | (25,332 | ) | ||||
Total derivatives | $ | (75,281 | ) | $ | — | $ | (75,281 | ) |
Amount | |||
(in thousands) | |||
2018 | $ | 676 | |
2019 | 1,170 | ||
2020 | 157 | ||
2021 | 159 | ||
2022 | 160 | ||
Thereafter | 36 | ||
Total minimum lease payments | $ | 2,358 | |
Number of shares | Weighted average Grant Date Fair Value | ||||
(shares in thousands) | |||||
December 31, 2017 | 683 | $ | 10.12 | ||
Granted | 205 | $ | 11.50 | ||
Vested | (166 | ) | $ | 11.68 | |
Forfeited | (26 | ) | $ | 10.12 | |
June 30, 2018 | 696 | $ | 10.20 |
Number of shares | Weighted average Grant Date Fair Value | ||||
(shares in thousands) | |||||
December 31, 2017 | 622 | $ | 7.09 | ||
Granted | 132 | $ | 7.49 | ||
Vested | — | $ | — | ||
Forfeited | (2 | ) | $ | 7.09 | |
June 30, 2018 | 752 | $ | 7.11 |
Berry Corp. (Successor) | ||||||
June 30, 2018 | December 31, 2017 | |||||
(in thousands) | ||||||
Prepaid expenses | $ | 6,692 | $ | 6,901 | ||
Oil inventories, materials and supplies | 7,062 | 5,938 | ||||
Other | 1,227 | 1,227 | ||||
$ | 14,981 | $ | 14,066 |
Berry Corp. (Successor) | ||||||
June 30, 2018 | December 31, 2017 | |||||
(in thousands) | ||||||
Accounts payable-trade | $ | 10,698 | $ | 15,469 | ||
Accrued expenses | 57,531 | 34,359 | ||||
Royalties payable | 18,811 | 25,793 | ||||
Greenhouse gas liability | 5,732 | 10,446 | ||||
Taxes other than income tax liability | 9,428 | 8,437 | ||||
Accrued interest | 10,970 | — | ||||
Other | — | 3,373 | ||||
$ | 113,170 | $ | 97,877 |
Berry Corp. | Berry LLC | ||||||||
(Successor) | (Predecessor) | ||||||||
Six Months Ended | Four Months Ended | Two Months Ended | |||||||
June 30, 2018 | June 30, 2017 | February 28, 2017 | |||||||
(in thousands) | |||||||||
Supplemental Disclosures of Significant Non-Cash Investing Activities: | |||||||||
(Decrease) increase in accrued liabilities related to purchases of property and equipment | $ | 8,614 | $ | 1,172 | $ | 2,249 | |||
Supplemental Disclosures of Cash Payments/(Receipts): | |||||||||
Interest | $ | 3,298 | $ | 5,261 | $ | 8,057 | |||
Income taxes | $ | — | $ | 1,168 | $ | — | |||
Reorganization items, net | $ | 1,352 | $ | (792 | ) | $ | 11,838 |
Berry Corp. (Successor) | Berry LLC (Predecessor) | ||||||||
(in thousands) | Six Months Ended | Four Months Ended | Two Months Ended | ||||||
Beginning of Period | June 30, 2018 | June 30, 2017 | February 28, 2017 | ||||||
Cash and cash equivalents | $ | 33,905 | $ | 32,049 | $ | 30,483 | |||
Restricted cash | 34,833 | 52,860 | 197,793 | ||||||
Restricted cash in other noncurrent assets | — | 125 | 128 | ||||||
Cash, cash equivalents and restricted cash | $ | 68,738 | $ | 85,034 | $ | 228,404 | |||
Ending of Period | |||||||||
Cash and cash equivalents | $ | 3,600 | $ | 3,735 | $ | 32,049 | |||
Restricted cash | 19,710 | 38,908 | 52,860 | ||||||
Restricted cash in other noncurrent assets | — | — | 125 | ||||||
Cash, cash equivalents and restricted cash | $ | 23,310 | $ | 42,643 | $ | 85,034 |
Berry Corp. (Successor) | Berry LLC | |||||||||||||
(Predecessor) | ||||||||||||||
Three Months Ended | Three Months Ended | Six Months Ended | Four Months Ended | Two Months Ended | ||||||||||
June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | February 28, 2017 | ||||||||||
(in thousands except per share amounts) | ||||||||||||||
Basic EPS calculation | ||||||||||||||
Net income (loss) | $ | (28,061 | ) | $ | 12,120 | $ | (21,651 | ) | 23,497 | n/a | ||||
less: Dividends on Series A Preferred Stock | (5,650 | ) | (5,404 | ) | (11,301 | ) | (7,196 | ) | n/a | |||||
Net income (loss) available to common stockholders | $ | (33,711 | ) | $ | 6,716 | $ | (32,952 | ) | $ | 16,301 | n/a | |||
Weighted-average shares of common stock outstanding | 33,010 | 32,920 | 32,971 | 32,920 | n/a | |||||||||
Shares of common stock distributable to holders of Unsecured Claims | 7,080 | 7,080 | 7,080 | 7,080 | n/a | |||||||||
Weighted-average common shares outstanding-basic | 40,090 | 40,000 | 40,051 | 40,000 | n/a | |||||||||
Basic Earnings (loss) per share | $ | (0.84 | ) | $ | 0.17 | $ | (0.82 | ) | $ | 0.41 | n/a | |||
Diluted EPS calculation | ||||||||||||||
Net income (loss) | $ | (28,061 | ) | $ | 12,120 | $ | (21,651 | ) | $ | 23,497 | n/a | |||
less: Dividends on Series A Preferred Stock | (5,650 | ) | (5,404 | ) | (11,301 | ) | (7,196 | ) | n/a | |||||
Net income (loss) available to common stockholders | $ | (33,711 | ) | $ | 6,716 | $ | (32,952 | ) | $ | 16,301 | n/a | |||
Weighted-average shares of common stock outstanding | 33,010 | 32,920 | 32,971 | 32,920 | n/a | |||||||||
Shares of common stock distributable to holders of Unsecured Claims | 7,080 | 7,080 | 7,080 | 7,080 | n/a | |||||||||
Weighted-average common shares outstanding-basic | 40,090 | 40,000 | 40,051 | 40,000 | n/a | |||||||||
Dilutive effect of potentially dilutive securities | — | 35,845 | — | 35,845 | n/a | |||||||||
Weighted-average common shares outstanding-diluted | 40,090 | 75,845 | 40,051 | 75,845 | n/a | |||||||||
Diluted Earnings (loss) per share | $ | (0.84 | ) | $ | 0.16 | $ | (0.82 | ) | $ | 0.31 | n/a |
Berry Corp. (Successor) June 30, 2018 | Series A Preferred Stock Conversion and Common Stock Offering | Berry Corp. (Successor) Pro Forma | ||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 3,600 | $ | — | (a) (b) | $ | 3,600 | |||
Accounts receivable, net | 56,860 | 56,860 | ||||||||
Restricted cash | 19,710 | 19,710 | ||||||||
Other current assets | 14,981 | 14,981 | ||||||||
Total current assets | 95,151 | — | 95,151 | |||||||
Noncurrent assets: | ||||||||||
Oil and natural gas properties (successful efforts method) | 1,382,777 | 1,382,777 | ||||||||
Less accumulated depletion and amortization | (88,548) | (88,548) | ||||||||
1,294,229 | 1,294,229 | |||||||||
Other property and equipment | 112,618 | 112,618 | ||||||||
Less accumulated depreciation | (8,928) | (8,928) | ||||||||
103,690 | 103,690 | |||||||||
Other noncurrent assets | 22,086 | 22,086 | ||||||||
Total assets | $ | 1,515,156 | $ | — | $ | 1,515,156 | ||||
LIABILITIES AND EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable and accrued expenses | $ | 113,170 | $ | — | $ | 113,170 | ||||
Derivative instruments | 11,447 | 11,447 | ||||||||
Liabilities subject to compromise | 19,710 | 19,710 | ||||||||
Total current liabilities | 144,327 | — | 144,327 | |||||||
Noncurrent liabilities: | ||||||||||
Long-term debt | 457,333 | (51,538 | ) | (a) | 405,795 | |||||
Derivative instruments | 3,563 | 3,563 | ||||||||
Asset retirement obligation | 88,575 | 88,575 | ||||||||
Other noncurrent liabilities | 12,862 | 12,862 | ||||||||
Equity: | ||||||||||
Successor Series A Preferred Stock ($.001 par value, 250,000,000 shares authorized and 37,669,805 shares issued at June 30, 2018) | 335,000 | (335,000) | (b) | — | ||||||
Successor common stock ($.001 par value, 750,000,000 shares authorized and 33,087,889 shares issued at June 30, 2018) | 33 | 48 | (a)(b) | 81 | ||||||
Additional paid-in-capital | 536,188 | 386,490 | (a)(b) | 922,678 | ||||||
Treasury stock, at cost | (20,006 | ) | (20,006 | ) | ||||||
Accumulated deficit | (42,719) | (42,719) | ||||||||
Total equity | 808,496 | 51,538 | 860,034 | |||||||
Total liabilities and equity | $ | 1,515,156 | $ | — | $ | 1,515,156 |
Berry Corp. (Successor) Six Months Ended June 30, 2018 | Issuance of 2026 Notes | Series A Preferred Stock Conversion and Common Stock Offering | Berry Corp. (Successor) Pro Forma | ||||||||||
Revenues and other: | |||||||||||||
Oil, natural gas and NGL sales | $ | 263,010 | $ | 263,010 | |||||||||
Electricity sales | 11,423 | 11,423 | |||||||||||
Gains (losses) on oil and natural gas derivatives | (112,787 | ) | (112,787 | ) | |||||||||
Marketing revenues | 1,302 | 1,302 | |||||||||||
Other revenues | 317 | 317 | |||||||||||
163,265 | — | — | 163,265 | ||||||||||
Expenses and other: | |||||||||||||
Lease operating expenses | 85,819 | 85,819 | |||||||||||
Electricity generation expenses | 7,725 | 7,725 | |||||||||||
Transportation expenses | 5,321 | 5,321 | |||||||||||
Marketing expenses | 987 | 987 | |||||||||||
General and administrative expenses | 24,466 | 24,466 | |||||||||||
Depreciation, depletion and amortization | 40,288 | 40,288 | |||||||||||
Taxes, other than income taxes | 16,972 | 16,972 | |||||||||||
Gains on sale of assets and other, net | 123 | 123 | |||||||||||
181,701 | — | — | 181,701 | ||||||||||
Other income and (expenses): | |||||||||||||
Interest expense, net of amounts capitalized | (16,951 | ) | (854 | ) | (c) | (17,805 | ) | ||||||
Other, net | (212 | ) | (212 | ) | |||||||||
(17,163 | ) | (854 | ) | — | (c) | (18,017 | ) | ||||||
Reorganization items, net | 9,411 | 9,411 | |||||||||||
(Loss) income before income taxes | (26,188 | ) | (854 | ) | — | (c) | (27,042 | ) | |||||
Income tax expense (benefit) | (4,537 | ) | (147 | ) | (c) | (4,684 | ) | ||||||
Net income (loss) | (21,651 | ) | (707 | ) | — | (22,358 | ) | ||||||
Dividends on Series A Preferred Stock | (11,301 | ) | 11,301 | (f) | — | ||||||||
Net income (loss) available to common stockholders | $ | (32,952 | ) | $ | (707 | ) | $ | 11,301 | $ | (22,358 | ) | ||
Net income (loss) per share of common stock: | |||||||||||||
Basic | $ | (0.82 | ) | $ | (0.26 | ) | |||||||
Diluted | $ | (0.82 | ) | $ | (0.26 | ) | |||||||
Weighted average common shares outstanding | |||||||||||||
Basic (g) | 40,051 | 46,333 | (d) (e) | 86,384 | |||||||||
Diluted (g) | 40,051 | 46,333 | (d) (e) | 86,384 |
(in thousands) | |||
Reversal of interest expense, unused fee and LOC fee on the RBL Facility | $ | (3,251 | ) |
Reversal of 2026 Notes interest expense | (10,970 | ) | |
Pro Forma- RBL Facility letter of credit fee ($7.1 million outstanding at 2.625%) | 93 | ||
Pro Forma-RBL Facility unused availability fee ($393 million availability at 0.5%) | 982 | ||
Pro Forma 2026 Notes interest expense. | 14,000 | ||
Pro Forma adjustment to increase interest expense | $ | 854 |
Berry Corp. (Successor) | Berry LLC (Predecessor) | ||||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | Six Months Ended | Four Months Ended | Two Months Ended | ||||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | February 28, 2017 | ||||||||||||||
(in thousands) | |||||||||||||||||||
Adjusted EBITDA reconciliation to net income (loss): | |||||||||||||||||||
Net income (loss) | $ | (28,061 | ) | $ | 6,410 | $ | 12,120 | $ | (21,651 | ) | $ | 23,497 | $ | (502,964 | ) | ||||
Add (Subtract): | |||||||||||||||||||
Depreciation, depletion, amortization and accretion | 21,859 | 18,429 | 20,549 | 40,288 | 27,571 | 28,149 | |||||||||||||
Interest expense | 9,155 | 7,796 | 4,885 | 16,951 | 6,600 | 8,245 | |||||||||||||
Income tax expense (benefit) | (5,476 | ) | 939 | 7,961 | (4,537 | ) | 15,435 | 230 | |||||||||||
Derivative (gain) loss | 78,143 | 34,644 | (23,962 | ) | 112,787 | (48,085 | ) | (12,886 | ) | ||||||||||
Net cash received (paid) for scheduled derivative settlements | (28,261 | ) | (17,849 | ) | 4,725 | (46,110 | ) | 5,856 | 534 | ||||||||||
(Gain) loss on sale of assets and other | 123 | — | 5 | 123 | 5 | (183 | ) | ||||||||||||
Stock compensation expense | 1,278 | 1,042 | — | 2,320 | — | — | |||||||||||||
Non-recurring restructuring and other costs | 1,714 | 2,047 | 16,846 | 3,761 | 24,442 | — | |||||||||||||
Reorganization items, net | (456 | ) | (8,955 | ) | (713 | ) | (9,411 | ) | 593 | 507,720 | |||||||||
Adjusted EBITDA | 50,018 | 44,503 | 42,416 | 94,521 | 55,914 | 28,845 | |||||||||||||
Net cash (received) paid for scheduled derivative settlements | 28,261 | 17,849 | (4,725 | ) | 46,110 | (5,856 | ) | (534 | ) | ||||||||||
Adjusted EBITDA unhedged | $ | 78,279 | $ | 62,352 | $ | 37,691 | $ | 140,631 | $ | 50,058 | $ | 28,311 |
Berry Corp. (Successor) | Berry LLC (Predecessor) | ||||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | Six Months Ended | Four Months Ended | Two Months Ended | ||||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | February 28, 2017 | ||||||||||||||
(in thousands) | |||||||||||||||||||
Adjusted EBITDA and Levered Free Cash Flow reconciliation to net cash provided (used) by operating activities: | |||||||||||||||||||
Net cash provided (used) by operating activities | $ | (77,394 | ) | $ | 27,846 | $ | 20,703 | $ | (49,548 | ) | $ | 44,937 | $ | 22,431 | |||||
Add (Subtract): | |||||||||||||||||||
Cash interest payments | 644 | 2,654 | 4,860 | 3,298 | 5,261 | 8,057 | |||||||||||||
Cash income tax payments | — | — | 1,168 | — | 1,168 | — | |||||||||||||
Cash reorganization item (receipts) payments | 1,047 | 305 | (1,384 | ) | 1,352 | (792 | ) | 11,838 | |||||||||||
Non-recurring restructuring and other costs | 1,714 | 2,047 | 16,846 | 3,761 | 24,442 | — | |||||||||||||
Derivative early termination payment | 126,949 | — | — | 126,949 | — | — | |||||||||||||
Other changes in operating assets and liabilities | (2,942 | ) | 11,651 | 223 | 8,709 | (19,102 | ) | (13,323 | ) | ||||||||||
Other, net | — | — | — | — | — | (158 | ) | ||||||||||||
Adjusted EBITDA | 50,018 | 44,503 | 42,416 | 94,521 | 55,914 | 28,845 | |||||||||||||
Subtract: | |||||||||||||||||||
Capital expenditures | (39,196 | ) | (15,732 | ) | (24,697 | ) | (54,928 | ) | (34,050 | ) | (5,407 | ) | |||||||
Interest expense | (9,155 | ) | (7,796 | ) | (4,885 | ) | (16,951 | ) | (6,600 | ) | (8,245 | ) | |||||||
Dividends | (5,650 | ) | (5,650 | ) | (5,404 | ) | (11,301 | ) | (7,196 | ) | — | ||||||||
Levered Free Cash Flow | (3,983 | ) | 15,325 | 7,430 | 11,341 | 8,068 | 15,193 | ||||||||||||
Net cash (received) paid for scheduled derivative settlements | 28,261 | 17,849 | (4,725 | ) | 46,110 | (5,856 | ) | (534 | ) | ||||||||||
Levered Free Cash Flow unhedged | $ | 24,278 | $ | 33,174 | $ | 2,705 | $ | 57,451 | $ | 2,212 | $ | 14,659 |
Berry Corp. (Successor) | Berry LLC (Predecessor) | |||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | Six Months Ended | Four Months Ended | Two Months Ended | |||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | February 28, 2017 | |||||||||||||
Adjusted Net Income (Loss) reconciliation to Net income (loss) attributable to common stockholders | (in thousands) | |||||||||||||||||
Net income (loss) attributable to common stockholders | $ | (33,711 | ) | $ | 760 | $ | 6,716 | $ | (32,952 | ) | $ | 16,301 | $ | (502,964 | ) | |||
Add (Subtract): | ||||||||||||||||||
Losses (gains) on oil and natural gas derivatives | 78,143 | 34,644 | (23,962 | ) | 112,787 | (48,085 | ) | (12,886 | ) | |||||||||
Net cash received (paid) for scheduled derivative settlements | (28,261 | ) | (17,849 | ) | 4,725 | (46,110 | ) | 5,856 | 534 | |||||||||
Losses (gains) on sale of assets and other, net | 123 | — | 5 | 123 | 5 | (183 | ) | |||||||||||
Non-recurring restructuring and other costs | 1,714 | 2,047 | 16,846 | 3,761 | 24,442 | — | ||||||||||||
