Berry Petroleum Announces Expansion of Its Diatomite Heavy Oil Asset
Tuesday, August 12th 2008
Berry Petroleum Company announced that it is increasing its estimate of original oil in place in its diatomite asset by over 35% to 330 million barrels. During 2008, Berry drilled six delineation wells in the northern portion of the field. These wells encountered a 300 feet to 400 feet thick oil column with reservoir characteristics similar to Berry’s current diatomite development. As a result, Berry anticipates drilling an additional 230 wells and now expects production from this project will increase to over 12,000 barrels per day by 2015.
Robert Heinemann, president and chief executive officer, stated, “These appraisal results have enabled us to expand our portfolio of low geologic risk, high-return oil projects. Our diatomite project continues to add significant long term oil production growth that will create value for our shareholders. Finding and development costs are expected to be between $6.00 and $8.00 per barrel. Assuming a steam oil ratio of 6 to 1 and a natural gas price of $7.50 per MMBtu, operating cost should be approximately $25 per barrel. At a $100 WTI price, this project is delivering exceptional rates of return and this latest addition to the overall project should add 19 million barrels of risked reserves to our resource base, assuming an ultimate recovery of 23%. Our existing diatomite development continues to deliver solid results with current production averaging 2,300 barrels per day and we expect to exit 2008 at 3,000 barrels per day.”
Berry Petroleum Company is a publicly traded independent oil and gas production and exploitation company with operations in California, Colorado, Texas and Utah.