Q1 2021 Berry Corporation (Bry) Earnings Call
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Excuse me, ladies and gentlemen, this is the operator today's call is scheduled to begin momentarily until that time your lines will again be placed back on a music hold thank you for your patience.
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Ladies and gentlemen, thank you for standing by and welcome to the Berry Corp, Q1, 2021 earnings Conference call. At this time, all participants are in a listen only mode.
After the speaker presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone please.
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If you require any further assistance. Please press Star then zero I would now like to hand, the conference over to your Speaker today, Todd Crabtree manager of Investor Relations. Thank you and please go ahead.
Thank you Brandy and welcome to everyone. Thank you for joining us for Berry first quarter 2021 earnings teleconference. Yesterday afternoon Berry issued an earnings release, highlighting full first quarter results speaking. This morning will be <unk> Smith Board Chair and CEO Fernando <unk>, Chief operating officer, and Executive Vice President and Cary Baetz, Chief Financial Officer, and Executive Vice.
This president DRAM will discuss our first quarter performance as well as our expectations for the remainder of 2021, Fernando and then Cary will share further details on how we are addressing the operational and financial aspects of our business before turning it over to questions trembled make a few concluding remarks before we begin I want to call your attention to the Safe Harbor language found in our earnings release.
The earnings release, and today's discussion contain certain projections and other forward looking statements within the meaning of federal Securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements. These include risks and other factors outlined in our filings with the SEC our website Dr. White.
<unk> Com has a link to the earnings release and our most recent investor presentation any information, including forward looking statements made on this call or contained in the earning release and that presentation reflect our analysis as of the date made we have no plans or duty to update them, except as required by law. Please refer to the tables in our earnings release and on our website for a reconciliation between.
And all the Justice measures mentioned in today's call and the related GAAP measures. We will also post the replay link of this call and the transcript on our website I will now turn the call over to tram Smith. Thank.
Thank you Todd good morning, everyone and thanks for joining us today.
Despite the dynamic environment in which we are operating we are executing as promised and continue to focus on the fundamentals that create value. We had a great quarter production was up Opex was down EBITDA and capital spending were better than expected, we generated $16 million in levered free cash flow and we had nearly $100 million.
Cash on hand at the end of the quarter, our liquidity position gives us flexibility on growth and returning capital to our shareholders. We restarted our dividend in the first quarter. It has been approved for the second and we expect it to continue and grow at these price levels.
I wanted to quickly address governor Newsome proposal to ban hydraulic fracturing in California as of 2024.
This band does not materially impact <unk> operations and as defined it does not affect our thermal diatomite production or future operations. However, this type of unilateral action by the Governor is not in the best interest of Californians and does not bring to stay closer to our goal of being net carbon neutral by two.
145 study.
Studies, including those overseen by the Governor's, California Air Resources Board, otherwise known as Carb have shown that Californians will still demand transportation fuels from hydrocarbons well past 2045.
Therefore, the span just shifts the state's supply source from local producers, who provide significant economic value locally and statewide through taxes employment et cetera, and operate using California's rigorous environmental and safety standards to foreign oil producers that do not share our social or <unk>.
Fire metal standards, nor contribute to the economy of the state.
It is important to recall that this year Berry will pay 40 million and greenhouse gas credits and the industry as a whole pays more than 1 billion annually help fund California's greenhouse gas reduction programs, we all wanted a clean and sustainable environment and we support the state's goal.
[noise] of carbon neutrality by 2045, but to achieve this we need to work together and find solutions that are equitable for everyone.
Additionally, the California legislature continues to do its work. It is our belief that we can be part of the solution to provide equitable affordable and reliable energy by working with others.
We have built relationships through the Western States Petroleum Association and developed coalitions with labor as well as other industries, including lumber agriculture and water.
This collaborative approach helps helped US successfully defeat Senate Bill 467, Senator wieners widened wide ranging anti oil bill.
There are other proposed bills, which are we are actively monitoring that could impact our industry more details can be found on slide 25 of our investor presentation.
