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CRC to Acquire BRY in All-Stock Merger Strengthening Asset Portfolio
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Key Takeaways
CRC to merge with Berry in $717M all-stock deal, with CRC shareholders owning about 94% of the combined firm.
Merger strengthens CRC's oil asset base, adds C&J Well Services, and expands into the Uinta Basin.
CRC targets $80-$90M annual synergies within 1 year, with 50% run-rate savings in 6 months.
California Resources Corporation (CRC - Free Report) announced that it has entered into a merger agreement with Berry Corporation (BRY - Free Report) to combine the two firms in an all-stock deal valued at approximately $717 million. The valuation includes Berry’s net debt. CRC has stated that the combination of the two companies will unlock operational synergies, lower costs and improve cash flow generation for the combined entity.
Asset Synergies
Per the terms of the agreement, California Resources shareholders will own approximately 94% of the combined firm following the closing of the deal. The merger is expected to strengthen CRC’s asset portfolio by adding high-quality, conventional assets, primarily with oil-weighted production, which complement the company’s existing low-decline, conventional oil assets in California. California Resources will also gain access to C&J Well Services, a subsidiary of BRY, as part of this transaction. C&J Well Services is an oilfield services firm, and the combination should help CRC improve the maintenance of its active wells and support long-term operational efficiency. It should also enable CRC to enhance its well abandonment capabilities and manage cost inflation in the long run.
As part of the transaction, CRC will also benefit from Berry’s extensive footprint in the prolific Uinta Basin, where it holds nearly 100,000 net acres that provide additional growth potential and financial upside.
Financial Impact
The merger is expected to be immediately accretive to significant financial metrics, including free cash flows and net operating cash flow, making it attractive to CRC shareholders. The company has also stated that it plans to achieve $80-$90 million in annual synergies within a year of concluding the deal. It expects to achieve 50% run-rate synergies within six months post-closing. CRC mentioned that these synergies will be primarily driven by operational efficiencies, debt refinancing to reduce interest expenses, corporate synergies and supply-chain improvements.
BRY shareholders shall receive 0.0718 shares of CRC common stock in exchange for each Berry common stock. Additionally, CRC has mentioned that it plans to refinance Berry’s debt through a mix of cash on hand and borrowings under its credit facility, and it may also consider issuing more debt to enhance its balance sheet strength. The deal is expected to conclude in the first quarter of 2026, subject to the fulfilment of customary closing conditions.
Zacks Rank & Other Key Picks
Currently, CRC carries a Zacks Rank #1 (Strong Buy) while BRY has a Zacks Rank #3 (Hold).
Repsol is a global multi-energy company involved in exploration and production activities as well as refining and marketing petroleum products. The company is also actively involved in transitioning toward cleaner and more sustainable energy solutions. This suggests that Repsol is positioning itself in line with global energy transition needs.
Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly the Mopane discovery in the Orange Basin, offshore Namibia. After the initial exploration phase, Galp estimated that the Mopane prospect could hold nearly 10 billion barrels of oil. This discovery allows Galp to diversify its global presence, with the potential to become a significant oil producer in the region.
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CRC to Acquire BRY in All-Stock Merger Strengthening Asset Portfolio
Key Takeaways
California Resources Corporation (CRC - Free Report) announced that it has entered into a merger agreement with Berry Corporation (BRY - Free Report) to combine the two firms in an all-stock deal valued at approximately $717 million. The valuation includes Berry’s net debt. CRC has stated that the combination of the two companies will unlock operational synergies, lower costs and improve cash flow generation for the combined entity.
Asset Synergies
Per the terms of the agreement, California Resources shareholders will own approximately 94% of the combined firm following the closing of the deal. The merger is expected to strengthen CRC’s asset portfolio by adding high-quality, conventional assets, primarily with oil-weighted production, which complement the company’s existing low-decline, conventional oil assets in California. California Resources will also gain access to C&J Well Services, a subsidiary of BRY, as part of this transaction. C&J Well Services is an oilfield services firm, and the combination should help CRC improve the maintenance of its active wells and support long-term operational efficiency. It should also enable CRC to enhance its well abandonment capabilities and manage cost inflation in the long run.
As part of the transaction, CRC will also benefit from Berry’s extensive footprint in the prolific Uinta Basin, where it holds nearly 100,000 net acres that provide additional growth potential and financial upside.
Financial Impact
The merger is expected to be immediately accretive to significant financial metrics, including free cash flows and net operating cash flow, making it attractive to CRC shareholders. The company has also stated that it plans to achieve $80-$90 million in annual synergies within a year of concluding the deal. It expects to achieve 50% run-rate synergies within six months post-closing. CRC mentioned that these synergies will be primarily driven by operational efficiencies, debt refinancing to reduce interest expenses, corporate synergies and supply-chain improvements.
BRY shareholders shall receive 0.0718 shares of CRC common stock in exchange for each Berry common stock. Additionally, CRC has mentioned that it plans to refinance Berry’s debt through a mix of cash on hand and borrowings under its credit facility, and it may also consider issuing more debt to enhance its balance sheet strength. The deal is expected to conclude in the first quarter of 2026, subject to the fulfilment of customary closing conditions.
Zacks Rank & Other Key Picks
Currently, CRC carries a Zacks Rank #1 (Strong Buy) while BRY has a Zacks Rank #3 (Hold).
Some other top-ranked stocks from the energy sector are Repsol S.A. (REPYY - Free Report) and Galp Energia SGPS SA (GLPEY - Free Report) . While Repsol sports a Zacks Rank #1, Galp Energia carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Repsol is a global multi-energy company involved in exploration and production activities as well as refining and marketing petroleum products. The company is also actively involved in transitioning toward cleaner and more sustainable energy solutions. This suggests that Repsol is positioning itself in line with global energy transition needs.
Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly the Mopane discovery in the Orange Basin, offshore Namibia. After the initial exploration phase, Galp estimated that the Mopane prospect could hold nearly 10 billion barrels of oil. This discovery allows Galp to diversify its global presence, with the potential to become a significant oil producer in the region.