California Resources Corporation (NYSE: CRC), an independent
energy and carbon management company committed to energy
transition, today reported second quarter 2023 operational and
financial results.
"CRC’s focus on execution drove solid operational and financial
performance in the second quarter," said Francisco Leon, CRC
President and Chief Executive Officer. "We returned nearly $84
million to our shareholders in the second quarter, bringing the
total shareholder return program to nearly $700 million since its
inception in 2021. We have accomplished this while growing our cash
flow per share along with developing our carbon management
business. Cash flow, carbon and California remain our core
strengths as we continue to deliver meaningful value to our
shareholders and provide low carbon intensity oil and gas that
California needs."
Primary Highlights
- Declared a quarterly dividend of $0.2825 per share of common
stock, totaling ~$20 million payable on September 15, 2023 to
shareholders of record on September 1, 2023
- Repurchased 1,618,746 common shares for $64 million at an
average share price of $39.12 per share during the second quarter
of 2023
- Repurchased a cumulative 14,498,770 shares for $584 million at
an average price of $40.18 per share since the inception of the
Share Repurchase Program in May 2021 through June 30, 2023
- Submitted a Class VI permit to the EPA for 17 million metric
tons (MMT) for CTV V CO2 reservoir in the Sacramento Basin,
bringing CRC's total storage capacity with Class VI permits
submitted the EPA to 191 MMT
- Signed a new storage-only carbon dioxide management agreement
(CDMA) with Verde Clean Fuels Inc. for 100 thousand metric tons per
annum (KMTPA) of CO2 injection
- Expanded the previously announced Lone Cypress Energy Service,
LLC, blue hydrogen project to an estimated 205 KMTPA of CO2
injection
Financial Highlights
- Reported net income of $97 million, or $1.35 per diluted share.
When adjusted for items analysts typically exclude from estimates
including mark-to-market adjustments and one-time costs, the
Company’s adjusted net income1 was $38 million, or $0.53 per
diluted share
- Generated net cash provided by operating activities of $108
million, adjusted EBITDAX1 of $138 million and free cash flow1 of
$69 million
- Ended the quarter with $448 million of cash and cash
equivalents and an undrawn Revolving Credit Facility, (excluding
$148 million of letters of credit) with $479 million of
availability representing $927 million of total liquidity2
Operational Highlights
- Reservoirs performed in line with expectations; total daily
gross production of 103,000 gross barrels of oil equivalent per day
(Boe/d) for the second quarter of 2023, which was flat compared to
the first quarter of 2023
- Produced an average of 86 net MBoe/d, including 53,000 net
barrels of oil per day (Bo/d), with E&P capital expenditures of
$35 million during the quarter
- Total daily net production for the three months ended June 30,
2023, includes 2 net MBoe/d of combined negative effects; including
1 net MBoe/d related to CRC's production-sharing contracts (PSCs)
and approximately 1 net MBoe/d due to changes in NGL storage
volumes
- Operated 1 drilling rig in LA Basin; drilled 6 wells and
brought 7 wells online in 2Q23
- Operated 35 maintenance rigs in the first quarter
Total Year 2023 Guidance and Capital
Program3
CRC estimates average net total production between 85 and 91
MBoe/d3 (~61% oil) for the total year 2023. CRC is reaffirming its
total year 2023 total capital which is expected to range between
$200 and $245 million with heavier weighting in the second half of
the year due to timing of projects and higher expected workover
activity and facilities projects. The program includes an expected
$185 to $220 million of adjusted E&P, corporate and other
adjusted capital1 and $15 to $25 million of adjusted CMB capital1
for carbon management projects4. CRC is also narrowing its total
year 2023 free cash flow1 guidance range to $380 to $460 million
from $360 to $470 million.
The Company plans to execute a 1 to 1.5 rig development program
on average for 2023. Activity will focus on drilling new locations
where CRC has permits and high return workovers. The capital plan
also includes procuring long-lead time items for planned
maintenance of our facilities in 2024.
CRC is lowering the top end of the range for its operating cost
guidance from $815 to $865 million to $815 to $850 million as a
result of lower natural gas prices expected in the second half of
2023. Natural gas marketing margin was increased from a range of
$80 to $110 million to $135 to $150 million to reflect the
Company's performance in the first half of the year. Similarly,
CRC's 2023 estimated commodity realizations were adjusted to
reflect the Company's results.
CRC GUIDANCE3
Total
2023E
CMB
2023E
E&P, Corp. & Other
2023E
Net Total Production (MBoe/d)
85 - 91
85 - 91
Net Oil Production (MBbl/d)
51 - 55
51 - 55
Operating Costs ($ millions)
$815 - $850
$815 - $850
CMB Expenses5 ($ millions)
$25 - $35
$25 - $35
Adjusted General and Administrative
Expenses1 ($ millions)
$195 - $225
$10 - $15
$185 - $210
Adjusted Total Capital1,4 ($ millions)
$200 - $245
$15 - $25
$185 - $220
Drilling & Completions
$67 - $77
$66 - $76
Workovers
$44 - $54
$44 - $54
Adjusted Facilities
$44 - $54
$44 - $54
Corporate & Other
$30 - $35
$30 - $35
Adjusted CMB
$15 - $25
$15 - $25
Free Cash Flow1 ($ millions)
$380 - $460
Adjusted Free Cash Flow1 ($ millions)
($60) - ($80)
$460 - $520
Natural Gas Marketing Margin ($
millions)
$135 - $150
$135 - $150
Electricity Margin ($ millions)
$70 - $110
$70 - $110
Transportation Expense ($ millions)
$50 - $70
$50 - $70
ARO Settlement Payments* ($ millions)
$55 - $60
$55 - $60
Taxes Other Than on Income* ($
millions)
$175 - $185
$175 - $185
Interest and Debt Expense* ($
millions)
$55 - $60
$5 - $6
$50 - $54
Cash Income Taxes* ($ millions)
$100 - $120
$100 - $120
Commodity Realizations:
Oil - % of Brent:
94% - 97%
94% - 97%
NGL - % of Brent:
54% - 58%
54% - 58%
Natural Gas - % of NYMEX:
275% - 325%
275% - 325%
*Notes:
- 2023E ARO Settlement Payments: ~25% of estimated annual amount
is paid every quarter
- 2023E Taxes Other Than on Income: ~30% of estimated annual
amount is paid in each 1Q, 2Q and 4Q
- 2023E Interest Expense: ~46% of estimated annual amount is paid
in cash in each 1Q and 3Q
- Cash Income Taxes aren’t paid evenly throughout 2023
Third Quarter 2023 Guidance and Capital
Program3
CRC expects its third quarter 2023 total capital to range
between $52 million and $67 million under current operating
conditions. This includes $1 to $2 million of adjusted CMB
capital1.
At this level of spending, CRC expects average net total
production between 86 and 88 net MBoe/d3 (~61% oil) in the third
quarter of 2023, running a 1 drilling rig program in the Los
Angeles basin where it has permits.
