Berry Corp (bry) — Call Transcript 2025

Good day, and welcome to the California Resources Corporation announces all-stock combination with Berry Corporation. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Joanna Park, Vice President of Investor Relations and Treasurer. Please go ahead. Good day, everyone. Welcome to our call to discuss California Resources Corporation's combination with Berry Corporation. Leading today's call is our President and CEO, Francisco Leon. In addition, we are pleased to be joined by Berry CEO, Fernando Araujo, who will also make a few remarks. Members of CRC's executive team are also here today and will join us for Q&A. Supplemental slides are posted in the Investor Relations section of our website, along with reconciliations of non-GAAP financial measures to GAAP financial measures. Today's discussion will include forward-looking remarks based on current expectations. Actual results may differ due to factors described in today's press release and in our SEC filings. During Q&A, please limit your time to one question and a follow-up, as this will allow us to get to more of your questions. With that, I'll turn the call over to Francisco. Good morning, and thank you for joining us. Today marks another milestone in CRC's growth story: an accretive all-stock combination with Berry. This transaction enhances our scale, creates significant operating and cost synergies, and strengthens our ability to deliver affordable, reliable, and responsibly produced energy for Californians, all while maintaining a strong balance sheet and ample liquidity. Let me cover the key highlights. First, the complementary California asset fit is compelling and will ultimately benefit a state that needs more energy. This bolt-on transaction aligns perfectly with CRC's core footprint. Berry will add approximately 20,000 barrels of oil per day of California-based, Brent-linked conventional production on about 20,000 mostly adjacent net acres. The added scale will make CRC more durable and provides new flexibility in how we elect to allocate capital. With more than 75% of California's oil consumption sourced from abroad, the need for locally produced, responsibly developed energy has never been clearer. California possesses vast resources and world-class geologic formation, and our company was built to responsibly unlock that potential. We have shown that assets are better in our hands. Recent legislative actions are very encouraging and will help offset the state's reliance on foreign oil by incentivizing local production, making the timing of today's California-focused combination all the more significant. Next, the deal was priced right. The transaction is valued at approximately 2.9 times 2025 consensus EBITDAX and about $30,000 per flowing barrel. Importantly, the transaction delivers accretion of more than 10% to second half 2025 operating cash flow and free cash flow, even before incorporating anticipated synergies. Third, we have a strong track record of delivering synergies, and in this transaction, we're targeting annual synergies of $80-$90 million within 12 months. This represents approximately 12% of transaction value. In our view, these significant synergies can only be realized because of the exceptional fit of these two portfolios. We expect synergies to come primarily from corporate synergies, lower interest costs from debt refinancing, operating improvements, and supply chain efficiencies. Looking back at the Aera merger, we achieved our targeted synergies ahead of schedule, demonstrating a strong integration capabilities as a premier California operator. We intend to apply the same discipline approach when we integrate Berry. Additionally, Berry will bring two exciting business units with its wholly owned subsidiary, C&J Well Services, and a large contiguous position in the rapidly developing Uinta Basin. First, C&J Well Services will help to insulate the business from future cost inflation and support responsible operations. Second, the Uinta assets will provide additional oil-weighted operational and financial optionality, with several opportunities to unlock significant value. Next, we will maintain our strong balance sheet. Upon closing, we expect our pro forma last 12 months leverage ratio to be about 0.8 times, making this essentially a credit-neutral transaction from a leverage standpoint. We have ample liquidity and can use the strength of our capital structure to refinance debt at more attractive interest rates. Following the closing of the combination, CRC shareholders will own 94% of the combined company, and we expect all stakeholders will benefit from greater capital efficiency, increased free cash flow, and sustained long-term value creation. Closing is currently expected to occur during the first quarter of 2026, subject to customary closing conditions, including regulatory clearance and Berry shareholder approval. Lastly, I would be remiss not to mention the significant legislative development from this weekend coming out of Sacramento. Last week, California took meaningful steps to address the state's need for more abundant, reliable, and affordable energy. As you know, CRC was built for California. We have proven our ability to safely operate with high regard to the environment while building a business with lots of optionality. Today's deal further strengthens our position. Recent actions will go a long way to incentivize increased local production, stabilize fuel markets, and advance California's decarbonization and emission reduction goals. Three important bills now await the governor's signature. The first is SB 237. This bill deems the Kern County EIR as sufficient. It removes the risk of further litigation on the adequacy of the EIR and moves to eliminate CEQA-related delays starting in January 2026 and lasting for a decade. The law will encourage local production through permits for up to 2,000 new wells annually in Kern County, furthering the state's goal for in-state crude production to meet at least 25% of refinery feedstock demand. Second, SB 614. This bill lifted the moratorium on CO2 pipelines. These pipelines are instrumental to us as we commercialize and expand our leading carbon management business through CTV. Third, AB 1207. The bill extended the state's cap-and-trade program through 2045, providing additional clarity and important incentives to support the energy transition. Together, these milestones not only strengthen the framework for responsible production in Kern, but also provide a clear path to grow and scale our Carbon TerraVault business. Before we move to Q&A, let me ask Berry CEO, Fernando Araujo, to say a few words from his perspective. Fernando? Thank you, Francisco, and it's a pleasure to be here. This combination marks an exciting new chapter for Berry. It builds on the value our team has created through discipline execution and strong operational results across all areas of our business. By joining with CRC, we're creating a stronger, more durable energy business, one with significant scale and enhanced capital structure and greater technical depth to responsibly, safely, and efficiently grow production, reduce emissions, and support energy security in the state. I'm proud of what we've built at Berry and confident that this combination positions us to unlock even greater long-term value for our shareholders, our employees, our communities, and for California itself. Back to you, Francisco. Thanks, Fernando. This transaction is about building a stronger CRC, larger, more efficient, and positioned for enhanced free cash flow generation. We're excited about the path forward and confident in our ability to deliver the benefits of this combination. We continue to show that CRC is a different kind of energy company. Thank you for joining us today. Operator, please open the line for questions. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. We ask that you please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. The first question today comes from Kalei Akamine with Bank of America. Please go ahead. Hey, good morning, guys. Nice timing. With oil permitting done in the state, I guess the coast was clear to do a deal like this. My first question is on the synergies. So $890 million, obviously, that's a solid number. I knew a time that a 10% discount rate will point to about $850 in value, but you guys are calling it $500 million. That represents 70% of the deal's value. I imagine that the $850 is an EBITDA valuation and the $500 million is a free cash flow discounted valuation. I'm curious what the delta is between the two numbers. Is it mainly taxed, or is there any associated capital to get there? No, Kalei, I think, yeah, it's two different numbers. So the $500 million is a discounted annual run rate of synergies, so $85 million on the midpoint. We're tremendously excited about the synergy potential of this deal. The asset fit is just so compelling. We looked at the Berry portfolio very differently after we acquired Aera. That really changed our view on the fit of the deal. Now, after a year after closing Aera, where we were able to deliver 100% of our synergies ahead of schedule, the confidence that this team can execute those synergies and get all the value accelerated for the shareholders is truly something that really motivated us to do this deal. I think you're talking about two different numbers. I mean, we basically see the synergies effectively paying for the deal over time. Got it. Just a clarification point. Do you need additional capital to get the $500 million of PV synergies? Yeah, largely, the synergies come from corporate staff reductions, from refinancing, from supply chain. So no, I mean, there could be some capital that has to be spent as you think about infrastructure consolidation, but those are small dollars or relative cents. This is a deal that's accretive day one, and we're very achievable synergies to pursue in the very near term. The next question comes from Josh Silverstein with UBS. Please go ahead. Yeah, thanks. Good morning, guys. Based on the legislation passing and now this transaction, how should we think about the volumes and activity levels for the pro forma company? Thanks. Yeah, we just have been having the tremendous, very constructive conversations with the state of California. It's really a truly significant change as we think about our business going forward, as the state is signaling a need for California production and, in particular, Kern County production. The dependence on foreign oil has taken its toll. It's driving prices higher. It's having refineries exiting the state. So to stabilize the fuel markets, the state really wants that local production. We've been dipping. I think we're about 22% of contribution in terms of overall state in-state supply. The government wants us to be at least at 25%. That's collectively between all the operators. It signals not only a need for that production, but a step up in activity going forward. As we look at the kind of the new normal, the kind of what California is looking going forward, we're going to continue to stay very disciplined on capital allocation. We felt the incremental cash flow from the Berry assets, from also all the synergies, puts us in the best position combined to be able to meet that challenge and increase that contribution of local supply. So we're excited to kind of test this new world and await the governor's signature of the bill. Then we'll talk about our 2026 plans as to what the production is going to be. It's an exciting day for California, an exciting day for CRC. Got it. Okay. I guess maybe along the same lines, how would you weigh potential increases in activity versus shareholder returns and maybe if you can give us a little bit of view as to what shareholder return profile may look like, kind of until the deal closes, then maybe afterwards as well? Yeah, we've been in a permit-constrained environment, buying back our shares aggressively. Continue to see a lot of value. The intrinsic value of CRC is phenomenal when you look at all the upcoming catalysts. So we'll continue buying back our shares. So we fully expect to continue that program. What this allows us to do as we think about capital allocation by bringing in incremental cash flow and, again, enhanced with synergies, it allows us to be able to continue to do all of the above as we've been doing. Increase the fixed dividend year on year, buy back shares. Now we also have the ability to invest in the business. So we expect to have a balanced view of the portfolio looking to grow cash flow per share. That's ultimately what our main objective is. We've been doing it, again, in a permit-constrained environment, and we look to do that, and now, a world where California is really looking for that California production, and it's giving us a significant runway to drill our inventory, which is very high quality, so one more tool to be able to enhance shareholder value, but we continue to see at current levels a lot of value in our stock, so expect the buybacks to continue. The next question comes from Betty Jiang with Barclays. Please go ahead. Thank you. Good morning. Just wanted to share the congratulations on the deal as well as the California bills. It's really coming at a time where, Francisco, you guys have a lot more choices today on how to allocate capital. Earlier, you mentioned you're very much focused on per-share growth. I'm just curious how you are thinking about the investment opportunities across the portfolio now between Aera assets, the newly acquired Berry, and then Legacy. Are there just things that we might underappreciate or these assets just being so underinvested for so long that how should we think? What are you looking at when you think about allocating capital across the portfolio now? Yeah, no, if you look at the maps that we put on our PowerPoint, you will not find the. More selling and strategic fit of the portfolio. Just to give you an example, Berry owns a property called The Hill, which is 480 acres, so three-fourths of a section. It's in the middle of the Belridge field. It's not adjacent. It's not close to Belridge. It's inside of Belridge. That produces about 3,500 barrels of oil per day. As it's the tradition in California, every operator builds their own facilities, no centralized facilities. That presents a very compelling opportunity to extract savings and real synergies very near