Reorganization items, net | (456 | ) | (8,955 | ) | (713 | ) | (9,411 | ) | 593 | 507,720 | ||||||||
51,263 | 9,887 | (3,099 | ) | 61,150 | (17,189 | ) | 495,185 | |||||||||||
Income tax (expense) benefit of adjustments at effective tax rate | (8,370 | ) | (1,263 | ) | 1,229 | (10,594 | ) | 6,815 | n/a | |||||||||
Adjusted Net Income (Loss) | $ | 9,182 | $ | 9,384 | $ | 4,846 | $ | 17,604 | $ | 5,927 | $ | (7,779 | ) |
Berry Corp. (Successor) | Berry LLC (Predecessor) | ||||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | Six Months Ended | Four Months Ended | Two Months Ended | ||||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | February 28, 2017 | ||||||||||||||
(in thousands) | |||||||||||||||||||
Adjusted General and Administrative Expense reconciliation to general and administrative expenses: | |||||||||||||||||||
General and administrative expenses | $ | 12,482 | $ | 11,985 | $ | 22,257 | $ | 24,466 | $ | 31,800 | $ | 7,964 | |||||||
Subtract: | |||||||||||||||||||
Non-recurring restructuring and other costs | (1,714 | ) | (2,047 | ) | (16,846 | ) | (3,761 | ) | (24,442 | ) | — | ||||||||
Non-cash stock compensation expense | (1,260 | ) | (1,019 | ) | — | (2,279 | ) | — | — | ||||||||||
Adjusted General and Administrative Expenses | $ | 9,508 | $ | 8,919 | $ | 5,411 | $ | 18,426 | $ | 7,358 | $ | 7,964 | |||||||
Capital Expenditure by Area | |||||
2018 Budget | 2017 Actual | ||||
(in millions) | |||||
California | $122-136 | $71 | |||
Uinta | 12-16 | 1 | |||
Piceance | 1-2 | 1 | |||
East Texas | — | — | |||
Corporate | 5-6 | — | |||
Total | $140-160 | $73 |
2018 | 2019 | 2020 | |||||||
Sold Oil Calls (ICE Brent): | |||||||||
Hedged volume (MBbls) | 186 | — | — | ||||||
Weighted average price ($/Bbl) | $ | 81.67 | $ | — | $ | — | |||
Purchased put options (ICE Brent) : | |||||||||
Hedged volume (MBbls) | — | 2,835 | 455 | ||||||
Weighted average price ($/Bbl) | $ | — | $ | 65.00 | $ | 65.00 | |||
Fixed Price Swaps (ICE Brent) | |||||||||
Hedged volume (MBbls) | 1,932 | 900 | — | ||||||
Weighted average price ($/Bbl) | $ | 75.13 | $ | 75.66 | $ | — | |||
Oil basis differential positions: | |||||||||
ICE Brent - NYMEX WTI basis swaps | |||||||||
Hedged volume (MBbls) | 184 | 182.5 | — | ||||||
Weighted average price ($/Bbl) | $ | 1.29 | $ | 1.29 | $ | — |
Berry Corp. (Successor) | Berry LLC (Predecessor) | |||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | Six Months Ended | Four Months Ended | Two Months Ended | |||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | February 28, 2017 | |||||||||||||
Crude Oil (per Bbl): | ||||||||||||||||||
Realized price, before the effects of derivative settlements | $ | 67.93 | $ | 62.14 | $ | 44.27 | $ | 65.06 | $ | 44.34 | $ | 46.94 | ||||||
Effects of derivative settlements | $ | (14.71 | ) | $ | (9.40 | ) | $ | 2.70 | $ | (12.08 | ) | $ | 2.50 | $ | 0.46 | |||
Berry Corp. (Successor) | Berry LLC (Predecessor) | |||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | Six Months Ended | Four Months Ended | Two Months Ended | |||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | February 28, 2017 | |||||||||||||
ICE (Brent) oil ($/Bbl) | $ | 74.87 | $ | 67.16 | $ | 50.90 | $ | 71.01 | $ | 51.31 | $ | 55.72 | ||||||
NYMEX (WTI) oil ($/Bbl) | $ | 67.76 | $ | 62.87 | $ | 48.28 | $ | 65.32 | $ | 48.63 | $ | 53.04 | ||||||
NYMEX Henry Hub natural gas ($MMBtu) | $ | 2.80 | $ | 3.00 | $ | 3.18 | $ | 2.90 | $ | 3.05 | $ | 3.66 |
Berry Corp. (Successor) | |||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | Variance | Variance | |||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | Q2 2018 vs. Q1 2018 | Q2 2018 vs. Q2 2017 | |||||||||||
Average daily production: | |||||||||||||||
Oil (MBbl/d) | 21.1 | 21.1 | 19.2 | — | 1.9 | ||||||||||
Natural Gas (MMcf/d) | 28.0 | 27.6 | 73.1 | 0.4 | (45.1 | ) | |||||||||
NGL (MBbl/d) | 0.7 | 0.5 | 2.9 | 0.2 | (2.2 | ) | |||||||||
Total (MBoe/d)(1) | 26.5 | 26.2 | 34.4 | 0.3 | (7.9 | ) | |||||||||
Total Production: | |||||||||||||||
Oil (MBbl) | 1,920 | 1,897 | 1,752 | 23 | 168 | ||||||||||
Natural gas (MMcf) | 2,551 | 2,481 | 6,656 | 70 | (4,105 | ) | |||||||||
NGLs (MBbl) | 62 | 45 | 267 | 17 | (205 | ) | |||||||||
Total combined production (MBoe)(1) | 2,408 | 2,356 | 3,128 | 52 | (720 | ) | |||||||||
Weighted average realized prices: | — | — | |||||||||||||
Oil with hedges (Bbl) | $ | 53.22 | $ | 52.74 | $ | 46.97 | $ | 0.48 | $ | 6.25 | |||||
Oil without hedges (Bbl) | $ | 67.93 | $ | 62.14 | $ | 44.27 | $ | 5.79 | $ | 23.66 | |||||
Natural gas (Mcf) | $ | 2.12 | $ | 2.64 | $ | 2.74 | $ | (0.52 | ) | $ | (0.62 | ) | |||
NGL (Bbl) | $ | 24.38 | $ | 25.56 | $ | 22.72 | $ | (1.18 | ) | $ | 1.66 | ||||
Average Benchmark prices: | $ | — | $ | — | |||||||||||
Oil (Bbl) – Brent | $ | 74.87 | $ | 67.16 | $ | 50.90 | $ | 7.71 | $ | 23.97 | |||||
Oil (Bbl) – WTI | $ | 67.76 | $ | 62.87 | $ | 48.28 | $ | 4.89 | $ | 19.48 | |||||
Natural gas (MMBtu) – NYMEX Henry Hub | $ | 2.80 | $ | 3.00 | $ | 3.18 | $ | (0.20 | ) | $ | (0.38 | ) | |||
Average costs per Boe(2): | |||||||||||||||
Lease operating expenses | $ | 17.24 | $ | 18.80 | $ | 14.62 | $ | (1.56 | ) | $ | 2.62 | ||||
Electricity generation expenses | $ | 1.30 | $ | 1.94 | $ | 1.43 | $ | (0.64 | ) | $ | (0.13 | ) | |||
Electricity sales (2) | $ | (2.48 | ) | $ | (2.31 | ) | $ | (1.83 | ) | $ | (0.17 | ) | $ | (0.65 | ) |
Transportation expenses | $ | 0.97 | $ | 1.26 | $ | 3.01 | $ | (0.29 | ) | $ | (2.04 | ) | |||
Transportation sales (2) | $ | (0.09 | ) | $ | — | $ | — | $ | (0.09 | ) | $ | (0.09 | ) | ||
Marketing expenses | $ | 0.17 | $ | 0.25 | $ | 0.23 | $ | (0.08 | ) | $ | (0.06 | ) | |||
Marketing revenues (2) | $ | (0.22 | ) | $ | (0.33 | ) | $ | (0.26 | ) | $ | 0.11 | $ | 0.04 | ||
Total operating expenses | $ | 16.89 | $ | 19.61 | $ | 17.20 | $ | (2.72 | ) | $ | (0.31 | ) | |||
General and administrative expenses (3) | $ | 5.18 | $ | 5.09 | $ | 7.11 | $ | 0.09 | $ | (1.93 | ) | ||||
Depreciation, depletion and amortization | $ | 9.08 | $ | 7.82 | $ | 6.57 | $ | 1.26 | $ | 2.51 | |||||
Taxes, other than income taxes | $ | 3.62 | $ | 3.50 | $ | 3.28 | $ | 0.12 | $ | 0.34 |
Berry Corp. (Successor) | ||||||
Three Months Ended | Three Months Ended | Three Months Ended | ||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | ||||
Average daily production (MBoe/d): | ||||||
California(1) | 18.8 | 18.8 | 16.3 | |||
Hugoton basin(2) | — | — | 8.6 | |||
Uinta basin | 5.3 | 5.0 | 5.9 | |||
Piceance basin | 1.6 | 1.6 | 2.5 | |||
East Texas | 0.8 | 0.8 | 1.1 | |||
26.5 | 26.2 | 34.4 |
(1) | On July 31, 2017, we purchased the remaining approximately 84% working interest of our South Belridge Hill property, located in Kern County, California. |
(2) | On July 31, 2017, we sold our 78% working interest in the Hugoton natural gas field located in southwest Kansas and the Oklahoma Panhandle. Our Hugoton assets represented approximately 24% of our average net daily production for the year ended December 31, 2016. |
Berry Corp. (Successor) | Berry LLC (Predecessor) | ||||||||
Six Months Ended | Four Months Ended | Two Months Ended | |||||||
June 30, 2018 | June 30, 2017 | February 28, 2017 | |||||||
Average Daily Production: | |||||||||
Oil (MBbl/d) | 21.1 | 19.2 | 19.5 | ||||||
Natural Gas (MMcf/d) | 27.8 | 72.8 | 71.7 | ||||||
NGL (MBbl/d) | 0.6 | 3.1 | 5.2 | ||||||
Total (MBoe/d)(1) | 26.3 | 34.4 | 36.6 | ||||||
Total Production: | |||||||||
Oil (MBbl) | 3,818 | 2,338 | 1,153 | ||||||
Natural gas (MMcf) | 5,032 | 8,877 | 4,232 | ||||||
NGLs (MBbl) | 108 | 379 | 304 | ||||||
Total combined production (MBoe)(1) | 4,764 | 4,196 | 2,162 | ||||||
Weighted average realized prices: | |||||||||
Oil with hedges (Bbl) | $ | 52.98 | $ | 46.84 | $ | 47.40 | |||
Oil without hedges (Bbl) | $ | 65.06 | $ | 44.34 | $ | 46.94 | |||
Natural gas (Mcf) | $ | 2.38 | $ | 2.67 | $ | 3.42 | |||
NGL (Bbl) | $ | 24.88 | $ | 21.64 | $ | 18.20 | |||
Average benchmark prices: | |||||||||
Oil (Bbl) – Brent | $ | 71.01 | $ | 51.31 | $ | 55.72 | |||
Oil (Bbl) – WTI | $ | 65.32 | $ | 48.63 | $ | 53.04 | |||
Natural gas (MMBtu) – NYMEX Henry Hub | $ | 2.90 | $ | 3.05 | $ | 3.66 | |||
Average costs per Boe (2): | |||||||||
Lease operating expenses | $ | 18.01 | $ | 14.01 | $ | 13.06 | |||
Electricity generation expenses | $ | 1.62 | $ | 1.34 | $ | 1.48 | |||
Electricity sales (2) | $ | (2.40 | ) | $ | (1.57 | ) | $ | (1.69 | ) |
Transportation expenses | $ | 1.12 | $ | 3.11 | $ | 2.86 | |||
Transportation sales (2) | $ | (0.05 | ) | $ | — | $ | — | ||
Marketing expenses | $ | 0.21 | $ | 0.24 | $ | 0.30 | |||
Marketing revenues (2) | $ | (0.27 | ) | $ | (0.26 | ) | $ | (0.29 | ) |
Total operating expenses | $ | 18.24 | $ | 16.87 | $ | 15.72 | |||
General and administrative expenses (3) | $ | 5.14 | $ | 7.58 | $ | 3.68 | |||
Depreciation, depletion and amortization | $ | 8.46 | $ | 6.57 | $ | 13.02 | |||
Taxes, other than income taxes | $ | 3.56 | $ | 3.18 | $ | 2.41 |
Berry Corp. (Successor) | Berry LLC (Predecessor) | |||||
Six Months Ended | Four Months Ended | Two Months Ended | ||||
June 30, 2018 | June 30, 2017 | February 28, 2017 | ||||
Average daily production (MBoe/d): | ||||||
California (San Joaquin) (1) | 18.8 | 16.3 | 17.0 | |||
Hugoton basin(2) | — | 8.9 | 10.8 | |||
Uinta basin | 5.1 | 5.7 | 5.4 | |||
Piceance basin | 1.6 | 2.5 | 2.3 | |||
East Texas | 0.8 | 1.0 | 1.1 | |||
26.3 | 34.4 | 36.6 |
Berry Corp. (Successor) | |||||||
June 30, 2018 | December 31, 2017 | ||||||
(in thousands) | |||||||
Cash and cash equivalents | $ | 3,600 | $ | 33,905 | |||
Accounts receivable, net | $ | 56,860 | $ | 54,720 | |||
Restricted cash | $ | 19,710 | $ | 34,833 | |||
Other current assets | $ | 14,981 | $ | 14,066 | |||
Property, plant & equipment, net | $ | 1,397,919 | $ | 1,387,191 | |||
Other noncurrent assets | $ | 22,086 | $ | 21,687 | |||
Accounts payable and accrued liabilities | $ | 113,170 | $ | 97,877 | |||
Derivative instruments-current and long term | $ | 15,010 | $ | 60,165 | |||
Liabilities subject to compromise | $ | 19,710 | $ | 34,833 | |||
Long term debt | $ | 457,333 | $ | 379,000 | |||
Asset retirement obligation | $ | 88,575 | $ | 94,509 | |||
Other noncurrent liabilties | $ | 12,862 | $ | 3,704 | |||
Equity | $ | 808,496 | $ | 859,310 |
Berry Corp. (Successor) | |||||||||||
Three Months Ended | Three Months Ended | ||||||||||
(in thousands) | June 30, 2018 | March 31, 2018 | $ Change | % Change | |||||||
Revenues and other: | |||||||||||
Oil, natural gas and NGL sales | $ | 137,385 | $ | 125,624 | $ | 11,761 | 9 | % | |||
Electricity sales | 5,971 | 5,453 | 518 | 9 | % | ||||||
(Losses) gains on oil and natural gas derivatives | (78,143 | ) | (34,644 | ) | (43,499 | ) | 126 | % | |||
Marketing and other revenues | 769 | 851 | (82 | ) | (10 | )% | |||||
65,982 | 97,284 | (31,302 | ) | (32 | )% | ||||||
Expenses and other: | |||||||||||
Lease operating expenses | 41,517 | 44,303 | (2,786 | ) | (6 | )% | |||||
Electricity generation expenses | 3,135 | 4,590 | (1,455 | ) | (32 | )% | |||||
Transportation expenses | 2,343 | 2,978 | (635 | ) | (21 | )% | |||||
Marketing expenses | 407 | 580 | (173 | ) | (30 | )% | |||||
General and administrative expenses | 12,482 | 11,985 | 497 | 4 | % | ||||||
Depreciation, depletion, amortization and accretion | 21,859 | 18,429 | 3,430 | 19 | % | ||||||
Taxes, other than income taxes | 8,715 | 8,256 | 459 | 6 | % | ||||||
(Gains) losses on sale of assets and other, net | 123 | — | 123 | ||||||||
90,581 | 91,121 | (540 | ) | (1 | )% | ||||||
Other income and (expenses): | |||||||||||
Interest expense | (9,155 | ) | (7,796 | ) | (1,359 | ) | 17 | % | |||
Other, net | (239 | ) | 27 | (266 | ) | (985 | )% | ||||
Reorganization items, net | 456 | 8,955 | (8,499 | ) | (95 | )% | |||||
Income (loss) before income taxes | (33,537 | ) | 7,349 | (40,886 | ) | (556 | )% | ||||
Income tax expense (benefit) | (5,476 | ) | 939 | (6,415 | ) | (683 | )% | ||||
Net income (loss) | (28,061 | ) | 6,410 | (34,471 | ) | (538 | )% | ||||
Dividends on Series A Preferred Stock | (5,650 | ) | (5,650 | ) | — | — | % | ||||
Net income (loss) available to common stockholders | $ | (33,711 | ) | $ | 760 | $ | (34,471 | ) | (4,536 | )% | |
Berry Corp. (Successor) | |||||||||
Three Months Ended | Three Months Ended | ||||||||
June 30, 2018 | March 31, 2018 | Variance | |||||||
(in thousands) | |||||||||
Severance taxes | $ | 2,997 | $ | 2,764 | $ | 233 | |||
Ad valorem and property taxes | 3,141 | 3,417 | (276 | ) | |||||
Greenhouse gas allowances | 2,577 | 2,075 | 502 | ||||||
$ | 8,715 | $ | 8,256 | $ | 459 | ||||
Berry Corp. (Successor) | |||||||||
Three Months Ended | Three Months Ended | ||||||||
June 30, 2018 | March 31, 2018 | Variance | |||||||
(in thousands) | |||||||||
Interest expense, net of amounts capitalized | $ | (9,155 | ) | $ | (7,796 | ) | $ | (1,359 | ) |
Other, net | (239 | ) | 27 | (266 | ) | ||||
$ | (9,394 | ) | $ | (7,769 | ) | $ | (1,625 | ) |
Berry Corp. (Successor) | |||||||||
Three Months Ended | Three Months Ended | ||||||||
(in thousands) | June 30, 2018 | March 31, 2018 | Variance | ||||||
Return of Undistributed Funds from Cash Distribution Pool | $ | — | $ | 9,000 | $ | (9,000 | ) | ||
Refund of pre-emergence prepaid costs | — | 579 | (579 | ) | |||||
Legal and other professional advisory fees | (1,178 | ) | (624 | ) | (554 | ) | |||
Gain on resolution of pre-emergence liabilities | 1,634 | — | 1,634 | ||||||
$ | 456 | $ | 8,955 | $ | (8,499 | ) |
Berry Corp. (Successor) | |||||||||||
Three Months Ended | Three Months Ended | ||||||||||
(in thousands) | June 30, 2018 | June 30, 2017 | $ Change | % Change | |||||||
Revenues and other: | |||||||||||
Oil, natural gas and NGL sales | $ | 137,385 | $ | 101,884 | $ | 35,501 | 35 | % | |||
Electricity sales | 5,971 | 5,712 | 259 | 5 | % | ||||||
(Losses) gains on oil and natural gas derivatives | (78,143 | ) | 23,962 | (102,105 | ) | (426 | )% | ||||
Marketing and other revenues | 769 | 3,164 | (2,395 | ) | (76 | )% | |||||
65,982 | 134,722 | (68,740 | ) | (51 | )% | ||||||
Expenses and other: | |||||||||||
Lease operating expenses | 41,517 | 45,726 | (4,209 | ) | (9 | )% | |||||
Electricity generation expenses | 3,135 | 4,465 | (1,330 | ) | (30 | )% | |||||
Transportation expenses | 2,343 | 9,404 | (7,061 | ) | (75 | )% | |||||
Marketing expenses | 407 | 730 | (323 | ) | (44 | )% | |||||
General and administrative expenses | 12,482 | 22,257 | (9,775 | ) | (44 | )% | |||||
Depreciation, depletion, amortization and accretion | 21,859 | 20,549 | 1,310 | 6 | % | ||||||
Taxes, other than income taxes | 8,715 | 10,249 | (1,534 | ) | (15 | )% | |||||
(Gains) losses on sale of assets and other, net | 123 | 5 | 118 | 2,360 | % | ||||||
90,581 | 113,385 | (22,804 | ) | (20 | )% | ||||||
Other income and (expenses): | |||||||||||
