• Aera Energy and California Resources Corporation (CRC) have agreed to combine in an all-stock transaction valued at $2.1 billion
  • The deal is expected to be immediately accretive to key financial metrics and create scale and durability in the E&P business
  • The combined company will be a leader in energy transition, producing low carbon intensity fuels and advancing carbon capture and sequestration projects
What does the merger mean for the companies and the industry?

Aera Energy and CRC are two of the largest oil and gas producers in California, with complementary assets, operations and expertise. By joining forces, they aim to create a stronger and more resilient company that can deliver value to shareholders, customers, employees and communities.

The merger is expected to generate significant synergies and savings, as well as enhance the combined company’s cash flow and balance sheet. According to the press release , the transaction is priced at approximately 2.6x enterprise value / 2024E Adjusted EBITDAX, and reflects approximately a 45% improvement to operating cash flow per share and 90% accretion to free cash flow per share in 2024.

The combined company will also have a diversified portfolio of high-quality, low-decline, oil-weighted assets, with estimated production of approximately 150 thousand barrels of oil equivalent per day (Boe/d) and proved reserves of approximately 680 million Boe in 2024. The majority of these reserves are proved developed, which reduces capital intensity and risk.

Moreover, the merger will position the combined company as a leader in energy transition, producing low carbon intensity fuels that meet California’s strict environmental standards and support the state’s decarbonization goals. The combined company will also leverage its expertise and infrastructure to accelerate the development of carbon capture and sequestration (CCS) projects, with a target of permanently sequestering 5 million metric tons of CO2 per year in its underground storage vaults.

Next Steps

The merger is subject to customary closing conditions, including approval by CRC’s shareholders and regulatory authorities. The transaction is expected to close in the second quarter of 2024. Upon closing, Aera’s owners will receive 21.2 million shares of CRC’s common stock, equal to approximately 22.9% of CRC’s fully diluted shares. CRC’s current shareholders will own the remaining 77.1% of the combined company.

The combined company will be headquartered in Long Beach, California, and will operate under the CRC name. Francisco Leon, CRC’s President and Chief Executive Officer, will continue to lead the combined company. Erik Bartsch, Aera’s President and Chief Executive Officer, will join CRC’s board of directors.

Career Opportunities

The combined company will have a talented and diverse workforce of approximately 3,000 employees, who share a commitment to safety, excellence, innovation and sustainability. The merger is expected to create new opportunities for career development and growth for employees across both organizations.

If you are interested in joining the combined company or learning more about its culture, values and benefits, you can visit CRC’s website or Aera’s website for more information.

California Resources Corporation

Aera Energy

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