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IPAA Midyear Meeting – CEO Roundtable – June 17, 2005 1 The Transformation of Berry Petroleum Company Safe Harbor Statement Safe Harbor under the Private.

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Presentation on theme: "IPAA Midyear Meeting – CEO Roundtable – June 17, 2005 1 The Transformation of Berry Petroleum Company Safe Harbor Statement Safe Harbor under the Private."— Presentation transcript:

1 IPAA Midyear Meeting – CEO Roundtable – June 17, The Transformation of Berry Petroleum Company Safe Harbor Statement Safe Harbor under the Private Securities Litigation Reform Act of 1995: With the exception of historical information, the matters in this presentation are forward-looking statements that involve risks and uncertainties. Although the Company believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include, but are not limited to: the timing and extent of changes in commodity prices for oil, gas and electricity; development, exploration, drilling and operating risks; a limited marketplace for electricity sales within California, counterparty risk; acquisition risks; competition, environmental risks, litigation uncertainties; the availability of drilling rigs and other support services, pipeline capacity, legislative and/or judicial decisions and other government or Tribal regulations. IPAA CEO Roundtable Presented by Bob Heinemann - President & Chief Executive Officer June 17, 2005 San Francisco, California

2 IPAA Midyear Meeting – CEO Roundtable – June 17, Snapshots of Berry Petroleum Company Berry Petroleum in 2003  Perennially profitable heavy oil producer  Highly concentrated operations in San Joaquin Valley, CA  Solid portfolio of stable reserves (100 MMBOE)  “Good at what they do” Very strong financially as evidenced by  Dividend = $0.40/share  Debt to Capitalization = 8%  ROCE = 17%  Total Shareholder Return = 11%  Share Price = $17 - $20/share

3 IPAA Midyear Meeting – CEO Roundtable – June 17, Snapshots of Berry Petroleum Company Berry Petroleum Today  Demonstrated production, reserves and earnings growth  Operations in California, Rockies and Mid-Continent  More diversified portfolio of reserves  Significant land position with considerable upside  Seeking additional acquisitions Even stronger financially in 2004 as evidenced by  Dividend = $0.52/share  Debt to Capitalization = 10% (34% at Q1)  ROCE = 26%  Total Shareholder Return = 138%  Share Price = $47 - $50/share

4 IPAA Midyear Meeting – CEO Roundtable – June 17, Per capita income 0 $5,000 $10,000 $15,000 $20,000 $25,000 $30, Per capita oil consumption (bbl/yr) Saudi Arabia India China Indonesia Russia Brazil Mexico Europe Japan Canada United States The world’s 15 largest economies Copyright: "The Color Of Oil," by Economides and Oligney Energy Consumption Indicates the Wealth of Nations

5 IPAA Midyear Meeting – CEO Roundtable – June 17, Source: EIA New fields outside M.E. Global production, MMbopd IOR Middle-East fields Existing fields outside Middle- East Current demand = 82 MMbopd Can Supply Keep Up With Demand?

6 IPAA Midyear Meeting – CEO Roundtable – June 17, Strength of the Dollar Impacts Oil Prices Oil Prices, $/bbl WTI Currency Exchange, $US/Euro Source: Futuresource.com

7 IPAA Midyear Meeting – CEO Roundtable – June 17, Significant Differences in Price Outlook Oil Prices, $/bbl WTI Oil Futures from May, 2004 Oil Futures Today WTI Actual, May ’04-’05

8 IPAA Midyear Meeting – CEO Roundtable – June 17, Strategies for Transforming Berry Growing production and reserves from existing assets while controlling expenses Acquiring light oil and gas assets with significant growth potential outside of California Entering new hydrocarbon basins, utilizing joint ventures to complement our skill base Investing the Company’s capital in an efficient, disciplined manner

9 IPAA Midyear Meeting – CEO Roundtable – June 17, Solid Acquisitions Beginning In 2003 Tri-State Joint Venture Brundage Canyon Acquisition Lake Canyon Joint Venture Utah BLM Lease Sale Coyote Flats Joint Venture Yuma Co Niobrara Acquisition Q3Q4Q1Q2Q3Q4Q

10 IPAA Midyear Meeting – CEO Roundtable – June 17, Growth and Diversification of Proved Reserves Berry Jan MMBOE Berry Today 124 MMBOE 77% Heavy oil 100% Heavy oil 15% Gas 8% Light Proved reserves have grown by the development and acquisition of light oil and gas while maintaining heavy oil reserves. 26% Increase

11 IPAA Midyear Meeting – CEO Roundtable – June 17, More Balanced, Increasing Capital Program 43 Other 2005 Wells 2002 Wells Capital Program, $MM Mid-Continent Rockies California

12 IPAA Midyear Meeting – CEO Roundtable – June 17, Total average daily production (BOE) Consistent Production Growth 2005 Heavy oil 72% Light oil 15% Gas 13%

13 IPAA Midyear Meeting – CEO Roundtable – June 17, Consistent Earnings Growth Quarterly Net Income, $MM 2005

14 IPAA Midyear Meeting – CEO Roundtable – June 17, Significant Upside Potential for Producing Acquisitions Berry has added interests in over 750,000 of gross acres since Q Mid-Continent Rockies Rockies: Brundage Canyon Lake Canyon Utah BLM Lease Sale Coyote Flats Mid-Continent: Yuma County Niobrara Tri-State Niobrara Acreage 45, ,000 17,000 69,000 Acreage 127, ,000

