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1. Company Snapshot

1.a. Company Description

California Resources Corporation operates as an independent oil and natural gas company.The company explores for, produces, gathers, processes, and markets crude oil, natural gas, and natural gas liquids for marketers, California refineries, and other purchasers that have access to transportation and storage facilities.As of December 31, 2021, it had interests in approximately 1.9 million net mineral acres with proved reserves totaled an estimated 480 million barrels of oil equivalent.


The company also engages in the generation and sale of electricity to the local utility and the grid.The company was incorporated in 2014 and is based in Santa Clarita, California.

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1.b. Last Insights on CRC

California Resources Corporation faces challenges despite recent positive earnings reports. The company's announcement to redeem its 7.125% Senior Notes due 2026 (Source: company press release, Sept 30) may indicate efforts to manage debt. Additionally, the company's private offering of $400 million in senior unsecured notes due 2034 (Source: company press release, Sept 24) may suggest a strategy to optimize its capital structure. However, Canter Resources Corp.'s (not directly related) recent private placement (Source: Canter Resources Corp. press release, Oct 10) may create market confusion. CRC's upcoming Q3 2025 earnings release (Source: company press release, Oct 3) is anticipated.

1.c. Company Highlights

2. CRC's Q3 2025 Earnings: A Strong Performance

California Resources Corporation (CRC) reported a robust third quarter 2025, with adjusted EBITDAX of $338 million and free cash flow before changes in working capital of $231 million. The company's earnings per share (EPS) came in at $1.46, beating analyst estimates of $1.31. CRC's net production was 137,000 BOE per day, with 78% oil. The company's financial performance was driven by its E&P business, which continues to perform well, with a reduced annual base decline assumption of 8-13%, down from 10-15% previously.

Publication Date: Nov -16

📋 Highlights
  • Production & Financial Performance:: Net production of 137,000 BOE/day (78% oil), adjusted EBITDAX of $338M, and free cash flow of $231M.
  • Strategic Merger:: Announced merger with Berry Corporation to create synergies and enhance operational scale in California.
  • Carbon Capture Progress:: Carbon TerraVault’s first CCS project at Elk Hills to start CO2 injection in 2026, with 2.4 GW decarbonized power potential in Kern County.
  • Balance Sheet Strength:: Net leverage of 0.6x, $1.1B liquidity, $200M share repurchase capacity, and a 5% dividend increase.
  • 2026 Capital Plan:: $280–$300M capital spend for 4 rigs, 64% oil production hedged at $64/Brent floor, and 60–70% allocation to workovers/sidetracks.

Operational Highlights

CRC's E&P business has seen significant improvements, particularly in the Belridge field, which is performing extremely well. The company has successfully brought out the best in the Aera assets, with the team working on improving injection and surveillance, leading to a shallower decline in conventional assets. The Elk Hills field has also seen improvements through technology and remote surveillance. The company's vision for a decarbonized power hub in Kern County is emerging, with multiple power plants and CO2 reservoirs in the area.

Carbon TerraVault Business Advancements

CRC's Carbon TerraVault business is advancing, with the first commercial-scale CCS project at Elk Hills expected to start CO2 injection in early 2026. The company has also partnered with Capital Power to develop carbon management solutions for the La Paloma power facility. The company's goal is to retrofit existing power plants with CCS to make them decarbonize and participate in the growing market.

Valuation and Outlook

CRC's valuation metrics indicate a relatively attractive price. The company's P/E Ratio is 10.64, P/B Ratio is 1.19, and EV/EBITDA is 3.99. Analysts estimate next year's revenue growth at 7.1%. With a strong hedge book, CRC is well-positioned to benefit from continued stable production, lower costs, and new efficiencies in the fourth quarter. The company's 2026 plan assumes an average of 4 rigs and hedged roughly 2/3 of expected 2026 production at a Brent floor price of $64 per barrel.

Capital Allocation and Growth

CRC is focused on growing cash flow per share and has a disciplined approach to capital allocation. The company plans to spend $280 million to $300 million on D&C and workover capital in 2026, running 4 rigs continuously. The company prioritizes capital allocation based on returns, currently seeing stronger returns in oil, but is prepared to pursue gas projects if market demand changes or increases.

Dividend and Share Repurchase

CRC increased its dividend by 5% and has over $200 million of remaining capacity for share repurchases through mid-2026. The company's dividend yield is 3.17%, providing a relatively attractive return for investors. With a strong balance sheet and free cash flow yield of 20.45%, CRC is well-positioned to continue returning value to shareholders.