Interest expense | (9,155 | ) | (4,885 | ) | (4,270 | ) | 87 | % | |||
Other, net | (239 | ) | 2,916 | (3,155 | ) | (108 | )% | ||||
Reorganization items, net | 456 | 713 | (257 | ) | (36 | )% | |||||
Income (loss) before income taxes | (33,537 | ) | 20,081 | (53,618 | ) | (267 | )% | ||||
Income tax expense (benefit) | (5,476 | ) | 7,961 | (13,437 | ) | (169 | )% | ||||
Net income (loss) | (28,061 | ) | 12,120 | (40,181 | ) | (332 | )% | ||||
Dividends on Series A Preferred Stock | (5,650 | ) | (5,404 | ) | (246 | ) | 5 | % | |||
Net income (loss) available to common stockholders | $ | (33,711 | ) | $ | 6,716 | $ | (40,427 | ) | (602 | )% | |
Berry Corp. (Successor) | |||||||||
Three Months Ended | Three Months Ended | ||||||||
June 30, 2018 | June 30, 2017 | Variance | |||||||
(in thousands) | |||||||||
Severance taxes | $ | 2,997 | $ | 2,466 | $ | 531 | |||
Ad valorem and property taxes | 3,141 | 4,498 | (1,357 | ) | |||||
Greenhouse gas allowances | 2,577 | 3,285 | (708 | ) | |||||
$ | 8,715 | $ | 10,249 | $ | (1,534 | ) |
Berry Corp. (Successor) | |||||||||
Three Months Ended | Three Months Ended | ||||||||
June 30, 2018 | June 30, 2017 | Variance | |||||||
(in thousands) | |||||||||
Interest expense, net of amounts capitalized | $ | (9,155 | ) | $ | (4,885 | ) | $ | (4,270 | ) |
Other, net | (239 | ) | 2,916 | (3,155 | ) | ||||
$ | (9,394 | ) | $ | (1,969 | ) | $ | (7,425 | ) |
Berry Corp. (Successor) | |||||||||
Three Months Ended | Three Months Ended | ||||||||
(in thousands) | June 30, 2018 | June 30, 2017 | Variance | ||||||
Legal and other professional advisory fees | (1,178 | ) | (3,199 | ) | 2,021 | ||||
Gain on resolution of pre-emergence liabilities | 1,634 | 3,912 | (2,278 | ) | |||||
$ | 456 | $ | 713 | $ | (257 | ) |
Berry Corp. (Successor) | Berry LLC (Predecessor) | |||||||||||||
(a) | (b) | (c) | (a)-((b)+(c)) | |||||||||||
Six Months Ended | Four Months Ended | Two Months Ended | ||||||||||||
June 30, 2018 | June 30, 2017 | February 28, 2017 | $ Change | % Change | ||||||||||
(in thousands) | ||||||||||||||
Revenues and other: | ||||||||||||||
Oil, natural gas and NGL sales | $ | 263,010 | $ | 135,562 | $ | 74,120 | $ | 53,328 | 25 | % | ||||
Electricity sales | 11,423 | 6,603 | 3,655 | 1,165 | 11 | % | ||||||||
(Losses) gains on oil and natural gas derivatives | (112,787 | ) | 48,085 | 12,886 | (173,758 | ) | (285 | )% | ||||||
Marketing and other revenues | 1,619 | 4,127 | 2,057 | (4,565 | ) | (74 | )% | |||||||
163,265 | 194,377 | 92,718 | (123,830 | ) | (43 | )% | ||||||||
Expenses and other: | — | |||||||||||||
Lease operating expenses | 85,819 | 58,790 | 28,238 | (1,209 | ) | (1 | )% | |||||||
Electricity generation expenses | 7,725 | 5,613 | 3,197 | (1,085 | ) | (12 | )% | |||||||
Transportation expenses | 5,321 | 13,059 | 6,194 | (13,932 | ) | (72 | )% | |||||||
Marketing expenses | 987 | 1,000 | 653 | (666 | ) | (40 | )% | |||||||
General and administrative expenses | 24,466 | 31,800 | 7,964 | (15,298 | ) | (38 | )% | |||||||
Depreciation, depletion, amortization and accretion | 40,288 | 27,571 | 28,149 | (15,432 | ) | (28 | )% | |||||||
Taxes, other than income taxes | 16,972 | 13,330 | 5,212 | (1,570 | ) | (8 | )% | |||||||
(Gains) losses on sale of assets and other, net | 123 | 5 | (183 | ) | 301 | (169 | )% | |||||||
181,701 | 151,168 | 79,424 | (48,891 | ) | (21 | )% | ||||||||
Other income and (expenses): | — | |||||||||||||
Interest expense | (16,951 | ) | (6,600 | ) | (8,245 | ) | (2,106 | ) | 14 | % | ||||
Other, net | (212 | ) | 2,916 | (63 | ) | (3,065 | ) | (107 | )% | |||||
Reorganization items, net | 9,411 | (593 | ) | (507,720 | ) | 517,724 | (102 | )% | ||||||
Income (loss) before income taxes | (26,188 | ) | 38,932 | (502,734 | ) | 437,614 | (94 | )% | ||||||
Income tax expense (benefit) | (4,537 | ) | 15,435 | 230 | (20,202 | ) | (129 | )% | ||||||
Net income (loss) | (21,651 | ) | 23,497 | (502,964 | ) | 457,816 | (95 | )% | ||||||
Dividends on Series A Preferred Stock | (11,301 | ) | (7,196 | ) | — | (4,105 | ) | 57 | % | |||||
Net income (loss) available to common stockholders | $ | (32,952 | ) | $ | 16,301 | $ | (502,964 | ) | $ | 453,711 | (93 | )% |
Berry Corp. (Successor) | Berry LLC (Predecessor) | |||||||||||
Six Months Ended | Four Months Ended | Two Months Ended | ||||||||||
June 30, 2018 | June 30, 2017 | February 28, 2017 | Variance | |||||||||
(a) | (b) | (c) | (a)-((b)+(c)) | |||||||||
(in thousands) | ||||||||||||
Severance taxes | $ | 5,761 | $ | 3,611 | $ | 1,540 | $ | 610 | ||||
Ad valorem and property taxes | 6,558 | 5,572 | 2,108 | (1,122 | ) | |||||||
Greenhouse gas allowances | 4,653 | 4,146 | 1,564 | (1,057 | ) | |||||||
$ | 16,972 | $ | 13,329 | $ | 5,212 | $ | (1,569 | ) |
Berry Corp. (Successor) | Berry LLC (Predecessor) | |||||||||||
Six Months Ended | Four Months Ended | Two Months Ended | ||||||||||
June 30, 2018 | June 30, 2017 | February 28, 2017 | Variance | |||||||||
(a) | (b) | (c) | (a)-((b)+(c)) | |||||||||
(in thousands) | ||||||||||||
Interest expense, net of amounts capitalized | $ | (16,951 | ) | $ | (6,600 | ) | $ | (8,245 | ) | $ | (2,106 | ) |
Other, net | (212 | ) | 2,916 | (63 | ) | (3,065 | ) | |||||
$ | (17,163 | ) | $ | (3,684 | ) | $ | (8,308 | ) | $ | (5,171 | ) |
Berry Corp. (Successor) | Berry LLC (Predecessor) | |||||||||||
Six Months Ended | Four Months Ended | Two Months Ended | ||||||||||
(in thousands) | June 30, 2018 | June 30, 2017 | February 28, 2017 | Variance | ||||||||
(a) | (b) | (c) | (a)-((b)+(c)) | |||||||||
Return of Undistributed Funds from Cash Distribution Pool | $ | 9,000 | $ | — | $ | — | $ | 9,000 | ||||
Legal and other professional advisory fees | (1,223 | ) | 112 | (19,481 | ) | 18,146 | ||||||
Gain on resolution of pre-emergence suspended royalties | — | — | 421,774 | (421,774 | ) | |||||||
Fresh-start valuation adjustments | — | — | (920,699 | ) | 920,699 | |||||||
Gain on resolution of pre-emergence liabilities | 1,634 | — | — | 1,634 | ||||||||
Other | — | (705 | ) | 10,686 | (9,981 | ) | ||||||
$ | 9,411 | $ | (593 | ) | $ | (507,720 | ) | $ | 517,724 |
Berry Corp. (Successor) | Berry LLC (Predecessor) | ||||||||
Six Months Ended | Four Months Ended | Two Months Ended | |||||||
June 30, 2018 | June 30, 2017 | February 28, 2017 | |||||||
(in thousands) | |||||||||
Net cash: | |||||||||
Provided by (used in) operating activities | $ | (49,548 | ) | $ | 44,937 | $ | 22,431 | ||
Used in investing activities | (42,347 | ) | (72,328 | ) | (3,133 | ) | |||
Provided by (used in) financing activities | 46,467 | (15,000 | ) | (162,668 | ) | ||||
Net decrease in cash, cash equivalents and restricted cash | $ | (45,428 | ) | $ | (42,391 | ) | $ | (143,370 | ) |
Berry Corp. (Successor) | Berry LLC (Predecessor) | ||||||||
Six Months Ended | Four Months Ended | Two Months Ended | |||||||
(in thousands) | June 30, 2018 | June 30, 2017 | February 28, 2017 | ||||||
Capital expenditures (1) | $ | (45,369 | ) | $ | (32,878 | ) | $ | (3,158 | ) |
Proceeds from sale of properties and equipment and other | 3,022 | — | 25 | ||||||
Deposit on acquisition of properties | — | (39,450 | ) | — | |||||
Cash used in investing activities: | $ | (42,347 | ) | $ | (72,328 | ) | $ | (3,133 | ) |
• | incur or guarantee additional indebtedness or issue certain types of preferred stock; |
• | pay dividends on capital stock or redeem, repurchase or retire our capital stock or subordinated indebtedness |
• | transfer, sell or dispose of assets; |
• | make investments; |
• | create certain liens securing indebtedness; |
• | enter into agreements that restrict dividends or other payments from our restricted subsidiaries to us; |
• | consolidate, merge or transfer all or substantially all of our assets; and |
• | engage in transactions with affiliates. |
• | incur or guarantee additional indebtedness; |
• | transfer, sell or dispose of assets; |
• | make loans to others; |
• | make investments; |
• | merge with another entity; |
• | make or declare dividends; |
• | hedge future production or interest rates; |
• | enter into transactions with affiliates; |
• | incur liens; and |
• | engage in certain other transactions without the prior consent of the lenders. |
• | volatility of oil, natural gas and NGL prices; |
• | inability to generate sufficient cash flow from operations or to obtain adequate financing to fund capital expenditures and meet working capital requirements; |
• | price and availability of natural gas; |
• | our ability to use derivative instruments to manage commodity price risk; |
• | impact of environmental, health and safety, and other governmental regulations, and of current or pending legislation; |
• | uncertainties associated with estimating proved reserves and related future cash flows; |
• | our inability to replace our reserves through exploration and development activities; |
• | our ability to meet our proposed drilling schedule and to successfully drill wells that produce oil and natural gas in commercially viable quantities; |
• | effects of competition; |
• | our ability to make acquisitions and successfully integrate any acquired businesses; |
• | market fluctuations in electricity prices and the cost of steam; |
• | asset impairments from commodity price declines; |
• | large or multiple customer defaults on contractual obligations, including defaults resulting from actual or potential insolvencies; |
• | geographical concentration of our operations; |
• | our ability to improve our financial results and profitability following our emergence from bankruptcy and other risks and uncertainties related to our emergence from bankruptcy; |
• | changes in tax laws; |
• | impact of derivatives legislation affecting our ability to hedge; |
• | ineffectiveness of internal controls; |
• | concerns about climate change and other air quality issues; |
• | catastrophic events; |
• | litigation; |
• | our ability to retain key members of our senior management and key technical employees; |
• | information technology failures or cyber attacks: |
• | Each executive is eligible to receive an annual equity award, as determined by the board of directors of the Company or a committee thereof. |
• | Upon a termination of each executive’s employment under certain circumstances, the executive is eligible to receive (a) any earned but unpaid annual bonus for the year prior to the year of termination, (b) a prorated annual bonus for the year of termination and (c) severance in an amount equal to 18 months’ worth, for Mr. Smith, and 12 months’ worth, for Messrs. Baetz and Grove (or, following a Qualifying Termination (as defined in the applicable Amended Agreement), 24 months’ worth for Mr. Smith and 18 months’ worth for Messrs. Baetz and Grove) of the sum of the applicable executive’s base salary and target annual bonus, and reimbursement of up to an equivalent number of months’ worth of health insurance premiums. |
• | Modifies the definition of Good Reason in certain respects. |
• | With respect to the Smith Agreement, Mr. Smith is eligible to receive an annual bonus in a target amount equal to 100% of his then-current base salary. |
Exhibit Number | Description | |
3.1 | ||
3.2 | ||
3.3 | ||
3.4 | ||
3.5 | ||
10.1 | ||
10.2 | ||
10.3 | ||
10.4 | ||
10.5 | ||
10.6 | ||
10.7 | ||
10.8 | ||
10.9 | ||
10.10 | ||
10.11 | ||
10.12 | ||
10.13 | ||
10.14* | ||
10.15* |
* | Filed herewith. |
** | Furnished herewith. |
BERRY PETROLEUM CORPORATION | |
(Registrant) | |
Date: August 23, 2018 | /s/ Michael S. Helm |
Michael S. Helm | |
Chief Accounting Officer | |
(Duly Authorized Officer and Principal Accounting Officer) | |
Date: August 23, 2018 | /s/ Cary Baetz |
Cary Baetz | |
Executive Vice President and Chief Financial Officer | |
(Principal Financial Officer) |
1. | Release. |
3. | Miscellaneous. |
BERRY PETROLEUM COMPANY, LLC | |
By:___________________________________ Name: [NAME OF AUTHORIZED OFFICER] Title: [TITLE OF AUTHORIZED OFFICER] |
CARY D. BAETZ | |
Signature:____________________________ Print Name: __________________________ | |
1. | Release. |
3. | Miscellaneous. |
BERRY PETROLEUM COMPANY, LLC | |
By:___________________________________ Name: [NAME OF AUTHORIZED OFFICER] Title: [TITLE OF AUTHORIZED OFFICER] |
GARY A. GROVE | |
Signature:____________________________ Print Name: __________________________ | |
1. | I have reviewed this quarterly report of Berry Petroleum Corporation (the “registrant”); | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
c. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |||||
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 23, 2018 | /s/ Arthur T. Smith |
Arthur T. Smith | |
President and Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this quarterly report of Berry Petroleum Corporation (the “registrant”); | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
c. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |||||
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 23, 2018 | /s/ Cary Baetz |
Cary Baetz | |
Executive Vice President and Chief Financial Officer | |
(Principal Financial Officer) |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and | ||
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 23, 2018 | |
/s/ Arthur T. Smith | |
Arthur T. Smith | |
President and Chief Executive Officer | |
(Principal Executive Officer) |
/s/ Cary Baetz | |
Cary Baetz | |
Executive Vice President and Chief Financial Officer | |
(Principal Financial Officer) |
Document and Entity Information Document - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 31, 2018 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Berry Petroleum Corp | |
Entity Central Index Key | 0001705873 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 81,336,762 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 950 | $ 970 |
Series A convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Series A convertible preferred stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Series A convertible preferred stock, shares issued (in shares) | 37,669,805 | 35,845,001 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 33,087,889 | 32,920,000 |
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - 6 months ended Jun. 30, 2018 - USD ($) $ in Thousands |
Total |
Preferred Stock
Series A Preferred Stock
|
Common stock |
Additional Paid-in Capital |
Accumulated Deficit |
Treasury Stock |
---|---|---|---|---|---|---|
Balance, December 31, 2017 at Dec. 31, 2017 | $ 859,310 | $ 335,000 | $ 33 | $ 545,345 | $ (21,068) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 2,320 | 2,320 | ||||
Share repurchase for payment of taxes on equity awards | (176) | (176) | ||||
Cash dividends declared on Series A Preferred Stock | (11,301) | (11,301) | ||||
Purchase of rights to common stock | (20,006) | (20,006) | ||||