Berry is and will be a part of the energy solution. We continued discussions to increase our scale through M&A and we have quantified more than three decades of inventory in our sandstone reservoirs alone that will help meet California's long term energy demand and provide value to all stakeholders for decades to come.
I will now turn it over to Fernando.
Thank you tram in Q1, we continued to create value by optimizing the performance of our current asset base and by generating meaningful growth from our oil rich conventional plays.
2020, one we expect almost 90% of our total production to be oil.
Also I'm proud to report that we continued to achieve excellent environment health and safety results in Q1. In fact, we just passed the one year mark without a recordable incidents as a company.
Also we did not have any vehicle incidents for the second quarter in a row.
We will continue to dedicate the necessary resources to ensure the safety of our employees and contractors to safeguard and respect the environment to meet all regulatory commitments and to maintain the quality of our infrastructure.
Moving to performance production in Q1 average 27100 barrels equivalent per day. This is 2% higher than Q4 2020.
Our California oil production, which constitutes 81 per cent of the total also increased quarter on quarter by 3%.
As previously stated in 2021, we intend to keep production essentially flat year on year.
Q2 production will be adversely affected by plugging and abandonment activity in thermal diatomite wells from by the timing of putting new wells on production.
This P&A activity will allow us to optimize our base production and re completion program in Q3 and Q4, we expect to see a slight production growth in the second half of the year with a higher exit rate compared to last year.
For most of Q1, we operated with two drilling rigs drilling 45, new producers all in thermal sandstone reservoirs in California, and five delineation wells.
In April we added a drilling rig in Utah. So we saw an opportunity an attractive opportunity to drill and complete seven to 10 wells in a predictable conventional assets in the Uinta basin.
Our plan in California is to pick up a third drilling rig in June targeting additional thermal sandstone wells.
I want to highlight our drilling activity in the hill property in the San Joaquin Valley.
Vertical wells targeting the predictable Tulare formation, where actual production is exceeding our type curves by close to 20%, resulting in very attractive returns as of <unk>.
Result, the asset is currently producing at a 30 year high.
I also want to highlight the excellent results from our Workover activity. This is a new focus area for Berry in 2020 one.
These activities are yielding a radar or.
Our yielding a rate of return in excess of 100% with 46 wells and brought back into production in Q1. Our plan is to maintain an aggressive workover campaign throughout the year.
Next let's turn to operating expenses and this is a great story.
Q1, we average the operating expense of $14 $40 per Boe E P.
This is a $4.11 per Boe improvement when compared to the 2020 annual average.
We reduced non energy opex by about a dollar per Boe compared to last year's average our internal cost cutting campaign is resulting in sustainable savings in most line items within our operating structure.
Our energy Opex.
As we do significantly compared to last year, mainly because of the one time price spike that we saw in electricity sales during the winter storms in February.
As you May remember our energy Opex.
It includes fuel gas purchases, which are mostly hedged offset by electricity sales from our cogeneration plants in California.
Now, let's turn to capital.
Capex in Q1 was slightly lower than expected at $24 million, we maintain our planned level of activity. However, our drilling costs came in under budget, we reduced drilling costs by changing well designs improving day rigs operating efficiency our cash.
Total program in 2020, one remains unchanged in the $120 million to $150 million range.
In terms of well permitting we have enough permits in hand to execute our capital program in 2020 one.
After Kern County, Recertify, the environmental impact report in March the county resumed responsibility over oil and gas land use permits in response, we are aggressively sought county permits and now have applications for our entire 2022 drilling program pending approval.
The Lawrence Livermore Technical study on high pressure cyclic steam operations in thermal Diatomite reservoir is complete and is under review by the news from administration. We are waiting on Cogent released a study.
We anticipate the opportunity to further work with Cal Jim to obtain new to obtain new permits to obtain new permit approvals for future thermal diatomite operations remember our 'twenty 'twenty. One plans currently to not include new thermal diatomite development and with that I'll turn it over to Kerry. Thanks, Fernando we were off to a very.