CRC GUIDANCE3
Total
3Q23E
CMB
3Q23E
E&P, Corp. & Other
3Q23E
Net Total Production (MBoe/d)
86 - 88
86 - 88
Net Oil Production (MBbl/d)
52 - 54
52 - 54
Operating Costs ($ millions)
$185 - $205
$185 - $205
CMB Expenses5 ($ millions)
$5 - $10
$5 - $10
Adjusted General and Administrative
Expenses1 ($ millions)
$52 - $60
$2 - $5
$50 - $55
Adjusted Total Capital1,4 ($ millions)
$52 - $67
$1 - $2
$50 - $65
Free Cash Flow1 ($ millions)
$30 - $50
Adjusted Free Cash Flow1 ($ millions)
($10) - ($15)
$45 - $60
Natural Gas Marketing Margin ($
millions)
$20 - $25
$20 - $25
Electricity Margin ($ millions)
$40 - $50
$40 - $50
Transportation Expense ($ millions)
$13 - $18
$13 - $18
Cash Income Taxes ($ millions)
$25 - $35
$25 - $35
Commodity Realizations:
Oil - % of Brent:
96% - 99%
96% - 99%
NGL - % of Brent:
45% - 50%
45% - 50%
Natural Gas - % of NYMEX:
140% - 160%
140% - 160%
Second Quarter 2023 E&P Operational
Results
Total daily net production for the three months ended June 30,
2023, compared to the three months ended March 31, 2023 decreased
by approximately 3 MBoe/d largely due to natural decline and
changes in NGL storage volumes. This decrease was partially offset
by increased production from drilling and workover activity. CRC's
PSCs negatively impacted net oil production by 1 MBoe/d in the
three months ended June 30, 2023 compared to the three months ended
March 31, 2023.
During the second quarter of 2023, CRC operated an average of 1
drilling rig in the Los Angeles basin, drilled 6 wells and brought
online 7 wells. See Attachment 3 for further information on CRC's
production results by basin and Attachment 5 for additional
information on CRC's drilling activity.
Second Quarter Financial
Results
2nd Quarter
1st Quarter
($ and shares in millions, except per
share amounts)
2023
2023
Statements of
Operations:
Revenues
Total operating revenues
$
591
$
1,024
Operating Expenses
Total operating expenses
444
638
Gain on asset divestitures
—
7
Operating Income
$
147
$
393
Net Income Attributable to Common
Stock
$
97
$
301
Net income attributable to common stock
per share - basic
$
1.39
$
4.22
Net income attributable to common stock
per share - diluted
$
1.35
$
4.09
Adjusted net income1
$
38
$
193
Adjusted net income1 per share -
diluted
$
0.53
$
2.63
Weighted-average common shares outstanding
- basic
69.7
71.3
Weighted-average common shares outstanding
- diluted
71.9
73.5
Adjusted EBITDAX1
$
138
$
358
Review of Second Quarter 2023 Financial
Results
Realized oil prices, excluding the effects of cash settlements
on CRC's commodity derivative contracts, decreased by $2.91 per
barrel from $78.68 per barrel in the first quarter of 2023 to
$75.77 per barrel in the second quarter of 2023. Prices decreased
slightly as global demand for crude remained generally flat.
Realized oil prices, including the effects of cash settlements
on CRC's commodity derivative contracts, increased by $0.62 from
$63.04 in the first quarter of 2023 to $63.66 in the second quarter
of 2023.
Adjusted EBITDAX1 for the second quarter of 2023 was $138
million. See table below for the Company's net cash provided by
operating activities, capital investments and free cash flow1
during the same periods.
FREE CASH FLOW
Management uses free cash flow, which is
defined by CRC as net cash provided by operating activities less
capital investments, as a measure of liquidity. The following table
presents a reconciliation of CRC's net cash provided by operating
activities to free cash flow. CRC supplemented its non-GAAP measure
of free cash flow with free cash flow of CRC's exploration and
production and corporate items (Free Cash Flow for E&P,
Corporate & Other) which it believes is a useful measure for
investors to understand the results of its core oil and gas
business. CRC defines Free Cash Flow for E&P, Corporate &
Other as consolidated free cash flow less results attributable to
its carbon management business (CMB).
2nd Quarter
1st Quarter
($ millions)
2023
2023
Net cash provided by operating
activities
$
108
$
310
Capital investments
(39
)
(47
)
Free cash flow1
69
263
E&P, corporate & other free cash
flow1
$
78
$
270
CMB free cash flow1
$
(9
)
$
(7
)
The following table presents key operating data for CRC's oil
and gas operations, on a per BOE basis, for the periods presented
below. Energy operating costs consist of purchased natural gas used
to generate electricity for CRC's operations and steam for its
steamfloods, purchased electricity and internal costs to generate
electricity used in CRC's operations. Gas processing costs include
costs associated with compression, maintenance and other activities
needed to run CRC's gas processing facilities at Elk Hills.
Non-energy operating costs equal total operating costs less energy
operating costs and gas processing costs.
OPERATING COSTS PER BOE
The reporting of PSCs creates a difference
between reported operating costs, which are for the full field, and
reported volumes, which are only CRC's net share, inflating the per
barrel operating costs. The following table presents operating
costs after adjusting for the excess costs attributable to
PSCs.
2nd Quarter
1st Quarter
($ per Boe)
2023
2023
Energy operating costs
$
7.39
$
15.56
Gas processing costs
0.64
0.62
Non-energy operating costs
15.68
15.43
Operating costs
$
23.71
$
31.61
Excess costs attributable to PSCs
$
(2.15
)
$
(2.23
)
Operating costs, excluding effects of PSCs
1
$
21.56
$
29.38
Operating costs decreased during the three months ended June 30,
2023 compared to the three months ended March 31, 2023 primarily
due to lower energy operating costs as natural gas prices in
California markets declined between quarters.
Carbon Management Business
Update
In July 2023, CRC applied for a Class VI permit for 17 MMT of
permanent CO2 storage at a new storage vault in the Sacramento
basin, CTV V. With this new permit, CRC has six Class VI permits
on-file with the EPA, bringing CTV's total potential permitted
carbon storage to 191 MMT. As of June 30, 2023, the Class VI
application for CTV IV was determined to be administratively
complete.
In July 2023, CTV entered into a new storage-only CDMA for 100
KMTPA of CO2 injection with Verde Clean Fuels Inc., at CRC's Net
Zero Industrial Park at Elk Hills field in Kern County, California.
Additionally, CTV expanded its Lone Cypress Energy Service, LLC,
(Lone Cypress) blue hydrogen project to 205 KMTPA from 100 KMTPA of
associated CO2 that could be permanently sequestered at CTV I. See
CTV's 2Q23 Press Release for further information on these
projects.
The CDMA frames the contractual terms between parties by
outlining the material economics and terms of the project and
includes conditions precedent to close. The CDMA provides a path
for the parties to reach final definitive documents and FID.
Balance Sheet and Liquidity
Update
The aggregate commitment under CRC's Revolving Credit Facility
was $627 million as of June 30, 2023, which includes a net $25
million increase that occurred during the second quarter of 2023.
