A New Owner For Placerita Oil Field On Sierra Highway
BY LEON WORDEN, SCVNEWS.COM
Berry Petroleum Co., the Denver-based owner of the Placerita oil field on Sierra Highway – with much bigger petroleum operations in Kern County, Utah, West Texas and Colorado – is being bought by an affiliate of Houston-based Linn Energy, one of the nation’s top 15 oil and natural gas companies.
The all-stock transaction is valued at about $2.5 billion, or $4.3 billion with assumed debt. Berry filed paperwork with the Securities and Exchange Commission on Thursday showing that its stockholders would receive 1.25 shares in LinnCo for each Berry share.
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That equates to $46.2375, or 19.8 percent more than Berry’s closing price on Wednesday. The company’s share prices jumped by roughly that amount Thursday to make up the difference.
“Today’s merger announcement with Linn Energy marks the beginning of a new, important chapter in our company’s history,” Berry CEO Robert Heinemann said in a statement. “Berry’s portfolio fits well with Linn’s structure and asset base, and the combination of the two companies will create one of the largest independent E&P companies in North America.”
“We have great respect for what the Berry management team has accomplished,” Linn CEO Mark E. Ellis said, “and (we) consider the Berry employees to be an important part of this transaction. We welcome them to Linn and believe that together, we will be positioned for great success in the future.”
Linn has about 4.8 trillion cubic feet of natural gas equivalent. By comparison, Berry’s proved reserves include 534 billion cubic feet of natural gas and 186 million barrels of liquids (for a combined total of 275 million barrels of oil equivalent).
Berry traces its roots to the San Joaquin basin in 1909. It became a publicly traded company in 1987. It bought the Placerita oil field from Arco in the late 1990s. The active portion of the Placerita field (northwest of Sierra Highway between Placerita Canyon Road and Golden Valley Road) dates to 1948; historic pumping in the broader Placerita Canyon area dates to 1899.
In 2011, Berry started flooding older wells on its Placerita property with steam in order to boost production to 2,300 barrels per day.
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