Net (loss) income | (21,651) | (21,651) | ||||
Balance, June 30, 2018 at Jun. 30, 2018 | $ 808,496 | $ 335,000 | $ 33 | $ 536,188 | $ (42,719) | $ (20,006) |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation “Berry Corp.” refers to Berry Petroleum Corporation, a Delaware corporation which, on and after February 28, 2017 is the sole member of Berry Petroleum Company, LLC. “Berry LLC” refers to Berry Petroleum Company, LLC, a Delaware limited liability company. As the context may require, the “Company”, “we”, “our” or similar words refer to (i) Berry Corp. (the "Successor”) and Berry LLC, its consolidated subsidiary, as of and after February 28, 2017, as a whole or (ii) either Berry Corp. or Berry LLC on an individual basis as of and after February 28, 2017. References to historical activities of the “Company” prior to February 28, 2017, refer to activities of Berry LLC (the "Predecessor”). “LINN Energy” refers to Linn Energy, LLC, a Delaware limited liability company of which Berry LLC was formerly a wholly-owned, indirect subsidiary. Nature of Business Berry Corp. is an independent oil and natural gas company that was incorporated under Delaware law on February 13, 2017. Berry Corp. operates through its wholly-owned subsidiary, Berry LLC. Our properties are located in the United States (“U.S.”), in California (in the San Joaquin and Ventura Basins), Utah (in the Uinta Basin), Colorado (in the Piceance Basin) and east Texas. In July, we completed the initial public offering ("IPO") of our common stock and as a result, on July 26, 2018, our common stock began trading on the NASDAQ Global Select Market under the ticker symbol BRY. Principles of Consolidation and Reporting The information reported herein reflects all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for the fair presentation of the results for the interim periods. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted under Securities and Exchange Commission (“SEC”) rules and regulations. The results reported in these unaudited condensed consolidated financial statements should not necessarily be taken as indicative of results that may be expected for the entire year. This report should be read in conjunction with the financial statements and notes in the Company's audited financial statements for the year ended December 31, 2017 presented in our final prospectus dated July 25, 2018 as filed with the SEC pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended, on July 27, 2018 (the "prospectus"). The condensed consolidated financial statements have been prepared in conformity with GAAP and include the accounts of the Successor and its wholly owned subsidiary after February 28, 2017 and the accounts of the Predecessor prior to February 28, 2017. All significant intercompany transactions and balances have been eliminated upon consolidation. For oil and gas exploration and production joint ventures in which we have a direct working interest, we account for our proportionate share of assets, liabilities, revenue, expense and cash flows within the relevant lines of the financial statements. Bankruptcy Accounting Upon emergence from bankruptcy on February 28, 2017, we adopted fresh start accounting which resulted in Berry Corp. becoming the financial reporting entity. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the condensed consolidated financial statements on or after February 28, 2017 are not comparable to the condensed consolidated financial statements prior to that date. Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP required management of the Company to make informed estimates and assumptions about future events. These estimates and the underlying assumptions affect the amount of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. As fair value is a market-based measurement, it was determined based on the assumptions that we believe market participants would use. We based these assumptions on management's best estimates and judgment. Management evaluates its assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, that management believes to be reasonable under the circumstances. Such assumptions are adjusted when management determines that facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates. Any changes in these assumptions resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. The estimates that are particularly significant to our financial statements include estimates of our reserves of oil and gas, future cash flows from oil and gas properties, depreciation, depletion and amortization, asset retirement obligations, certain revenues and expenses, fair values of commodity derivatives and fair values of assets acquired and liabilities assumed. In addition, as part of fresh-start accounting, we made estimates and assumptions related to our reorganization value, liabilities subject to compromise and the fair value of assets and liabilities recorded. Accounting and Disclosure Changes Recently Adopted Accounting Standards In March 2016, the Financial Accounting Standards Board (“FASB”) issued rules to improve the accounting for share-based payment transactions. We early-adopted these rules retrospectively on April 1, 2018 and as a result are reporting cash paid to tax authorities when we withhold shares from an employee's award as a cash outflow for financing activities on the statement of cash flows. There was no change to the other financial statements as a result of adopting these rules. In November 2016, the FASB issued rules intended to address the diversity in practice in classification and presentation of changes in restricted cash on the statement of cash flows. We adopted these rules retrospectively on January 1, 2018, as a result of which we included restricted cash amounts in our beginning and ending cash balances on the statement of cash flows and included a disclosure reconciling cash and cash equivalents presented on the balance sheets to cash, cash equivalents and restricted cash on the statement of cash flows. New Accounting Standards Issued, But Not Yet Adopted In February 2016, the FASB issued rules requiring lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months and to include qualitative and quantitative disclosures with respect to the amount, timing, and uncertainty of cash flows arising from leases. As an emerging growth company, we have elected to delay the adoption of these rules until they are applicable to non-SEC issuers which is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We expect the adoption of these rules to primarily impact other assets and other liabilities and do not expect a material impact on our consolidated results of operations. During 2016, the FASB issued rules clarifying the new revenue recognition standard issued in 2014. The new rules are intended to improve and converge the financial reporting requirements for revenue from contracts with customers. We are an emerging growth company and have elected to delay adoption of these rules until they are applicable to non-SEC issuers which is for fiscal years beginning after December 31, 2018. We are currently evaluating the impact of the adoption of these rules on our consolidated financial statements and related disclosures. |
Emergence from Voluntary Reorganization under Chapter 11 |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Emergence from Voluntary Reorganization under Chapter 11 | Emergence from Voluntary Reorganization under Chapter 11 On December 16, 2013, an affiliate of LINN Energy, LinnCo, LLC (“LinnCo”), acquired all the outstanding common shares of Berry Petroleum Company and contributed Berry Petroleum Company to LINN Energy in exchange for LINN Energy units. In connection with its acquisition by LINN Energy, Berry Petroleum Company was converted from a Delaware corporation into a Delaware limited liability company and changed its name to “Berry Petroleum Company, LLC.” Linn Acquisition Company, LLC, a direct subsidiary of LINN Energy, became Berry LLC’s sole member. On May 11, 2016 (the “Petition Date”), the LINN entities ("LINN Entities") and, consequently, Berry LLC (collectively, the “Debtors”), filed voluntary petitions (“Bankruptcy Petitions”) for relief under Chapter 11 (“Chapter 11”) of the U.S. Bankruptcy Code (“Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of Texas (“Bankruptcy Court”). The Debtors’ Chapter 11 cases were administered jointly under the caption In re Linn Energy, LLC, et al., Case No. 16-60040 (collectively, the “Chapter 11 Proceedings”). During the pendancy of the Chapter 11 Proceedings, the debtors in the Chapter 11 Proceedings (the “Debtors”), operated their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. In December 2016, Berry LLC and Linn Acquisition Company, LLC, on the one hand, and LINN Energy and its other affiliated debtors, on the other hand, filed separate plans of reorganization with the Bankruptcy Court. The “Amended Joint Chapter 11 Plan of Reorganization of Linn Acquisition Company, LLC and Berry Petroleum Company, LLC” (the “Plan”) was filed on December 13, 2016. On January 27, 2017, the Bankruptcy Court entered its confirmation order (the “Confirmation Order”) approving and confirming the Plan. On February 28, 2017, the Plan became effective and was implemented in accordance with its terms. Among other transactions, Linn Acquisition Company, LLC transferred 100% of Berry LLC’s outstanding membership interests to Berry Corp. As a result, Berry LLC emerged from bankruptcy as a wholly-owned subsidiary of Berry Corp., separate from LINN Energy and its affiliates, effective February 28, 2017 (the “Effective Date”). Plan of Reorganization On the Effective Date, the Company consummated the following reorganization transactions in accordance with the Plan:
Liabilities Subject to Compromise Liabilities subject to compromise decreased from approximately $35 million as of December 31, 2017 to approximately $20 million as of June 30, 2018. Activity for our liabilities subject to compromise for the six months ended June 30, 2018 included the return of $9 million in undistributed funds from restricted cash, approximately $6 million in settlement payments to general unsecured creditors and other payments of professional fees incurred to settle these claims. Reorganization Items, Net We have incurred and continue to incur expenses associated with the reorganization. Reorganization items, net represent costs and gains directly associated with the Chapter 11 proceedings since the Petition Date, and also include adjustments to reflect the carrying value of certain liabilities subject to compromise at their estimated allowed claim amounts, as such adjustments were determined. The following table summarizes the components of reorganization items included on the condensed consolidated statements of operations:
In August 2018, we received an additional return of undistributed funds from the Cash Distribution Pool of approximately $14 million. |
Debt |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The following table summarizes our outstanding debt:
At June 30, 2018 and December 31, 2017, debt issuance costs for the RBL Facility reported in "non current assets" on the balance sheet were approximately $18 million and $21 million net of amortization, respectively. The amortization of debt issuance costs is presented in interest expense on the condensed consolidated statements of operations. Fair Value Our debt is recorded at the carrying amount on the balance sheets. The carrying amount of the RBL Facility approximates fair value because the interest rates are variable and reflect market rates. The fair value of the 2026 senior unsecured notes was approximately $408 million at June 30, 2018. Credit Facilities On July 31, 2017, we entered into a credit agreement (“RBL Facility”), with Wells Fargo Bank, N.A. as administrative agent and certain lenders with up to $1.5 billion of commitments, subject to a reserves-based borrowing base. In connection with the issuance of the 2026 Notes, the RBL Facility borrowing base was set at $400 million which incorporated a $100 million reduction, or 25% of the face value of the 2026 Notes (as defined below). In March 2018, we completed a borrowing base redetermination which reaffirmed our borrowing base at $400 million with an elected commitment feature that allows us to increase the RBL Facility to $575 million with lender approval. As of June 30, 2018, the financial performance covenants under our RBL Facility were (i) a leverage ratio of no more than 4.00 to 1.00 and (ii) a current ratio of at least 1.00 to 1.00. At June 30, 2018, our actual ratios were 2.63 to 1.00 and 3.18 to 1.00, respectively. In addition, the RBL Facility currently provides that to the extent we incur unsecured indebtedness, including any amounts raised in the future, the borrowing base will be reduced by an amount equal to 25% of the amount of such unsecured debt. We were in compliance with all financial covenants as of June 30, 2018. As of June 30, 2018, we had approximately $327 million of available borrowing capacity under the RBL Facility. As of June 30, 2018 and December 31, 2017, we had letters of credit outstanding of approximately $7 million and $21 million, respectively, under our revolving credit facilities. These letters of credit were issued to support ordinary course of business marketing, insurance, regulatory and other matters. In July and August 2018, we paid down approximately $105 million on the RBL Facility from the net proceeds we received in the IPO of our common stock (see Note 6). On August 20, 2018, we had approximately $388 million of available borrowing capacity under the RBL Facility and approximately $36 million of cash on hand. Senior Unsecured Notes Offering In February 2018, we completed a private issuance of $400 million in aggregate principal amount of 7.00% senior unsecured notes due 2026 (the “2026 Notes”), which resulted in net proceeds to us of approximately $391 million after deducting expenses and the initial purchasers’ discount. We used a portion of the net proceeds from the issuance of the 2026 Notes to repay borrowings under the RBL Facility and used the remainder for general corporate purposes. |