The borrowing base for the Revolving Credit Facility was reaffirmed
at $1.2 billion on April 26, 2023 as part of CRC's semi-annual
redetermination.
As of June 30, 2023, CRC had liquidity of $927 million, which
consisted of $448 million in cash and cash equivalents plus $479
million of available borrowing capacity under its Revolving Credit
Facility (which is net of $148 million of issued letters of
credit).
Shareholder Return
Strategy
CRC continues to prioritize shareholder returns and therefore
dedicates a significant portion of its free cash flow to
shareholders in the form of dividends and share repurchases.
On July 28, 2023, CRC's Board of Directors declared a quarterly
cash dividend of $0.2825 per share of common stock. The dividend is
payable to shareholders of record on September 1, 2023 and will be
paid on September 15, 2023.
During the second quarter of 2023, CRC repurchased 1.6 million
shares for $64 million at an average price of $39.12 per share.
Since the inception of the Share Repurchase Program in May 2021
through June 30, 2023, 14,498,770 shares have been repurchased for
$584 million at an average price of $40.18 per share. These total
repurchases represent 17% of CRC’s shares outstanding at emergence
from bankruptcy.
Through June 30, 2023, CRC has returned approximately $700
million of cash to its shareholders, including approximately $600
million in share repurchases and approximately $100 million of
dividends since May 2021. These figures exclude the $20 million
second quarter dividend declared and payable in September 2023.
Upcoming Investor Conference
Participation
CRC's executives will be participating in the following events
in September of 2023:
- Barclays CEO Energy-Power Conference on September 5 to 7 in New
York City, NY
- Pickering Energy Partners TE&M Fest Conference on September
20 to 22 in Austin, TX
- Goldman Sachs Sustainability Forum on September 27 in New York
City, NY
CRC’s presentation materials will be available the day of the
events on the Events and Presentations page in the Investor
Relations section on www.crc.com.
Conference Call Details
To participate in the conference call scheduled for August 1,
2023, at 1:00 p.m. Eastern Time, please dial (877) 328-5505
(International calls please dial +1 (412) 317-5421) or access via
webcast at www.crc.com 15 minutes prior to the scheduled start time
to register. Participants may also pre-register for the conference
call at https://dpregister.com/sreg/10179237/f985ba358a. A digital
replay of the conference call will be archived for approximately 90
days and supplemental slides for the conference call will be
available online in the Investor Relations section of
www.crc.com.
1
See Attachment 2 for the non-GAAP
financial measures of adjusted EBITDAX, operating costs per BOE
(excluding effects of PSCs), adjusted net income (loss), adjusted
net income (loss) per share - basic and diluted, free cash flow,
adjusted free cash flow, adjusted G&A and adjusted total
capital, including reconciliations to their most directly
comparable GAAP measure, where applicable. For the full year 2023
and 3Q23 estimates of the non-GAAP measure of free cash flow,
adjusted free cash flow, adjusted G&A and adjusted capital,
including reconciliations to their most directly comparable GAAP
measure, see Attachment 7.
2
Calculated as $448 million of available
cash plus $627 million of capacity on CRC's Revolving Credit
Facility less $148 million in outstanding letters of credit.
3
Current guidance assumes a 2023 Brent
price of $77.54 per barrel of oil, NGL realizations as a percentage
of Brent consistent with prior years and a NYMEX gas price of $2.87
per mcf and a 3Q23 Brent price of $75.25 per barrel of oil, NGL
realizations as a percentage of Brent consistent with prior years
and a NYMEX gas price of $2.73 per mcf. CRC's share of production
under PSC contracts decreases when commodity prices rise and
increases when prices fall.
4
Adjusted E&P Capital and Adjusted CMB
Capital are Non-GAAP measures. These measures reflect the
reclassification of certain E&P, Corporate & Other Capital
to CMB Capital related to the investment in facilities to advance
carbon sequestration activities. For the full year 2023 and 3Q23
estimates of the non-GAAP measure of free cash flow, including
reconciliations to their most directly comparable GAAP measure, see
Attachment 7.
5
CMB Expenses includes lease cost for
sequestration easements, advocacy, and other startup related
costs.
About Carbon TerraVault
Carbon TerraVault Holdings, LLC (CTV), a subsidiary of CRC,
provides services that include the capture, transport and storage
of carbon dioxide for its customers. CTV is engaged in a series of
CCS projects that inject CO2 captured from industrial sources into
depleted underground reservoirs and permanently store CO2 deep
underground. For more information about CTV, please visit
www.carbonterravault.com.
About California Resources
Corporation
California Resources Corporation (CRC) is an independent energy
and carbon management company committed to energy transition. CRC
produces some of the lowest carbon intensity oil in the US and is
focused on maximizing the value of its land, mineral and technical
resources for decarbonization efforts. For more information about
CRC, please visit www.crc.com.
Forward-Looking
Statements
This document contains statements that CRC believes to be
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements other than historical facts
are forward-looking statements, and include statements regarding
CRC's future financial position, business strategy, projected
revenues, earnings, costs, capital expenditures and plans and
objectives of management for the future. Words such as "expect,"
"could," "may," "anticipate," "intend," "plan," “ability,”
"believe," "seek," "see," "will," "would," "estimate," "forecast,"
"target," "guidance," "outlook," "opportunity" or "strategy" or
similar expressions are generally intended to identify
forward-looking statements. Such forward-looking statements are
subject to risks and uncertainties that could cause actual results
to differ materially from those expressed in, or implied by, such
statements.