3. NewsRoom

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Why Is California Resources (CRC) Up 3.2% Since Last Earnings Report?

Dec -04

Source: zacks.com

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Creative Planning Raises Stake in California Resources Corporation $CRC

Nov -27

Source: defenseworld.net

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California Resources Corporation Supports Food Security Efforts Across California with $200,000 Donation

Nov -20

Source: globenewswire.com

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California Resources Corporation Achieves MiQ ‘Grade A' Certification for its Ventura Basin Assets

Nov -18

Source: globenewswire.com

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The Zacks Analyst Blog CDW, California Resources, Exxon Mobil Corp and Entergy

Nov -07

Source: zacks.com

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Focus on 4 Stocks That Recently Hiked Dividends Amid Market Volatility

Nov -06

Source: zacks.com

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Continuum Recovery Center of Colorado Selects the Janus Contingency Management Platform to Strengthen Addiction Treatment Services

Nov -06

Source: prnewswire.com

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California Resources Corporation (CRC) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.62%)

6. Segments

Oil

Expected Growth: 5%

California Resources Corporation's 5% growth in oil production is driven by increased drilling activities in the San Joaquin Basin, improved well completion techniques, and enhanced oil recovery methods. Additionally, the company's focus on cost reduction and operational efficiencies has also contributed to the growth.

Natural Gas

Expected Growth: 4%

California Resources Corporation's 4% growth in natural gas is driven by increasing demand from power generation and industrial sectors, coupled with rising production from existing assets and strategic acquisitions. Additionally, favorable state regulations and growing exports to Mexico contribute to the growth.

Natural Gas Liquids

Expected Growth: 3%

California Resources Corporation's Natural Gas Liquids segment growth is driven by increasing demand for clean energy, strategic acquisitions, and optimized operations. Additionally, the company's focus on enhancing drilling and completion techniques, coupled with favorable geology in California, contributes to the 3% growth rate.

7. Detailed Products

Crude Oil

California Resources Corporation is a leading producer of crude oil, which is used as a primary energy source for transportation, industrial processes, and power generation.

Natural Gas

California Resources Corporation produces natural gas, a clean-burning fuel used for electricity generation, heating, and industrial processes.

Natural Gas Liquids (NGLs)

California Resources Corporation extracts NGLs, which are used as feedstocks for petrochemicals, fuels, and other products.

Electricity

California Resources Corporation generates electricity through its power plants, which use natural gas and other fuels to produce electricity.

8. California Resources Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

California Resources Corporation operates in the energy industry, which has a moderate threat of substitutes. While there are alternative energy sources, the company's focus on oil and gas production reduces the threat of substitutes.

Bargaining Power Of Customers

California Resources Corporation's customers, primarily refineries and petrochemical companies, have limited bargaining power due to the company's significant market share and diversified customer base.

Bargaining Power Of Suppliers

The company's suppliers, including drilling and extraction service providers, have moderate bargaining power due to the availability of alternative suppliers and the company's significant purchasing power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the energy industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The energy industry is highly competitive, with several major players competing for market share. California Resources Corporation faces intense rivalry from other oil and gas producers, which can lead to pricing pressure and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 20.01%
Debt Cost 11.37%
Equity Weight 79.99%
Equity Cost 11.37%
WACC 11.37%
Leverage 25.01%

11. Quality Control: California Resources Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
California Resources

A-Score: 5.9/10

Value: 8.0

Growth: 3.3

Quality: 8.2

Yield: 5.0

Momentum: 5.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
SM Energy

A-Score: 5.3/10

Value: 9.4

Growth: 5.7

Quality: 6.8

Yield: 5.0

Momentum: 1.5

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Marathon Oil

A-Score: 5.3/10

Value: 5.8

Growth: 6.3

Quality: 6.6

Yield: 1.0

Momentum: 5.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Crescent Energy

A-Score: 4.7/10

Value: 6.9

Growth: 4.3

Quality: 4.2

Yield: 8.0

Momentum: 1.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
CNX Resources

A-Score: 4.4/10

Value: 6.8

Growth: 3.1

Quality: 5.5

Yield: 0.0

Momentum: 4.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Kosmos Energy

A-Score: 3.4/10

Value: 9.4

Growth: 5.2

Quality: 3.8

Yield: 0.0

Momentum: 0.5

Volatility: 1.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

47.64$

Current Price

47.64$

Potential

-0.00%

Expected Cash-Flows