Page 8 - NorthAmOil Week 40 2022
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NorthAmOil                                    INVESTMENT                                          NorthAmOil


       Berry reportedly exploring




       options including sale




        US               CALIFORNIA-FOCUSED conventional oil  California in the second quarter of 2022, with the
                         producer Berry is reported to be exploring  remainder coming from Utah’s Uinta Basin. The
                         strategic options that could result in a sale.  company also has a well-servicing business.
                         Citing people familiar with the matter, Reu-  However, focusing on oil production in Cal-
                         ters reported on October 6 that the company  ifornia is not as attractive a prospect as it had
                         was considering a “wide” range of options as it  been previously. The state is aiming to phase out
                         carries out a strategic review with the help of a  oil production completely by 2045 and this is
                         financial adviser.                   causing some operators to reconsider their plans
                           According to the sources, no decision has  there over the longer term.
                         been made on pursuing any specific course of   Last month, Shell and ExxonMobil agreed to
                         action. However, one of the sources said Berry  sell their California joint venture to investment
                         could attract interest from buyers backed by pri-  firm IKAV for $4bn. Berry is now among the
                         vate equity funds, or from international energy  operators that is considering following suit.
                         companies.                             The company is also preparing to hold its
                           The company’s share price jumped 15%  earnings call for the third quarter of 2022 on
                         following the publication of the Reuters story,  November 2. In the second quarter of the year,
                         peaking at $9.30 on October 6. Based on Berry’s  it reported production of 26,200 barrels of oil
                         closing price on October 5, it has a market value  equivalent per day, down slightly from 26,700
                         of around $669mn. It also holds long-term debt  boepd in the first quarter. The decline was
                         worth $395mn as of June 30.          attributed to the sale of the company’s Colo-
                           Berry in its current form was created when  rado assets in the first quarter and shut-in pro-
                         LINN Energy went bankrupt in 2017, becoming  duction during planned drilling, workover and
                         a standalone public company the following year.  abandonment activities in California during
                         Around 80% of Berry’s production came from  the second quarter.™


       SilverBow announces further




       expansion in Texas




        TEXAS            SILVERBOW Resources said on October 3  13,000-net acre (53 square km) block with 100
                         that it had agreed to acquire oil and gas assets in  high rate of return drilling locations, the com-
                         Texas’ DeWitt and Gonzales counties for $87mn  pany said. It expects that this combined position
                         from an undisclosed seller.          will pave the way for optimised development,
                           In a statement, the company said the trans-  allowing for 70,000 additional lateral feet (21,336
                         action consisted of incremental working inter-  metres) to be drilled with 12 fewer wells. Silver-
                         est on its existing acreage as well as new adjacent  Bow also expects that this approach will signifi-
                         acreage. This provides for extended laterals,  cantly improve its capital efficiency.
                         additional inventory locations and more efficient   The transaction comes less than three weeks
                         development, it added.               after the company announced a separate acqui-
                           According to SilverBow, the acquisition adds  sition targeting dry gas in the Dorado play in
                         around 5,200 net acres (21 square km) in the oil  Texas’ Webb County for roughly $50mn. Mean-
                         and condensate window that spans DeWitt and  while, the company also adopted a poison pill
                         Gonzales counties. Production from the assets  provision in late September in response to “sig-
                         reached 1,100 barrels of oil equivalent per day  nificant accumulations” of its stock by activist
                         (boepd) in June, with oil accounting for around  investor Kimmeridge Energy.
                         44% of this. The assets span the Eagle Ford and   Kimmeridge disclosed in a regulatory filing
                         Austin Chalk formations, with SilverBow noting  that it has spent more than $100mn to acquire
                         that there was “significant upside” in the Austin  14.7% of SilverBow’s shares. In response, Sil-
                         Chalk. That acreage has been de-risked, it added,  verBow adopted a plan that would be exer-
                         with one Austin Chalk well having produced  cisable if a group acquires more than 15% of
                         over 200,000 barrels of oil to date.  its stock, giving its board the option of dou-
                           In combination with the company’s existing  bling its shares and effectively diluting Kim-
                         position, the acquisition creates a consolidated  meridge’s ownership.™

       P8                                       www. NEWSBASE .com                        Week 40   06•October•2022
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