Although CRC believes the expectations and forecasts reflected
in its forward-looking statements are reasonable, they are
inherently subject to numerous risks and uncertainties, most of
which are difficult to predict and many of which are beyond CRC's
control. No assurance can be given that such forward-looking
statements will be correct or achieved or that the assumptions are
accurate or will not change over time. Particular uncertainties
that could cause CRC's actual results to be materially different
than those expressed in its forward-looking statements include:
- fluctuations in commodity prices, including supply and demand
considerations for CRC's products and services;
- decisions as to production levels and/or pricing by OPEC or
U.S. producers in future periods;
- government policy, war and political conditions and events,
including the war in Ukraine and oil sanctions on Russia, Iran and
others;
- regulatory actions and changes that affect the oil and gas
industry generally and CRC in particular, including (1) the
availability or timing of, or conditions imposed on, permits and
approvals necessary for drilling or development activities or CRC's
carbon management business; (2) the management of energy, water,
land, greenhouse gases (GHGs) or other emissions, (3) the
protection of health, safety and the environment, or (4) the
transportation, marketing and sale of CRC's products;
- the impact of inflation on future expenses and changes
generally in the prices of goods and services;
- changes in business strategy and CRC's capital plan;
- lower-than-expected production or higher-than-expected
production decline rates;
- changes to CRC's estimates of reserves and related future cash
flows, including changes arising from CRC's inability to develop
such reserves in a timely manner, and any inability to replace such
reserves;
- the recoverability of resources and unexpected geologic
conditions;
- general economic conditions and trends, including conditions in
the worldwide financial, trade and credit markets;
- production-sharing contracts' effects on production and
operating costs;
- the lack of available equipment, service or labor price
inflation;
- limitations on transportation or storage capacity and the need
to shut-in wells;
- any failure of risk management;
- results from operations and competition in the industries in
which CRC operates;
- CRC's ability to realize the anticipated benefits from prior or
future efforts to reduce costs;
- environmental risks and liability under federal, regional,
state, provincial, tribal, local and international environmental
laws and regulations (including remedial actions);
- the creditworthiness and performance of CRC's counterparties,
including financial institutions, operating partners, CCS project
participants and other parties;
- reorganization or restructuring of CRC's operations;
- CRC's ability to claim and utilize tax credits or other
incentives in connection with its CCS projects;
- CRC's ability to realize the benefits contemplated by its
energy transition strategies and initiatives, including CCS
projects and other renewable energy efforts;
- CRC's ability to successfully identify, develop and finance
carbon capture and storage projects and other renewable energy
efforts, including those in connection with the Carbon
TerraVault;
- CRC's ability to convert it's CDMAs to definitive agreements
and enter into other offtake agreements;
- CRC's ability to maximize the value of its carbon management
business and operate it on a stand-alone basis;
- CRC's ability to successfully develop infrastructure projects
and enter into third party contracts on contemplated terms;
- uncertainty around the accounting of emissions and CRC's
ability to successfully gather and verify emissions data and other
environmental impacts;
- changes to CRC's dividend policy and Share Repurchase Program,
and its ability to declare future dividends or repurchase shares
under its debt agreements;
- limitations on CRC's financial flexibility due to existing and
future debt;
- insufficient cash flow to fund CRC's capital plan and other
planned investments and return capital to shareholders;
- changes in interest rates, and CRC's access to and the terms of
credit in commercial banking and capital markets, including its
ability to refinance its debt or obtain separate financing for its
carbon management business;
- changes in state, federal or international tax rates, including
CRC's ability to utilize its net operating loss carryforwards to
reduce its income tax obligations;
- effects of hedging transactions;
- the effect of CRC's stock price on costs associated with
incentive compensation;
- inability to enter into desirable transactions, including joint
ventures, divestitures of oil and natural gas properties and real
estate, and acquisitions, and CRC's ability to achieve any expected
synergies;
- disruptions due to earthquakes, forest fires, floods, extreme
weather events or other natural occurrences, accidents, mechanical
failures, power outages, transportation or storage constraints,
labor difficulties, cybersecurity breaches or attacks or other
catastrophic events;
- pandemics, epidemics, outbreaks, or other public health events,
such as the COVID-19 pandemic; and
- other factors discussed in Part I, Item 1A – Risk Factors in
CRC's Annual Report on Form 10-K and its other SEC filings
available at www.crc.com.
CRC cautions you not to place undue reliance on forward-looking
statements contained in this document, which speak only as of the
filing date, and CRC undertakes no obligation to update this
information. This document may also contain information from third
party sources. This data may involve a number of assumptions and
limitations, and CRC has not independently verified them and do not
warrant the accuracy or completeness of such third-party
information.
Attachment 1
SUMMARY OF RESULTS
2nd Quarter
1st Quarter
2nd Quarter
Six Months
Six Months
($ and shares in millions, except per
share amounts)
2023
2023
2022
2023
2022
Statements of Operations:
Revenues
Oil, natural gas and NGL sales
$
447
$
715
$
718
$
1,162
$
1,346
Net gain (loss) from commodity
derivatives
31
42
(100
)
73
(662
)
Sales of purchased natural gas
72
184
75
256
107
Electricity sales
34
68
49
102
83
Other revenue
7
15
5
22
26
Total operating revenues
591
1,024
747
1,615
900
Operating Expenses
Operating costs
186
254
190
440
372
General and administrative expenses(1)
71
65
56
136
104
Depreciation, depletion and
amortization
56
58
50
114
99
Asset impairment
—
3
2
3
2
Taxes other than on income
42
42
42
84
76
Exploration expense
1
1
1
2
2
Purchased natural gas expense
27
124
67
151
88
Electricity generation expenses
13
49
33
62
57
Transportation costs
16
17
12
33
24
Accretion expense
11
12
11
23
22
Other operating expenses, net
21
13
9
34
23
Total operating expenses
444
638
473
1,082
869
Net gain on asset divestitures
—
7
4
7
58
Operating Income
147
393
278
540
89
Non-Operating (Expenses) Income
Interest and debt expense
(14
)
(14
)
(13
)
(28
)
(26
)
Loss from investment in unconsolidated
subsidiary
(1
)
(2
)
—
(3
)
—
Other non-operating income (expense),
net
3
(1
)
1
2
2
Income Before Income Taxes
135
376
266
511
65
Income tax provision
(38
)
(75
)
(76
)
(113
)
(50
)
Net income
$
97
$
301
$
190
$
398
$
15
Net income attributable to common stock
per share - basic
$
1.39
$
4.22
$
2.48
$
5.65
$
0.19
Net income attributable to common stock
per share - diluted
$
1.35
$
4.09
$
2.41
$
5.47
$
0.19
Adjusted net income
$
38
$
193
$
89
$
231
$
180
Adjusted net income per share - basic
$
0.55
$
2.71
$
1.16
$
3.28
$
2.32
Adjusted net income per share -
diluted
$
0.53
$
2.63
$
1.13
$
3.18
$
2.26
Weighted-average common shares outstanding
- basic
69.7
71.3
76.7
70.5
77.6
Weighted-average common shares outstanding
- diluted
71.9
73.5
78.8
72.7
79.6
Adjusted EBITDAX
$
138
$
358
$
204
$
496
$
410
Effective tax rate
28
%
20
%
29
%
22
%
78
%
(1) General and administrative expenses
included $13 million, $9 million and $6 million of non-cash stock
based compensation expense for the second quarter of 2023, first
quarter of 2023 and second quarter of 2022, respectively. General
and administrative expenses included $22 million and $12 million of
non-cash stock based compensation expense for the six months ended
June 30, 2023 and 2022, respectively. General and administrative
expenses also included $3 million and $5 million in the first and
second quarters of 2023, respectively, related to information
technology infrastructure.