Strong start executing our 2021 plan, we continued to manage controllable cost with non energy opex per Boe down, 11% compared to the fourth quarter of 2020, and adjusted G&A down 10% from.
The more our gas hedging strategy is working we protected 85% of our first quarter gas purchases from the historical price Spike driven by winter storm here.
Our gas hedge prices were less than $3 an M M btu when market prices exceed $100 per M. M. Btu for a few days. Additionally, we have realized a significant unseasonable pickup and electricity sales driven by the high gas prices due to the tightened natural gas supply finally.
Rockies gas sales revenue for nearly work nearly as high in the first quarter as they were in all of 2020 due to the winter storm.
While we certainly can't count on gas and electricity sales impact from these unseasonably high prices every quarter, we can rely on having stable gas purchase cost with our hedging strategy, which in turn provides stability visibility to all to our overall cost structure.
Oil prices continue to rise in Q1, with Brent averaging $61 a barrel in the quarter you may recall last year, we put on significant oil hedges in place for 2021, when we plan for a two year down cycle due to the uncertainty of how long COVID-19 and oil oil.
Price War would last despite the unfavorable impact from our first quarter oil hedges, we still achieved EBITDA of $52 million and we continued to build cash was $16 million of Levered free cash flow.
Even with an increased capital compared to 2020 and reinstating our dividend for the first quarter, our cash grew from $20 million to $80 million at year end to nearly $100 million at the end of January.
Which we maintained at the end of the first quarter with this performance. We are still in excellent position to continue to return capital to our shareholders and in fact, the board recently approved a second quarter dividend of <unk> per share on another liquidity note last week, we completed our scheduled semiannual <unk> borrowing base Redetermination, which result.
And reaffirmed borrowing base and companies like commitment is up $200 million as of quarter end, we had liquidity of $292 million consisting of cash on hand, and the RV L. Borrowing availability as a reminder, we primarily use the RBS facility to manage working capital fluctuations.
We have no outstanding borrowings on the line today.
For 2020, one we still expect our total average production to be relatively flat year over year, but with higher year end exit rate.
However for the second quarter were reshuffling the development schedule a bit as we focus on maximizing our capital efficiency and as a.
As a result, I expect to see relatively flat production in the current quarter with an accelerated pace in the second half of the year. We currently aren't making any changes to our capital guidance that we are pleased with our with the capital Finch day in Q1 and look to continue to build on that success for the rest of the year all in.
All it was a strong quarter, which demonstrates that the way, we manage our costs and our natural gas hedging strategy ensures that we are generating the best margins by being the low cost producer of oil in California. Our 10-Q will be filed later today, if you want to take a deeper dive into the financials now I'll turn it back over.
The trend for final remarks, thanks, Gary.
And Fernando demonstrated we had a fruitful quarter and we are well positioned for the rest of the year.
I want to briefly touch on our environmental social and government governance efforts or ESG, we recognize the importance of this work to all our stakeholders and the growing interest by our investors. We are designing our ESG strategy to focus on those initiatives that are most material to berry and value, adding to our shareholders and these priorities.
Will guide our future investments and reporting our ESG reporting will be solely focused on the areas that are measurable and achievable helped.
Help berry meet its business goals and are based on real data and science.
For information on our ESG approach and initiatives more.
More information can be found on the 2020 annual report we look forward to continuing our work in this area and welcome stakeholder feedback.
In closing I believe that for the energy transition to be successful, we must recognize some realities exist Paul.
Populations continue to grow locally and worldwide and are putting increased stress on the environment, We live in P.
People expect to at the very least maintain their current lifestyles, if not improve them over time and do not expect to go broke in the process.
If we are to be successful in providing californians with affordable equitable and reliable energy we need a solution that includes all forms and sources of energy wind solar biomass hydro hydrogen oil and gas for example, and all of the above energy solution.
Now I'll open it up for questions.