Derivatives |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | Derivatives We have hedged a portion of our forecasted production to reduce exposure to fluctuations in oil and natural gas prices and we target covering our operating expenses and fixed charges two years out. We have also hedged a portion of our exposure to differentials between Brent and WTI. We also, from time to time, have entered into agreements to purchase a portion of the natural gas we require for our operations that we do not record at fair value as derivatives because they qualify for normal purchases and normal sales exclusions. Our current hedge positions consist of primarily oil swap contracts and deferred premium purchased put options, though in the past we have also used collars and three-way collars and hedged our exposure to natural gas and natural gas liquids (NGL) price changes. We enter into these transactions with respect to a portion of our projected production to provide an economic hedge against the risk related to the future commodity prices received. We do not enter into derivative contracts for speculative trading purposes. We did not designate any of our contracts as cash flow hedges; therefore, the changes in fair value of these instruments are recorded in current earnings. As part of our hedging program, we entered into a number of derivative transactions that resulted in the following crude oil contracts as of June 30, 2018:
We earn a premium on our sold oil calls at the time of sale. We make net settlement payments for prices above the indicated weighted-average price per barrel of Brent. If the calls expire unexercised, no payments are received. For our purchased puts, we would receive settlement payments for prices below the indicated weighted-average price per barrel of Brent. The purchased put options contain deferred premiums of approximately $17.9 million and are reflected in the mark-to-market valuation of the derivatives on the balance sheet at June 30, 2018. The premiums will be payable in conjunction with the monthly settlements of these contracts and thus have been deferred until payments begin in 2019. For fixed-price swaps, we make settlement payments for prices above the indicated weighted-average price per barrel of Brent and receive settlement payments for prices below the indicated weighted-average price per barrel of Brent. For oil basis swaps, we make settlement payments if the difference between Brent and WTI is greater than the indicated weighted-average price per barrel and receive settlement payments if the difference between Brent and WTI is below the indicated weighted-average price per barrel. Our commodity derivatives are measured at fair value using industry-standard models with various inputs including forward prices, and all are classified as Level 2 in the required fair value hierarchy for the periods presented. The following tables present the fair values (gross and net) of our outstanding derivatives as of June 30, 2018 and December 31, 2017:
In May 2018, we elected to terminate outstanding commodity derivative contracts for all WTI oil swaps and certain WTI/Brent basis swaps for July 2018 through December 2019 and all WTI oil sold call options for July 2018 through June 2020. Termination costs totaled approximately $127 million and were calculated in accordance with a bilateral agreement on the cost of elective termination included in these derivative contracts; the present value of the contracts using the forward price curve as of the date termination was elected. No penalties were charged as a result of the elective termination. Concurrently, Berry Corp. entered into commodity derivative contracts consisting of Brent oil swaps for July 2018 through March 2019 and Brent oil purchased put options for January 2019 through March 2020. These Brent oil swaps hedge 1.8 MMBbls in 2018 and 0.9 MMBbls in 2019 at a weighted average price of $75.66. These Brent oil purchased put options provide a weighted-average price floor of $65.00 for 2.8 MMBbls in 2019 and 0.5 MMBbls in 2020. We effected these transactions to move from a WTI-based position to a Brent-based position as well as bring our hedged pricing more in line with current market pricing. |
Lawsuits, Claims, Commitments and Contingencies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Lawsuits, Claims, Commitments and Contingencies | Lawsuits, Claims, Commitments and Contingencies In the normal course of business, we, or our subsidiary, are subject to lawsuits, environmental and other claims and other contingencies that seek, or may seek, among other things, compensation for alleged personal injury, breach of contract, property damage or other losses, punitive damages, civil penalties, or injunctive or declaratory relief. On May 11, 2016 our predecessor company filed the Chapter 11 Proceeding. Our bankruptcy case was jointly administered with that of Linn Energy and its affiliates under the caption In re Linn Energy, LLC, et al., Case No. 16-60040. On January 27, 2017, the Bankruptcy Court approved and confirmed our plan of reorganization in the Chapter 11 Proceeding. On the Effective Date the plan became effective and was implemented. The Chapter 11 Proceeding will, however, remain pending until final resolution of all outstanding claims. For further information, see Note 2. We accrue reserves for currently outstanding lawsuits, claims and proceedings when it is probable that a liability has been incurred and the liability can be reasonably estimated. We have not recorded any reserve balances at June 30, 2018 and December 31, 2017. We also evaluate the amount of reasonably possible losses that we could incur as a result of these matters. We believe that reasonably possible losses that we could incur in excess of reserves accrued on our balance sheet would not be material to our consolidated financial position or results of operations. We have certain commitments under contracts, including purchase commitments for goods and services. At June 30, 2018, purchase obligations of approximately $13 million included a commitment to invest at least $9 million to construct a new access road in connection with our Piceance assets or provide access to an existing road or to pay 50% of the difference between $12 million and the actual amount spent on such access road construction prior to the end of 2019. If we do not obtain extensions for the road obligation, provide access to an existing road or construct a new access road, we may trigger the payment obligation which, if we were unable to negotiate resolution, would reduce our capital available for investment. Also, as of June 30, 2018, we had entered into agreements to purchase natural gas for our operations in 2018 for approximately $7 million. We, or our subsidiary, or both, have indemnified various parties against specific liabilities those parties might incur in the future in connection with transactions that they have entered into with us. As of June 30, 2018, we are not aware of material indemnity claims pending or threatened against us. We have entered into operating lease agreements mainly for office space. Lease payments are generally expensed as part of general and administrative expenses. At June 30, 2018, future net minimum lease payments for non-cancelable operating leases (excluding oil and natural gas and other mineral leases, utilities, taxes and insurance and maintenance expense) totaled:
|
Equity |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Initial Public Offering of Common Stock In July, we completed our IPO and as a result, on July 26, 2018, our common stock began trading on the NASDAQ Global Select Market under the ticker symbol BRY. The Company sold 10,497,849 shares and the selling stockholders sold 2,545,630 shares at a price of $14.00 per share. We used a portion of our proceeds to repurchase 1,802,196 shares of our common stock owned by Benefit Street Partners and Oaktree Capital Management. After giving effect to the IPO and the share repurchase, the number of shares of our common stock outstanding increased by 8,695,653. We and the selling stockholders have granted the underwriters the option to purchase up to an additional 1,534,895 shares and 421,626 shares of common stock, respectively, on the same terms and conditions set forth above. The Company received approximately $136 million in net proceeds from the offering after deducting underwriting discounts and offering expenses payable by us. We did not receive any proceeds from the sale by the selling stockholders. We used approximately $24 million of the net proceeds to purchase shares of our common stock (at a price equal to the price paid by the underwriters for shares of common stock in the offering) from funds affiliated with Benefit Street Partners and Oaktree Capital Management. Of the remaining approximately $112 million of net proceeds received by us in the IPO, we used approximately $105 million to repay borrowings under our RBL Facility. This included the $60 million we borrowed on the RBL Facility to make the payment to the holders of our Series A Preferred Stock in connection with the conversion of preferred stock to common stock. We used the remainder for general corporate purposes. In connection with the IPO, each of the 37.7 million shares of our Series A Preferred Stock was automatically converted into 1.05 shares of our common stock or 39.6 million shares in aggregate and the right to receive a cash payment of $1.75 ("Series A Preferred Stock Conversion"). The cash payment was reduced in respect of any cash dividend paid by the Company on such share of Series A Preferred Stock for any period commencing on or after April 1, 2018. Because we paid the second quarter preferred dividend of $0.15 per share in June, the cash payment for the conversion was reduced to $1.60 per share, or approximately $60 million. Shares Issued and Outstanding As of July 31, 2018, there were 81,336,762 shares of common stock issued and outstanding including 167,889 common shares that have vested as of June 30, 2018 relating to the Company's Omnibus Incentive Plan. An additional 1,447,998 unvested restricted stock units and performance restricted stock units were outstanding under the Company's Omnibus Incentive Plan as of July 31, 2018. A further 7,080,000 common shares have been reserved for issuance to the general unsecured creditor group pending resolution of disputed claims. In March 2018, the board of directors approved a cumulative paid-in-kind dividend on the Series A Preferred Stock for the periods through December 31, 2017. The cumulative dividend was 0.050907 per share and approximately 1,825,000 shares in total. Also in March 2018, the board approved a $0.158 per share, or approximately $5.6 million, cash dividend on the Series A Preferred Stock for the quarter ended March 31, 2018. In both cases, the payments were to stockholders of record as of March 15, 2018. In May 2018 the board of directors approved a $0.15 per share, or approximately $5.6 million cash dividend, on the Series A Preferred Stock for the quarter ended June 30, 2018. The payment was to stockholders of record as of June 7, 2018. In July 2018, all shares our of Series A Preferred Stock, approximately 37.7 million in total, were converted to approximately 39.6 million common shares and, as a result, there were no shares of our Series A Preferred Stock outstanding following the IPO. On August 21, 2018, our board of directors approved a $0.12 per share quarterly cash dividend on our common stock on a pro-rata basis from the date of our IPO through September 30, 2018, which will result in a payment of $0.09 per share. Purchase of Common Stock In connection with our IPO, we entered into stock purchase agreements with funds affiliated with each of Benefit Street Partners and Oaktree Capital Management pursuant to which we purchased an aggregate of 1,802,196 shares of our common stock at a price equal to the net proceeds per share received from the IPO of our common stock before expenses. The stock purchase agreement with funds affiliated with Benefit Street Partners requires us to purchase additional shares at the same price if the underwriters exercise their option to purchase additional shares in the IPO. Treasury Stock Purchase In March and April 2018, we entered into settlement agreements with two general unsecured creditors from our bankruptcy process. As a result, we paid approximately $20 million to purchase their claims to our common stock that we have reflected as treasury stock. We do not yet know the final amount of shares out of the 7,080,000 set aside that we will issue to third parties with respect to the unsecured claims. When all unsecured claims are settled, we will be able to assign a share count to the treasury stock. See Note 2 under "Plan of Reorganization" and Note 11 for further discussion of the common shares set aside to settle claims. Stock-Based Compensation In July 2018, we became a public company and our stock began trading on the NASDAQ Global Select Market. As a result, the estimate of the fair value of our stock-based compensation awards granted will no longer be based on complex models using inputs and assumptions but will be based on the price of our stock at the date of grant. On June 27, 2018, our board of directors adopted the Berry Petroleum Corporation 2017 Omnibus Incentive Plan, as amended and restated (our “Restated Incentive Plan”). This plan constitutes an amendment and restatement of the plan as in effect immediately prior to the adoption of the Restated Incentive Plan (the "Prior Plan"). The Prior Plan constituted an amendment and restatement of the plan originally adopted as of June 15, 2017 (the "2017 Plan"). The Restated Incentive Plan provides for the grant, from time to time, at the discretion of the board of directors or a committee thereof, of stock options, stock appreciation rights ("SARs"), restricted stock, restricted stock units, stock awards, dividend equivalents, other stock-based awards, cash awards and substitute awards. The maximum number of shares of common stock that may be issued pursuant to an award under the Restated Incentive Plan is 10,000,000 inclusive of the number of shares of common stock previously issued pursuant to awards granted under the Prior Plan or the 2017 Plan. The maximum number of shares remaining that may be issued is approximately 8.3 million. Included in lease operating expenses and general and administrative expenses is stock-based compensation expense of $44,000 and $1.3 million, respectively, for the three months ended June 30, 2018, and $67,000 and $2.3 million, respectively, for the six months ended June 30, 2018. For the three and six months ended June 30, 2017, including the successor and predecessor periods, there were no such expenses. For the six months ended June 30, 2018, stock-based compensation had an immaterial associated income tax benefit. The table below summarizes the activity relating to restricted stock units ("RSUs") issued under the 2017 Plan during the six months ended June 30, 2018. The RSUs vest ratably over three years. Unrecognized compensation cost associated with the RSUs at June 30, 2018 is approximately $6.8 million which will be recognized over a weighted average period of approximately two years.