term. When we looked at Era, and you've asked this question before, Betty, the assets are performing extremely well since we bought Era. The declines are shallower. The production has just been even more and more steady. So when you look at kind of the missing acreage and some of the missing parts of Berry, expect that to be just as high quality as the rest of the Aera portfolio. So well, you're right. These assets have been assets that have their. It's incredibly good rock. That's benefit of California production is conventional, low decline, fantastic rock, and with a very strong backdrop with California needing more production and with the know-how of our team to be able to develop these assets. I expect the Berry portfolio to be very competitive, similar to Era and CRC's, right? Now we have the ability to really optimize that portfolio and move capital as we increase potentially some activity into projects that are very, very, very compelling. Excited to have the full force of the inventory as we're getting permits for the first time in more than three years. Excited, really excited to be able to really have all the option value come forward and pick the best projects in the combined portfolio. Great. That's great to see. My follow-up is on the asset. What are you looking to evaluate, and what are the objectives going forward for you to decide on whether or not to keep that asset within the portfolio? Yeah, Betty. So the deal for us is all about California. That's what we focused on, the timing of it, the permitting reform, and the value of being able to buy very de-risked PDP assets that were trading heavily at a discounted PDP value. That's the number one priority. That and the synergies is why we did the deal. An added feature is certainly the Berry Uinta portfolio. This is. We've been a 100% California company since inception. So we'll take a look. We'll explore what the Uinta Basin has to offer. We've been hearing a lot about the Uinta Basin as having a lot of activity, a lot of interest. Certainly, Berry has been doing a great job. They're forceful too. Also, no, it's an added feature. It brings option value, and we look forward to digging in and learning more about the basin. The next question comes from David Deckelbaum with TD Cowen. Please go ahead. Thanks for taking my questions, and congrats on the deal and obviously 237 and 881. Francisco, you just remarked to Betty about how this deal is all about California. Also, just curious how you think about this deal, either complementing or enhancing non-upstream businesses or if you just see all of the value in this deal really squarely coming from the upstream side. Yeah, the tangible value, David, is in upstream. By being able to unlock incremental cash flow, improve the cost structure, enhance the margins, that gives us more ammunition and skill to be able to do more in California. I mean, not only the sentiment shift, but the reality of California is very different today than it's been for years. It might take some people a while to realize the shift in the view, but we were excited. I mean, this will continue our focus on growing cash flow per share. We have a very strong position on the power business. Berry happens to have about 66 megawatts of power generation in the portfolio. So it's an enhancement across that. The more power assets that you have, the more flexibility you have to think about not only self-supply, but how do you participate in an exciting power market in California. Expect elements there. Then there's also Carbon TerraVault benefits of owning more of your production, more of the ability to be able to build infrastructure that connects different fields. The rights-of-way are extremely valuable. The more that we own in that space, now that we have the ability to invest in CO2 pipelines, it will have a positive impact there as well. It covers every aspect of our business. I mean, we did the deal for upstream and for cash flow, but certainly, it positions us for more success of the largest energy company in the state. If I might ask one more question on the permitting side. Now, with this combination, obviously, you're benefiting as well, I guess, from just increased staffing and resources that Berry would have had available to them in California for permitting. With 237, if we assume that Newsom signs off, we move into next year, I guess, how do you think about this deal complementing or improving the pace of permit issuance? We know that you can permit up to 2,000 new wells per year in Kern County for the whole industry. Realistically speaking, how quickly do you think you could start achieving these permits and start being able to deploy incremental capital? No, absolutely. The county, so effectively, the Kern County is going to have the delegation to be able to issue permits. Talking to the county, they're ready to go. They've been looking to get the Kern County reestablished for some time. Very supportive of our industry. They've been staffing up on the permit front. Like I said, 2,000 wells per year for a decade gives us full access to our inventory. We expect to be a very large participant in the permitting process. So yeah, we have our own staff ready to go. We have permits ready to be filed. Some of them already have been filed. We will wait for the governor to sign the bill effective January 1st. So expect a quarter, maybe two quarters max, to be able to get all the incremental activity going. Everybody's getting ready, and we'll have time between now and January 1st to make sure all things are moving in the right direction. So we're ready to go and excited about the opportunity. It's really been a long time coming, and yeah, we can't wait. The next question comes from Nate Pendleton with Texas Capital. Please go ahead. Good morning, and congrats to both of the teams on the transaction. Fernando, Berry had been able to keep California production roughly flat despite the permitting headwinds in the state. Can you talk about how that low-decline production base complements your assets and potential maintenance capital going forward? Yeah. No, thanks, Nate. Yeah, maybe not something that our investors have appreciated, but Berry has been four years keeping production flat in kind of the same environment we've had. About $70 million annually to keep production flat. So a great portfolio. Again, we know the assets extremely well, really good fit, and very similar, very similar in every respect. Like I said, even inside of our field boundaries in some cases. I would expect the corporate decline to be the same as we've been trending prior to the deal. So 10%-15%, call it 12.5% midpoint without capital. As we get to deploy capital now with the full extent of the portfolio, expect to see a very capital-efficient program of conventional assets. So yeah, the Berry portfolio fits us very, very well. Expect it's hard to find assets of the quality of our combined portfolios. Low decline in a shale world with shrinking inventory, that's never been the issue in California. It's an inventory-rich environment with great rock, just without the need to really stimulate. It's more about maintaining pressure. It's more about recovery factors. We know these assets well. I think when we picked up Aera, we brought a lot of engineering expertise that knows how to run the steamflood and the diatomite. That's what Berry owns. I look forward for the teams to build a super team in the state to get access to all that resource. That's great, and as my follow-up, perhaps for Francisco or Fernando if he's on Q&A, it looks like that first operated Uinta pad delivered really encouraging early results from what we see in the PowerPoint. Is there anything you can share on how those wells are trending versus expectations and how you see those going forward? Yeah, thank you, Nate. That's a very good question, and just for the benefit of the larger audience, let me provide just a quick overview of Berry and the Uinta Basin, and then I'll address the specific pad that you're asking about, Nate, but Berry holds 100,000 acres in the basin. We have high working interest. It's mostly held by production, and obviously, this gives us operational flexibility in terms of the pace of development. The basin is very rich in oil and gas, and there's significant drilling activity currently in the basin, and Berry's focus shifted from legacy vertical wells to horizontal wells in 2024, initially targeting the Uteland Butte formation, which is one of five different reservoirs that we produce from in the basin, and actually, the industry has targeted all five reservoirs for horizontal well development as well with success. This year, going back to your question, Nate, this year we drilled our first operated pad, four wells, three-mile laterals, targeting this prolific Uinta Butte reservoir. The wells were put on production in August, and production from the pad is increasing every day as the wells continue to clean up. As mentioned, the pad is currently making about 3,800 barrels of oil equivalent, 93% oil, about 7% gas. That's gross production. Remember that our net production currently, or in the first half of the year in Utah, was about 40 or was about 4,200 barrels of oil equivalent per day. We expect to have peak production from these wells in late September. These results, Nate, are really consistent or even slightly better than our offset wells, our offset non-operated wells.So we're really encouraged with initial results from these wells and with the potential that we have in the basin with horizontal well development. The next question comes from Michael Furrow with Pickering Energy Partners. Please go ahead. Hi, good morning. Congrats on the deal. Obviously, it seems like there's a lot of benefits here. It seems like a logical, natural combination. The state seems to be taking a more supportive stance towards the industry. Are there any regulatory approvals that need to be acquired before this transaction can cross the finish line? Thanks. Thanks, Michael. So we expect to follow kind of the standard review process on an HSR basis. Given the size of the transaction, nature of the assets, and the fact that this is an upstream combination, we don't anticipate any federal regulatory issues. Similarly, we don't expect any state regulatory approval needed. That's great detail. Then I just have a follow-up on synergies. So that's been one of the items that's really stood out to us over the last year, is just the positive execution on the Era synergies that the company outlined. So is there anything that the company has learned through the Era integration that made it easier to underwrite the synergies in this deal? Maybe as a quick follow-up to that, is there any sort of breakdown you could provide in the synergy target between operating costs, corporate costs, and tax? Yeah, I mean, I think the learnings really come from tremendous execution from the team. There's certain types of synergies, especially personnel-related synergies, that a lot of companies will advertise when doing deals. What we really liked about Aera, and we're going to do again with Berry, is reimagine the California oil field and make sure that when you're looking at water, when you're looking at natural gas and power, you're able to move all of those into the best place to enhance margins. That's what we've been able to do very successfully with Aera. We see some very tangible opportunities to do that again here. We also are part of Berry's C&J. C&J is a great well services company has a significant participation in the market in California. As we look at some of the cost and cost inflation challenges, having an integrated solution in-house is something that we look forward to thinking about. There's a lot of compelling aspects to this deal. In terms of a breakdown, I would say it might track something similar to Aera in terms of proportions. We look to Berry's been on their term loan that we'll be able to refinance. Within the market backdrop, it's favorable to do so. There'll be an element of improved interest expense. There will be an element of corporate savings and operating savings, and also some enhancements on the supply chain. Proportionally weighted similar to Aera, and we're ready to get started. The last question today comes from Noel Parks with Tuohy Brothers. Please go ahead. Good morning. I was wondering, just as far as the deal terms, is there a lockup condition involved or collars on the deal? No, it's a straightforward deal. No lockups or collars. Berry's a publicly traded company. You can see some of their ownership levels and who owns it. So you would see a lot of similarities in people that invest in Berry with CRC, but nothing, I would say, out of the norm in terms of the deal. Pretty straightforward all-stock deal. Great. You mentioned that the rights of way that the Berry assets would offer could be particularly valuable for Carbon TerraVault. So I was just curious if they had any well, I guess, since there is a good bit of overlap, does this move the needle on pore space at all? Do they have any estimates? I'm just wondering, does it complicate or require you revising any of your Class VI permit applications to the EPA? Yeah, I will not look at the Berry assets additive to pore space at this point. Our team will certainly look at it. So no changes on Class VI. It allows you to, I mean, so this weekend, we received the good news that the pipeline moratorium has been lifted for CO2 injection. So if you think about a world where we can connect brownfield emitters to our storage, every mile of right of way is valuable. Every straight line that we can either recondition or build new pipe is extremely valuable. So land ownership is one of the strengths of CRC in adding more acres to the combination to the combined company as we look to build that infrastructure of the future to decarbonize the state. That all has infinite value. So excited to, again, add more land and more acreage to our portfolio. I would say it's on the right of ways and CO2 pipelines where we see the connectivity with CTV. This concludes our question and answer session. I would like to turn the conference back over for any closing remarks. Thank you for your time today and your interest in CRC. We look forward to keeping you updated as we move towards closing. Thank you. Bye-bye. The conference has now concluded. Thank you for attending today's presentation. You may now.