At this time, if you would like to ask a question. Please press Star then the number one on your telephone keypad again. It is star then the number one we will pause for just a moment to compile the Q&A roster.
Your first question comes from the line of Leo Mariani with Keybanc.
Hey, guys I was hoping you provide a little bit more detail on your commentary around second quarter production I guess talked about it.
Being flat here with one key before you start to see outsized growth in.
In the second half.
Wanted to clarify it sounded like maybe there was a bunch of workover activity that was taking.
Some wells offline and you also mentioned debt reshuffling.
The schedule or are we just going to see not a lot of wells turned on as well in the second quarter, where its more pushed to the back half just wanted to make sure I kind of understood the operational dynamics there behind it.
Hello, Neil this.
As Fernando our expectation for Q2 is again to keep production essentially flat compared to Q1.
In Q2, we have some planned downtime.
Associated to P&A activity into thermal diatomite.
Reservoirs.
And this is affecting production, but at the same time, we have picked up a third drilling rig in Utah. We're currently drilling.
Utah Wells, and we will be drilling seven to 10 wells in Utah.
We won't see this production until early June because of the of the completion.
We're doing the completions on the Fracs that we're doing there we.
We do those by pad. So we won't see that production until until June at the same time, we expect to increase production in Q3, as we will be picking up a third drilling rig for California.
And at the same time, we'll be optimizing our base production in the thermal diatomite reservoir. After we finish the PNA campaign in Q in Q2.
And then on the Workovers, we completed 46 Workovers in Q1, and our expectation is to complete about 200 workovers throughout the year and we've seen some excellent results and we will continue to do that.
For the rest of the year, but again, our expectation is to have our exit production at the end of the year to be higher.
Production compared to last year's exit production.
Okay. Thanks for the color.
I just wanted to kind of jump in on the regulatory side here.
Yes, it seems like there's been a pretty significant delay in knee.
Kind of final results of the Lawrence Livermore study.
Given to you guys.
Guys had any heard any update with respect to potential timing on that and also just sticking with the regulatory front.
Just wanted to get a sense of what you guys think of the potential traction that 2500 foot setbacks might be having in the state and if you think that is approved what do you think day impact to Berry would be obviously you guys have got some more rural operations concentrating in Kern County, and just thinking along the <unk>.
There might be a bunch of local control and perhaps Kern counties are allowed to do their own thing on setbacks.
Leo This is true.
First first part of the question is.
<unk>.
The activity in conversation between Whisper and each individual company and Cal Jim on on generally keeping permitting in general on on course, and the state is very active at the moment.
Lots of help being accomplished with the current <unk> in place now there is some clarity around how to expedite permits and we're taking full advantage of that part of that conversation is Cal Jim is trying to usher through the Governor's office, where that final approval of the high pressure cyclic steam study.
Needs to occur and that's up to them will they.
We're not going to predict anymore, what the governor is going to do we do not incorporate those thermal diatomite wells as Fernando very clearly stated in our plans and we manage our thermals.
The thermal diatomite production very well and as you know.
It's not a huge component of our overall oil production. So we're good.
It's also in the meantime, we have plenty of sandstone reservoirs to be drilling and lots of opportunity there.
On the rest of it with a 2500 Youll remember that Senate Bill 467, Scott winners Bill was killed in committee.
That was the effort this year for the 2500 foot setbacks, the governor responded by coming out with.
As.
Edict as executive order or two.
Start a rulemaking process to eliminate fracking by January of 2024.
And that we there is no other legislation that we're aware of that's in process. It would deal with any kind of setbacks. This year. So that is.
Discussion at this point, we do monitor that of course, and we pay attention and just in general for those that may be asking coming up.
At the moment, there don't appear to be significant oil and oil production impactful legislation in process.
Which is pretty good I learned yesterday, there 2700 bills.
In the.
And the state legislature at the moment and going through a process and very happy to say that none of them impact oil and gas production at the moment.
Okay, that's a great update and just lastly from me.
You mentioned it in your prepared remarks.
Do you guys still see just M&A is a critical.
<unk> for the company here in in 'twenty, one and you guys have confidence that you might be able to procure a deal. This year I know you're very focused on looking at conventional assets.
Yeah. Leo this is Cary I think we've made it very clear that scale is very important for US. We continue to turn every stone and look forward to.
Finding something that works and works for our current share of hurdles works for our balance sheet and as soon as we do we will let everybody know, but it's a top priority of all of us.
Okay. Thanks.
Your next question comes from the line of Charles Meade with Johnson Rice.
Good morning Charles.
Good morning, Jim.
Hey, I wanted to just go back because to the to some of your regulatory comments from because I think I might've been confused or maybe a little less than clear on something.
You mentioned in your press release that debt the current debt.
Sure.
<unk>.
Nuisance proposal as as it's currently defined doesn't affect your thermal diatomite program, but.
But are we to make the difference debt that it does affect your your sandstone.
Samsung, which is the which is the bulk of your.
Blaine.
Charles I can always count on you to ask the question for clarification just to make it very clear it has no impact on our sandstones period okay.
And I, just because thermal diatomite comes up so often we tend to maybe overstate the impact of any of these pieces of legislation on it. Okay. So I really appreciate your take in asking this question.
The reason, we're excited that we've quantified three debt over three decades of Samsung locations is trying to put that whole question Tibet.
Okay.
That help yes, it does and and do I understand correctly, there is because you're not relying on any racking for that thermal sandstone that but yeah. That's correct. The sandstones have.
Moderate, 20% Prosodies, which is great, but they also have huge permeability.
So there is no need to frac any of those or even come close to something called fracking. There. So so then maybe the last one a little bit of clean up on this front then.
You know obviously, you're fracking is the thing that has it is the activity has a target on its back but is there.
In a in.
In any of this you know nuisance ideas or are there things that we should be on the lookout for that that might be in somebody's. A list of list of things, we don't want to see that would affect.
Your thermal sandstone.
Not that we're aware of it all and we do monitor that Theres nothing on the horizon. There got it got it and then alright. Thank you for that.
Net.
Hopefully I'm not the only one who needed that clarification, but in any case I appreciate it debt. The one follow up if I do have a follow up.
You talked about the you talked about you know the Western States Petroleum Association and you know in other.
Not only other oil and gas producers, but also other kind of.
Maybe extractive industries or debt.
Debt or maybe simply frustrated is there.
Is there a wider picture you can paint for us either among the California oil producers or other California industries, whether it be your forestry or things like that debt.
Is there any kind of broader response, that's that's.
That's maybe starting to come into shape against some of this.
Oh, you know some some of this extremism or some of this kind of a.
Excessive progressive stuff coming out of Sacramento.
The answer is a qualitative yes, that's very true.
It's the coalitions are coming together quite.
The coalitions that you may not think of naturally are coming together quite quickly here.
Because of the number of jobs the issues around the regulatory environment et cetera for.
For example, all of these industries that you just mentioned require land use permits for example, and all of them are going through a similar process as frustrated et cetera as anybody so when when you start seeing restrictions and bands and things coming out of the Governor's office all of those industry see a threat to them.
Themselves and therefore generate come together as a natural coalition then you also were seeing very active co.
Culture of an energy working group call for something called <unk>, which is how Kern county itself remembered size of the state of New Jersey with lots of renewables and lots of oil.
<unk> is going to become carbon.
Neutral by 2045.
The coalition that's obvious there includes by the way some renewable industry wind and solar as well as the counties of the year.
Unions, the firefighters and police those that are impacted by the reduction in revenue.
Should any of those industries be impacted so.
The answer to your question is the Colo Colo Coalescing of coalition partners is happening quite rapidly now, which I'm glad I'm, sorry, it had to happen, but I'm glad to see it happening.
That is helpful detail on the on the situation. Thank you Jeremy.
You bet. Thanks Charles.