The table below summarizes the activity relating to the performance-based restricted stock units ("PRSUs") issued under the 2017 Plan during the six months ended June 30, 2018. The PRSUs vest if the Company's stock price reaches certain levels over defined periods of time. Unrecognized compensation cost associated with the PRSUs at June 30, 2018 is approximately $3.8 million which will be recognized over a weighted-average period of approximately two years.
|
Income taxes |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes Prior to the Effective Date, Berry LLC was a limited liability company treated as a disregarded entity for federal and state income tax purposes, with the exception of the state of Texas. Limited liability companies are subject to Texas margin tax. As such, with the exception of the state of Texas, Berry LLC was not a taxable entity, it did not directly pay federal and state income taxes and recognition was not given to federal and state income taxes for the operations of Berry LLC. Upon emergence from bankruptcy, Berry Corp. acquired the assets of Berry LLC in a taxable asset acquisition as part of the restructuring. Consequently, we are now taxed as a corporation and have no net operating loss carryforwards for the periods prior to February 28, 2017. On December 22, 2017, the U.S. the Tax Cuts and Jobs Act (the “Act”) which made significant changes to the Internal Revenue Code of 1986, including lowering the maximum federal corporate rate from 35 percent to 21 percent and imposing limitations on the use of net operating losses arising in taxable years ending after December 31, 2017. This was the key contributor to the decrease in our effective rate from 40% in the 2017 Successor periods to 16% and 17% in the three and six months ended June 30, 2018, respectively. We anticipate earnings for fiscal year 2018, in part due to the termination and resetting of our hedge positions in May 2018. These earnings consequently allow for the release of our valuation allowance, described below, resulting in an effective tax rate less than the maximum federal and applicable state tax rate for the six months ended June 30, 2018. There were no current income taxes during the six months ended June 30, 2018 Our accounting for the U.S. Tax Reform Act is incomplete. As noted at year-end, however, we were able to reasonably estimate certain effects and, therefore, recorded provisional adjustments to income tax expense for the revaluation of deferred tax assets and liabilities from 35 percent to 21 percent associated with the reduction in the U.S. corporate income tax rate, and for a valuation allowance on certain deferred tax assets impacted by the Act. We have not revised any of the 2017 provisional estimates. Any subsequent adjustments to these amounts will be recorded to income tax expense in the quarter the analysis is complete. |
Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows | Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows Other current assets reported on the condensed consolidated balance sheets included the following:
The major classes of inventory were not material and therefore not stated separately. Other non-current assets at June 30, 2018 and December 31, 2017, included approximately $18 million and $20 million of deferred financing costs, net of amortization, respectively. Accounts payable and accrued expenses on the condensed consolidated balance sheets included the following:
Supplemental Cash Flow Information Supplemental disclosures to the statements of cash flows are presented below:
The following table provides a reconciliation of Cash, Cash Equivalents and Restricted Cash as reported in the Consolidated Statements of Cash Flows to the line items within the Consolidated Balance Sheets:
Restricted cash is primarily associated with cash reserved to settle claims with the general unsecured creditors resulting from implementation of the Plan. Cash and cash equivalents consists primarily of highly liquid investments with original maturities of three months or less and are stated at cost, which approximates fair value. Pro Forma Financial Data PRO FORMA FINANCIAL DATA The following unaudited pro forma condensed consolidated financial information of Berry Corp. gives effect to the issuance of the 2026 Notes, the Series A Preferred Stock Conversion and the IPO including the application of net proceeds from the IPO. The unaudited pro forma condensed consolidated statement of operations is presented for the six months ended June 30, 2018. The unaudited pro forma condensed consolidated balance sheet is presented as of June 30, 2018. This unaudited pro forma condensed consolidated financial information should be read in conjunction with Berry Corp.’s historical consolidated financial statements as of and for the six months ended June 30, 2018. The unaudited pro forma condensed consolidated statement of operations gives effect to the issuance of the 2026 Notes, the Series A Preferred Stock Conversion and the IPO, including the application of net proceeds from the offering, as if each had been completed as of January 1, 2017. The unaudited pro forma condensed consolidated balance sheet gives effect to the same transactions as if each had been completed on June 30, 2018. The unaudited pro forma condensed consolidated financial statements are for informational and illustrative purposes only and are not necessarily indicative of the financial results that would have been had the events and transactions occurred on the dates assumed, nor are such financial statements necessarily indicative of the results of operations in future periods. The pro forma adjustments, as described in the accompanying notes, are based upon currently available information. The historical financial information has been adjusted to give effect to pro forma adjustments that are (i) directly attributable to the 2026 Notes, the Series A Preferred Stock Conversion, the IPO and the application of net proceeds from the offering, (ii) factually supportable, and (iii) expected to have a continuing impact on the Company’s consolidated results. Background 2026 Notes In February 2018, we completed a private issuance of $400 million in aggregate principal amount of 7.00% senior unsecured notes due 2026, which resulted in net proceeds of approximately $391 million after deducting expenses and the initial purchasers' discount. A portion of these proceeds were used to repay borrowings under the RBL Facility and the remainder for general corporate purposes. Series A Preferred Stock Conversion and Common Stock Offering In connection with our IPO, we amended the Series A Preferred Stock certificate of designation to provide for the automatic conversion of all outstanding shares of Series A Preferred Stock. Pursuant to the amendment, each outstanding share of Series A Preferred Stock was automatically converted into (i) 1.05 shares of common stock and (ii) the right to receive $1.75, minus the amount of any cash dividend paid by the Company on such share of Series A Preferred Stock in respect of any period commencing on or after April 1, 2018. We received approximately $136 million of net proceeds from the IPO after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We did not receive any proceeds from the sale of shares by the selling stockholders. We used approximately $24 million of the net proceeds to purchase shares of our common stock (at a price equal to the price paid by the underwriters for shares of common stock in the offering) from funds affiliated with Benefit Street Partners and Oaktree Capital Management. Of the remaining approximately $112 million of net proceeds received by us in the IPO, we used approximately $105 million to repay borrowings under our RBL Facility. This included the amounts we borrowed in July on the RBL Facility to make the payment to the holders of our Series A Preferred Stock in connection with the conversion of preferred stock to common stock. We used the remainder for general corporate purposes. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET JUNE 30, 2018 (in thousands)
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR SIX MONTHS ENDED JUNE 30, 2018 (in thousands, except per share amounts)
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION 1. Basis of Presentation The accompanying unaudited pro forma condensed consolidated statement of operations presents the financial information of Berry Corp. assuming the events and transactions had occurred on January 1, 2017. The consolidated balance sheet presents the information assuming the transactions occurred on June 30, 2018. Issuance of 2026 Notes Adjustments represent adjustments to give effect to the Company's issuance and net proceeds from the 2026 Notes to the condensed consolidated statement of operations as of the date assumed. Series A Preferred Stock Conversion and Common Stock Offering Adjustments represent adjustments to give effect to the conversion of preferred stock into common stock, including the payment of cash dividends and the common stock offering to the condensed consolidated financial statements as of the date assumed. 2. Pro Forma Balance Sheet Adjustments (a) Reflects the issuance of 8,695,653 additional net shares of common stock in the offering, the receipt of approximately $112 million of net proceeds, after the repurchase of 1,802,196 shares for approximately $24 million, from funds affiliated with Benefit Street Partners and Oaktree Capital Management in connection with the IPO and the usage of a portion of the net proceeds to pay down the outstanding balance on the RBL Facility. The number of shares and net proceeds does not include a number of shares issued by us equal to the number of shares purchased by us from funds affiliated with Benefit Street Partners and Oaktree Capital Management in connection with the IPO. (b) Reflects the conversion of the outstanding shares of Series A Preferred Stock into (1) approximately 39.6 million shares of common stock and (2) the cash payment from the IPO net proceeds of $1.60 on each pre-conversion share of Series A Preferred Stock, or approximately $60 million. 3. Pro Forma Statement of Operations Adjustments Issuance of 2026 Notes Adjustments (c) The issuance of the 2026 Notes was assumed to have occurred on January 1, 2017 for pro forma purposes and to have resulted in net proceeds of $391 million. As a result, borrowings under the RBL Facility would not have been necessary during this period. The Company calculated the pro forma adjustment to increase interest expense as a result of the higher interest rate on the 2026 Notes and reversing the interest expense and other fees associated with the RBL Facility for the six months ended June 30, 2018 as follows:
The effective tax rate applied to the increased interest expense was 17.3% for the six months ended June 30, 2018. Series A Preferred Stock Conversion and Common Stock Offering Adjustments (d) Reflects basic and diluted income per common share giving effect to the issuance of 8,695,653 shares of common stock in the IPO, assuming the IPO occurred January 1, 2017. The number of shares and net proceeds does not include shares purchased from the selling stockholders in the IPO or a number of shares issued by us equal to the number of shares purchased by us from funds affiliated with Benefit Street Partners and Oaktree Capital Management in connection with the IPO. (e) Reflects the conversion of the outstanding shares of Series A Preferred Stock into approximately 37.7 million shares of common stock, assumed to occur on January 1, 2017. (f) Reflects the effect of reversing the Series A Preferred Stock dividends, assuming the IPO and the Series A Preferred Stock Conversion occurred January 1, 2017. (g) Share count includes 7 million shares reserved for issuance to the general unsecured creditors resulting from the bankruptcy process. |
Certain Relationships and Related Party Transactions |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Certain Relationships and Related Party Transactions | Certain Relationships and Related Party Transactions In connection with our emergence from bankruptcy, we entered into agreements with certain of our affiliates and with parties who received shares of our common stock and Series A Preferred Stock in exchange for their claims. Transition Services and Separation Agreement (“TSSA”) On the Effective Date, Berry LLC entered into the TSSA with LINN Energy and certain of its subsidiaries to facilitate the separation of Berry LLC’s operations from LINN Energy’s operations. Pursuant to the TSSA, (i) LINN Energy continued to provide, or cause to be provided, certain administrative, management, operating, and other services and support to the Company during a transitional period following the Effective Date (the “Transition Services”), (ii) the LINN Energy debtors and Berry LLC separated their previously combined enterprise and (iii) the LINN Energy debtors transferred to Berry LLC certain assets that relate to Berry LLC’s properties or its business, in each case under the terms and conditions specified in the TSSA. Under the TSSA, Berry LLC reimbursed LINN Energy for any and all reasonable, third-party out-of-pocket costs and expenses, without markup, actually incurred by LINN Energy, to the extent documented, in connection with providing the Transition Services. Additionally, Berry LLC paid to LINN Energy a management fee equal to $6 million per month, prorated for partial months, during the period from the Effective Date through the last day of the second full calendar month after the Effective Date (the “Transition Period”) and $2.7 million per month, prorated for partial months, from the first day following the Transition Period through the last day of the second full calendar month thereafter (the “Accounting Period”). During the Accounting Period, the scope of the Transition Services was reduced to specified accounting and administrative functions. The Transition Period under the TSSA ended April 30, 2017, and the Accounting Period ended June 30, 2017. For the four months ended June 30, 2017, we incurred management fee expenses of approximately $17 million under the TSSA. Since the agreement commenced on the Effective Date, no expenses were incurred for the period ended February 28, 2017. |
Acquisitions and Divestitures |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Chevron North Midway-Sunset Acquisition In April 2018, we acquired from LINN Energy Holdings, LLC two leases on an aggregate of 214 acres and a lease option on 490 acres (the "Chevron North Midway-Sunset Acquisition") of land owned by Chevron U.S.A. in the north Midway-Sunset field immediately adjacent to assets we currently operate. We assumed a drilling commitment of approximately $34.5 million over a 5-year term and would assume a further minimum 40 well drilling commitment if we exercise our option; but otherwise we paid no consideration. Our drilling commitment will be tolled for a month for each consecutive 30-day period for which the posted price of WTI is less than $45 per barrel. This transaction is consistent with our business strategy to investigate areas beyond our known productive areas. |
Earnings Per Share |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The Predecessor was organized as a limited liability company and, as such, did not issue any stock. Accordingly, we have not presented earnings per share calculations for the predecessor company periods. We calculate basic earnings (loss) per share by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during each period. Common shares issuable upon the satisfaction of certain conditions pursuant to a contractual agreement, such as those shares contemplated by the Plan, are considered common shares outstanding and are included in the computation of net income (loss) per share. Accordingly, the 40 million shares of common stock contemplated by the Plan, without regard to actual issuance dates, were included in the computation of net income (loss) per share for the three and six months ended June 30, 2018, the three months ended June 30, 2017, and the four months ended June 30, 2017. The actual amount of our common stock that will be issued from the 7,080,000 shares reserved for Unsecured Claims and included in the 40 million shares above, cannot be known until all claims are settled, adjustments have been made based on the stock to be received by Unsecured Claims and claims under the Unsecured Notes and, the final number of shares of common stock to be received per dollar of Unsecured Claims, is known. However, while we do not yet know the final amount of shares that we will issue to third parties, we have entered into agreements in March and April 2018 that materially reduced that number. The Series A Preferred Stock was not a participating security, therefore, we calculated diluted EPS using the “if-converted" method under which the preferred dividends are added back to the numerator and the convertible preferred stock is assumed to be converted at the beginning of the period. No incremental shares of Series A Preferred Stock were included in the diluted EPS calculation for the three and six months ended June 30, 2018, as their effect was antidilutive under the “if-converted” method. However, the convertible preferred stock may potentially dilute basic earnings per share in the future. In July 2018, all outstanding shares of our Series A Preferred Stock were converted to common shares in connection with the IPO of our common stock (see Note 6).
