California Resources (CRC) Q3 2024 earnings summary

Executive summary

• Achieved strong operational and financial performance in Q3 2024, with net income of $345 million, $402 million in adjusted EBITDAX, and $141 million in free cash flow, driven by the Aera Merger and robust production efficiencies.

• Successfully integrated Aera Energy, creating California's largest producer, with $135 million of $235 million targeted synergies actioned and a 12% workforce reduction planned.

• Advanced carbon management business with key regulatory milestones, including California's first conditional use permits for Carbon TerraVault CCS projects and a new MOU for 1.5 million metric tons per annum of CO2 sequestration.

• Maintained a compelling investment proposition with increased quarterly dividend to $0.3875 per share, continued share repurchases, and a strong balance sheet.

• Operating revenues for Q3 2024 rose to $1.35 billion, reflecting the Aera acquisition and improved commodity pricing.

Financial highlights

• Q3 2024 net production averaged 145,000 boe/d (78% oil), with oil sold at 96–98% of Brent after hedges.

• Generated $402 million in adjusted EBITDAX, $141 million in free cash flow, and $220 million in operating cash flow.

• Q3 2024 net income was $345 million, reversing a prior year loss, and EPS was $3.78 diluted.

• Returned $76 million to shareholders in Q3 2024, including $34 million in dividends and $42 million in share repurchases.

• Liquidity at quarter-end was $1.14–$1.15 billion, with $213–$241 million in cash.

Outlook and guidance

• Q4 2024 net production guidance is 140–144 Mboe/d, with capital investments of $85–$105 million.

• 2025 outlook includes 72% of oil production hedged at a $67/bbl floor and >5% YoY improvement in non-energy operating costs and G&A by year-end.

• Plan to sustain a one-rig program through 2025, focusing on projects using existing permits.

• Resource Adequacy contracts to increase payments by 50% YoY to $150 million in 2025.

• Sufficient liquidity to meet obligations for the next twelve months.