Speaker 1: Good day, and welcome to the California Resources Corporation announces all-stock combination with Berry Corporation. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Joanna Park, Vice President of Investor Relations and Treasurer. Please go ahead. Good day, and welcome to the California Resources Corporation announces all-stock combination with Berry Corporation. good day and welcome to the california resources corporation announces all-stock combination with berry corporation All participants will be in a listen-only mode. all participants will be in a listen-only mode Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. should you need assistance please signal a conference specialist by pressing the star key followed by zero After today's presentation, there will be an opportunity to ask questions. after today's presentation there will be an opportunity to ask questions To ask a question, you may press star, then one on a touch-tone phone. to ask a question you may press star then one on a touch-tone phone To withdraw your question, please press star, then two. to withdraw your question please press star then two Please note this event is being recorded. please note this event is being recorded I would now like to turn the conference over to Joanna Park, Vice President of Investor Relations and Treasurer. i would now like to turn the conference over to joanna park vice president of investor relations and treasurer Please go ahead. please go ahead

Speaker 11: Good day, everyone. Welcome to our call to discuss California Resources Corporation's combination with Berry Corporation. Leading today's call is our President and CEO, Francisco Leon. In addition, we are pleased to be joined by Berry CEO, Fernando Araujo, who will also make a few remarks. Members of CRC's executive team are also here today and will join us for Q&A. Good day, everyone. good day everyone Welcome to our call to discuss California Resources Corporation's combination with Berry Corporation. welcome to our call to discuss california resources corporation's combination with berry corporation Leading today's call is our President and CEO, Francisco Leon. leading today's call is our president and ceo francisco leon In addition, we are pleased to be joined by Berry CEO, Fernando Araujo, who will also make a few remarks. in addition we are pleased to be joined by berry ceo fernando araujo who will also make a few remarks Members of CRC's executive team are also here today and will join us for Q&A. members of crc's executive team are also here today and will join us for q&a Supplemental slides are posted in the Investor Relations section of our website, along with reconciliations of non-GAAP financial measures to GAAP financial measures. Today's discussion will include forward-looking remarks based on current expectations. Actual results may differ due to factors described in today's press release and in our SEC filings. During Q&A, please limit your time to one question and a follow-up, as this will allow us to get to more of your questions. With that, I'll turn the call over to Francisco. Supplemental slides are posted in the Investor Relations section of our website, along with reconciliations of non-GAAP financial measures to GAAP financial measures. supplemental slides are posted in the investor relations section of our website along with reconciliations of non-gaap financial measures to gaap financial measures Today's discussion will include forward-looking remarks based on current expectations. today's discussion will include forward-looking remarks based on current expectations Actual results may differ due to factors described in today's press release and in our SEC filings. actual results may differ due to factors described in today's press release and in our sec filings During Q&A, please limit your time to one question and a follow-up, as this will allow us to get to more of your questions. during q&a please limit your time to one question and a follow-up as this will allow us to get to more of your questions With that, I'll turn the call over to Francisco. with that i'll turn the call over to francisco

Speaker 10: Good morning, and thank you for joining us. Today marks another milestone in CRC's growth story: an accretive all-stock combination with Berry. This transaction enhances our scale, creates significant operating and cost synergies, and strengthens our ability to deliver affordable, reliable, and responsibly produced energy for Californians, all while maintaining a strong balance sheet and ample liquidity. Let me cover the key highlights. Good morning, and thank you for joining us. good morning and thank you for joining us Today marks another milestone in CRC's growth story: an accretive all-stock combination with Berry. today marks another milestone in crc's growth story an accretive all-stock combination with berry This transaction enhances our scale, creates significant operating and cost synergies, and strengthens our ability to deliver affordable, reliable, and responsibly produced energy for Californians, all while maintaining a strong balance sheet and ample liquidity. this transaction enhances our scale creates significant operating and cost synergies and strengthens our ability to deliver affordable reliable and responsibly produced energy for californians all while maintaining a strong balance sheet and ample liquidity Let me cover the key highlights. let me cover the key highlights First, the complementary California asset fit is compelling and will ultimately benefit a state that needs more energy. This bolt-on transaction aligns perfectly with CRC's core footprint. Berry will add approximately 20,000 barrels of oil per day of California-based, Brent-linked conventional production on about 20,000 mostly adjacent net acres. The added scale will make CRC more durable and provides new flexibility in how we elect to allocate capital. First, the complementary California asset fit is compelling and will ultimately benefit a state that needs more energy. first the complementary california asset fit is compelling and will ultimately benefit a state that needs more energy This bolt-on transaction aligns perfectly with CRC's core footprint. this bolt-on transaction aligns perfectly with crc's core footprint Berry will add approximately 20,000 barrels of oil per day of California-based, Brent-linked conventional production on about 20,000 mostly adjacent net acres. berry will add approximately 20,000 barrels of oil per day of california-based brent-linked conventional production on about 20,000 mostly adjacent net acres The added scale will make CRC more durable and provides new flexibility in how we elect to allocate capital. the added scale will make crc more durable and provides new flexibility in how we elect to allocate capital With more than 75% of California's oil consumption sourced from abroad, the need for locally produced, responsibly developed energy has never been clearer. California possesses vast resources and world-class geologic formation, and our company was built to responsibly unlock that potential. We have shown that assets are better in our hands. Recent legislative actions are very encouraging and will help offset the state's reliance on foreign oil by incentivizing local production, making the timing of today's California-focused combination all the more significant. Next, the deal was priced right. The transaction is valued at approximately 2.9 times 2025 consensus EBITDAX and about $30,000 per flowing barrel. Importantly, the transaction delivers accretion of more than 10% to second half 2025 operating cash flow and free cash flow, even before incorporating anticipated synergies. With more than 75% of California's oil consumption sourced from abroad, the need for locally produced, responsibly developed energy has never been clearer. with more than 75% of california's oil consumption sourced from abroad the need for locally produced responsibly developed energy has never been clearer California possesses vast resources and world-class geologic formation, and our company was built to responsibly unlock that potential. california possesses vast resources and world-class geologic formation and our company was built to responsibly unlock that potential We have shown that assets are better in our hands. we have shown that assets are better in our hands Recent legislative actions are very encouraging and will help offset the state's reliance on foreign oil by incentivizing local production, making the timing of today's California-focused combination all the more significant. recent legislative actions are very encouraging and will help offset the state's reliance on foreign oil by incentivizing local production making the timing of today's california-focused combination all the more significant Next, the deal was priced right. next the deal was priced right The transaction is valued at approximately 2.9 times 2025 consensus EBITDAX and about $30,000 per flowing barrel. the transaction is valued at approximately 2.9 times 2025 consensus ebitdax and about $30,000 per flowing barrel Importantly, the transaction delivers accretion of more than 10% to second half 2025 operating cash flow and free cash flow, even before incorporating anticipated synergies. importantly the transaction delivers accretion of more than 10% to second half 2025 operating cash flow and free cash flow even before incorporating anticipated synergies Third, we have a strong track record of delivering synergies, and in this transaction, we're targeting annual synergies of $80-$90 million within 12 months. This represents approximately 12% of transaction value. In our view, these significant synergies can only be realized because of the exceptional fit of these two portfolios. We expect synergies to come primarily from corporate synergies, lower interest costs from debt refinancing, operating improvements, and supply chain efficiencies. Third, we have a strong track record of delivering synergies, and in this transaction, we're targeting annual synergies of $80-$90 million within 12 months. third we have a strong track record of delivering synergies and in this transaction we're targeting annual synergies of $80-$90 million within 12 months This represents approximately 12% of transaction value. this represents approximately 12% of transaction value In our view, these significant synergies can only be realized because of the exceptional fit of these two portfolios. in our view these significant synergies can only be realized because of the exceptional fit of these two portfolios We expect synergies to come primarily from corporate synergies, lower interest costs from debt refinancing, operating improvements, and supply chain efficiencies. we expect synergies to come primarily from corporate synergies lower interest costs from debt refinancing operating improvements and supply chain efficiencies Looking back at the Aera merger, we achieved our targeted synergies ahead of schedule, demonstrating a strong integration capabilities as a premier California operator. We intend to apply the same discipline approach when we integrate Berry. Additionally, Berry will bring two exciting business units with its wholly owned subsidiary, C&J Well Services, and a large contiguous position in the rapidly developing Uinta Basin. Looking back at the Aera merger, we achieved our targeted synergies ahead of schedule, demonstrating a strong integration capabilities as a premier California operator. looking back at the aera merger we achieved our targeted synergies ahead of schedule demonstrating a strong integration capabilities as a premier california operator We intend to apply the same discipline approach when we integrate Berry. we intend to apply the same discipline approach when we integrate berry Additionally, Berry will bring two exciting business units with its wholly owned subsidiary, C&J Well Services, and a large contiguous position in the rapidly developing Uinta Basin. additionally berry will bring two exciting business units with its wholly owned subsidiary c&j well services and a large contiguous position in the rapidly developing uinta basin First, C&J Well Services will help to insulate the business from future cost inflation and support responsible operations. Second, the Uinta assets will provide additional oil-weighted operational and financial optionality, with several opportunities to unlock significant value. Next, we will maintain our strong balance sheet. Upon closing, we expect our pro forma last 12 months leverage ratio to be about 0.8 times, making this essentially a credit-neutral transaction from a leverage standpoint. First, C&J Well Services will help to insulate the business from future cost inflation and support responsible operations. first c&j well services will help to insulate the business from future cost inflation and support responsible operations S econd, the Uinta assets will provide additional oil-weighted operational and financial optionality, with several opportunities to unlock significant value. s econd the uinta assets will provide additional oil-weighted operational and financial optionality with several opportunities to unlock significant value Next, we will maintain our strong balance sheet. next we will maintain our strong balance sheet Upon closing, we expect our pro forma last 12 months leverage ratio to be about 0.8 times , making this essentially a credit-neutral transaction from a leverage standpoint. upon closing we expect our pro forma last 12 months leverage ratio to be about 0.8 times making this essentially a credit-neutral transaction from a leverage standpoint We have ample liquidity and can use the strength of our capital structure to refinance debt at more attractive interest rates. Following the closing of the combination, CRC shareholders will own 94% of the combined company, and we expect all stakeholders will benefit from greater capital efficiency, increased free cash flow, and sustained long-term value creation. We have ample liquidity and can use the strength of our capital structure to refinance debt at more attractive interest rates. we have ample liquidity and can use the strength of our capital structure to refinance debt at more attractive interest rates Following the closing of the combination, CRC shareholders will own 94% of the combined company, and we expect all stakeholders will benefit from greater capital efficiency, increased free cash flow, and sustained long-term value creation. following the closing of the combination crc shareholders will own 94% of the combined company and we expect all stakeholders will benefit from greater capital efficiency increased free cash flow and sustained long-term value creation Closing is currently expected to occur during the first quarter of 2026, subject to customary closing conditions, including regulatory clearance and Berry shareholder approval. Lastly, I would be remiss not to mention the significant legislative development from this weekend coming out of Sacramento. Last week, California took meaningful steps to address the state's need for more abundant, reliable, and affordable energy. As you know, CRC was built for California. Closing is currently expected to occur during the first quarter of 2026, subject to customary closing conditions, including regulatory clearance and Berry shareholder approval. closing is currently expected to occur during the first quarter of 2026 subject to customary closing conditions including regulatory clearance and berry shareholder approval L astly, I would be remiss not to mention the significant legislative development from this weekend coming out of Sacramento. l astly i would be remiss not to mention the significant legislative development from this weekend coming out of sacramento Last week, California took meaningful steps to address the state's need for more abundant, reliable, and affordable energy. last week california took meaningful steps to address the state's need for more abundant reliable and affordable energy As you know, CRC was built for California. as you know crc was built for california We have proven our ability to safely operate with high regard to the environment while building a business with lots of optionality. Today's deal further strengthens our position. Recent actions will go a long way to incentivize increased local production, stabilize fuel markets, and advance California's decarbonization and emission reduction goals. Three important bills now await the governor's signature. The first is SB 237. This bill deems the Kern County EIR as sufficient. We have proven our ability to safely operate with high regard to the environment while building a business with lots of optionality. we have proven our ability to safely operate with high regard to the environment while building a business with lots of optionality Today's deal further strengthens our position. today's deal further strengthens our position Recent actions will go a long way to incentivize increased local production, stabilize fuel markets, and advance California's decarbonization and emission reduction goals. recent actions will go a long way to incentivize increased local production stabilize fuel markets and advance california's decarbonization and emission reduction goals Three important bills now await the governor's signature. three important bills now await the governor's signature The first is SB 237. the first is sb 237 This bill deems the Kern County EIR as sufficient. this bill deems the kern county eir as sufficient It removes the risk of further litigation on the adequacy of the EIR and moves to eliminate CEQA-related delays starting in January 2026 and lasting for a decade. The law will encourage local production through permits for up to 2,000 new wells annually in Kern County, furthering the state's goal for in-state crude production to meet at least 25% of refinery feedstock demand. Second, SB 614. This bill lifted the moratorium on CO2 pipelines. It removes the risk of further litigation on the adequacy of the EIR and moves to eliminate CEQA-related delays starting in January 2026 and lasting for a decade. it removes the risk of further litigation on the adequacy of the eir and moves to eliminate ceqa-related delays starting in january 2026 and lasting for a decade The law will encourage local production through permits for up to 2,000 new wells annually in Kern County, furthering the state's goal for in-state crude production to meet at least 25% of refinery feedstock demand. the law will encourage local production through permits for up to 2,000 new wells annually in kern county furthering the state's goal for in-state crude production to meet at least 25% of refinery feedstock demand Second, SB 614. second sb 614 This bill lifted the moratorium on CO2 pipelines. this bill lifted the moratorium on co2 pipelines These pipelines are instrumental to us as we commercialize and expand our leading carbon management business through CTV. Third, AB 1207. The bill extended the state's cap-and-trade program through 2045, providing additional clarity and important incentives to support the energy transition. Together, these milestones not only strengthen the framework for responsible production in Kern, but also provide a clear path to grow and scale our Carbon TerraVault business. Before we move to Q&A, let me ask Berry CEO, Fernando Araujo, to say a few words from his perspective. Fernando? These pipelines are instrumental to us as we commercialize and expand our leading carbon management business through CTV. these pipelines are instrumental to us as we commercialize and expand our leading carbon management business through ctv T hird, AB 1207. t hird ab 1207 The bill extended the state's cap-and-trade program through 2045, providing additional clarity and important incentives to support the energy transition. the bill extended the state's cap-and-trade program through 2045 providing additional clarity and important incentives to support the energy transition Together, these milestones not only strengthen the framework for responsible production in Kern, but also provide a clear path to grow and scale our Carbon TerraVault business. together these milestones not only strengthen the framework for responsible production in kern but also provide a clear path to grow and scale our carbon terravault business Before we move to Q&A, let me ask Berry CEO, Fernando Araujo, to say a few words from his perspective. before we move to q&a let me ask berry ceo fernando araujo to say a few words from his perspective Fernando? fernando