2nd Quarter
1st Quarter
2nd Quarter
Six Months
Six Months
($ in millions)
2023
2023
2022
2023
2022
Cash Flow Data:
Net cash provided by operating
activities
$
108
$
310
$
181
$
418
$
341
Net cash used in investing activities
$
(44
)
$
(61
)
$
(76
)
$
(105
)
$
(129
)
Net cash used in financing activities
$
(93
)
$
(79
)
$
(109
)
$
(172
)
$
(193
)
June 30,
December 31,
($ in millions)
2023
2022
Selected Balance Sheet Data:
Total current assets
$
867
$
864
Property, plant and equipment, net
$
2,745
$
2,786
Deferred tax asset
$
108
$
164
Total current liabilities
$
582
$
894
Long-term debt, net
$
593
$
592
Noncurrent asset retirement
obligations
$
411
$
432
Stockholders' Equity
$
2,110
$
1,864
GAINS AND LOSSES FROM COMMODITY
DERIVATIVES
2nd Quarter
1st Quarter
2nd Quarter
Six Months
Six Months
($ millions)
2023
2023
2022
2023
2022
Non-cash derivative gain (loss)
$
94
$
107
$
141
$
201
$
(240
)
Net payments on settled commodity
derivatives
(63
)
(65
)
(241
)
(128
)
(422
)
Net gain (loss) from commodity
derivatives
$
31
$
42
$
(100
)
$
73
$
(662
)
CAPITAL INVESTMENTS
2nd Quarter
1st Quarter
2nd Quarter
Six Months
Six Months
($ millions)
2023
2023
2022
2023
2022
Facilities (1)
$
11
$
9
$
15
$
20
$
32
Drilling
13
25
62
38
121
Workovers
11
6
9
17
15
Total E&P capital
35
40
86
75
168
CMB (1)
—
1
10
1
11
Corporate and other
4
6
2
10
18
Total capital program
$
39
$
47
$
98
$
86
$
197
(1) Facilities capital includes $1
million, $1 million and $3 million in the second and first quarter
of 2023 and second quarter of 2022, respectively, to build
replacement water injection facilities which will allow CRC to
divert produced water away from a depleted oil and natural gas
reservoir held by the Carbon TerraVault JV. Construction of these
facilities supports the advancement of CRC’s carbon management
business and CRC reported these amounts as part of adjusted CMB
capital in this earnings release. Where adjusted CMB capital is
presented, CRC removed the amounts from facilities capital and
presented adjusted E&P, Corporate and Other capital.
Attachment 2
NON-GAAP FINANCIAL MEASURES AND
RECONCILIATIONS
To supplement the presentation of its
financial results prepared in accordance with U.S generally
accepted accounting principles (GAAP), management uses certain
non-GAAP measures to assess its financial condition, results of
operations and cash flows. The non-GAAP measures include adjusted
net income (loss), adjusted EBITDAX, E&P, Corporate & Other
adjusted EBITDAX, CMB adjusted EBITDAX, free cash flow, E&P,
Corporate & Other free cash flow, CMB free cash flow, adjusted
general and administrative expenses, operating costs per BOE, and
adjusted total capital among others. These measures are also widely
used by the industry, the investment community and CRC's lenders.
Although these are non-GAAP measures, the amounts included in the
calculations were computed in accordance with GAAP. Certain items
excluded from these non-GAAP measures are significant components in
understanding and assessing CRC's financial performance, such as
CRC's cost of capital and tax structure, as well as the effect of
acquisition and development costs of CRC's assets. Management
believes that the non-GAAP measures presented, when viewed in
combination with CRC's financial and operating results prepared in
accordance with GAAP, provide a more complete understanding of the
factors and trends affecting the Company's performance. The
non-GAAP measures presented herein may not be comparable to other
similarly titled measures of other companies. Below are additional
disclosures regarding each of the non-GAAP measures reported in
this earnings release, including reconciliations to their most
directly comparable GAAP measure where applicable.
ADJUSTED NET INCOME (LOSS)
Adjusted net income (loss) and adjusted
net income (loss) per share are non-GAAP measures. CRC defines
adjusted net income as net income excluding the effects of
significant transactions and events that affect earnings but vary
widely and unpredictably in nature, timing and amount. These events
may recur, even across successive reporting periods. Management
believes these non-GAAP measures provide useful information to the
industry and the investment community interested in comparing CRC's
financial performance between periods. Reported earnings are
considered representative of management's performance over the long
term. Adjusted net income (loss) is not considered to be an
alternative to net income (loss) reported in accordance with GAAP.
The following table presents a reconciliation of the GAAP financial
measure of net income and net income attributable to common stock
per share to the non-GAAP financial measure of adjusted net income
and adjusted net income per share.
2nd Quarter
1st Quarter
2nd Quarter
Six Months
Six Months
($ millions, except per share amounts)
2023
2023
2022
2023
2022
Net income
$
97
$
301
$
190
$
398
$
15
Unusual, infrequent and other items:
Non-cash derivative (gain) loss
(94
)
(107
)
(141
)
(201
)
240
Asset impairment
—
3
2
3
2
Severance and termination costs
2
1
—
3
—
Net (gain) loss on asset divestitures
—
(7
)
(4
)
(7
)
(58
)
Other, net
10
3
2
13
3
Total unusual, infrequent and other
items
(82
)
(107
)
(141
)
(189
)
187
Income tax provision (benefit) of
adjustments at effective tax rate
23
30
40
53
(53
)
Income tax (benefit) provision - out of
period
—
(31
)
—
(31
)
31
Adjusted net income attributable to common
stock
$
38
$
193
$
89
$
231
$
180
Net income attributable to common stock
per share - basic
$
1.39
$
4.22
$
2.48
$
5.65
$
0.19
Net income attributable to common stock
per share - diluted
$
1.35
$
4.09
$
2.41
$
5.47
$
0.19
Adjusted net income per share - basic
$
0.55
$
2.71
$
1.16
$
3.28
$
2.32
Adjusted net income per share -
diluted
$
0.53
$
2.63
$
1.13
$
3.18
$
2.26
ADJUSTED EBITDAX
CRC defines Adjusted EBITDAX as earnings
before interest expense; income taxes; depreciation, depletion and
amortization; exploration expense; other unusual, infrequent and
out-of-period items; and other non-cash items. CRC believes this
measure provides useful information in assessing its financial
condition, results of operations and cash flows and is widely used
by the industry, the investment community and its lenders. Although
this is a non-GAAP measure, the amounts included in the calculation
were computed in accordance with GAAP. Certain items excluded from
this non-GAAP measure are significant components in understanding
and assessing CRC’s financial performance, such as its cost of
capital and tax structure, as well as depreciation, depletion and
amortization of CRC's assets. This measure should be read in
conjunction with the information contained in CRC’s financial
statements prepared in accordance with GAAP. A version of Adjusted
EBITDAX is a material component of certain of its financial
covenants under CRC's Revolving Credit Facility and is provided in
addition to, and not as an alternative for, income and liquidity
measures calculated in accordance with GAAP.
The following table represents a
reconciliation of the GAAP financial measures of net income and net
cash provided by operating activities to the non-GAAP financial
measure of adjusted EBITDAX. CRC has supplemented its non-GAAP
measures of consolidated adjusted EBITDAX with adjusted EBITDAX for
its exploration and production and corporate items (Adjusted
EBITDAX for E&P, Corporate & Other) which management
believes is a useful measure for investors to understand the
results of the core oil and gas business. CRC defines adjusted
EBITDAX for E&P, Corporate & Other as consolidated adjusted
EBITDAX less results attributable to its carbon management business
(CMB).
