Inventory management forecasts Good Q2Inventory management is an essential requirement for business.
Having too little or too much is costly.
BRY is no different.
The Covid crash caught them off guard as it did with most energy businesses.
As a consequence, inventory levels were set at normal levels at March 31/20.
However, by Q2, oil prices collapsed and as a consequence, revenues were just half of the forecast level of inventory ( $15.7 m ).
By Q3, they were beginning to get control of inventories, and were back to expected requiement levels by Exit Dec 2020.
At that time, Inventory levels were $11.3 million which was almost identical to Q1 revenues of $11,5 m.
Inventory levels going into Q2 were $11.4 million, almost identical to the level at Dec 30/20.
Since then, the oil and gas actvity in the US and Canada have increased substantially.
This means that forecast needs of $11.4 m at March 31/21 will not be sufficient to meet demand and more inventory will have to be produced during Q2.
What this indicates is that management expected sales in Q2 to be the same as Q1 ( about $11.5 m ) .
Demand has obviously increased, so $11.5 m in Q2 will be a low ball estimate.
More likely, Q2/21 revenues will be much higher than $11.5 m and probably in the range of $15 m to $18 m in Q2.