Speaker 7: Thank you, Francisco, and it's a pleasure to be here. This combination marks an exciting new chapter for Berry. It builds on the value our team has created through discipline execution and strong operational results across all areas of our business. By joining with CRC, we're creating a stronger, more durable energy business, one with significant scale and enhanced capital structure and greater technical depth to responsibly, safely, and efficiently grow production, reduce emissions, and support energy security in the state. I'm proud of what we've built at Berry and confident that this combination positions us to unlock even greater long-term value for our shareholders, our employees, our communities, and for California itself. Back to you, Francisco. Thank you, Francisco, and it's a pleasure to be here. thank you francisco and it's a pleasure to be here This combination marks an exciting new chapter for Berry. this combination marks an exciting new chapter for berry It builds on the value our team has created through discipline execution and strong operational results across all areas of our business. it builds on the value our team has created through discipline execution and strong operational results across all areas of our business By joining with CRC, we're creating a stronger, more durable energy business, one with significant scale and enhanced capital structure and greater technical depth to responsibly, safely, and efficiently grow production, reduce emissions, and support energy security in the state. by joining with crc we're creating a stronger more durable energy business one with significant scale and enhanced capital structure and greater technical depth to responsibly safely and efficiently grow production reduce emissions and support energy security in the state I'm proud of what we've built at Berry and confident that this combination positions us to unlock even greater long-term value for our shareholders, our employees, our communities, and for California itself. i'm proud of what we've built at berry and confident that this combination positions us to unlock even greater long-term value for our shareholders our employees our communities and for california itself Back to you, Francisco. back to you francisco

Speaker 10: Thanks, Fernando. This transaction is about building a stronger CRC, larger, more efficient, and positioned for enhanced free cash flow generation. We're excited about the path forward and confident in our ability to deliver the benefits of this combination. We continue to show that CRC is a different kind of energy company. Thank you for joining us today. Operator, please open the line for questions. Thanks, Fernando. thanks fernando This transaction is about building a stronger CRC, larger, more efficient, and positioned for enhanced free cash flow generation. this transaction is about building a stronger crc larger more efficient and positioned for enhanced free cash flow generation We're excited about the path forward and confident in our ability to deliver the benefits of this combination. we're excited about the path forward and confident in our ability to deliver the benefits of this combination We continue to show that CRC is a different kind of energy company. we continue to show that crc is a different kind of energy company Thank you for joining us today. thank you for joining us today Operator, please open the line for questions. operator please open the line for questions

Speaker 1: We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. We ask that you please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. The first question today comes from Kalei Akamine with Bank of America. Please go ahead. We will now begin the question and answer session. we will now begin the question and answer session To ask a question, you may press star, then one on your touch-tone phone. to ask a question you may press star then one on your touch-tone phone If you are using a speakerphone, please pick up your handset before pressing the keys. if you are using a speakerphone please pick up your handset before pressing the keys If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. if at any time your question has been addressed and you would like to withdraw your question please press star then two We ask that you please limit yourself to one question and one follow-up. we ask that you please limit yourself to one question and one follow-up At this time, we will pause momentarily to assemble our roster. at this time we will pause momentarily to assemble our roster The first question today comes from Kalei Akamine with Bank of America. the first question today comes from kalei akamine with bank of america Please go ahead. please go ahead

Speaker 4: Hey, good morning, guys. Nice timing. With oil permitting done in the state, I guess the coast was clear to do a deal like this. My first question is on the synergies. So $890 million, obviously, that's a solid number. I knew a time that a 10% discount rate will point to about $850 in value, but you guys are calling it $500 million. That represents 70% of the deal's value. I imagine that the $850 is an EBITDA valuation and the $500 million is a free cash flow discounted valuation. I'm curious what the delta is between the two numbers. Is it mainly taxed, or is there any associated capital to get there? Hey, good morning, guys. hey good morning guys Nice timing. nice timing With oil permitting done in the state, I guess the coast was clear to do a deal like this. with oil permitting done in the state i guess the coast was clear to do a deal like this My first question is on the synergies. my first question is on the synergies So $890 million, obviously, that's a solid number. so $890 million obviously that's a solid number I knew a time that a 10% discount rate will point to about $850 in value, but you guys are calling it $500 million. i knew a time that a 10% discount rate will point to about $850 in value but you guys are calling it $500 million That represents 70% of the deal's value. I imagine that the $850 is an EBITDA valuation and the $500 million is a free cash flow discounted valuation. that represents 70% of the deal's value i imagine that the $850 is an ebitda valuation and the $500 million is a free cash flow discounted valuation I'm curious what the delta is between the two numbers. i'm curious what the delta is between the two numbers Is it mainly taxed, or is there any associated capital to get there? is it mainly taxed or is there any associated capital to get there

Speaker 10: No, Kalei, I think, yeah, it's two different numbers. So the $500 million is a discounted annual run rate of synergies, so $85 million on the midpoint. We're tremendously excited about the synergy potential of this deal. The asset fit is just so compelling. We looked at the Berry portfolio very differently after we acquired Aera. That really changed our view on the fit of the deal. No, Kalei, I think, yeah, it's two different numbers. no kalei i think yeah it's two different numbers So the $500 million is a discounted annual run rate of synergies, so $85 million on the midpoint. so the $500 million is a discounted annual run rate of synergies so $85 million on the midpoint We're tremendously excited about the synergy potential of this deal. we're tremendously excited about the synergy potential of this deal The asset fit is just so compelling. the asset fit is just so compelling We looked at the Berry portfolio very differently after we acquired Aera. we looked at the berry portfolio very differently after we acquired aera That really changed our view on the fit of the deal. that really changed our view on the fit of the deal Now, after a year after closing Aera, where we were able to deliver 100% of our synergies ahead of schedule, the confidence that this team can execute those synergies and get all the value accelerated for the shareholders is truly something that really motivated us to do this deal. I think you're talking about two different numbers. I mean, we basically see the synergies effectively paying for the deal over time. Now, after a year after closing Aera, where we were able to deliver 100% of our synergies ahead of schedule, the confidence that this team can execute those synergies and get all the value accelerated for the shareholders is truly something that really motivated us to do this deal. I think you're talking about two different numbers. now after a year after closing aera where we were able to deliver 100% of our synergies ahead of schedule the confidence that this team can execute those synergies and get all the value accelerated for the shareholders is truly something that really motivated us to do this deal i think you're talking about two different numbers I mean, we basically see the synergies effectively paying for the deal over time. i mean we basically see the synergies effectively paying for the deal over time

