425: Berry Subsidiary Addresses CRC Merger, Assures Employees

Berry Corporation's C&J Well Services President assures employees of business continuity and future opportunities following the announced combination with California Resources Corporation, expected to close in Q1 2026.

Summary

• Berry Corporation has entered into an agreement to combine with California Resources Corporation (CRC).
• The transaction is expected to close during the first quarter of 2026.
• Until closing, the transaction will not change C&J Well Services employees' jobs, roles, responsibilities, or day-to-day tasks.
• C&J Well Services will continue to operate as a separate company and an independent service provider to all customers, including Berry and CRC.
• The combination is expected to bring exciting new opportunities, expand the reach of C&J's work, and provide a better platform for business investment.
• Employees are encouraged to join a town hall with Fernando and Dani and to direct any inquiries to management, avoiding speculation on rumors.

Sentiment

Score: 7

Explanation: The sentiment is largely positive and reassuring, focusing on future opportunities and business continuity for employees. However, it acknowledges the 'longer process' and potential for questions, indicating a realistic but optimistic outlook on the merger.

Positives

• CRC is excited about the C&J team and their work, which was a key reason for the combination.
• Becoming part of CRC will bring exciting new opportunities and expand the reach of C&J's work.
• The combination will provide a better platform to invest in the C&J business.

Negatives

• The announcement may bring about questions among employees.
• The transaction is described as 'day one of a longer process' with significant work ahead to integrate the organizations.

Risks

• Transaction costs associated with the proposed combination.
• Unknown liabilities that may arise from the transaction.
• Potential adverse effects on the market price of Berry's or CRC's common stock due to announcements.
• Challenges in successfully integrating the businesses of Berry and CRC.
• Inability to achieve projected synergies or taking longer than expected to achieve them.
• Risks related to financial community and rating agency perceptions of Berry, CRC, or the industry.
• Potential impact of general economic, political, and market factors on Berry, CRC, or the proposed transaction.
• The occurrence of any event, change, or circumstance that could lead to the termination of the proposed transaction.
• Risk that Berry's stockholders may not approve the proposed transaction.
• Disruption of management time from ongoing business operations due to the proposed transaction.
• Effects of the announcement, pendency, or completion of the proposed transaction on the ability to retain customers and key personnel, and maintain supplier relationships.
• Risk that any closing conditions, including necessary regulatory approvals, may not be satisfied in a timely manner or may be subject to unanticipated conditions.
• Other factors discussed in Berry's and CRC's Annual Reports on Form 10-K and other SEC filings.

Future Outlook

The combination of Berry Corporation and California Resources Corporation is expected to bring exciting new opportunities, expand the reach of C&J Well Services' work, and provide a better platform for investment in the business. The transaction is anticipated to close in the first quarter of 2026, with significant work ahead to integrate the organizations.

Management Comments

• "A key reason CRC is excited about this combination is our team and the work we do."
• "Until it closes, this transaction will not change your job, your roles or responsibilities, or your day-to-day tasks."
• "Becoming a part of CRC will bring exciting new opportunities, expand the reach of the important work we do, and provide us with a better platform to invest in our business."
• "Its business as usual for all of us, with safety and operational excellence as our top priorities."
• "This announcement is just day one of a longer process."
• "We are committed to supporting you all and providing updates as there is news to share."
• "Please do not speculate on rumors and/or respond to any inbounds you may receive."

Industry Context

This announcement reflects ongoing consolidation within the oil and gas and energy services sectors, where companies seek to enhance scale, operational efficiency, and market reach through strategic combinations. Such mergers are common responses to market dynamics, aiming to create more robust entities capable of better navigating industry challenges and capitalizing on opportunities.

Stakeholder Impact

• **Shareholders:** The proposed combination with CRC is a significant strategic move that could impact future share value, subject to integration success and market reception. The filing mentions potential adverse effects on market price as a risk.
• **Employees (C&J Well Services):** Assured of no immediate job changes, roles, or responsibilities. Anticipated future opportunities, expanded reach, and better investment platform. Management is committed to support and provide updates.
• **Customers:** C&J Well Services will continue to serve all customers, including Berry and CRC, with the same excellent service.
• **Suppliers:** The filing mentions risks related to maintaining relationships with respective suppliers.

Next Steps

• Determine how best to bring the two organizations (Berry and CRC) together.
• Provide updates to employees at appropriate times.
• Employees are encouraged to join a town hall meeting with Fernando and Dani.
• Obtain necessary regulatory approvals for the transaction.
• Secure stockholder approval for the proposed transaction.

Key Dates

Keywords

Berry Corporation, California Resources Corporation, C&J Well Services, Merger, Acquisition, Oil and Gas, Energy Services, Corporate Combination, SEC Filing