California Resources (CRC) Q2 2024 earnings summary

Executive summary

• Closed the Aera merger on July 1, 2024, doubling daily production volumes, expanding operational scale, and issuing 21.3M shares while paying $990M to extinguish Aera's debt.

• Increased quarterly dividend by 25% to $0.3875/share, enhancing shareholder returns and raising annual dividend policy to $1.55 per share.

• Returned $136 million to shareholders in 1H24, including $93 million in share repurchases and $43 million in dividends.

• Demonstrated carbon management leadership by submitting new EPA Class VI permits and expanding CO₂ storage agreements, targeting ~320 million metric tons of storage.

• Net income for Q2 2024 was $8 million, with adjusted net income of $42 million.

Financial highlights

• Q2 2024 revenues were $514 million, with adjusted EBITDAX of $139 million and free cash flow of $63 million.

• Operating cash flow for Q2 2024 was $97 million; operating costs declined 11% quarter-over-quarter to $156 million.

• Net production averaged 76 MBoe/d in Q2 2024, with oil at 47 MBbl/d, and realized oil price at $81.29 per barrel after hedges.

• Share repurchases totaled $93 million for 1H24; $57 million returned to shareholders in Q2 2024.

• Total assets at June 30, 2024, were $4.49 billion; cash and equivalents were $1.03 billion; long-term debt was $1.16 billion.

Outlook and guidance

• 2H24 net production guidance: 140–146 MBoe/d (79% oil); 3Q24: 141–145 MBoe/d.

• 2H24 adjusted EBITDAX guidance: $720–$760 million; capital guidance: $170–$210 million.

• 2H24 guidance includes $30 million in Aera synergies and $60 million in interest savings.

• Sufficient liquidity to meet obligations for the next twelve months; ongoing evaluation of refinancing 2026 Senior Notes.

• Continued focus on operational efficiencies, margin enhancement, and carbon management expansion.