Speaker 4: Got it. Just a clarification point. Do you need additional capital to get the $500 million of PV synergies? Got it. got it Just a clarification point. just a clarification point Do you need additional capital to get the $500 million of PV synergies? do you need additional capital to get the $500 million of pv synergies

Speaker 10: Yeah, largely, the synergies come from corporate staff reductions, from refinancing, from supply chain. So no, I mean, there could be some capital that has to be spent as you think about infrastructure consolidation, but those are small dollars or relative cents. This is a deal that's accretive day one, and we're very achievable synergies to pursue in the very near term. Yeah, largely, the synergies come from corporate staff reductions, from refinancing, from supply chain. yeah largely the synergies come from corporate staff reductions from refinancing from supply chain So no, I mean, there could be some capital that has to be spent as you think about infrastructure consolidation, but those are small dollars or relative cents. so no i mean there could be some capital that has to be spent as you think about infrastructure consolidation but those are small dollars or relative cents This is a deal that's accretive day one, and we're very achievable synergies to pursue in the very near term. this is a deal that's accretive day one and we're very achievable synergies to pursue in the very near term

Speaker 1: The next question comes from Josh Silverstein with UBS. Please go ahead. The next question comes from Josh Silverstein with UBS. the next question comes from josh silverstein with ubs Please go ahead. please go ahead

Speaker 5: Yeah, thanks. Good morning, guys. Based on the legislation passing and now this transaction, how should we think about the volumes and activity levels for the pro forma company? Thanks. Yeah, thanks. yeah thanks Good morning, guys. good morning guys Based on the legislation passing and now this transaction, how should we think about the volumes and activity levels for the pro forma company? based on the legislation passing and now this transaction how should we think about the volumes and activity levels for the pro forma company Thanks. thanks

Speaker 10: Yeah, we just have been having the tremendous, very constructive conversations with the state of California. It's really a truly significant change as we think about our business going forward, as the state is signaling a need for California production and, in particular, Kern County production. The dependence on foreign oil has taken its toll. It's driving prices higher. Yeah, we just have been having the tremendous, very constructive conversations with the state of California. yeah we just have been having the tremendous very constructive conversations with the state of california It's really a truly significant change as we think about our business going forward, as the state is signaling a need for California production and, in particular, Kern County production. it's really a truly significant change as we think about our business going forward as the state is signaling a need for california production and in particular kern county production The dependence on foreign oil has taken its toll. the dependence on foreign oil has taken its toll It's driving prices higher. it's driving prices higher It's having refineries exiting the state. So to stabilize the fuel markets, the state really wants that local production. We've been dipping. I think we're about 22% of contribution in terms of overall state in-state supply. The government wants us to be at least at 25%. That's collectively between all the operators. It signals not only a need for that production, but a step up in activity going forward. It's having refineries exiting the state. it's having refineries exiting the state So to stabilize the fuel markets, the state really wants that local production. so to stabilize the fuel markets the state really wants that local production We've been dipping. we've been dipping I think we're about 22% of contribution in terms of overall state in-state supply. i think we're about 22% of contribution in terms of overall state in-state supply T he government wants us to be at least at 25%. t he government wants us to be at least at 25% That's collectively between all the operators. that's collectively between all the operators I t signals not only a need for that production, but a step up in activity going forward. i t signals not only a need for that production but a step up in activity going forward As we look at the kind of the new normal, the kind of what California is looking going forward, we're going to continue to stay very disciplined on capital allocation. We felt the incremental cash flow from the Berry assets, from also all the synergies, puts us in the best position combined to be able to meet that challenge and increase that contribution of local supply. So we're excited to kind of test this new world and await the governor's signature of the bill. Then we'll talk about our 2026 plans as to what the production is going to be. It's an exciting day for California, an exciting day for CRC. As we look at the kind of the new normal, the kind of what California is looking going forward, we're going to continue to stay very disciplined on capital allocation. as we look at the kind of the new normal the kind of what california is looking going forward we're going to continue to stay very disciplined on capital allocation W e felt the incremental cash flow from the Berry assets, from also all the synergies, puts us in the best position combined to be able to meet that challenge and increase that contribution of local supply. w e felt the incremental cash flow from the berry assets from also all the synergies puts us in the best position combined to be able to meet that challenge and increase that contribution of local supply So we're excited to kind of test this new world and await the governor's signature of the bill. so we're excited to kind of test this new world and await the governor's signature of the bill T hen we'll talk about our 2026 plans as to what the production is going to be. t hen we'll talk about our 2026 plans as to what the production is going to be I t's an exciting day for California, an exciting day for CRC. i t's an exciting day for california an exciting day for crc

Speaker 5: Got it. Okay. I guess maybe along the same lines, how would you weigh potential increases in activity versus shareholder returns and maybe if you can give us a little bit of view as to what shareholder return profile may look like, kind of until the deal closes, then maybe afterwards as well? Got it. got it Okay. okay I guess maybe along the same lines, how would you weigh potential increases in activity versus shareholder returns and maybe if you can give us a little bit of view as to what shareholder return profile may look like, kind of until the deal closes, then maybe afterwards as well? i guess maybe along the same lines how would you weigh potential increases in activity versus shareholder returns and maybe if you can give us a little bit of view as to what shareholder return profile may look like kind of until the deal closes then maybe afterwards as well

Speaker 10: Yeah, we've been in a permit-constrained environment, buying back our shares aggressively. Continue to see a lot of value. The intrinsic value of CRC is phenomenal when you look at all the upcoming catalysts. So we'll continue buying back our shares. So we fully expect to continue that program. What this allows us to do as we think about capital allocation by bringing in incremental cash flow and, again, enhanced with synergies, it allows us to be able to continue to do all of the above as we've been doing. Increase the fixed dividend year on year, buy back shares. Now we also have the ability to invest in the business. So we expect to have a balanced view of the portfolio looking to grow cash flow per share. That's ultimately what our main objective is. Yeah, we've been in a permit-constrained environment, buying back our shares aggressively. yeah we've been in a permit-constrained environment buying back our shares aggressively Continue to see a lot of value. continue to see a lot of value T he intrinsic value of CRC is phenomenal when you look at all the upcoming catalysts. t he intrinsic value of crc is phenomenal when you look at all the upcoming catalysts So we'll continue buying back our shares. so we'll continue buying back our shares So we fully expect to continue that program. so we fully expect to continue that program W hat this allows us to do as we think about capital allocation by bringing in incremental cash flow and, again, enhanced with synergies, it allows us to be able to continue to do all of the above as we've been doing. w hat this allows us to do as we think about capital allocation by bringing in incremental cash flow and again enhanced with synergies it allows us to be able to continue to do all of the above as we've been doing Increase the fixed dividend year on year, buy back shares. increase the fixed dividend year on year buy back shares N ow we also have the ability to invest in the business. n ow we also have the ability to invest in the business So we expect to have a balanced view of the portfolio looking to grow cash flow per share. so we expect to have a balanced view of the portfolio looking to grow cash flow per share That's ultimately what our main objective is. that's ultimately what our main objective is We've been doing it, again, in a permit-constrained environment, and we look to do that, and now, a world where California is really looking for that California production, and it's giving us a significant runway to drill our inventory, which is very high quality, so one more tool to be able to enhance shareholder value, but we continue to see at current levels a lot of value in our stock, so expect the buybacks to continue. We've been doing it, again, in a permit-constrained environment, and we look to do that, and now, a world where California is really looking for that California production, and it's giving us a significant runway to drill our inventory, which is very high quality, so one more tool to be able to enhance shareholder value, but we continue to see at current levels a lot of value in our stock, so expect the buybacks to continue. we've been doing it again in a permit-constrained environment and we look to do that and now a world where california is really looking for that california production and it's giving us a significant runway to drill our inventory which is very high quality so one more tool to be able to enhance shareholder value but we continue to see at current levels a lot of value in our stock so expect the buybacks to continue

Speaker 1: The next question comes from Betty Jiang with Barclays. Please go ahead. The next question comes from Betty Jiang with Barclays. the next question comes from betty jiang with barclays Please go ahead. please go ahead

Speaker 6: Thank you. Good morning. Just wanted to share the congratulations on the deal as well as the California bills. It's really coming at a time where, Francisco, you guys have a lot more choices today on how to allocate capital. Earlier, you mentioned you're very much focused on per-share growth. I'm just curious how you are thinking about the investment opportunities across the portfolio now between Aera assets, the newly acquired Berry, and then Legacy. Are there just things that we might underappreciate or these assets just being so underinvested for so long that how should we think? What are you looking at when you think about allocating capital across the portfolio now? Thank you. thank you Good morning. good morning Just wanted to share the congratulations on the deal as well as the California bills. just wanted to share the congratulations on the deal as well as the california bills It's really coming at a time where, Francisco, you guys have a lot more choices today on how to allocate capital. it's really coming at a time where francisco you guys have a lot more choices today on how to allocate capital E arlier, you mentioned you're very much focused on per-share growth. I'm just curious how you are thinking about the investment opportunities across the portfolio now between Aera assets, the newly acquired Berry, and then Legacy. e arlier you mentioned you're very much focused on per-share growth i'm just curious how you are thinking about the investment opportunities across the portfolio now between aera assets the newly acquired berry and then legacy Are there just things that we might underappreciate or these assets just being so underinvested for so long that how should we think? are there just things that we might underappreciate or these assets just being so underinvested for so long that how should we think What are you looking at when you think about allocating capital across the portfolio now? what are you looking at when you think about allocating capital across the portfolio now

