Berry (BRY) Shares Drop 1.50% to 14-Month Low as Merger Uncertainty, Permitting Risks Weigh

Berry Corporation (BRY) shares hit a 14-month low on Tuesday, with the stock dropping 1.50% intraday, marking its weakest level since September 2025. The decline came amid ongoing uncertainty surrounding its strategic direction and operational challenges, despite a major merger announcement earlier in the month.

The proposed $717 million all-stock merger with California Resources Corporation (CRC), aimed at creating a more efficient energy entity, has sparked mixed investor sentiment. While the deal aligns with broader industry consolidation trends and regulatory easing in California, analysts note the all-stock structure and permitting risks could temper short-term gains. The merger’s success hinges on streamlining operations and leveraging regulatory approvals, though delays in project execution remain a concern.

Operational updates highlight both progress and headwinds. Berry recently reported $500,000 in cost reductions per well in its Uinta Basin operations and integrated the July-acquired Macpherson Energy, which boosted 2023 production forecasts. However, permitting bottlenecks and regulatory scrutiny in California—where drilling reforms have been slow to materialize—have constrained growth. Institutional investors have shown divided activity, with some trimming stakes while others added shares, reflecting cautious optimism about long-term synergies.

Analyst sentiment remains polarized. Jefferies downgraded BRY to “Hold” in July, citing permitting challenges, while others adjusted earnings forecasts based on improved cost efficiency. Despite a 49% year-on-year drop in earnings per share, revised 2025 projections suggest potential for a rebound. The stock’s volatility underscores investor skepticism about Berry’s ability to balance regulatory compliance, environmental concerns, and capital efficiency in a shifting energy landscape.

Broader sector dynamics, including WTI price fluctuations and global energy transition pressures, further complicate Berry’s outlook. While reduced breakeven costs and a stable dividend signal financial resilience, the company must navigate a fragile balance between production expansion and sustainability expectations. For now, the path to recovery depends on executing the CRC merger smoothly, accelerating permitting progress, and maintaining operational discipline amid a competitive and uncertain market.