And as a reminder, if you would like to ask a question. Please press Star then the number one on your telephone keypad.
Net of store then the number one your next question comes from the line of Nicholas Pope with Seaport Global.
Good morning good.
Good morning.
I was hoping I mean, it was a very there's.
There's a lot of noise in the ER and the operating expense line item and I was hoping maybe we could give a little bit to that.
Lease operating expenses debt 62 million.
I guess, how much of that is.
Is attributed to the Workover increase that you guys had during the quarter and Andy I'll expect to Hum.
Kind of continue that through the rest of the year.
And also.
Okay.
I'm just.
Are the big moving natural gas derivatives I'm trying to just make sure I got kind of I'm understanding the apples to apples.
How that relates to kind of the current guidance you'll have for the full year.
Yeah, Nick this will be Kerry I'll jump in just a little bit on the financial side and all that.
Fernando fill in any holes.
But overall workovers are primarily capitalized for us and not in your operating expense.
And we've highlighted that in the past that this is kind of a new program.
And so, but they're primarily capitalized debt the big number Andy Yellowy as fuel unhedged fuel so and when we saw again, you've got M. M Btu over $100 for extended period of time day.
<unk> kind of why we do a hedging strategy I think that's the perfect example of why we do the hedging strategy, but I think they're really the noise around if you're looking for noise in the low it would have to do with the unhedged fuel, but I think from our point of view. That's the reason we continue to have a a.
Hey, a hedging program on natural gas and keeping about $3 an M. N V to you as best we can and we're well we're actually.
Good shape promotion that debt debt.
Through October of this year and starting to add considerably to next year.
Net to eliminate that I don't know Fernando Gabby I think from a net non op.
From a non energy Opex things you are considering going well and again cost are being realized.
Yes, just to put a little color around the non energy side in Q1.
As you saw we lowered our non energy opex by about a dollar a barrel compared to last year's average and we believe that most of these costs are going to be cost reductions are going to be sustainable as we've seen reductions in every major category.
Really the reductions are a combination of several things including <unk>.
Negotiating contracts with our vendors also changing some operating practices also implementing some facility solutions.
<unk> two to reduce long term and also by engaging the field staff in our business and they're coming up with ideas to reduce operating expenses every day and in fact in Q1 day came up with over 200 ideas to reduce operating expenses.
So we've had great success, and we believe it's going to be sustainable in terms of lowering our non energy.
Operating expenses.
Does that give you that gives you kind of are you looking for yes. That's helpful.
And also just kind of further on that on that point.
The guidance that you gave for operating expenses last quarter that $17 25 to $18 55 per Boe.
What is that comparable to.
On.
What am I comparing that to on this on these line items right now.
So you're talking about our annual guidance.
And looking at it Ain't got yes.
We're obviously well below that at this point in time.
But in that and the reason for that is as we've talked about first quarter. They're really the anomaly was gas was was the sale of electricity in the first quarter that is usually minimal in the first quarter, we primarily see major cell.
How're in June July August September kind of the hot season, the air conditioning season, but because of winter storm Yuri the amount of gas debt moved east versus traditionally moving west. This time of year. It caused a supplier it caused a supply problem natural gas it caused some of your major power producers.
Year to reduce their capacity day leaned on cogent and ppas to offset that that raised the rising tide rises all boats right. That's what we saw across our platform and I think probably other producers and other people with co gens and PPA saw the same thing so Nick that's the biggest driver of why we are.
Billy below guidance at this point in time, we expect second quarter natural gas sales I mean power sales to be kind of historical and we don't see a big blow up in natural gas in the second quarter and I will say that in the second quarter, we do look to the third quarter and again with natural gas tight.
Across North America, and a hot summer could cause some more spikes, but again. Another reason we're hedged does that help yes. The force of the <unk> 40 is what's comparable per Boe.
For the quarter, yes, yes.
Okay.
That is helpful and debt.
You've also mentioned previously this greenhouse gas cost that I think is in.
Right now it's in current liability our current.
Current liabilities.
It's I think it's a $40 million payment is that right that somewhere.
Roughly $40 million, yet and what is the cash is that a cash outlay in <unk> and is that something that is going to be ongoing and in future years.
Yeah. So most of our G. H G. We pay on a.
You never knows that it's just a regular ongoing over the last couple of years. We've been able then to go she ate a deferred payment on those and those debt deferred payment is what we're realizing this year and it is going it will go throughout throughout the first really the first three quarters of this year, so you'll you'll see it.
A little bit was that in Q1, you didn't notice that much youll see some more of it in Q2, and then Q3 and it will it will go through our accounts payable side, so you'll see it in working capital on on accounts payable.
Got it and.
And on an ongoing basis when it's not.
Just negotiate a deferred payment where does it normally show up is that in L. A we kind of line item, whereas whereas that its taxes other than income taxes got it okay. Perfect. That's all I had thanks.
Thanks, Ed.
Great.
Your next question comes from the line of Gabon, Mathis Berry stakeholder.
Good morning, I Should've set assembly member Devin mattress in there I apologize.
When he.
Wanted to go to expand a little bit.
I know the partnership from the different industries are going quite well I've seen that per.
<unk>.
Do appreciate your time on things like the C trip.
In other stuff really having those collaborative conversation, but what what is that looking like.
From your and looking at going obviously.
Talking about second quarter, staying flat, but second half of the year things rising.
Because I've got to think about sustainability for constituents and what that's going to look like.
The overall, San Joaquin Valley economy, as a whole, but also realizing that you need a diversified portfolio. So it's very refreshing to hear you all talk about it and I've seen you on the ground doing it.
Could you expand on that a little bit and what that looks like from your end.
Sure Devin of by the way. Thank you for joining US. This morning, I think youre the first.
First assembly member to join Us for the call and just speak up its very a really really personally appreciate it.
The answer to your question is.
We would like.
For a lot of reasons, we can list here today, we would like to be able to grow berries presence in production in California and to provide an oil source theres plenty of oil here, Okay. There's plenty of oil in the San Joaquin.
I would like to start eliminating of foreign imports into the state. So that we ended up with more employment and pay higher taxes, more taxes et cetera, et cetera to this day to the economy itself, which doesn't happen with the foreign imports as you know.
And at the same time.
In my experience there is no place that you can work without a diversified source of anything and that includes energy to make it affordable equitable and reliable in California of course needs that more than ever now.
There is plenty of room for renewables there is plenty of room for biomass theres plenty of room for all of the above as I as I said at the end.
But to allow oil too.
To manage Theres no reason the oil is declining in the state. It's just a matter of people investing and having confidence to invest in this day Berry has that confidence and we'd like to see more of it to hold the production at least flat if not grow it for the overall state and.
And Barry is going to do its part of course.
As you've heard but.
It's at the expense of imports not at the expense of diversification of energy sources from the people of California.
Does that makes sense.
It does and I think you know the group.
Obviously, the materials and the minions I've seen anywhere quite a bit about.
You know, California oil is clean oil and we need to look at that as a better option versus imports.
I wish my colleagues.
On the other side of the oil understood that and it sounds like you know we have defeated quite a bit.
Legislation over the years and to see and hear those numbers I don't think people realized that.
The gravity of the fact that we started with over 3000 pieces of legislation this year.
With only 300 of those away.
<unk>, even hit appropriations are huge.
Thing.
But no I think the partnerships are great I think the communication is going well and I think.
Your credit into the group's credit it shows the dividends by defeating these things out the gate before they.
Get to rear their ugly heads up.
Thank you guys for what you do on that site.
Devin Thanks for joining us today.
Thanks Deb.
And there are no further questions at this time I will now turn the call back over for any closing remarks.
I want to thank everybody for their time today and look forward to talking to you again at the end of the second quarter. Okay.
Have a good day everyone. Thank you all.
This concludes today's conference call you may now disconnect.
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