•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
California Resources (CRC) reported stronger-than-expected first-quarter results and raised its 2026 outlook, citing higher oil prices, improved capital efficiency, accelerated drilling plans, and cost savings from its Berry merger.
CEO Francisco Leon said CRC is benefiting from energy market volatility that has created tailwinds for its California-focused oil and gas business, noting disruptions in global supply chains and California’s reliance on imported crude.
EVP and CFO Clio Crespy said adjusted EBITDA was $304 million, about 17% above the midpoint. Operating cash flow before changes in working capital was $247 million, and free cash flow before changes in working capital was $116 million.
Net production averaged 154,000 boe/d, with oil representing 81% of the production mix. Realizations were 96% of Brent before hedges. CRC said underlying production was in line with quarterly guidance after adjusting for production-sharing effects.
G&A expenses were above guidance due to the timing of legal costs and higher cash-settled equity compensation tied to share price appreciation. CRC said G&A is trending lower and should benefit from Berry merger synergies in 2026.
Capital deployment totaled $131 million in the quarter, at the high end of guidance, reflecting pre-spud timing on development wells and accelerated facilities spending to support the planned activity ramp.
CRC plans to increase its drilling cadence this summer by three rigs, bringing the peak to seven rigs. The program includes two rigs in California and one in Utah. CRC said permits are in hand for the seven-rig program and planning for 2027 is underway.
For Q2, CRC expects net production of 149,000 boe/d, supported by higher prices and a planned short maintenance window at Elk Hills. Capital deployment is expected at about $130 million, with G&A of about $95 million. Adjusted EBITDAX is expected at about $390 million, assuming Brent at $105/b.
For full-year 2026, CRC raised its outlook to exit gross production of 175,000 boe/d, representing about 1% growth. Total capital guidance was raised to $540 million, including a $100 million increase in drilling, completion and workover capital, offset by a $10 million reduction in facilities capital.
Crespy said a seven-rig program and about $485 million of drilling, completion and workover capital were previously expected to hold production flat. CRC now expects entry-to-exit growth with an average of five rigs and less than $400 million in drilling, completion and workover spend.
CRC now expects full-year free cash flow before changes in working capital to exceed $800 million. The full-year adjusted EBITDAX midpoint was raised to $1.45 billion, assuming Brent at $91/b. CRC said Brent prices are up about 38% from prior assumptions, and its EBITDAX outlook is up about 42%.
CRC increased its Berry merger synergy target by $10 million (12%), driven by field consolidation and contractor-to-crew conversions. The cumulative synergy and cost reduction target through 2028 now exceeds $460 million.
Leon said CRC is merging overlapping water and oil treatment facilities, consolidating supplier contracts, and integrating legacy Berry fields into CRC’s operational control center. He said potential AI-related gains have not yet been included in targets.
During the quarter, CRC priced a $350 million add-on to its 2034 notes, upsized from $250 million. Proceeds were used to redeem its 2029 notes. CRC said the weighted average maturity was extended to about six years. Net debt was $1.3 billion, and net leverage was 1.1x last-12-month EBITDA.
CRC returned $46 million to shareholders during the quarter, including $36 million in dividends and $10 million in share repurchases.
Leon said CRC’s carbon management business, CTV, is nearing a major milestone after completing construction and commissioning of California’s first commercial-scale carbon capture and storage project at Elk Hills. He said an EPA final determination is expected any day now.
Leon said CRC has submitted more than 350 million metric tons of carbon storage capacity to the EPA, with additional reservoirs tracking for draft permits through 2026. He also said conversations related to data centers are gaining momentum, including with a top-tier national data center developer investing to accelerate site readiness and permitting at Elk Hills.
CRC is positioning Elk Hills to provide land, firm natural gas supply, power infrastructure, and carbon capture, saying power is the binding constraint for AI growth and that CRC is among the few platforms that can address that need in California.
The company is also monitoring California’s Reliable and Clean Power Procurement Program. Leon said natural gas with carbon capture is not yet eligible, though support is building with three of five CPUC commissioners publicly endorsing inclusion. CRC said the next major update is expected in H2 2026.
CRC discussed its Uinta Basin position from Berry. Leon said the company plans to drill four wells before year-end and has more than 200 gross Uteland Butte locations. CRC said it is evaluating full development or monetization, while California remains core. Leon said Uinta could offer upside, and CRC assigned very low value to Utah in the Berry transaction.
“We are not in the holding pattern anymore,” Leon said. “We’re gonna make a decision coming up.”
CRC is an independent exploration and production company focused on developing oil and natural gas assets in California. Its operations are concentrated in three core regions: the Los Angeles Basin, the Ventura Basin, and the San Joaquin Basin.
Premium gym chains are entering a “golden era” that is ending or already in decline, as rising operating costs collide with shifting consumer preferences toward more flexible, community-based ways to exercise. Long-term memberships are shrinking, margins are pressured by higher rents and facility expenses, and competition from smaller, more personalized…