15 IPAA Midyear Meeting – CEO Roundtable – June 17, Primary Producing Asset Locations Uinta Basin Midway-Sunset Montalvo Placerita Poso Creek Niobrara Gas CA

16 IPAA Midyear Meeting – CEO Roundtable – June 17, Berry’s Legacy Asset: Midway-Sunset Field Midway Sunset Reserves – 69.3 MMBOE 63% of total Total average daily production (BOE)

17 IPAA Midyear Meeting – CEO Roundtable – June 17, Major S. Midway-Sunset Capital Projects Nine (9) infill horizontals in 2004 Eight (8) infill horizontals in 2005 Complete development at 100' spacing with an additional 10 wells in 2006 Will move a significant number of reserve barrels to proved over the next several years Horizontal wells are projected to produce over 60% of total S. Midway Sunset production within the next 5 years South Midway-Sunset Properties Infill Horizontals

18 IPAA Midyear Meeting – CEO Roundtable – June 17, South Midway Ethel D Redevelopment First property acquired by CJ Berry in 1909 Averaged 150 BOPD over the past 20 yrs from cyclic steam stimulation New steamflood pilot initiated in mid-2004 Expansion to full-scale project planned for 2006 Production target in excess of 1,000 BOPD Main formation with remaining oil saturation > 50%

19 IPAA Midyear Meeting – CEO Roundtable – June 17, Greater Altamont/Bluebell UTAH Greater Monument Butte COLORADO Greater Natural Butte Greater Altamont/Bluebell UTAH Greater Monument Butte Greater Natural Butte Roosevelt Uinta Basin: A Central Area of Activity for Berry Brundage Canyon (8/03) Lake Canyon Prospect (7/04) BLM Lease Sale Acreage (9/04) Coyote Flats Prospect (12/04) Green River Trend Wasatch/Mesaverde Trend Gas Oil Dakota/Entrada/Wasatch Trend

20 IPAA Midyear Meeting – CEO Roundtable – June 17, Production Growth from Brundage Canyon Reserves: 13.2 MMBOE (12% of total) Total average daily production (BOE) Brundage Canyon First light oil acquisition 42 degree API gravity waxy crude Large drilling inventory Producing from Green River formation at depths above 6,000 feet

21 IPAA Midyear Meeting – CEO Roundtable – June 17, Brundage Program Contains More Variability 80 wells in ‘03-’04 drilling program 87 existing wells at purchase 100’s of potential locations remaining Brundage Canyon Field, Uinta Basin, UT (45,000 acres) 59 wells planned for ‘05 based on H (Hz) –40-acre infill –Extensions to the north and south –New gas plant and compression 1 mile Berry Leasehold

22 IPAA Midyear Meeting – CEO Roundtable – June 17, Lake Canyon Activity in 2005 Two Green River wells permitted for May/June spud 50 sq. mi. 3D seismic program proposed for acquisition in summer Deep Mesaverde test well will be located using the 3D seismic Mesaverde well will be spud in late 2005 Area enlarged Proposed 3D Survey Area 1 mile Lake Canyon Green River wells Brundage Canyon Berry Leasehold UTAH

23 IPAA Midyear Meeting – CEO Roundtable – June 17, Scofield-Thorpe Discovery well Scofield-Thorpe First Ferron test Emery CBM pilot 0 1 miles Coyote Flats Activity in 2005 Ferron discovery well (Scofield- Thorpe 22-41) tested for 30 days in Dec with a peak rate of 1.1 MMcf/day Berry will offset the discovery well with the Scofield-Thorpe in mid-’05 to a depth of 6,800 feet The Emery CBM test pilot will also be drilled mid-year, consisting of 5 Emery coal wells (TD – 3,200’) and a water disposal well Coyote Flats Berry Leasehold UTAH

24 IPAA Midyear Meeting – CEO Roundtable – June 17, Niobrara Natural Gas Reserves: 15 MMBOE 12% of total Total average daily production (BOE) Niobrara First mid-continent acquisition Acquired late Jan Significant additional development: –700 locations –40-acre infill approved

25 IPAA Midyear Meeting – CEO Roundtable – June 17, Yuma County Niobrara Gas Production Purchased for $105 MM Total resource of 140 Bcf –Net production of 9.1 MMcf/d –88 Bcf of proved reserves –672 producing wells Drilled 12 wells to-date, permitting 80-plus wells, drilling 60 wells in 2005 Northern Yuma acreage largely covered by 3D seismic Berry Fields

26 IPAA Midyear Meeting – CEO Roundtable – June 17, Tri-State Joint Venture Partnered with Bill Barrett Corp. 50% working interest in over 345,000 acres of prospective acreage Large footprint, adjacent to Yuma County gas assets Evaluating the first joint venture Niobrara well in Sherman Co, KS First horizontal Niobrara well to be drilled in May Acquiring 530 miles of 2D seismic data beginning in April Berry will operate the asset development Tri-State Project Boundary

27 IPAA Midyear Meeting – CEO Roundtable – June 17, View of % growth in production before acquisitions Over $100 million of capital investment Integration of new Niobrara gas properties Initial appraisal of prospective Utah and Tri-State acreage Continued excellent earnings and cash flow


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