2nd Quarter
1st Quarter
2nd Quarter
Six Months
Six Months
($ millions, except per BOE amounts)
2023
2023
2022
2023
2022
Net income
$
97
$
301
$
190
$
398
$
15
Interest and debt expense
14
14
13
28
26
Depreciation, depletion and
amortization
56
58
50
114
99
Income tax provision (benefit)
38
75
76
113
50
Exploration expense
1
1
1
2
2
Interest income
(5
)
(4
)
—
(9
)
—
Unusual, infrequent and other items
(1)
(82
)
(107
)
(141
)
(189
)
187
Non-cash items
Accretion expense
11
12
11
23
22
Stock-based compensation
8
7
4
15
8
Post-retirement medical and pension
—
1
—
1
1
Adjusted EBITDAX
$
138
$
358
$
204
$
496
$
410
Net cash provided by operating
activities
$
108
$
310
$
181
$
418
$
341
Cash interest payments
2
23
2
25
25
Cash interest received
(5
)
(4
)
—
(9
)
—
Cash income taxes
51
—
20
51
20
Exploration expenditures
1
1
1
2
2
Working capital changes
(19
)
28
—
9
22
Adjusted EBITDAX
$
138
$
358
$
204
$
496
$
410
E&P, Corporate & Other Adjusted
EBITDAX
$
151
$
367
$
209
$
518
$
417
CMB Adjusted EBITDAX
$
(13
)
$
(9
)
$
(5
)
$
(22
)
$
(7
)
Adjusted EBITDAX per Boe
$
17.59
$
44.55
$
24.61
$
31.23
$
25.24
(1) See Adjusted Net Income (Loss)
reconciliation.
FREE CASH FLOW
Management uses free cash flow, which is
defined by CRC as net cash provided by operating activities less
capital investments, as a measure of liquidity. The following table
presents a reconciliation of CRC's net cash provided by operating
activities to free cash flow. CRC supplemented its non-GAAP measure
of free cash flow with free cash flow of its exploration and
production and corporate items (Free Cash Flow for E&P,
Corporate & Other), which it believes is a useful measure for
investors to understand the results of CRC's core oil and gas
business. CRC defines Free Cash Flow for E&P, Corporate &
Other as consolidated free cash flow less results attributable to
its carbon management business (CMB).
2nd Quarter
1st Quarter
2nd Quarter
Six Months
Six Months
($ millions)
2023
2023
2022
2023
2022
Net cash provided by operating
activities
$
108
$
310
$
181
$
418
$
341
Capital investments
(39
)
(47
)
(98
)
(86
)
(197
)
Free cash flow
$
69
$
263
$
83
$
332
$
144
E&P, Corporate and Other
$
78
$
270
$
98
$
348
$
162
CMB
$
(9
)
$
(7
)
$
(15
)
$
(16
)
$
(18
)
Adjustments to capital investments:
Replacement water facilities(1)
$
1
$
1
$
3
$
2
$
5
Adjusted capital investments:
E&P, Corporate and Other
$
38
$
45
$
85
$
83
$
181
CMB
$
1
$
2
$
13
$
3
$
16
Adjusted free cash flow(2):
E&P, Corporate and Other
$
79
$
271
$
101
$
350
$
167
CMB
$
(10
)
$
(8
)
$
(18
)
$
(18
)
$
(23
)
(1) Facilities capital includes $1
million, $1 million and $3 million in the first and second quarter
of 2023 and second quarter of 2022, respectively, to build
replacement water injection facilities which will allow CRC to
divert produced water away from a depleted oil and natural gas
reservoir held by the Carbon TerraVault JV. Construction of these
facilities supports the advancement of CRC’s carbon management
business and CRC reported these amounts as part of adjusted CMB
capital in this press release. Where adjusted CMB capital is
presented, CRC removed the amounts from facilities capital and
presented adjusted E&P, Corporate and Other capital.
(2) Adjusted free cash flow is defined as
net cash provided by operating activities less adjusted capital
investments.
ADJUSTED GENERAL & ADMINISTRATIVE
EXPENSES
Management uses a measure called adjusted
general and administrative (G&A) expenses to provide useful
information to investors interested in comparing CRC's costs
between periods and performance to our peers. CRC supplemented its
non-GAAP measure of adjusted general and administrative expenses
with adjusted general and administrative expenses of its
exploration and production and corporate items (adjusted general
& administrative expenses for E&P, Corporate & Other)
which it believes is a useful measure for investors to understand
the results or CRC's core oil and gas business. CRC defines
adjusted general & administrative Expenses for E&P,
Corporate & Other as consolidated adjusted general and
administrative expenses less results attributable to its carbon
management business (CMB).
2nd Quarter
1st Quarter
2nd Quarter
Six Months
Six Months
($ millions)
2023
2023
2022
2023
2022
General and administrative expenses
$
71
$
65
$
56
$
136
$
104
Stock-based compensation
(8
)
(7
)
(4
)
(15
)
(8
)
Other
(6
)
(3
)
(1
)
(9
)
(1
)
Adjusted G&A expenses
$
57
$
55
$
51
$
112
$
95
E&P, Corporate and Other adjusted
G&A expenses
$
54
$
52
$
47
$
106
$
90
CMB adjusted G&A expenses
$
3
$
3
$
4
$
6
$
5
OPERATING COSTS PER BOE
The reporting of PSC-type contracts
creates a difference between reported operating costs, which are
for the full field, and reported volumes, which are only CRC's net
share, inflating the per barrel operating costs. The following
table presents operating costs after adjusting for the excess costs
attributable to PSCs.
2nd Quarter
1st Quarter
2nd Quarter
Six Months
Six Months
($ per BOE)
2023
2023
2022
2023
2022
Energy operating costs (1)
$
7.39
$
15.56
$
6.88
$
11.52
$
6.78
Gas processing costs (2)
0.64
0.62
0.54
0.63
0.55
Non-energy operating costs (3)
15.68
15.43
15.50
15.56
15.57
Operating costs
$
23.71
$
31.61
$
22.92
$
27.71
$
22.90
Costs attributable to PSCs
Excess energy operating costs attributable
to PSCs
$
(0.91
)
$
(1.19
)
$
(1.03
)
$
(0.98
)
$
(0.96
)
Excess non-energy operating costs
attributable to PSCs
(1.24
)
(1.04
)
(1.55
)
(1.21
)
(1.49
)
Excess costs attributable to
PSCs
$
(2.15
)
$
(2.23
)
$
(2.58
)
$
(2.19
)
$
(2.45
)
Energy operating costs, excluding effect
of PSCs (1)
$
6.48
$
14.37
$
5.85
$
10.54
$
5.82
Gas processing costs, excluding effect of
PSCs (2)
0.64
0.62
0.54
0.63
0.55
Non-energy operating costs, excluding
effect of PSCs (3)
14.44
14.39
13.95
14.35
14.08
Operating costs, excluding effects of
PSCs
$
21.56
$
29.38
$
20.34
$
25.52
$
20.45
(1) Energy operating costs consist of
purchased natural gas used to generate electricity for operations
and steamfloods, purchased electricity and internal costs to
generate electricity used in CRC's operations.
(2) Gas processing costs include costs
associated with compression, maintenance and other activities
needed to run CRC's gas processing facilities at Elk Hills.
