Berry Petroleum Corporation, an independent upstream energy company, engages in the development and production of conventional oil reserves located in the western United States.
The last earnings update was 41 days ago.
Discounted Cash Flow Calculation for DB:1P6 using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
DB:1P6 DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Berry Petroleum's share price is below the future cash flow value, but not at a moderate discount (< 20%).
Berry Petroleum's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Berry Petroleum's earnings available for a low price, and how does
this compare to other companies in the same industry?
Berry Petroleum's earnings are expected to grow significantly at over 20% yearly.
Berry Petroleum's revenue is expected to grow by 11.9% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Berry Petroleum's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
Oil and Gas
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
2/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
Mr. Arthur T. Smith, also known as Trem, has been the President, Chief Executive Officer and Director at Berry Petroleum Company, LLC and Berry Petroleum Corporation since March 2017. Mr. Smith serves as Chairman of the Board at Berry Petroleum Corporation since February 28, 2019. Prior to being named Chief Executive Officer, Mr. Smith began an informal consulting relationship in May 2016, followed by a formal consulting relationship later in October 2016, and then served as interim Chief Executive Officer while he was a consultant in January 2017. He has significant experience in all phases of the oil and gas exploration and production business in the U.S. and internationally. In January 2014, Mr. Smith founded TS&J Consulting, where he served until joining Berry Corp. in March 2017, which focused on providing consulting services to distressed companies and assets in the United States and United Kingdom. He served as the Chief Executive Officer of TS&J Consulting. From January 2007 until January 2014, Mr. Smith was President and Chief Executive Officer at Hillwood International Energy, L.P. and HKN Energy Ltd. Mr. Smith spent 25 years of his career at Chevron, from 1981 until 2006, where he served in a number of leadership positions with increasing responsibilities in Russia, Thailand and multiple locations in the United States, including La Habra and San Francisco, California. He held various roles at Chevron Corporation, including President and General Manager of Russia operations, where he led several major acquisition projects and operational initiatives. While at Chevron, Mr. Smith was exposed to all phases of the business, including production, operations, exploration, business development, M&A, finance and technology. He graduated magna cum laude from Amherst College with a major in Geology and Russian. He has a Masters and PhD in Economic Geology from The Pennsylvania State University.
Trem's compensation has increased in line with Berry Petroleum recently becoming profitable.
Trem's remuneration is higher than average for companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Berry Petroleum management team is less than 2 years, this suggests a new team.
Executive VP & COO
Chief Accounting Officer
Manager of Investor Relations
Executive Vice President of Business Development
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Berry Petroleum board of directors is less than 3 years, this suggests a new board.
Berry Petroleum Corporation, an independent upstream energy company, engages in the development and production of conventional oil reserves located in the western United States. The company’s properties are located in the San Joaquin and Ventura basins, California; Uinta basin, Utah; and Piceance basin, Colorado. As of December 31, 2018, it had a total of 3,743 net producing wells. The company was founded in 1909 and is headquartered in Dallas, Texas.
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