California Resources Corporation (CRC) and Berry Corporation said they have entered into a definitive agreement to combine in an all-stock transaction valuing Berry at approximately $717 million, inclusive of Berry’s net debt.
Under the terms of the merger agreement, existing CRC shareholders are expected to own approximately 94 percent of the combined company upon closing, the two companies said in a joint statement. Berry shareholders will receive a fixed exchange ratio of 0.0718 shares of CRC common stock for each share of Berry common stock owned.
The transaction will add oil-weighted, mostly conventional proved developed reserves and sustainable cash flow to CRC. On a pro forma basis, the combined company would have produced approximately 16,000 barrels of oil equivalent per day (boepd) consisting of 81 percent oil in the second quarter and would have held approximately 652 million barrels of oil equivalent (MMboe) proved reserves as of the end of 2024, according to the statement.
The transaction is expected to close in the first quarter of 2026, subject to customary closing conditions, including receipt of required regulatory approvals and receipt of Berry shareholder approval.
As a result of the 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, the company said.
CRC’s executive management team will lead the combined company from its headquarters in Long Beach, California, according to the statement.
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 to further optimize its balance sheet and support long-term capital allocation priorities, the statement said.
“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,” CRC President and CEO Francisco Leon said.
“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,” Leon added.
“This announcement presents a compelling value proposition for our shareholders,” Berry Board Chair Renée Hornbaker said.
“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,” Hornbaker added.
California Resources describes itself as an independent energy and carbon management company committed to energy transition.
Berry describes itself as an independent upstream energy company with a focus on onshore, low geologic risk, long-lived oil and gas reserves. Its California assets are in the San Joaquin Basin, and its Utah assets are in the Uinta Basin. The company provides well servicing and abandonment services to third-party operators in California and its California E&P operations through C&J Well Services.
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