|
Pro Forma Financial Data |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pro Forma Financial Data | Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows Other current assets reported on the condensed consolidated balance sheets included the following:
The major classes of inventory were not material and therefore not stated separately. Other non-current assets at June 30, 2018 and December 31, 2017, included approximately $18 million and $20 million of deferred financing costs, net of amortization, respectively. Accounts payable and accrued expenses on the condensed consolidated balance sheets included the following:
Supplemental Cash Flow Information Supplemental disclosures to the statements of cash flows are presented below:
The following table provides a reconciliation of Cash, Cash Equivalents and Restricted Cash as reported in the Consolidated Statements of Cash Flows to the line items within the Consolidated Balance Sheets:
Restricted cash is primarily associated with cash reserved to settle claims with the general unsecured creditors resulting from implementation of the Plan. Cash and cash equivalents consists primarily of highly liquid investments with original maturities of three months or less and are stated at cost, which approximates fair value. Pro Forma Financial Data PRO FORMA FINANCIAL DATA The following unaudited pro forma condensed consolidated financial information of Berry Corp. gives effect to the issuance of the 2026 Notes, the Series A Preferred Stock Conversion and the IPO including the application of net proceeds from the IPO. The unaudited pro forma condensed consolidated statement of operations is presented for the six months ended June 30, 2018. The unaudited pro forma condensed consolidated balance sheet is presented as of June 30, 2018. This unaudited pro forma condensed consolidated financial information should be read in conjunction with Berry Corp.’s historical consolidated financial statements as of and for the six months ended June 30, 2018. The unaudited pro forma condensed consolidated statement of operations gives effect to the issuance of the 2026 Notes, the Series A Preferred Stock Conversion and the IPO, including the application of net proceeds from the offering, as if each had been completed as of January 1, 2017. The unaudited pro forma condensed consolidated balance sheet gives effect to the same transactions as if each had been completed on June 30, 2018. The unaudited pro forma condensed consolidated financial statements are for informational and illustrative purposes only and are not necessarily indicative of the financial results that would have been had the events and transactions occurred on the dates assumed, nor are such financial statements necessarily indicative of the results of operations in future periods. The pro forma adjustments, as described in the accompanying notes, are based upon currently available information. The historical financial information has been adjusted to give effect to pro forma adjustments that are (i) directly attributable to the 2026 Notes, the Series A Preferred Stock Conversion, the IPO and the application of net proceeds from the offering, (ii) factually supportable, and (iii) expected to have a continuing impact on the Company’s consolidated results. Background 2026 Notes In February 2018, we completed a private issuance of $400 million in aggregate principal amount of 7.00% senior unsecured notes due 2026, which resulted in net proceeds of approximately $391 million after deducting expenses and the initial purchasers' discount. A portion of these proceeds were used to repay borrowings under the RBL Facility and the remainder for general corporate purposes. Series A Preferred Stock Conversion and Common Stock Offering In connection with our IPO, we amended the Series A Preferred Stock certificate of designation to provide for the automatic conversion of all outstanding shares of Series A Preferred Stock. Pursuant to the amendment, each outstanding share of Series A Preferred Stock was automatically converted into (i) 1.05 shares of common stock and (ii) the right to receive $1.75, minus the amount of any cash dividend paid by the Company on such share of Series A Preferred Stock in respect of any period commencing on or after April 1, 2018. We received approximately $136 million of net proceeds from the IPO after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We did not receive any proceeds from the sale of shares by the selling stockholders. We used approximately $24 million of the net proceeds to purchase shares of our common stock (at a price equal to the price paid by the underwriters for shares of common stock in the offering) from funds affiliated with Benefit Street Partners and Oaktree Capital Management. Of the remaining approximately $112 million of net proceeds received by us in the IPO, we used approximately $105 million to repay borrowings under our RBL Facility. This included the amounts we borrowed in July on the RBL Facility to make the payment to the holders of our Series A Preferred Stock in connection with the conversion of preferred stock to common stock. We used the remainder for general corporate purposes. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET JUNE 30, 2018 (in thousands)
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR SIX MONTHS ENDED JUNE 30, 2018 (in thousands, except per share amounts)
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION 1. Basis of Presentation The accompanying unaudited pro forma condensed consolidated statement of operations presents the financial information of Berry Corp. assuming the events and transactions had occurred on January 1, 2017. The consolidated balance sheet presents the information assuming the transactions occurred on June 30, 2018. Issuance of 2026 Notes Adjustments represent adjustments to give effect to the Company's issuance and net proceeds from the 2026 Notes to the condensed consolidated statement of operations as of the date assumed. Series A Preferred Stock Conversion and Common Stock Offering Adjustments represent adjustments to give effect to the conversion of preferred stock into common stock, including the payment of cash dividends and the common stock offering to the condensed consolidated financial statements as of the date assumed. 2. Pro Forma Balance Sheet Adjustments (a) Reflects the issuance of 8,695,653 additional net shares of common stock in the offering, the receipt of approximately $112 million of net proceeds, after the repurchase of 1,802,196 shares for approximately $24 million, from funds affiliated with Benefit Street Partners and Oaktree Capital Management in connection with the IPO and the usage of a portion of the net proceeds to pay down the outstanding balance on the RBL Facility. The number of shares and net proceeds does not include a number of shares issued by us equal to the number of shares purchased by us from funds affiliated with Benefit Street Partners and Oaktree Capital Management in connection with the IPO. (b) Reflects the conversion of the outstanding shares of Series A Preferred Stock into (1) approximately 39.6 million shares of common stock and (2) the cash payment from the IPO net proceeds of $1.60 on each pre-conversion share of Series A Preferred Stock, or approximately $60 million. 3. Pro Forma Statement of Operations Adjustments Issuance of 2026 Notes Adjustments (c) The issuance of the 2026 Notes was assumed to have occurred on January 1, 2017 for pro forma purposes and to have resulted in net proceeds of $391 million. As a result, borrowings under the RBL Facility would not have been necessary during this period. The Company calculated the pro forma adjustment to increase interest expense as a result of the higher interest rate on the 2026 Notes and reversing the interest expense and other fees associated with the RBL Facility for the six months ended June 30, 2018 as follows:
The effective tax rate applied to the increased interest expense was 17.3% for the six months ended June 30, 2018. Series A Preferred Stock Conversion and Common Stock Offering Adjustments (d) Reflects basic and diluted income per common share giving effect to the issuance of 8,695,653 shares of common stock in the IPO, assuming the IPO occurred January 1, 2017. The number of shares and net proceeds does not include shares purchased from the selling stockholders in the IPO or a number of shares issued by us equal to the number of shares purchased by us from funds affiliated with Benefit Street Partners and Oaktree Capital Management in connection with the IPO. (e) Reflects the conversion of the outstanding shares of Series A Preferred Stock into approximately 37.7 million shares of common stock, assumed to occur on January 1, 2017. (f) Reflects the effect of reversing the Series A Preferred Stock dividends, assuming the IPO and the Series A Preferred Stock Conversion occurred January 1, 2017. (g) Share count includes 7 million shares reserved for issuance to the general unsecured creditors resulting from the bankruptcy process. |
Basis of Presentation (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation and Reporting | Principles of Consolidation and Reporting The information reported herein reflects all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for the fair presentation of the results for the interim periods. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted under Securities and Exchange Commission (“SEC”) rules and regulations. The results reported in these unaudited condensed consolidated financial statements should not necessarily be taken as indicative of results that may be expected for the entire year. This report should be read in conjunction with the financial statements and notes in the Company's audited financial statements for the year ended December 31, 2017 presented in our final prospectus dated July 25, 2018 as filed with the SEC pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended, on July 27, 2018 (the "prospectus"). The condensed consolidated financial statements have been prepared in conformity with GAAP and include the accounts of the Successor and its wholly owned subsidiary after February 28, 2017 and the accounts of the Predecessor prior to February 28, 2017. All significant intercompany transactions and balances have been eliminated upon consolidation. For oil and gas exploration and production joint ventures in which we have a direct working interest, we account for our proportionate share of assets, liabilities, revenue, expense and cash flows within the relevant lines of the financial statements. |
Use of Estimates | Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP required management of the Company to make informed estimates and assumptions about future events. These estimates and the underlying assumptions affect the amount of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. As fair value is a market-based measurement, it was determined based on the assumptions that we believe market participants would use. We based these assumptions on management's best estimates and judgment. Management evaluates its assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, that management believes to be reasonable under the circumstances. Such assumptions are adjusted when management determines that facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates. Any changes in these assumptions resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. The estimates that are particularly significant to our financial statements include estimates of our reserves of oil and gas, future cash flows from oil and gas properties, depreciation, depletion and amortization, asset retirement obligations, certain revenues and expenses, fair values of commodity derivatives and fair values of assets acquired and liabilities assumed. In addition, as part of fresh-start accounting, we made estimates and assumptions related to our reorganization value, liabilities subject to compromise and the fair value of assets and liabilities recorded. |
Recently Adopted Accounting Standards and New Accounting Standards Issued, But Not Yet Adopted | Recently Adopted Accounting Standards In March 2016, the Financial Accounting Standards Board (“FASB”) issued rules to improve the accounting for share-based payment transactions. We early-adopted these rules retrospectively on April 1, 2018 and as a result are reporting cash paid to tax authorities when we withhold shares from an employee's award as a cash outflow for financing activities on the statement of cash flows. There was no change to the other financial statements as a result of adopting these rules. In November 2016, the FASB issued rules intended to address the diversity in practice in classification and presentation of changes in restricted cash on the statement of cash flows. We adopted these rules retrospectively on January 1, 2018, as a result of which we included restricted cash amounts in our beginning and ending cash balances on the statement of cash flows and included a disclosure reconciling cash and cash equivalents presented on the balance sheets to cash, cash equivalents and restricted cash on the statement of cash flows. New Accounting Standards Issued, But Not Yet Adopted In February 2016, the FASB issued rules requiring lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months and to include qualitative and quantitative disclosures with respect to the amount, timing, and uncertainty of cash flows arising from leases. As an emerging growth company, we have elected to delay the adoption of these rules until they are applicable to non-SEC issuers which is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We expect the adoption of these rules to primarily impact other assets and other liabilities and do not expect a material impact on our consolidated results of operations. During 2016, the FASB issued rules clarifying the new revenue recognition standard issued in 2014. The new rules are intended to improve and converge the financial reporting requirements for revenue from contracts with customers. We are an emerging growth company and have elected to delay adoption of these rules until they are applicable to non-SEC issuers which is for fiscal years beginning after December 31, 2018. We are currently evaluating the impact of the adoption of these rules on our consolidated financial statements and related disclosures. |
Emergence from Voluntary Reorganization under Chapter 11 (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reorganization Items, Net | The following table summarizes the components of reorganization items included on the condensed consolidated statements of operations:
|
Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Debt | The following table summarizes our outstanding debt:
|
Derivatives (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of derivative instruments | As part of our hedging program, we entered into a number of derivative transactions that resulted in the following crude oil contracts as of June 30, 2018:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of derivative instruments in statement of financial position | The following tables present the fair values (gross and net) of our outstanding derivatives as of June 30, 2018 and December 31, 2017:
|
Lawsuits, Claims, Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum lease payments for non-cancelable operating leases | At June 30, 2018, future net minimum lease payments for non-cancelable operating leases (excluding oil and natural gas and other mineral leases, utilities, taxes and insurance and maintenance expense) totaled:
|
Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share-based compensation, restricted stock units activity | The table below summarizes the activity relating to restricted stock units ("RSUs") issued under the 2017 Plan during the six months ended June 30, 2018. The RSUs vest ratably over three years. Unrecognized compensation cost associated with the RSUs at June 30, 2018 is approximately $6.8 million which will be recognized over a weighted average period of approximately two years.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share-based compensation, performance-based restricted stock unit activity | The table below summarizes the activity relating to the performance-based restricted stock units ("PRSUs") issued under the 2017 Plan during the six months ended June 30, 2018. The PRSUs vest if the Company's stock price reaches certain levels over defined periods of time. Unrecognized compensation cost associated with the PRSUs at June 30, 2018 is approximately $3.8 million which will be recognized over a weighted-average period of approximately two years.