Speaker 10: Yeah, no, if you look at the maps that we put on our PowerPoint, you will not find the. More selling and strategic fit of the portfolio. Just to give you an example, Berry owns a property called The Hill, which is 480 acres, so three-fourths of a section. It's in the middle of the Belridge field. It's not adjacent. It's not close to Belridge. It's inside of Belridge. That produces about 3,500 barrels of oil per day. Yeah, no, if you look at the maps that we put on our PowerPoint, you will not find the. yeah no if you look at the maps that we put on our powerpoint you will not find the More selling and strategic fit of the portfolio. more selling and strategic fit of the portfolio Just to give you an example, Berry owns a property called The Hill, which is 480 acres, so three-fourths of a section. just to give you an example berry owns a property called the hill which is 480 acres so three-fourths of a section It's in the middle of the Belridge field. it's in the middle of the belridge field It's not adjacent. it's not adjacent It's not close to Belridge. it's not close to belridge It's inside of Belridge. it's inside of belridge T hat produces about 3,500 barrels of oil per day. t hat produces about 3,500 barrels of oil per day As it's the tradition in California, every operator builds their own facilities, no centralized facilities. That presents a very compelling opportunity to extract savings and real synergies very near term. When we looked at Era, and you've asked this question before, Betty, the assets are performing extremely well since we bought Era. The declines are shallower. The production has just been even more and more steady. As it's the tradition in California, every operator builds their own facilities, no centralized facilities. as it's the tradition in california every operator builds their own facilities no centralized facilities T hat presents a very compelling opportunity to extract savings and real synergies very near term. t hat presents a very compelling opportunity to extract savings and real synergies very near term W hen we looked at Era, and you've asked this question before, Betty, the assets are performing extremely well since we bought Era. w hen we looked at era and you've asked this question before betty the assets are performing extremely well since we bought era The declines are shallower. the declines are shallower The production has just been even more and more steady. the production has just been even more and more steady So when you look at kind of the missing acreage and some of the missing parts of Berry, expect that to be just as high quality as the rest of the Aera portfolio. So well, you're right. These assets have been assets that have their. It's incredibly good rock. That's benefit of California production is conventional, low decline, fantastic rock, and with a very strong backdrop with California needing more production and with the know-how of our team to be able to develop these assets. So when you look at kind of the missing acreage and some of the missing parts of Berry, expect that to be just as high quality as the rest of the Aera portfolio. so when you look at kind of the missing acreage and some of the missing parts of berry expect that to be just as high quality as the rest of the aera portfolio So well, you're right. so well you're right These assets have been assets that have their. these assets have been assets that have their It's incredibly good rock. it's incredibly good rock That's benefit of California production is conventional, low decline, fantastic rock, and with a very strong backdrop with California needing more production and with the know-how of our team to be able to develop these assets. that's benefit of california production is conventional low decline fantastic rock and with a very strong backdrop with california needing more production and with the know-how of our team to be able to develop these assets I expect the Berry portfolio to be very competitive, similar to Era and CRC's, right? Now we have the ability to really optimize that portfolio and move capital as we increase potentially some activity into projects that are very, very, very compelling. Excited to have the full force of the inventory as we're getting permits for the first time in more than three years. Excited, really excited to be able to really have all the option value come forward and pick the best projects in the combined portfolio. I expect the Berry portfolio to be very competitive, similar to Era and CRC's, right? i expect the berry portfolio to be very competitive similar to era and crc's right Now we have the ability to really optimize that portfolio and move capital as we increase potentially some activity into projects that are very, very, very compelling. now we have the ability to really optimize that portfolio and move capital as we increase potentially some activity into projects that are very very very compelling Excited to have the full force of the inventory as we're getting permits for the first time in more than three years. excited to have the full force of the inventory as we're getting permits for the first time in more than three years Excited, really excited to be able to really have all the option value come forward and pick the best projects in the combined portfolio. excited really excited to be able to really have all the option value come forward and pick the best projects in the combined portfolio

Speaker 6: Great. That's great to see. My follow-up is on the asset. What are you looking to evaluate, and what are the objectives going forward for you to decide on whether or not to keep that asset within the portfolio? Great. great That's great to see. that's great to see My follow-up is on the asset. my follow-up is on the asset What are you looking to evaluate, and what are the objectives going forward for you to decide on whether or not to keep that asset within the portfolio? what are you looking to evaluate and what are the objectives going forward for you to decide on whether or not to keep that asset within the portfolio

Speaker 10: Yeah, Betty. So the deal for us is all about California. That's what we focused on, the timing of it, the permitting reform, and the value of being able to buy very de-risked PDP assets that were trading heavily at a discounted PDP value. That's the number one priority. That and the synergies is why we did the deal. An added feature is certainly the Berry Uinta portfolio. This is. Yeah, Betty. yeah betty So the deal for us is all about California. so the deal for us is all about california That's what we focused on, the timing of it, the permitting reform, and the value of being able to buy very de-risked PDP assets that were trading heavily at a discounted PDP value. that's what we focused on the timing of it the permitting reform and the value of being able to buy very de-risked pdp assets that were trading heavily at a discounted pdp value That's the number one priority. that's the number one priority That and the synergies is why we did the deal. that and the synergies is why we did the deal An added feature is certainly the Berry Uinta portfolio. an added feature is certainly the berry uinta portfolio This is. this is We've been a 100% California company since inception. So we'll take a look. We'll explore what the Uinta Basin has to offer. We've been hearing a lot about the Uinta Basin as having a lot of activity, a lot of interest. Certainly, Berry has been doing a great job. They're forceful too. Also, no, it's an added feature. It brings option value, and we look forward to digging in and learning more about the basin. We've been a 100% California company since inception. we've been a 100% california company since inception So we'll take a look. so we'll take a look We'll explore what the Uinta Basin has to offer. we'll explore what the uinta basin has to offer We've been hearing a lot about the Uinta Basin as having a lot of activity, a lot of interest. we've been hearing a lot about the uinta basin as having a lot of activity a lot of interest Certainly, Berry has been doing a great job. certainly berry has been doing a great job They're forceful too. they're forceful too Also, no, it's an added feature. also no it's an added feature It brings option value, and we look forward to digging in and learning more about the basin. it brings option value and we look forward to digging in and learning more about the basin

Speaker 1: The next question comes from David Deckelbaum with TD Cowen. Please go ahead. The next question comes from David Deckelbaum with TD Cowen. the next question comes from david deckelbaum with td cowen Please go ahead. please go ahead

Speaker 9: Thanks for taking my questions, and congrats on the deal and obviously 237 and 881. Francisco, you just remarked to Betty about how this deal is all about California. Also, just curious how you think about this deal, either complementing or enhancing non-upstream businesses or if you just see all of the value in this deal really squarely coming from the upstream side. Thanks for taking my questions, and congrats on the deal and obviously 237 and 881. thanks for taking my questions and congrats on the deal and obviously 237 and 881 Francisco, you just remarked to Betty about how this deal is all about California. francisco you just remarked to betty about how this deal is all about california Also, just curious how you think about this deal, either complementing or enhancing non-upstream businesses or if you just see all of the value in this deal really squarely coming from the upstream side. also just curious how you think about this deal either complementing or enhancing non-upstream businesses or if you just see all of the value in this deal really squarely coming from the upstream side

Speaker 10: Yeah, the tangible value, David, is in upstream. By being able to unlock incremental cash flow, improve the cost structure, enhance the margins, that gives us more ammunition and skill to be able to do more in California. I mean, not only the sentiment shift, but the reality of California is very different today than it's been for years. Yeah, the tangible value, David, is in upstream. yeah the tangible value david is in upstream B y being able to unlock incremental cash flow, improve the cost structure, enhance the margins, that gives us more ammunition and skill to be able to do more in California. b y being able to unlock incremental cash flow improve the cost structure enhance the margins that gives us more ammunition and skill to be able to do more in california I mean, not only the sentiment shift, but the reality of California is very different today than it's been for years. i mean not only the sentiment shift but the reality of california is very different today than it's been for years It might take some people a while to realize the shift in the view, but we were excited. I mean, this will continue our focus on growing cash flow per share. We have a very strong position on the power business. Berry happens to have about 66 megawatts of power generation in the portfolio. So it's an enhancement across that. It might take some people a while to realize the shift in the view, but we were excited. it might take some people a while to realize the shift in the view but we were excited I mean, this will continue our focus on growing cash flow per share. i mean this will continue our focus on growing cash flow per share W e have a very strong position on the power business. w e have a very strong position on the power business Berry happens to have about 66 megawatts of power generation in the portfolio. berry happens to have about 66 megawatts of power generation in the portfolio So it's an enhancement across that. so it's an enhancement across that The more power assets that you have, the more flexibility you have to think about not only self-supply, but how do you participate in an exciting power market in California. Expect elements there. Then there's also Carbon TerraVault benefits of owning more of your production, more of the ability to be able to build infrastructure that connects different fields. The more power assets that you have, the more flexibility you have to think about not only self-supply, but how do you participate in an exciting power market in California. the more power assets that you have the more flexibility you have to think about not only self-supply but how do you participate in an exciting power market in california Expect elements there. expect elements there Then there's also Carbon TerraVault benefits of owning more of your production, more of the ability to be able to build infrastructure that connects different fields. then there's also carbon terravault benefits of owning more of your production more of the ability to be able to build infrastructure that connects different fields The rights-of-way are extremely valuable. The more that we own in that space, now that we have the ability to invest in CO2 pipelines, it will have a positive impact there as well. It covers every aspect of our business. I mean, we did the deal for upstream and for cash flow, but certainly, it positions us for more success of the largest energy company in the state. The rights-of-way are extremely valuable. the rights-of-way are extremely valuable The more that we own in that space, now that we have the ability to invest in CO2 pipelines, it will have a positive impact there as well. the more that we own in that space now that we have the ability to invest in co2 pipelines it will have a positive impact there as well It covers every aspect of our business. it covers every aspect of our business I mean, we did the deal for upstream and for cash flow, but certainly, it positions us for more success of the largest energy company in the state. i mean we did the deal for upstream and for cash flow but certainly it positions us for more success of the largest energy company in the state

Speaker 9: If I might ask one more question on the permitting side. Now, with this combination, obviously, you're benefiting as well, I guess, from just increased staffing and resources that Berry would have had available to them in California for permitting. With 237, if we assume that Newsom signs off, we move into next year, I guess, how do you think about this deal complementing or improving the pace of permit issuance? We know that you can permit up to 2,000 new wells per year in Kern County for the whole industry. Realistically speaking, how quickly do you think you could start achieving these permits and start being able to deploy incremental capital? If I might ask one more question on the permitting side. if i might ask one more question on the permitting side Now, with this combination, obviously, you're benefiting as well, I guess, from just increased staffing and resources that Berry would have had available to them in California for permitting. now with this combination obviously you're benefiting as well i guess from just increased staffing and resources that berry would have had available to them in california for permitting With 237, if we assume that Newsom signs off, we move into next year, I guess, how do you think about this deal complementing or improving the pace of permit issuance? with 237 if we assume that newsom signs off we move into next year i guess how do you think about this deal complementing or improving the pace of permit issuance We know that you can permit up to 2,000 new wells per year in Kern County for the whole industry. we know that you can permit up to 2,000 new wells per year in kern county for the whole industry Realistically speaking, how quickly do you think you could start achieving these permits and start being able to deploy incremental capital? realistically speaking how quickly do you think you could start achieving these permits and start being able to deploy incremental capital

