Berry Corp. is exploring strategic options that could result in a sale of the California-focused oil producer, people familiar with the matter said on Oct. 6.
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 Oct. 5, 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 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 and Exxon Mobil Corp. agreed last month to sell their California joint venture to investment firm IKAV for $4 billion.
Recommended Reading
Iraq to Seek Bids for Oil, Gas Contracts April 27
2024-04-18 - Iraq will auction 30 new oil and gas projects in two licensing rounds distributed across the country.
Third Suriname Find for Petronas, Exxon Could Support 100,000 bbl/d FPSO
2024-05-17 - A recent find offshore Suriname in Block 52 by Petronas and Exxon Mobil could support a 100,000 bbl/d FPSO development, according to Wood Mackenzie.
Exxon Mobil Keeps Its Options Open in Guyana and Globally
2024-05-23 - Exxon Mobil Guyana Ltd.’s President Alistair Routledge said the company is seeking resources offshore Guyana that compete financially within its portfolio.
Petrobras Sending Nearly Half of Oil Exports to China
2024-04-30 - Conflict in the Middle East has enabled Brazil’s state-owned Petrobras to change the flow of its oil exports, with China being the primary beneficiary, followed by Europe.
Mexico’s Zama Drama Eases, but Not Over for Talos, Other IOCs
2024-06-26 - Houston-based Talos Energy and its Block 7 consortium partners could make FID on the Zama field development sometime in the next year. But despite the importance placed on the project to secure energy security for Mexico, the consortium continues to run into headwinds.