|
Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other current assets | Other current assets reported on the condensed consolidated balance sheets included the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses on the condensed consolidated balance sheets included the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of cash flow, supplemental disclosures | Supplemental disclosures to the statements of cash flows are presented below:
The following table provides a reconciliation of Cash, Cash Equivalents and Restricted Cash as reported in the Consolidated Statements of Cash Flows to the line items within the Consolidated Balance Sheets:
|
Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share |
|
Pro Forma Financial Data (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited pro forma condensed consolidated balance sheet | UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET JUNE 30, 2018 (in thousands)
Pro Forma Balance Sheet Adjustments (a) Reflects the issuance of 8,695,653 additional net shares of common stock in the offering, the receipt of approximately $112 million of net proceeds, after the repurchase of 1,802,196 shares for approximately $24 million, from funds affiliated with Benefit Street Partners and Oaktree Capital Management in connection with the IPO and the usage of a portion of the net proceeds to pay down the outstanding balance on the RBL Facility. The number of shares and net proceeds does not include a number of shares issued by us equal to the number of shares purchased by us from funds affiliated with Benefit Street Partners and Oaktree Capital Management in connection with the IPO. (b) Reflects the conversion of the outstanding shares of Series A Preferred Stock into (1) approximately 39.6 million shares of common stock and (2) the cash payment from the IPO net proceeds of $1.60 on each pre-conversion share of Series A Preferred Stock, or approximately $60 million. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited pro forma condensed statement of operations | UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR SIX MONTHS ENDED JUNE 30, 2018 (in thousands, except per share amounts)
Pro Forma Statement of Operations Adjustments Issuance of 2026 Notes Adjustments (c) The issuance of the 2026 Notes was assumed to have occurred on January 1, 2017 for pro forma purposes and to have resulted in net proceeds of $391 million. As a result, borrowings under the RBL Facility would not have been necessary during this period. The Company calculated the pro forma adjustment to increase interest expense as a result of the higher interest rate on the 2026 Notes and reversing the interest expense and other fees associated with the RBL Facility for the six months ended June 30, 2018 as follows:
The effective tax rate applied to the increased interest expense was 17.3% for the six months ended June 30, 2018. Series A Preferred Stock Conversion and Common Stock Offering Adjustments (d) Reflects basic and diluted income per common share giving effect to the issuance of 8,695,653 shares of common stock in the IPO, assuming the IPO occurred January 1, 2017. The number of shares and net proceeds does not include shares purchased from the selling stockholders in the IPO or a number of shares issued by us equal to the number of shares purchased by us from funds affiliated with Benefit Street Partners and Oaktree Capital Management in connection with the IPO. (e) Reflects the conversion of the outstanding shares of Series A Preferred Stock into approximately 37.7 million shares of common stock, assumed to occur on January 1, 2017. (f) Reflects the effect of reversing the Series A Preferred Stock dividends, assuming the IPO and the Series A Preferred Stock Conversion occurred January 1, 2017. (g) Share count includes 7 million shares reserved for issuance to the general unsecured creditors resulting from the bankruptcy process. |
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Feb. 28, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Long-Term Debt- Principal Amount | $ 466,000 | $ 379,000 | |
Less: Debt Issuance Costs | (8,667) | 0 | |
Long-Term Debt, net | 457,333 | 379,000 | |
Line of credit | RBL Facility | |||
Debt Instrument [Line Items] | |||
Long-Term Debt- Principal Amount | $ 66,000 | $ 379,000 | |
Interest rate - variable rates | 4.50% | 4.80% | |
Security | 85.00% | ||
Medium-term notes | 2026 Notes | |||
Debt Instrument [Line Items] | |||
Long-Term Debt- Principal Amount | $ 400,000 | $ 0 | |
Interest Rate | 7.00% | 7.00% |
Derivatives - Narrative (Details) $ in Millions |
1 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
May 31, 2018
USD ($)
|
Jun. 30, 2018
USD ($)
|
Dec. 31, 2020
$ / bbl
MBbls
|
Dec. 31, 2019
$ / bbl
MBbls
|
Dec. 31, 2018
$ / bbl
MBbls
|
|
Derivative [Line Items] | |||||
Period of target exposure coverage | 2 years | ||||
Purchased put options premium | $ | $ 17.9 | ||||
Derivative termination deferred costs | $ | $ 127.0 | ||||
Brent oil swaps from July 2018 through March 2019 | Scenario, Forecast | |||||
Derivative [Line Items] | |||||
Hedged volume (MBbls) | MBbls | 900 | 1,800 | |||
Weighted average price ($/Bbl) | $ / bbl | 75.66 | 75.66 | |||
Brent oil purchased put options for January 2019 through March 2020 | Scenario, Forecast | |||||
Derivative [Line Items] | |||||
Hedged volume (MBbls) | MBbls | 500 | 2,800 | |||
Weighted average floor price ($/Bbls) | $ / bbl | 65.00 | 65.00 |
Derivatives - Contract Transactions (Details) - Scenario, Forecast |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018
$ / bbl
MBbls
|
Sep. 30, 2018
$ / bbl
MBbls
|
Dec. 31, 2020
$ / bbl
MBbls
|
Dec. 31, 2019
$ / bbl
MBbls
|
|
Sold Oil Calls (ICE Brent) | ||||
Derivative [Line Items] | ||||
Hedged volume (MBbls) | MBbls | 0 | 186 | 0 | 0 |
Weighted average price ($/Bbl) | $ / bbl | 0.00 | 81.67 | 0.00 | 0.00 |
Purchased Put Options (ICE Brent) | ||||
Derivative [Line Items] | ||||
Hedged volume (MBbls) | MBbls | 0 | 0 | 455 | 2,835 |
Weighted average price ($/Bbl) | $ / bbl | 0.00 | 0.00 | 65.00 | 65.00 |
Fixed Price Swaps (ICE Brent) | ||||
Derivative [Line Items] | ||||
Hedged volume (MBbls) | MBbls | 966 | 966 | 0 | 900 |
Weighted average price ($/Bbl) | $ / bbl | 75.13 | 75.13 | 0.00 | 75.66 |
ICE Brent-NYMEX WTI basis swaps | ||||
Derivative [Line Items] | ||||
Hedged volume (MBbls) | MBbls | 92 | 92 | 0 | 182.5 |
Weighted average price ($/Bbl) | $ / bbl | 1.29 | 1.29 | 0.00 | 1.29 |
Derivatives - Fair Value in Balance Sheet (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Gross Amounts Recognized at Fair Value | $ (15,010) | $ (75,281) |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Fair Value Presented in the Balance Sheet | (15,010) | (75,281) |
Commodity Contracts | Current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Gross Amounts Recognized at Fair Value | (11,447) | (49,949) |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Fair Value Presented in the Balance Sheet | (11,447) | (49,949) |
Commodity Contracts | Non-current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Gross Amounts Recognized at Fair Value | (3,563) | (25,332) |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Fair Value Presented in the Balance Sheet | $ (3,563) | $ (25,332) |
Lawsuits, Claims, Commitments and Contingencies - Narrative (Details) $ in Millions |
Jun. 30, 2018
USD ($)
|
---|---|
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Commitments under contracts | $ 13 |
Agreement to purchase natural gas | 7 |
New Road Access | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Commitments under contracts | $ 9 |
Commitments under contracts, percentage of variable component | 50.00% |
Commitment based on variable components | $ 12 |
Lawsuits, Claims, Commitments and Contingencies - Operating Lease Payments (Details) $ in Thousands |
Jun. 30, 2018
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2018 | $ 676 |
2019 | 1,170 |
2020 | 157 |
2021 | 159 |
2022 | 160 |
Thereafter | 36 |
Total minimum lease payments | $ 2,358 |
Equity - Purchase of Common Stock (Details) |
1 Months Ended |
---|---|
Jul. 31, 2018
shares
| |
Initial Public Offering | Subsequent Event | |
Subsidiary, Sale of Stock [Line Items] | |
Common shares purchased (in shares) | 1,802,196 |
Equity - Treasury Stock (Details) - USD ($) $ in Thousands |
2 Months Ended | 4 Months Ended | 6 Months Ended | |
---|---|---|---|---|
Apr. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Feb. 28, 2017 |
|
Equity [Abstract] | ||||
Purchase of common stock | $ 20,000 | $ 0 | $ 20,006 | |
Bankruptcy claims, common shares available to unsecured creditors (in shares) | 7,080,000 | 7,080,000 |
Income taxes (Details) |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 16.00% | 17.30% | 40.00% |
Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows - Other Current Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 6,692 | $ 6,901 |
Oil inventories, materials and supplies | 7,062 | 5,938 |
Other | 1,227 | 1,227 |
Other current assets | $ 14,981 | $ 14,066 |
Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows - Narrative (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred financing costs, non-current, net of amortization | $ 18 | $ 20 |
Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable-trade | $ 10,698 | $ 15,469 |
Accrued expenses | 57,531 | 34,359 |
Royalties payable | 18,811 | 25,793 |
Greenhouse gas liability | 5,732 | 10,446 |
Taxes other than income tax liability | 9,428 | 8,437 |
Accrued interest | 10,970 | 0 |
Other | 0 | 3,373 |
Accounts payable and accrued expenses | $ 113,170 | $ 97,877 |
Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
2 Months Ended | 4 Months Ended | 6 Months Ended |
---|---|---|---|
Feb. 28, 2017 |
Jun. 30, 2017 |
Jun. 30, 2018 |
|
Supplemental Disclosures of Significant Non-Cash Investing Activities: | |||
(Decrease) increase in accrued liabilities related to purchases of property and equipment | $ 1,172 | $ 8,614 | |
Supplemental Disclosures of Cash Payments/(Receipts): | |||
Interest | 5,261 | 3,298 | |
Income taxes | 1,168 | 0 | |
Reorganization items, net | $ (792) | $ 1,352 | |
Predecessor | |||
Supplemental Disclosures of Significant Non-Cash Investing Activities: | |||
(Decrease) increase in accrued liabilities related to purchases of property and equipment | $ 2,249 | ||
Supplemental Disclosures of Cash Payments/(Receipts): | |||
Interest | 8,057 | ||
Income taxes | 0 | ||
Reorganization items, net | $ 11,838 |
Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
Jun. 30, 2017 |
Feb. 28, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|---|
Condensed Cash Flow Statements, Captions [Line Items] | |||||
Cash and cash equivalents | $ 3,600 | $ 33,905 | $ 3,735 | $ 32,049 | |
Restricted cash | 19,710 | 34,833 | 38,908 | 52,860 | |
Restricted cash in other noncurrent assets | 0 | 0 | 0 | 125 | |
Cash, cash equivalents and restricted cash | $ 23,310 | $ 68,738 | $ 42,643 | 85,034 | |
Predecessor | |||||
Condensed Cash Flow Statements, Captions [Line Items] | |||||
Cash and cash equivalents | 32,049 | $ 30,483 | |||
Restricted cash | 52,860 | 197,793 | |||
Restricted cash in other noncurrent assets | 125 | 128 | |||
Cash, cash equivalents and restricted cash | $ 85,034 | $ 228,404 |
Certain Relationships and Related Party Transactions (Details) - LINN Energy - Transition Services and Separation Agreement - USD ($) $ in Millions |
2 Months Ended | 4 Months Ended | |
---|---|---|---|
Jun. 30, 2017 |
Apr. 30, 2017 |
Jun. 30, 2017 |
|
Related Party Transaction [Line Items] | |||
Related party transaction, monthly amount | $ 2.7 | $ 6.0 | |
Related party transaction, amount of transaction | $ 17.0 |
Acquisitions and Divestitures (Details) - Chevron North Midway-Sunset Acquisition |
1 Months Ended |
---|---|
Apr. 30, 2018
USD ($)
a
lease
well
$ / bbl
| |
Business Acquisition [Line Items] | |
Number of leases acquired | lease | 2 |
Area of land acquired in lease (in acres) | a | 214 |
Area of land with option to acquire from lease (in acres) | a | 490 |
Drilling commitment liability assumed | $ | $ 34,500,000 |
Term of drilling commitment liability assumed | 5 years |
Number of wells committed to drilling under lease option | well | 40 |
Consideration transferred in acquisition | $ | $ 0 |
Oil and gas delivery commitments, consecutive period for which price not met which will incur a toll | 30 days |
Oil and gas delivery commitments, fixed price to be met, less than (in dollars per barrel) | $ / bbl | 45 |
Pro Forma Financial Data - 2026 Notes (Details) - 2026 Notes - Medium-term notes - USD ($) |
1 Months Ended | |
---|---|---|
Feb. 28, 2018 |
Jun. 30, 2018 |
|
Debt Instrument [Line Items] | ||
Principal amount of debt issued | $ 400,000,000 | |
Interest rate | 7.00% | 7.00% |
Net proceeds from debt issuance | $ 391,000,000 |
Pro Forma Financial Data - Unaudited Pro Forma Condensed Consolidated Balance Sheet (Share Information) (Details) - $ / shares |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Successor Series A convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Successor Series A convertible preferred stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Successor Series A convertible preferred stock, shares issued (in shares) | 37,669,805 | 35,845,001 |
Successor common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Successor common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Successor common stock, shares issued (in shares) | 33,087,889 | 32,920,000 |
Pro Forma Financial Data - Pro Forma Balance Sheet Adjustments (Details) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 2 Months Ended | 4 Months Ended | 6 Months Ended |
---|---|---|---|---|
Jul. 31, 2018 |
Apr. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
|
Subsidiary, Sale of Stock [Line Items] | ||||
Purchase of common stock | $ 20,000 | $ 0 | $ 20,006 | |
Initial Public Offering | Subsequent Event | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Increase in common stock outstanding (in shares) | 8,695,653 | |||
Consideration received after purchase of common stock | $ 112,000 | |||
Common shares purchased (in shares) | 1,802,196 | |||
Purchase of common stock | $ 24,000 | |||
Conversion of Series A to Common Shares | Subsequent Event | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Common shares issued on conversion (in shares) | 39,600,000 | |||
Right to receive cash payment less paid dividends per share (in dollars per share) | $ 1.60 | |||
Cash payment for conversion of preferred shares | $ 60,000 |
:XSF
MXA_A L*'!R4^1Z6%C2NJ!NNTG%F\%,E>IYVKN(_3S7X_P[8!= ;0!7 ;\Y I
M453^P!PK
O&
MN 3)TY[5\ /,S_ZL;$06E;(5T.E6=DA!E>'[^'@Z.+P'_&IAU*L] P'YC$L(D&Q.RNAT"5.WG0J-"
M#IV?R55V&;U[ZF_7/_@TM\],U6VGT44:>T?]3:JD-&!+B>YLPXU]*I: 0V7<
M]I/=JVE@IL#(?GX+R/(@Y7\!4$L#!!0 ( '2%%TW1Q'Z]MP$ -(# 9
M >&PO=V]R:W-H965T P)D_!EFG_JSF#_N^Z.AO_)Z?ZR:X%5IK Q@%2*CYTN42/%4TCN*J1J'F@AIYN:8FT5W3= #W B?RX(M^RD%
MH(K-V;NQ[)3+R\-4+,M^="^9)N37TIN[2&B!2_<@1OEM'/R3; OM-@7T4V/]3XOV'$K
7HBY=WX)
MKD2"*3'UN,#U1>#^A DN'(()QWJQ6 T@/DF894G*/'V2X.(AB'BXKVJX*@C[
M0,JX*HB[RR$I6GFC?9LQ:O?Y58<
MYF$6!ENVH\=*O/#S5V8,Q6%@W']G)U9)7,U$CK'A5:]_@\VQ%[PV4>14:OHQ
M/,M&/\\F_J?,+T!&@$8!)/\58"/ ]PJ($9![!;$1Q/<*$B-(+$$T+)9>_345
M=#'K^#GHA@1JJ
&PO=V]R:W-H965TZO2#9H4YME#-@=:P/MD!O
K6G5UZ;W]\0^I^_3=AV5G_.I\]^*
M/9\67K#;^WO#UN!ZP90(UBB\MCS_= U7PF&\X;&.=@@@P2TM"XK!3;3>5FK%
MWU$=R9!0ZD-VRT;]Y':=BD.*!?SJ0E^GFT?TLN_+&%0LIN%"KK\CTY_;I,^6
M^X>>TQ0H)ZU$;2XCH9;N[-HC:Y2L,#)%+)+LOE#WCXJ=I*-SB=:J>638*$=S
MD>8SCXXYLOVHO(+6V"A&@4Y,%AGV&\ H520J')UKBI;'+-*?T\6BB-XGZ]N<
MF%T% =1=S*JM??^G&(8 /(\49>8CENO?X1WT9([Z;9'XQKS
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MR%3S%5- V'P1B/^@):S\@48DH2[X_;44Q!YLB4T$U33#C?YH9@HG9-+Q HM
M!01-SF7C8]M@-?&XC$' 8+G78>=1) (BHFBT>\/!_=M_<[?5<&AV+3CAU&X(
M)8Y*ENV4-Y>$O4->>3H] @#RV\XM_3JJ%&/P/X5X#/R;XA'-L\QDHX7_S-*P
MW(HF]UM*N5>!9L\9XJXU>,8X7K1&(GZ&(6?6J8&K*DO"C.X$_8#&OWXZM%G<
MT$JZ$%$-C?[Y%@409!C*AG;#Q5=D;TWXQ8+3E05/@V.G/F ]@*AGCJ7%(5,C
MN230?R"K).%'7;T0=ZTG,