Jul. 18—A midsize oil producer active in Kern County announced Tuesday it has arranged to acquire a much smaller local competitor in a $70 million cash deal expected to close in the third quarter of this year.
Dallas-based Berry Corp.'s purchase of Santa Monica-based Macpherson Energy Corp. is expected to increase its daily production by about 10%, or 2,400 barrels of oil per day, by applying technologies it already uses in complementary operations.
Berry CEO Fernando Araujo said by email all of Macpherson's roughly 40 non-executive employees will be offered jobs at the combined company.
"We value the operational and technical knowledge of the Macpherson team and look forward to working together to continue the success of the acquired assets," he wrote.
A representative of Macpherson declined to comment on the deal Tuesday and instead referred questions to Berry.
The acquisition is Berry's first since 2021, when it bought C&J Well Services at auction. The arrangement did not increase Berry's oil production capacity but expanded its oil field capabilities, allowing it to perform plugging and abandonment jobs for itself and other local companies.
Berry produces oil in the Midway-Sunset Oil Field and other parts of rural Kern, as well as Utah's Uinta Basin. Macpherson's focus is on the Round Mountain and Mount Poso areas.
The purchase of Macpherson is expected to pay for itself by the middle of next year while enhancing financial flexibility, according to Berry.
"Further, leveraging Berry's track record of unlocking value from mature assets with existing well bores in California, we are confident we can achieve significant production upside, even in the current regulatory environment, as well as significant synergies," Berry said in a news release Tuesday morning.
Berry said half the cost of the acquisition will come from its 2023 capital budget along with expected cash flow from the deal. It added that the final $20 million payment to Macpherson will be made in July 2024.
Both companies use steam in oil production, and Berry said economies of scale will present money-saving opportunities, not just from sharing steam and water plants but also in the areas of well work, rig services and facilities.
"They are a good fit operationally as their production methods are similar to Berry's," Araujo stated.
After the acquisition's announcement, Berry's stock price closed Tuesday up 39 cents, or 5.6%, at $7.38.