Speaker 10: No, absolutely. The county, so effectively, the Kern County is going to have the delegation to be able to issue permits. Talking to the county, they're ready to go. They've been looking to get the Kern County reestablished for some time. Very supportive of our industry. They've been staffing up on the permit front. No, absolutely. no absolutely The county, so effectively, the Kern County is going to have the delegation to be able to issue permits. the county so effectively the kern county is going to have the delegation to be able to issue permits T alking to the county, they're ready to go. t alking to the county they're ready to go They've been looking to get the Kern County reestablished for some time. they've been looking to get the kern county reestablished for some time Very supportive of our industry. very supportive of our industry They've been staffing up on the permit front. they've been staffing up on the permit front Like I said, 2,000 wells per year for a decade gives us full access to our inventory. We expect to be a very large participant in the permitting process. So yeah, we have our own staff ready to go. We have permits ready to be filed. Some of them already have been filed. We will wait for the governor to sign the bill effective January 1st. So expect a quarter, maybe two quarters max, to be able to get all the incremental activity going. Everybody's getting ready, and we'll have time between now and January 1st to make sure all things are moving in the right direction. So we're ready to go and excited about the opportunity. It's really been a long time coming, and yeah, we can't wait. Like I said, 2,000 wells per year for a decade gives us full access to our inventory. like i said 2,000 wells per year for a decade gives us full access to our inventory W e expect to be a very large participant in the permitting process. w e expect to be a very large participant in the permitting process So yeah, we have our own staff ready to go. so yeah we have our own staff ready to go We have permits ready to be filed. we have permits ready to be filed Some of them already have been filed. some of them already have been filed We will wait for the governor to sign the bill effective January 1st. we will wait for the governor to sign the bill effective january 1st So expect a quarter, maybe two quarters max, to be able to get all the incremental activity going. so expect a quarter maybe two quarters max to be able to get all the incremental activity going Everybody's getting ready, and we'll have time between now and January 1st to make sure all things are moving in the right direction. everybody's getting ready and we'll have time between now and january 1st to make sure all things are moving in the right direction So we're ready to go and excited about the opportunity. so we're ready to go and excited about the opportunity It's really been a long time coming, and yeah, we can't wait. it's really been a long time coming and yeah we can't wait

Speaker 1: The next question comes from Nate Pendleton with Texas Capital. Please go ahead. The next question comes from Nate Pendleton with Texas Capital. the next question comes from nate pendleton with texas capital Please go ahead. please go ahead

Speaker 3: Good morning, and congrats to both of the teams on the transaction. Fernando, Berry had been able to keep California production roughly flat despite the permitting headwinds in the state. Can you talk about how that low-decline production base complements your assets and potential maintenance capital going forward? Good morning, and congrats to both of the teams on the transaction. good morning and congrats to both of the teams on the transaction Fernando, Berry had been able to keep California production roughly flat despite the permitting headwinds in the state. fernando berry had been able to keep california production roughly flat despite the permitting headwinds in the state Can you talk about how that low-decline production base complements your assets and potential maintenance capital going forward? can you talk about how that low-decline production base complements your assets and potential maintenance capital going forward

Speaker 10: Yeah. No, thanks, Nate. Yeah, maybe not something that our investors have appreciated, but Berry has been four years keeping production flat in kind of the same environment we've had. About $70 million annually to keep production flat. So a great portfolio. Again, we know the assets extremely well, really good fit, and very similar, very similar in every respect. Yeah. yeah No, thanks, Nate. no thanks nate Yeah, maybe not something that our investors have appreciated, but Berry has been four years keeping production flat in kind of the same environment we've had. yeah maybe not something that our investors have appreciated but berry has been four years keeping production flat in kind of the same environment we've had A bout $70 million annually to keep production flat. a bout $70 million annually to keep production flat So a great portfolio. so a great portfolio Again, we know the assets extremely well, really good fit, and very similar, very similar in every respect. again we know the assets extremely well really good fit and very similar very similar in every respect Like I said, even inside of our field boundaries in some cases. I would expect the corporate decline to be the same as we've been trending prior to the deal. So 10%-15%, call it 12.5% midpoint without capital. As we get to deploy capital now with the full extent of the portfolio, expect to see a very capital-efficient program of conventional assets. So yeah, the Berry portfolio fits us very, very well. Like I said, even inside of our field boundaries in some cases. I would expect the corporate decline to be the same as we've been trending prior to the deal. like i said even inside of our field boundaries in some cases i would expect the corporate decline to be the same as we've been trending prior to the deal So 10%-15%, call it 12.5% midpoint without capital. so 10%-15% call it 12.5% midpoint without capital A s we get to deploy capital now with the full extent of the portfolio, expect to see a very capital-efficient program of conventional assets. a s we get to deploy capital now with the full extent of the portfolio expect to see a very capital-efficient program of conventional assets So yeah, the Berry portfolio fits us very, very well. so yeah the berry portfolio fits us very very well Expect it's hard to find assets of the quality of our combined portfolios. Low decline in a shale world with shrinking inventory, that's never been the issue in California. It's an inventory-rich environment with great rock, just without the need to really stimulate. It's more about maintaining pressure. It's more about recovery factors. We know these assets well. I think when we picked up Aera, we brought a lot of engineering expertise that knows how to run the steamflood and the diatomite. That's what Berry owns. I look forward for the teams to build a super team in the state to get access to all that resource. Expect it's hard to find assets of the quality of our combined portfolios. expect it's hard to find assets of the quality of our combined portfolios Low decline in a shale world with shrinking inventory, that's never been the issue in California. low decline in a shale world with shrinking inventory that's never been the issue in california It's an inventory-rich environment with great rock, just without the need to really stimulate. it's an inventory-rich environment with great rock just without the need to really stimulate It's more about maintaining pressure. it's more about maintaining pressure It's more about recovery factors. it's more about recovery factors We know these assets well. we know these assets well I think when we picked up Aera, we brought a lot of engineering expertise that knows how to run the steamflood and the diatomite. i think when we picked up aera we brought a lot of engineering expertise that knows how to run the steamflood and the diatomite That's what Berry owns. that's what berry owns I look forward for the teams to build a super team in the state to get access to all that resource. i look forward for the teams to build a super team in the state to get access to all that resource

Speaker 3: That's great, and as my follow-up, perhaps for Francisco or Fernando if he's on Q&A, it looks like that first operated Uinta pad delivered really encouraging early results from what we see in the PowerPoint. Is there anything you can share on how those wells are trending versus expectations and how you see those going forward? That's great, and as my follow-up, perhaps for Francisco or Fernando if he's on Q&A, it looks like that first operated Uinta pad delivered really encouraging early results from what we see in the PowerPoint. that's great and as my follow-up perhaps for francisco or fernando if he's on q&a it looks like that first operated uinta pad delivered really encouraging early results from what we see in the powerpoint Is there anything you can share on how those wells are trending versus expectations and how you see those going forward? is there anything you can share on how those wells are trending versus expectations and how you see those going forward

Speaker 7: Yeah, thank you, Nate. That's a very good question, and just for the benefit of the larger audience, let me provide just a quick overview of Berry and the Uinta Basin, and then I'll address the specific pad that you're asking about, Nate, but Berry holds 100,000 acres in the basin. We have high working interest. It's mostly held by production, and obviously, this gives us operational flexibility in terms of the pace of development. Yeah, thank you, Nate. yeah thank you nate That's a very good question, and just for the benefit of the larger audience, let me provide just a quick overview of Berry and the Uinta Basin, and then I'll address the specific pad that you're asking about, Nate, but Berry holds 100,000 acres in the basin. that's a very good question and just for the benefit of the larger audience let me provide just a quick overview of berry and the uinta basin and then i'll address the specific pad that you're asking about nate but berry holds 100,000 acres in the basin We have high working interest. we have high working interest It's mostly held by production, and obviously, this gives us operational flexibility in terms of the pace of development. it's mostly held by production and obviously this gives us operational flexibility in terms of the pace of development The basin is very rich in oil and gas, and there's significant drilling activity currently in the basin, and Berry's focus shifted from legacy vertical wells to horizontal wells in 2024, initially targeting the Uteland Butte formation, which is one of five different reservoirs that we produce from in the basin, and actually, the industry has targeted all five reservoirs for horizontal well development as well with success. The basin is very rich in oil and gas, and there's significant drilling activity currently in the basin, and Berry's focus shifted from legacy vertical wells to horizontal wells in 2024, initially targeting the Uteland Butte formation , which is one of five different reservoirs that we produce from in the basin, and actually, the industry has targeted all five reservoirs for horizontal well development as well with success. the basin is very rich in oil and gas and there's significant drilling activity currently in the basin and berry's focus shifted from legacy vertical wells to horizontal wells in 2024 initially targeting the uteland butte formation which is one of five different reservoirs that we produce from in the basin and actually the industry has targeted all five reservoirs for horizontal well development as well with success This year, going back to your question, Nate, this year we drilled our first operated pad, four wells, three-mile laterals, targeting this prolific Uinta Butte reservoir. The wells were put on production in August, and production from the pad is increasing every day as the wells continue to clean up. As mentioned, the pad is currently making about 3,800 barrels of oil equivalent, 93% oil, about 7% gas. This year, going back to your question, Nate, this year we drilled our first operated pad, four wells, three-mile laterals, targeting this prolific Uinta Butte reservoir. this year going back to your question nate this year we drilled our first operated pad four wells three-mile laterals targeting this prolific uinta butte reservoir The wells were put on production in August, and production from the pad is increasing every day as the wells continue to clean up. the wells were put on production in august and production from the pad is increasing every day as the wells continue to clean up As mentioned, the pad is currently making about 3,800 barrels of oil equivalent, 93% oil, about 7% gas. as mentioned the pad is currently making about 3,800 barrels of oil equivalent 93% oil about 7% gas That's gross production. Remember that our net production currently, or in the first half of the year in Utah, was about 40 or was about 4,200 barrels of oil equivalent per day. We expect to have peak production from these wells in late September. These results, Nate, are really consistent or even slightly better than our offset wells, our offset non-operated wells.So we're really encouraged with initial results from these wells and with the potential that we have in the basin with horizontal well development. That's gross production. that's gross production R emember that our net production currently, or in the first half of the year in Utah, was about 40 or was about 4,200 barrels of oil equivalent per day. r emember that our net production currently or in the first half of the year in utah was about 40 or was about 4,200 barrels of oil equivalent per day W e expect to have peak production from these wells in late September. w e expect to have peak production from these wells in late september T hese results, Nate, are really consistent or even slightly better than our offset wells, our offset non-operated wells. t hese results nate are really consistent or even slightly better than our offset wells our offset non-operated wells So we're really encouraged with initial results from these wells and with the potential that we have in the basin with horizontal well development. so we're really encouraged with initial results from these wells and with the potential that we have in the basin with horizontal well development

Speaker 1: The next question comes from Michael Furrow with Pickering Energy Partners. Please go ahead. The next question comes from Michael Furrow with Pickering Energy Partners. the next question comes from michael furrow with pickering energy partners Please go ahead. please go ahead

