Poso Creek

LETTER TO SHAREHOLDERS, continued

SUMMARY

Berry has grown significantly in the past four years and it is our goal to continue this pattern of growth based on the foundation of our principles, assets and people. With this growth comes challenges, but with the quality employees we have and a framework in place to fairly evaluate, compensate and reward them for excellent performance, these challenges become opportunities.

As a company focused on growing and as a developer of natural resources, Berry takes very seriously its role in managing the properties it develops for landowners, Tribes, state and federal agencies. We are committed to conducting our business in accordance with all current regulations and guidelines. We believe it is in the best interest of America’s energy companies and Berry’s shareholders to be good stewards of these resources as we pursue our growth objectives.

Before we close, we want to recognize our chief financial officer, Ralph Goehring, for his many contributions to Berry’s success. Ralph will be retiring from Berry during 2008 after 21 years of service, beginning prior to our IPO in 1989 through every step of Berry’s journey as a public company. His talent, integrity and commitment will be certainly missed by all and we wish Ralph and his family the very best.

We began this letter with five principles that define today’s Berry Petroleum Company and have shown how the implementation of those principles delivers growth and outstanding returns. To make us accountable to our shareholders in 2008, we will close with five expectations for the coming year:

  • We expect double-digit production and reserve growth from our existing assets.
  • We intend to add 25-30 MMBOE of proved reserves at a $10-$12/BOE finding and development cost.
  • We will focus on near-term oil development and pursue long-term natural gas development.
  • We expect to generate sufficient internal cash flow to fund our organic growth objectives.
  • We will use acquisitions to consolidate oil and natural gas positions and pursue growth opportunities in new domestic basins.

The successful execution of our development plans will put us in a great position for delivering outstanding results in 2008 and sets us up to repeat this success in the future.


Sincerely,

Young

Martin H. Young, Jr.
Chairman of the Board

Heilemann

Robert F. Heinemann
President and Chief Executive Officer

March 18, 2008