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Berry Petroleum Co. to sell units to the public in 2008

Berry Petroleum Co., the U.S. oil and gas producer founded in 1909 by a gold miner who struck it rich in Alaska's Klondike, said it will form a master limited partnership that will sell units to the public next year.

The partnership will sell about $125 million to $175 million in units in 2008's first half and will acquire oil and gas assets from Berry, the company, based in Bakersfield, Calif., said Monday in a statement. Berry — which has production in California, Utah and Colorado — will retain a stake and will control the partnership by owning its general partner.

Such partnerships, called MLPs, command higher market values than if the same assets were held in a regular corporate structure, because they are exempt from federal income taxes and pay out most of their cash flow in tax-advantaged dividends to unit holders. Berry follows oil and gas producers Devon Energy Corp. and Chesapeake Energy Corp. in forming a partnership. MLPs were commonly used by pipeline operators in the past decade.

Berry said it plans to use proceeds from its MLP unit sale to cut debt and accelerate oil and gas projects.

Company founder Clarence J. Berry struck oil near Taft, Calif., after amassing his fortune in gold mining.