(3) Non-energy operating costs equal total
operating costs less energy operating costs and gas processing
costs. Purchased natural gas used to generate steam in CRC's
steamfloods was reclassified from non-energy operating costs to
energy operating costs beginning in the third quarter of 2022. All
prior periods have been updated to conform to this
presentation.
Attachment 3
PRODUCTION STATISTICS
2nd Quarter
1st Quarter
2nd Quarter
Six Months
Six Months
Net Production Per Day
2023
2023
2022
2023
2022
Oil (MBbl/d)
San Joaquin Basin
34
35
38
35
38
Los Angeles Basin
19
20
16
19
17
Total
53
55
54
54
55
NGLs (MBbl/d)
San Joaquin Basin
11
11
12
11
11
Total
11
11
12
11
11
Natural Gas (MMcf/d)
San Joaquin Basin
119
119
132
119
127
Los Angeles Basin
1
1
1
1
1
Sacramento Basin
15
16
18
16
18
Total
135
136
151
136
146
Total Production (MBoe/d)
86
89
91
88
90
Gross Operated and Net
Non-Operated
2nd Quarter
1st Quarter
2nd Quarter
Six Months
Six Months
Production Per Day
2023
2023
2022
2023
2022
Oil (MBbl/d)
San Joaquin Basin
38
39
42
39
42
Los Angeles Basin
25
26
25
25
26
Total
63
65
67
64
68
NGLs (MBbl/d)
San Joaquin Basin
12
12
13
12
11
Total
12
12
13
12
11
Natural Gas (MMcf/d)
San Joaquin Basin
136
135
141
135
135
Los Angeles Basin
7
7
7
7
7
Sacramento Basin
19
20
22
20
23
Total
162
162
170
162
165
Total Production (MBoe/d)
103
103
108
103
106
Note: MBbl/d refers to thousands
of barrels per day; MMcf/d refers to millions of cubic feet per
day; MBoe/d refers to thousands of barrels of oil equivalent (Boe)
per day. Natural gas volumes have been converted to Boe based on
the equivalence of energy content of six thousand cubic feet of
natural gas to one barrel of oil. Barrels of oil equivalence does
not necessarily result in price equivalence.
Attachment 4
PRICE STATISTICS
2nd Quarter
1st Quarter
2nd Quarter
Six Months
Six Months
2023
2023
2022
2023
2022
Oil ($ per Bbl)
Realized price with derivative
settlements
$
63.66
$
63.04
$
63.17
$
63.35
$
61.71
Realized price without derivative
settlements
$
75.77
$
78.68
$
112.32
$
77.25
$
104.07
NGLs ($/Bbl)
$
42.48
$
58.88
$
68.29
$
50.88
$
72.57
Natural gas ($/Mcf)
Realized price with derivative
settlements
$
3.46
$
21.56
$
6.72
$
12.44
$
6.51
Realized price without derivative
settlements
$
3.46
$
21.56
$
6.85
$
12.44
$
6.58
Index Prices
Brent oil ($/Bbl)
$
78.01
$
82.22
$
111.79
$
80.12
$
104.59
WTI oil ($/Bbl)
$
73.78
$
76.13
$
108.41
$
74.95
$
101.35
NYMEX average monthly settled price
($/MMBtu)
$
2.10
$
3.42
$
7.17
$
2.76
$
6.06
Realized Prices as Percentage of Index
Prices
Oil with derivative settlements as a
percentage of Brent
82
%
77
%
57
%
79
%
59
%
Oil without derivative settlements as a
percentage of Brent
97
%
96
%
100
%
96
%
100
%
Oil with derivative settlements as a
percentage of WTI
86
%
83
%
58
%
85
%
61
%
Oil without derivative settlements as a
percentage of WTI
103
%
103
%
104
%
103
%
103
%
NGLs as a percentage of Brent
54
%
72
%
61
%
64
%
69
%
NGLs as a percentage of WTI
58
%
77
%
63
%
68
%
72
%
Natural gas with derivative settlements as
a percentage of NYMEX contract month average
165
%
630
%
94
%
451
%
107
%
Natural gas without derivative settlements
as a percentage of NYMEX contract month average
165
%
630
%
96
%
451
%
109
%
Attachment 5
SECOND QUARTER 2023 DRILLING
ACTIVITY
San Joaquin
Los Angeles
Ventura
Sacramento
Wells Drilled
Basin
Basin
Basin
Basin
Total
Development Wells
Primary
—
—
—
—
—
Waterflood
—
6
—
—
6
Steamflood
—
—
—
—
—
Total (1)
—
6
—
—
6
SIX MONTHS 2023 DRILLING
ACTIVITY
San Joaquin
Los Angeles
Ventura
Sacramento
Wells Drilled
Basin
Basin
Basin
Basin
Total
Development Wells
Primary
2
—
—
—
2
Waterflood
1
12
—
—
13
Steamflood
—
—
—
—
—
Total (1)
3
12
—
—
15
(1) Includes steam injectors and drilled
but uncompleted wells, which are not included in the SEC definition
of wells drilled.
Attachment 6
OIL HEDGES AS OF JUNE 30, 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
2H 2024
2025
Sold Calls
Barrels per day
17,363
5,747
7,750
10,500
10,375
14,811
Weighted-average Brent price per
barrel
$
57.06
$
57.06
$
90.00
$
90.20
$
90.20
$
85.83
Swaps
Barrels per day
19,697
27,094
6,000
1,000
1,000
1,687
Weighted-average Brent price per
barrel
$
70.73
$
70.73
$
79.06
$
77.20
$
77.20
$
70.32
Net Purchased Puts (1)
Barrels per day
17,363
5,747
14,684
10,500
10,375
14,811
Weighted-average Brent price per
barrel
$
76.25
$
76.25
$
69.72
$
65.48
$
65.48
$
60.00
(1) Purchased puts and sold puts with the
same strike price have been presented on a net basis.
