Deals - Acquisition, Mergers, Divestitures

CRC to Acquire Berry in All-Stock Combination, Building a Larger California-Focused Energy Leader

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   |    Monday,September 15,2025

California Resources Corporation (CRC) and Berry Corporation announced a definitive agreement to combine in an all-stock transaction valuing Berry at approximately $717 million (inclusive of Berry net debt). The deal is designed to create a larger, more efficient California-focused operator with a stronger free cash flow profile, expanded proved developed reserves, and meaningful synergy upside, while maintaining a low-leverage balance sheet and a robust hedge book.

CRC CEO Francisco Leon described the transaction as attractively valued and immediately accretive across key financial metrics. CRC expects the combination to materially lower costs and generate higher free cash flow through corporate and operating synergies, supply chain efficiencies, and lower interest costs from refinancing Berry's outstanding debt. Just as important, CRC emphasized that the combined company will retain a strong balance sheet and liquidity, providing flexibility to pursue new development opportunities in California amid an improving permitting backdrop in Kern County.

From Berry's perspective, Board Chair Renee Hornbaker highlighted the industrial logic of the merger and the opportunity for Berry shareholders to participate in a larger and more sustainable business with an improved capital structure and significant operational synergies. Management also pointed to supportive regulatory tailwinds in California as a key reason the timing is attractive.

The transaction strengthens CRC portfolio by adding high-quality, oil-weighted, mostly conventional proved developed reserves and durable cash flow. On a pro forma basis, the combined company produced approximately 161 thousand barrels of oil equivalent per day (Mboe/d) (81% oil) in the second quarter of 2025 and held approximately 652 million barrels of oil equivalent (MMboe) of proved reserves (87% proved developed) as of year-end 2024.

A key differentiator is CRC's acquisition of C&J Well Services, Berry's California-focused oilfield services subsidiary. CRC noted this business can improve well maintenance and abandonment execution, support safe and responsible operations, mitigate future cost inflation, and strengthen long-term operational efficiency in California.

Uinta Basin: Additional Optionality

While the transaction is anchored by California scale and synergy capture, Berry's Uinta Basin position provides additional operational and financial optionality. Berry's Uinta position totals approximately 100,000 net acres and produced 4.2 Mboe/d in the second quarter of 2025 (approximately 65% oil/liquids). Berry recently brought online four horizontal wells that together are producing approximately 3.8 Mboe/d gross (approximately 93% oil), with peak production expected in late September to early October.

Deal Structure and Timing

Berry shareholders will receive a fixed exchange ratio of 0.0718 shares of CRC common stock for each share of BRY common stock, representing a premium of 15% based on the closing prices of both stocks on September 12, 2025. Existing CRC shareholders are expected to own approximately 94% of the combined company upon closing.

CRC plans to refinance Berry's outstanding debt using cash on hand and borrowings under its credit agreement and may pursue a new debt issuance subject to market conditions. The transaction is expected to close in the first quarter of 2026, subject to customary closing conditions, including regulatory approvals and Berry shareholder approval. CRC's executive management team will lead the combined company from its headquarters in Long Beach, California. CRC expects to provide updated guidance for the combined company after closing.

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