DENVER - Berry Petroleum Company (BRY) earned net income of $35 million, or $0.77 per diluted share, for the three months ended March 31, 2009, down 19% from net income of $43 million, or $0.94 per diluted share, in the first quarter of 2008, according to Robert F. Heinemann, president and chief executive officer.

Discretionary cash flow totaled $81 million in Q1 of this year, down from last year’s $97 million for the same time period. (Discretionary cash flow is a non-GAAP measure; see reconciliation below.)

The company says the reported net income includes items that affect year-on-year comparisons including an impairment to the value of the Denver-Julesburg (DJ) basin asset held for sale at the end of the first quarter, a gain on the termination of associated DJ basin gas hedges and a gain on ineffective hedges related to new California crude sales contracts secured by the Company in the first quarter of 2009.

In total, for the first quarter of 2009, these items increased net income by approximately $17.9 million or $0.39 per diluted share for an adjusted first quarter net income of $17.1 million or $0.38 per diluted share, compared to an adjusted $0.86 per diluted share in the first quarter of 2008.

For the first quarter ended March 31, 2009 net production averaged 33,330 barrels of oil equivalent per day (BOE/D) for Q1, an increase of 19% from the 28,070 BOE/D achieved in the same 2008 period and down 6% from an average of 35,580 BOE/D in the fourth quarter of 2008. Berry Petroleum drilled 26 wells in the first quarter of 2009. Company-wide production is expected to average approximately 30,000 BOE/D for the full year with no future contributions from the DJ assets, which averaged approximately 3,100 BOE/D in the first quarter of 2009.

For the first quarters of 2009 and 2008, net production in BOE per day was as follows:

First Quarter Ended March 31
2009 Production                                     2008 Production
Oil (Bbls) 19,500 59 %                           19,890 71 %
Natural Gas (BOE) 13,830 41 %            8,180 29 %
Total BOE per day 33,330 100 %       28,070 100 %

Mr. Heinemann continued, “The first four months of 2009 have been an important period of time for Berry Petroleum. We continue to take the appropriate steps to manage our Company in the current commodity and financial environment. Berry remains focused on reducing costs, marketing our California crude oil, and investing capital in our highest return projects while generating excess cash flow to reduce debt.