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&lt;p style="FONT-FAMILY: times"&gt;&lt;font size="2"&gt;&lt;b&gt;1. Basis of Presentation&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="FONT-FAMILY: times"&gt;&lt;font size="2"&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;These Condensed Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial reporting. All adjustments which are, in the opinion of management, necessary to present fairly Berry Petroleum Company's (the Company) Condensed Financial Statements have been included herein. Interim results are not necessarily indicative of expected annual results because of the impact of fluctuations in prices received for oil and natural gas, as well as other factors. In the course of preparing the Condensed Financial Statements, management makes various assumptions, judgments and estimates to determine the reported amounts of assets, liabilities, revenues and expenses, and in the disclosures of commitments and contingencies. Changes in these assumptions, judgments and estimates will occur as a result of the passage of time and the occurrence of future events, and, accordingly, actual results could differ from amounts previously established.&lt;/font&gt;&lt;/p&gt;
&lt;p style="FONT-FAMILY: times"&gt;&lt;font size="2"&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;The Company's Condensed Financial Statements have been prepared on a basis consistent with the accounting principles and policies reflected in the Company's audited financial statements as of and for the year ended December&amp;nbsp;31, 2010. The year-end Condensed Balance Sheet was derived from audited Financial Statements included in such report, but does not include all disclosures required by GAAP.&lt;/font&gt;&lt;/p&gt;
&lt;p style="FONT-FAMILY: times"&gt;&lt;font size="2"&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;Certain amounts in the prior year financial statements have been reclassified to conform to the 2011 financial statement presentation. The Company revised Comprehensive (loss) earnings for the three months ended March&amp;nbsp;31, 2010 from $14.3&amp;nbsp;million to $21.1&amp;nbsp;million to reflect the correction of a prior period error. The Company has concluded that the presentation error was immaterial to the previously filed financial statements. &lt;/font&gt;&lt;/p&gt;
&lt;p style="FONT-FAMILY: times"&gt;&lt;font size="2"&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;The Company's cash management process provides for the daily funding of checks as they are presented to the bank. Included in accounts payable at March&amp;nbsp;31, 2011 and December&amp;nbsp;31, 2010 are $21.0&amp;nbsp;million and $16.3&amp;nbsp;million, respectively, representing outstanding checks in excess of the bank balance (book overdraft). &lt;/font&gt;&lt;/p&gt;&lt;/td&gt;&lt;/tr&gt;&lt;/table&gt;
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1. Basis of Presentation
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