Item
1.01 Entry into a Material Definitive Agreement
On March
20, 2009, Berry Petroleum Company (Company) entered into a crude oil purchase
contract with Tesoro Corporation for the sale of all of the Company’s crude oil
production from the Midway Sunset Field. The volume approximates
12,000 barrels per day. The Agreement is effective on April 1, 2009
and continues until September 30, 2009. A copy of the crude oil
purchase contract will be filed as an exhibit to the Company’s quarterly report
on Form 10-Q for the fiscal quarter ending March 31, 2009. Under the
Stipulation, the parties reserved all of their rights, including Berry’s right
to seek damages caused by the default under the contract.
Item
1.02 Termination of a Material Definitive Agreement
On March
17, 2009, the Company and Big West of California, LLC (BWOC) entered into a
stipulation (Stipulation) regarding BWOC’s rejection of the Company’s crude oil
purchase contract. The Stipulation provides for a termination of the
Company’s crude oil purchase contract with BWOC effective as of March 16,
2009.
The
Stipulation was filed with the United States Bankruptcy Court, District of
Delaware, which is overseeing BWOC’s Chapter 11 bankruptcy
proceeding. It is anticipated that the bankruptcy court will hear the
Stipulation to terminate the crude oil purchase contract on or about April 3,
2009. The Stipulation is subject to an entry of order by the
bankruptcy court authorizing BWOC’s rejection of the crude oil purchase
contract, although the Company continues to sell its crude oil production to
third parties.
Item
8.01 Other events
The
Company continues to market its California crude oil production, other than
production from the Midway Sunset field discussed in Item 1.01 above, to various
parties. The term of these contracts range from nine months to one
month. The average pricing for all California production pursuant to
applicable California Crude Oil Purchase Contracts, calculated on a monthly
basis is the higher of 1) WTI NYMEX crude oil less a fixed differential, or 2)
heavy oil field posting (San Joaquin) plus a
premium.