California oil producer Berry Corp explores sale -sources
06/10/2022 18:04
By Shariq Khan and David French
Oct 6 (Reuters) - Berry Corporation BRY.O is exploring
strategic options that could result in a sale of the
California-focused oil producer, people familiar with the matter
said on Thursday.
The company is considering a wide range of options as it
undertakes the strategic review with the help of a financial
adviser, said the sources, who cautioned that a final decision
on pursuing any specific course has not been made.
Berry has a market value of about $669 million, based on its
closing price on Wednesday, and holds long-term debt worth $395
million as of June 30.
The sources requested anonymity as these discussions are
confidential.
Berry could attract interest from suitors backed by private
equity funds or international energy companies, one of the
sources said.
Berry did not respond to requests for comment.
Originally formed in 1909 during the golden days of oil
drilling in California, Berry in its current form was created
from the bankruptcy of LINN Energy in 2017 and became a
standalone public company the following year.
Its shares have gained 10% from the start of the year,
according to Refinitiv Eikon, lagging other oil and gas stocks
which have jumped on the back of elevated commodity prices. By
comparison, the S&P 500 energy sector .SPNY has climbed 49%
this year.
Around 80% of Berry's production came from California in the
second quarter, with the remainder from Utah's Uinta basin. The
company also has a well servicing business.
Despite its rich oil history, California has become
increasingly difficult for producers to operate in, with the
state vowing to phase out oil extraction entirely by 2045.
Such conditions are forcing oil and gas companies to
reassess their future plans in the state. Shell PLC SHEL.L and
Exxon Mobil Corp XOM.N agreed last month to sell their
California joint venture to investment firm IKAV for $4 billion.
(Reporting by Shariq Khan in Bengaluru and David French in New
York
Editing by Marguerita Choy)
((davidj.french@thomsonreuters.com;))