Speaker 8: Hi, good morning. Congrats on the deal. Obviously, it seems like there's a lot of benefits here. It seems like a logical, natural combination. The state seems to be taking a more supportive stance towards the industry. Are there any regulatory approvals that need to be acquired before this transaction can cross the finish line? Hi, good morning. hi good morning Congrats on the deal. congrats on the deal Obviously, it seems like there's a lot of benefits here. obviously it seems like there's a lot of benefits here It seems like a logical, natural combination. it seems like a logical natural combination The state seems to be taking a more supportive stance towards the industry. the state seems to be taking a more supportive stance towards the industry A re there any regulatory approvals that need to be acquired before this transaction can cross the finish line? a re there any regulatory approvals that need to be acquired before this transaction can cross the finish line

Speaker 10: Thanks. Thanks, Michael. So we expect to follow kind of the standard review process on an HSR basis. Given the size of the transaction, nature of the assets, and the fact that this is an upstream combination, we don't anticipate any federal regulatory issues. Similarly, we don't expect any state regulatory approval needed. Thanks. thanks Thanks, Michael. thanks michael So we expect to follow kind of the standard review process on an HSR basis. so we expect to follow kind of the standard review process on an hsr basis Given the size of the transaction, nature of the assets, and the fact that this is an upstream combination, we don't anticipate any federal regulatory issues. given the size of the transaction nature of the assets and the fact that this is an upstream combination we don't anticipate any federal regulatory issues Similarly, we don't expect any state regulatory approval needed. similarly we don't expect any state regulatory approval needed

Speaker 8: That's great detail. Then I just have a follow-up on synergies. So that's been one of the items that's really stood out to us over the last year, is just the positive execution on the Era synergies that the company outlined. So is there anything that the company has learned through the Era integration that made it easier to underwrite the synergies in this deal? Maybe as a quick follow-up to that, is there any sort of breakdown you could provide in the synergy target between operating costs, corporate costs, and tax? That's great detail. that's great detail T hen I just have a follow-up on synergies. t hen i just have a follow-up on synergies So that's been one of the items that's really stood out to us over the last year, is just the positive execution on the Era synergies that the company outlined. so that's been one of the items that's really stood out to us over the last year is just the positive execution on the era synergies that the company outlined So is there anything that the company has learned through the Era integration that made it easier to underwrite the synergies in this deal? so is there anything that the company has learned through the era integration that made it easier to underwrite the synergies in this deal M aybe as a quick follow-up to that, is there any sort of breakdown you could provide in the synergy target between operating costs, corporate costs, and tax? m aybe as a quick follow-up to that is there any sort of breakdown you could provide in the synergy target between operating costs corporate costs and tax

Speaker 10: Yeah, I mean, I think the learnings really come from tremendous execution from the team. There's certain types of synergies, especially personnel-related synergies, that a lot of companies will advertise when doing deals. What we really liked about Aera, and we're going to do again with Berry, is reimagine the California oil field and make sure that when you're looking at water, when you're looking at natural gas and power, you're able to move all of those into the best place to enhance margins. That's what we've been able to do very successfully with Aera. We see some very tangible opportunities to do that again here. We also are part of Berry's C&J. C&J is a great well services company has a significant participation in the market in California. Yeah, I mean, I think the learnings really come from tremendous execution from the team. yeah i mean i think the learnings really come from tremendous execution from the team There's certain types of synergies, especially personnel-related synergies, that a lot of companies will advertise when doing deals. there's certain types of synergies especially personnel-related synergies that a lot of companies will advertise when doing deals W hat we really liked about Aera, and we're going to do again with Berry, is reimagine the California oil field and make sure that when you're looking at water, when you're looking at natural gas and power, you're able to move all of those into the best place to enhance margins. w hat we really liked about aera and we're going to do again with berry is reimagine the california oil field and make sure that when you're looking at water when you're looking at natural gas and power you're able to move all of those into the best place to enhance margins T hat's what we've been able to do very successfully with Aera. t hat's what we've been able to do very successfully with aera W e see some very tangible opportunities to do that again here. w e see some very tangible opportunities to do that again here We also are part of Berry's C&J. we also are part of berry's c&j C&J is a great well services company has a significant participation in the market in California. c&j is a great well services company has a significant participation in the market in california As we look at some of the cost and cost inflation challenges, having an integrated solution in-house is something that we look forward to thinking about. There's a lot of compelling aspects to this deal. In terms of a breakdown, I would say it might track something similar to Aera in terms of proportions. We look to Berry's been on their term loan that we'll be able to refinance. Within the market backdrop, it's favorable to do so. There'll be an element of improved interest expense. There will be an element of corporate savings and operating savings, and also some enhancements on the supply chain. Proportionally weighted similar to Aera, and we're ready to get started. As we look at some of the cost and cost inflation challenges, having an integrated solution in-house is something that we look forward to thinking about. as we look at some of the cost and cost inflation challenges having an integrated solution in-house is something that we look forward to thinking about There's a lot of compelling aspects to this deal. there's a lot of compelling aspects to this deal In terms of a breakdown, I would say it might track something similar to Aera in terms of proportions. in terms of a breakdown i would say it might track something similar to aera in terms of proportions We look to Berry's been on their term loan that we'll be able to refinance. we look to berry's been on their term loan that we'll be able to refinance Within the market backdrop, it's favorable to do so. within the market backdrop it's favorable to do so There'll be an element of improved interest expense. there'll be an element of improved interest expense There will be an element of corporate savings and operating savings, and also some enhancements on the supply chain. there will be an element of corporate savings and operating savings and also some enhancements on the supply chain Proportionally weighted similar to Aera, and we're ready to get started. proportionally weighted similar to aera and we're ready to get started

Speaker 1: The last question today comes from Noel Parks with Tuohy Brothers. Please go ahead. The last question today comes from Noel Parks with Tuohy Brothers. the last question today comes from noel parks with tuohy brothers Please go ahead. please go ahead

Speaker 2: Good morning. I was wondering, just as far as the deal terms, is there a lockup condition involved or collars on the deal? Good morning. good morning I was wondering, just as far as the deal terms, is there a lockup condition involved or collars on the deal? i was wondering just as far as the deal terms is there a lockup condition involved or collars on the deal

Speaker 10: No, it's a straightforward deal. No lockups or collars. Berry's a publicly traded company. You can see some of their ownership levels and who owns it. So you would see a lot of similarities in people that invest in Berry with CRC, but nothing, I would say, out of the norm in terms of the deal. Pretty straightforward all-stock deal. No, it's a straightforward deal. no it's a straightforward deal No lockups or collars. no lockups or collars Berry's a publicly traded company. berry's a publicly traded company You can see some of their ownership levels and who owns it. you can see some of their ownership levels and who owns it So you would see a lot of similarities in people that invest in Berry with CRC, but nothing, I would say, out of the norm in terms of the deal. so you would see a lot of similarities in people that invest in berry with crc but nothing i would say out of the norm in terms of the deal Pretty straightforward all-stock deal. pretty straightforward all-stock deal

Speaker 3: Great. You mentioned that the rights of way that the Berry assets would offer could be particularly valuable for Carbon TerraVault. So I was just curious if they had any well, I guess, since there is a good bit of overlap, does this move the needle on pore space at all? Do they have any estimates? I'm just wondering, does it complicate or require you revising any of your Class VI permit applications to the EPA? Great. great Y ou mentioned that the rights of way that the Berry assets would offer could be particularly valuable for Carbon TerraVault. y ou mentioned that the rights of way that the berry assets would offer could be particularly valuable for carbon terravault So I was just curious if they had any well, I guess, since there is a good bit of overlap, does this move the needle on pore space at all? so i was just curious if they had any well i guess since there is a good bit of overlap does this move the needle on pore space at all Do they have any estimates? I'm just wondering, does it complicate or require you revising any of your Class VI permit applications to the EPA? do they have any estimates i'm just wondering does it complicate or require you revising any of your class vi permit applications to the epa

Speaker 10: Yeah, I will not look at the Berry assets additive to pore space at this point. Our team will certainly look at it. So no changes on Class VI. It allows you to, I mean, so this weekend, we received the good news that the pipeline moratorium has been lifted for CO2 injection. So if you think about a world where we can connect brownfield emitters to our storage, every mile of right of way is valuable. Yeah, I will not look at the Berry assets additive to pore space at this point. yeah i will not look at the berry assets additive to pore space at this point Our team will certainly look at it. our team will certainly look at it So no changes on Class VI. so no changes on class vi I t allows you to, I mean, so this weekend, we received the good news that the pipeline moratorium has been lifted for CO2 injection. i t allows you to i mean so this weekend we received the good news that the pipeline moratorium has been lifted for co2 injection So if you think about a world where we can connect brownfield emitters to our storage, every mile of right of way is valuable. so if you think about a world where we can connect brownfield emitters to our storage every mile of right of way is valuable Every straight line that we can either recondition or build new pipe is extremely valuable. So land ownership is one of the strengths of CRC in adding more acres to the combination to the combined company as we look to build that infrastructure of the future to decarbonize the state. That all has infinite value. So excited to, again, add more land and more acreage to our portfolio. I would say it's on the right of ways and CO2 pipelines where we see the connectivity with CTV. Every straight line that we can either recondition or build new pipe is extremely valuable. every straight line that we can either recondition or build new pipe is extremely valuable So land ownership is one of the strengths of CRC in adding more acres to the combination to the combined company as we look to build that infrastructure of the future to decarbonize the state. so land ownership is one of the strengths of crc in adding more acres to the combination to the combined company as we look to build that infrastructure of the future to decarbonize the state That all has infinite value. that all has infinite value So excited to, again, add more land and more acreage to our portfolio. so excited to again add more land and more acreage to our portfolio I would say it's on the right of ways and CO2 pipelines where we see the connectivity with CTV. i would say it's on the right of ways and co2 pipelines where we see the connectivity with ctv

Speaker 1: This concludes our question and answer session. I would like to turn the conference back over for any closing remarks. This concludes our question and answer session. this concludes our question and answer session I would like to turn the conference back over for any closing remarks. i would like to turn the conference back over for any closing remarks

Speaker 10: Thank you for your time today and your interest in CRC. We look forward to keeping you updated as we move towards closing. Thank you. Bye-bye. Thank you for your time today and your interest in CRC. thank you for your time today and your interest in crc We look forward to keeping you updated as we move towards closing. we look forward to keeping you updated as we move towards closing Thank you. thank you Bye-bye. bye-bye

Speaker 1: The conference has now concluded. Thank you for attending today's presentation. You may now. The conference has now concluded. the conference has now concluded Thank you for attending today's presentation. thank you for attending today's presentation You may now. you may now