California Resources Stock

California Resources Corporation operates as an independent oil and natural gas exploration and production and carbon management company. The company’s operating properties are exclusively within California. The company is committed to energy transition and has some of the lowest carbon intensity production in the United States. The company is in the early stages of developing several carbon capture and storage projects in California. The company’s carbon management business, that it refers to as Carbon TerraVault, is expected to build, install, operate and maintain CO2 capture equipment, transportation assets and storage facilities in California.

Oil and Natural Gas Operations

As of December 31, 2023, the company held approximately 1.7 million net mineral acres, the largest privately owned mineral acreage position in California. The company’s operated asset base spans 97 distinct fields. The company had average net production of approximately 86 MBoe/d (60% oil) for the year ended December 31, 2023.

San Joaquin Basin

The company holds substantially all the working, surface and mineral interests in the Elk Hills field, which is its largest producing asset in the San Joaquin basin and has a large ownership interest in several other oil fields located in the San Joaquin basin, including Buena Vista and Coles Levee. The company has also been successfully developing steamfloods in its Kern Front operations.

At Elk Hills the company operates efficient natural gas processing facilities, including a cryogenic gas plant, with a combined gas processing capacity of 330 MMcf/d (million cubic feet of natural gas per day.). Additionally, the company’s Elk Hills power plant generates electricity to power its oil and gas operations at the Elk Hills field, and offers excess power to the California Independent System Operator (CAISO) wholesale energy marketplace. The company also markets power plant capacity in excess of its internal needs to the CAISO Resource Adequacy (RA) marketplace. The company’s operations at Elk Hills also include an advanced central control facility and remote automation control on over 95% of the producing wells.

The company’s extensive 3D seismic library, which covers over 800,000 acres in the San Joaquin basin, or over 50% of its gross mineral acreage in this basin, gives it a competitive advantage in field development.

Los Angeles Basin

The Los Angeles basin has one of the highest concentrations per acre of crude oil in the world. Large active oil fields in this basin include the Wilmington and Huntington Beach fields, where the company has significant operations.

The company is pursuing the potential divestiture of its 90-acre Huntington Beach field, which is currently a producing oil field with average daily net production of 3 MBoe/d. At its Huntington Beach field the company has begun the plugging and abandonment work of wells in 2024. The company is working towards the longer-term remediation of this property to provide flexibility for real estate sales in the future.

Sacramento Basin

The Sacramento basin is a deep, thick sequence of sedimentary deposits of natural gas within an elongated northwest-trending structural feature covering about 7.7 million acres. The company is in the process of pursuing permits to facilitate production growth and develop this resource, leveraging the existing infrastructure already in place.

Ventura Basin

The company divested a vast majority of its assets in the Ventura basin other than a de minimis non-operated asset, during the fourth quarter of 2021 and the first quarter of 2022. The company expects the sale of its remaining Ventura basin asset could occur in 2024.

Other

The company also has mineral interests in undeveloped acreage throughout California including in the Salinas basin and the Santa Maria basin.

Marketing Arrangements

Crude Oil – The company sells nearly all of its crude oil to California refiners. A majority of the company’s crude oil production is connected to third-party pipelines and California refining markets via its gathering systems. Natural Gas – The company sells all of its natural gas not used in its operations into the California market. In addition to selling natural gas, the company also uses natural gas in steam generation for its steamfloods and power generation.

The company holds transportation capacity contracts to transport all of its natural gas volumes for multiple years.

NGLs – The company processes its wet gas to extract NGLs and other natural gas byproducts. The company then delivers dry gas to pipelines and separately sell the remaining products as NGLs. The efficiency with which the company extracts liquids from the wet gas stream affects its operating results. The company’s natural gas-processing plants also facilitate access to third-party delivery points near the Elk Hills field.

The company has a ship-or-pay pipeline transportation contract for approximately 6,100 barrels per day of NGLs through March 2026. The company’s contract to transport NGLs requires it to cash settle any shortfall between the committed quantities and volumes actually shipped. The company has met all its shipping commitments under this contract for the periods presented.

Electricity – A portion of the electrical output of the Elk Hills power plant is used by Elk Hills and other nearby production fields. This provides a reliable source of power. The company sells remaining electrical output to the CAISO wholesale power market. The company sells capacity in excess of its site needs into the CAISO RA marketplace.

Delivery Commitments

The company has commitments to certain refineries and other buyers to deliver oil, natural gas and NGLs. As of December 31, 2023, the company had oil delivery commitments averaging 9 MMBbl (million barrels of crude oil, condensate or NGLs) in 2024 and 1 MMBbl in 2025, NGL delivery commitments of 1 MMBbl through March 2024 and natural gas delivery commitments of 15 Bcf through December 2024. The company generally has significantly more production than the amounts committed for delivery and have the ability to secure additional volumes of products as needed.

Principal Customers

The company sells crude oil, natural gas and NGLs to marketers, California refineries and other purchasers that have access to transportation and storage facilities. The company’s ability to sell its products can be affected by factors that are beyond its control and cannot be accurately predicted.

Title to Properties

As is customary in the oil and natural gas industry for acquired properties, the company initially conducts a level review of the title to its properties at the time of acquisition.

History

California Resources Corporation was founded in 2014. The company was incorporated in 2014.