Attachment 7
2023 Estimated
TOTAL CRC GUIDANCE1
Consolidated
CMB
E&P, Corporate &
Other
Net Total Production (MBoe/d)
85 - 91
85 - 91
Net Oil Production (MBbl/d)
51 - 55
51 - 55
Operating Costs ($ millions)
$815 - $850
$815 - $850
CMB Expenses2 ($ millions)
$25 - $35
$25 - $35
Adjusted General and Administrative
Expenses1 ($ millions)
$195 - $225
$10 - $15
$185 - $210
Adjusted Total Capital3 ($ millions)
$200 - $245
$15 - $25
$185 - $220
Free Cash Flow3 ($ millions)
$380 - $460
Adjusted Free Cash Flow3 ($ millions)
($60) - ($80)
$460 - $520
Natural Gas Marketing Margin ($
millions)
$135 - $150
$135 - $150
Electricity Margin ($ millions)
$70 - $110
$70 - $110
Transportation Expense ($ millions)
$50 - $70
$50 - $70
ARO Settlement Payments* ($ millions)
$55 - $60
$55 - $60
Taxes Other Than on Income* ($
millions)
$175 - $185
$175 - $185
Interest and Debt Expense* ($
millions)
$55 - $60
$5 - $6
$50 - $54
Cash Income Taxes* ($ millions)
$100 - $120
$100 - $120
Commodity Realizations:
Oil - % of Brent:
94% - 97%
94% - 97%
NGL - % of Brent:
54% - 58%
54% - 58%
Natural Gas - % of NYMEX*:
275% - 325%
275% - 325%
*Notes:
- 2023E ARO Settlement Payments: ~25% of estimated annual amount
is paid every quarter
- 2023E Taxes Other Than on Income: ~30% of estimated annual
amount is paid in 1Q, 2Q and 4Q
- 2023E Interest Expense: ~46% of estimated annual amount is paid
in cash in 1Q and 3Q
- Cash Income Taxes aren’t paid evenly throughout 2023
CRC GUIDANCE3
Total
3Q23E
CMB
3Q23E
E&P, Corp. & Other
3Q23E
Net Total Production (MBoe/d)
86 - 88
86 - 88
Net Oil Production (MBbl/d)
52 - 54
52 - 54
Operating Costs ($ millions)
$185 - $205
$185 - $205
CMB Expenses2 ($ millions)
$5 - $10
$5 - $10
Adjusted General and Administrative
Expenses1 ($ millions)
$52 - $60
$2 - $5
$50 - $55
Adjusted Total Capital3 ($ millions)
$52 - $67
$1 - $2
$50 - $65
Free Cash Flow3 ($ millions)
$30 - $50
Adjusted Free Cash Flow3 ($ millions)
($10) - ($15)
$45 - $60
Natural Gas Marketing Margin ($
millions)
$20 - $25
$20 - $25
Electricity Margin ($ millions)
$40 - $50
$40 - $50
Transportation Expense ($ millions)
$13 - $18
$13 - $18
Cash Income Taxes ($ millions)
$25 - $35
$25 - $35
Commodity Realizations:
Oil - % of Brent:
96% - 99%
96% - 99%
NGL - % of Brent:
45% - 50%
45% - 50%
Natural Gas - % of NYMEX:
140% - 160%
140% - 160%
See Attachment 2 for management's
disclosure of its use of these non-GAAP measures and how these
measures provide useful information to investors about CRC's
results of operations and financial condition. CRC has supplemented
its non-GAAP measures of consolidated free cash flow with free cash
flow from CRC's exploration and production and corporate items
(free cash flow from E&P, Corporate & Other) which CRC
believes is a useful measure for investors to understand the
results of its core oil and gas business. CRC defines free cash
flow from E&P, Corporate & Other as consolidated free cash
flow less free cash flow attributable to CMB.
ESTIMATED FREE CASH FLOW
RECONCILIATION
2023 Estimated
Consolidated
CMB
E&P, Corporate &
Other
($ millions)
Low
High
Low
High
Low
High
Net cash provided (used) by operating
activities
$
625
$
660
$
(55
)
$
(45
)
$
680
$
705
Capital investments
(245
)
(200
)
(15
)
(5
)
(230
)
(195
)
Estimated free cash flow
$
380
$
460
$
(70
)
$
(50
)
$
450
$
510
Adjustments to capital investments:
Replacement water facilities
(10
)
(10
)
10
10
Adjusted capital investments(3)
$
(25
)
$
(15
)
$
(220
)
$
(185
)
Net cash provided (used) by operating
activities
$
(55
)
$
(45
)
$
680
$
705
Adjusted capital investments
(25
)
(15
)
(220
)
(185
)
Estimated adjusted free cash
flow
$
(80
)
$
(60
)
$
460
$
520
3Q23 Estimated
Consolidated
CMB
E&P, Corporate &
Other
($ millions)
Low
High
Low
High
Low
High
Net cash provided (used) by operating
activities
$
92
$
96
$
(13
)
$
(9
)
$
105
$
105
Capital investments
(62
)
(46
)
(1
)
—
(61
)
(46
)
Estimated free cash flow
$
30
$
50
$
(14
)
$
(9
)
$
44
$
59
Adjustments to capital investments:
Replacement water facilities
(1
)
(1
)
1
1
Adjusted capital investments(3)
$
(2
)
$
(1
)
$
(60
)
$
(45
)
Net cash provided (used) by operating
activities
$
(13
)
$
(9
)
$
105
$
105
Adjusted capital investments
(2
)
(1
)
(60
)
(45
)
Estimated adjusted free cash
flow
$
(15
)
$
(10
)
$
45
$
60
ESTIMATED ADJUSTED GENERAL AND
ADMINISTRATIVE EXPENSES RECONCILIATION
2023 Estimated
Consolidated
CMB
E&P, Corporate &
Other
($ millions)
Low
High
Low
High
Low
High
General and administrative expenses
$
235
$
250
$
10
$
15
$
225
$
235
Equity-settled stock-based
compensation
(25
)
(15
)
(25
)
(15
)
Other
(15
)
(10
)
(15
)
(10
)
Estimated adjusted general and
administrative expenses
$
195
$
225
$
10
$
15
$
185
$
210
3Q23 Estimated
Consolidated
CMB
E&P, Corporate &
Other
($ millions)
Low
High
Low
High
Low
High
General and administrative expenses
$
67
$
72
$
2
$
5
$
65
$
67
Equity-settled stock-based
compensation
(8
)
(6
)
(8
)
(6
)
Other
(7
)
(6
)
(7
)
(6
)
Estimated adjusted general and
administrative expenses
$
52
$
60
$
2
$
5
$
50
$
55
(1) Current guidance assumes a 2023 Brent
price of $77.54 per barrel of oil, NGL realizations as a percentage
of Brent consistent with prior years and a NYMEX gas price of $2.87
per mcf and a 3Q23 Brent price of $75.25 per barrel of oil, NGL
realizations as a percentage of Brent consistent with prior years
and a NYMEX gas price of $2.73 per mcf. CRC's share of production
under PSC contracts decreases when commodity prices rise and
increases when prices fall.
(2) CMB Expenses includes lease cost for
sequestration easements, advocacy, and other startup related
costs.
(3) Adjusted E&P capital investments
and Adjusted CMB capital investments are non-GAAP measures. These
measures reflect E&P facilities capital for replacement water
injection facilities (which will allow CRC's oil and gas operations
to divert produced water away from a depleted oil and natural gas
reservoir held by the Carbon TerraVault JV) as Adjusted CMB capital
investment. Construction of these facilities supports the
advancement of CRC’s carbon management business (CMB). CRC has
supplemented its non-GAAP financial measure of free cash flow with
adjusted free cash flow calculated using adjusted capital
investments for its E&P, Corporate & Other. Management
believes this is a useful measure for investors to understand the
results of the core oil and gas business. CRC defines adjusted free
cash flow for E&P, Corporate & Other as consolidated free
cash flow less results attributable to its carbon management
business.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230731313922/en/
Joanna Park (Investor Relations) 818-661-3731
Joanna.Park@crc.com
Richard Venn (Media) 818-661-6014 Richard.Venn@crc.com
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