- Highly Accretive Transaction Across Key Financial Metrics Enhances CRC’s Portfolio
- Combination to Create a Stronger, More Efficient Leader in California Energy
California Resources Corporation and Berry Corporation have jointly announced their entry into a definitive agreement to combine in an all-stock transaction valuing Berry at approx. $717 million, inclusive of Berry’s net debt (1). Under the terms of the merger agreement, existing CRC shareholders are expected to own approx. 94% of the combined company upon closing. Supplemental slides have been posted to CRC’s website at crc.com and Berry’s website at bry.com.
'The combination of CRC and Berry will create a stronger, more efficient California energy leader. This transaction is attractively valued and immediately accretive across key financial metrics, strengthening our ability to deliver sustainable value to shareholders,' said CRC President and CEO Francisco Leon. 'By realizing substantial corporate and operating synergies, we expect to significantly lower costs and generate higher free cash flow. Equally important, the combined company will maintain a strong balance sheet with low leverage, a robust hedge book and liquidity—providing the flexibility to pursue new development opportunities amid an improving permitting backdrop in Kern County. We are now well positioned to unlock our deep asset inventory and drive long-term cash flow per share growth.'
'This announcement presents a compelling value proposition for our shareholders,' said Renée Hornbaker, Berry’s Board Chair. 'The industrial logic of this merger will allow Berry shareholders to benefit from the creation of a larger and more sustainable business, with an improved capital structure and significant operational synergies. Additionally, the strong tailwinds we are seeing on the regulatory front makes this the right time to consummate this merger. The combined company will ensure our communities have access to safe, reliable and affordable energy through responsible in-state production, all while delivering significant long-term value for shareholders.'
Highlights
- Compelling fit with CRC’s low decline, conventional assets in California: The transaction will add high quality, oil-weighted, mostly conventional proved developed reserves and sustainable cash flow to CRC. On a pro forma(2) basis, the combined company would have produced approximately 161 thousand barrels of oil equivalent per day (Mboe/d) (81% oil) in the second quarter of 2025 and would have held approximately 652 million barrels of oil equivalent (MMboe) proved reserves3 (87% proved developed) as of year-end 2024. As a result of this combination, CRC will also own C&J Well Services, a California-focused oilfield services subsidiary of Berry. This business will enhance CRC’s ability to maintain active wells, strengthen its well abandonment capabilities, help support safe and responsible operations, mitigate future cost inflation and ensure long-term operational efficiency.
- Accretive to key financial metrics: The combination is expected to be accretive to net cash provided by operating activities and free cash flow. It is priced at approximately 2.9x enterprise value / 2025E adjusted EBITDAX1,4 with projected second half 2025 per share accretion to both net cash provided by operating activities4,5 and free cash flow4,5 of more than 10% before estimated synergies.
- Significant synergies identified, with upside potential: Within 12 months post closing, CRC expects to achieve annual synergies of $80 – 90 million, or approximately 12% of the transaction value1. Approximately 50% of the run-rate synergies are expected to be implemented within six months of closing and the remaining 50% of synergies are anticipated within 12 months. Synergies are expected to primarily come through corporate synergies, lower interest costs through debt refinancing, operating improvements and supply chain efficiencies.
- Maintains financial strength and flexibility: Post closing, CRC will retain its strong balance sheet with estimated pro forma LTM leverage ratio4 of less than 1.0x and approximately 70% of its expected second half 2025 pro forma oil production hedged at $68/Bbl Brent floor price6.
- Uinta Basin - strategic optionality and development upside: Berry’s large, contiguous Uinta Basin position (~100,000 net acres with significant identified inventory), provides additional operational and financial optionality. Second quarter 2025 production was 4.2 MBoe/d (~65% oil/liquids, 79% NRI) with a PV-103,4 of total proved reserves of approximately $110 million as of year-end 2024. Berry recently brought online four horizontal wells which together are producing approximately 3.8 MBoe/d gross (~93% oil)7 with peak production expected in late September to early October.
Transaction Details
Berry shareholders will receive a fixed exchange ratio of 0.0718 shares of CRC common stock for each share of BRY common stock owned, representing a premium of 15% based on the closing prices of the stocks on Friday, September 12, 2025. Based on the closing stock prices for CRC and Berry on September 12, 2025, the exchange ratio implies an enterprise value for the combined entity of more than $6 billion1. CRC plans to refinance Berry’s outstanding debt with cash on hand and borrowings under its Credit Agreement and may also pursue a new debt issuance, subject to market conditions, to further optimize its balance sheet and support long-term capital allocation priorities. CRC’s strong balance sheet and liquidity position provides flexibility regarding refinancing options and timing.
The transaction, which is expected to close in the first quarter of 2026, has been unanimously approved by the board of directors of both companies. Closing is subject to customary closing conditions, including receipt of required regulatory approvals and receipt of Berry shareholder approval. CRC’s executive management team will lead the combined company from its headquarters in Long Beach, California. Following the close of the transaction, CRC will provide additional financial and operating guidance for the combined company.
Advisors
RBC Capital Markets and Petrie Partners are serving as financial advisors and Sullivan & Cromwell LLP is serving as a legal advisor to CRC. Guggenheim Securities, LLC is serving as financial advisor and Vinson & Elkins LLP is serving as legal advisor to Berry.
Source: California Resources
