California Resources 2026 Outlook: Policy Shifts and Berry Merger

California Resources (CRC) heads into 2026 with a markedly improved in-state backdrop and a clear integration agenda. Supportive policy reforms, a pending Berry tie-up, and a conservative balance sheet anchor the setup.Near term, investors still need to navigate softer production, higher operating and tax costs, and derivative noise. But the path to steadier activity is getting clearer.Why California Policy Now Supports In-State ProductionCalifornia’s 2025 policy shift tightened the permitting framework (SB 237), authorized CO2 pipelines, and extended Cap-and-Invest to 2045, creating the most constructive regulatory landscape in years. Management plans to double the rig count to four in early 2026 and advance multiple Class VI carbon storage permits under EPA review, with the normalization of permitting and CO2 transport expected to accelerate approvals. This improves project visibility and should shorten cycle times as CRC moves through 2026.What Scale and Synergies the Berry Deal AddsCRC expects to close its all-stock merger with Berry in the first quarter of 2026. The deal targets $80–$90 million of annual synergies within 12 months of closing, with nearly half realized in the first six months. It adds 20,000 net acres and 20 thousand barrels of oil equivalent per day (Mboe/d) of production, deepening CRC’s low-decline conventional portfolio, while pro forma leverage remains below 1X. Integration execution and the cadence of permit approvals are the key swing factors for realizing the synergy and volume plan.Financial Cushions that Support Steady Capital ReturnsCRC finished the latest quarter with more than $1.1 billion of liquidity, minimal net leverage, and maturities pushed out to 2029. Management raised the quarterly dividend 5% to $0.405 and continues to repurchase stock, supported by a robust hedge book that stabilizes cash flows through commodity cycles. These cushions support measured investment and consistent returns as integration proceeds.Near-Term Pressure Points Investors Should WatchProduction softness versus 2024 remains a headwind. Q3 2025 net production averaged 137 Mboe/d (down from 145 Mboe/d a year ago), and operating costs stepped up with last year’s merger with Aera Energy, alongside elevated taxes other than income. Derivative swings were the dominant driver of the year-over-year revenue delta in Q3 2025, turning a prior gain into a loss and explaining about $498 million of the decline. These factors complicate quarter-to-quarter comparability.For Q4, CRC guided to 131–135 Mboe/d with ~78% oil, operating costs near $310 million, adjusted EBITDAX around $240 million at the midpoint, and capital spending of roughly $115 million. Looking into 2026, the capex framework sits at $280–$300 million, and the corporate base decline assumption was lowered to 8–13%, supporting steadier volumes as permitting and integration progress.What the Short-Term Rating SignalsCRC holds a short-term Zacks Rank of 3 (Hold) and a VGM Score of A, reflecting strong Value and Momentum characteristics with a solid Growth profile. Estimate trends are mixed near term, with the four-week change in F1 EPS modestly positive and the 12-week trend lower, a pattern consistent with a neutral short-term view. Execution on catalysts such as Berry synergy capture, rig adds, and permitting milestones could tilt revisions and multiples as 2026 unfolds. You can see the complete list of today’s Zacks #1 Rank stocks here.California Resources Corporation Price and Consensus California Resources Corporation price-consensus-chart | California Resources Corporation QuotePeer ContextMatador Resources (MTDR). MTDR also carries a Zacks Rank of 3 and offers value characteristics within the U.S. E&P sub-industry, with dividend income and scale in liquids-weighted development that may appeal to investors comparing capital return profiles alongside CRC.Murphy Oil (MUR). MUR, ranked 3, pairs a higher dividend yield with low EV/EBITDA among peers, providing another balanced return option for investors seeking payout plus value while monitoring commodity sensitivity.Bottom LinePolicy normalization, CO2 infrastructure enablement, and Cap-and-Invest extension support CRC’s ability to plan and execute in-state projects with shorter cycles. The Berry merger adds scale, synergy, and low leverage, while ample liquidity, extended maturities, a higher dividend, buybacks, and hedging underpin returns. Against near-term production softness, cost inflation, and derivative variability, the Zacks Rank of 3 and A VGM score frame a watch-and-verify stance as permitting, rig adds, and integration milestones drive the 2026 narrative. Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Murphy Oil Corporation (MUR): Free Stock Analysis Report Matador Resources Company (MTDR): Free Stock Analysis Report California Resources Corporation (CRC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks