Energy News Beat

OKLAHOMA CITY, Okla., May 7, 2024 /PRNewswire/ — SandRidge Energy, Inc. (the “Company” or “SandRidge”) (NYSE: SD) today announced financial and operational results for the three-month period ended March 31, 2024.

Recent Highlights

On May 2, 2024, the Board of Directors declared a $0.11 per share cash dividend payable on May 31, 2024 to shareholders of record on May 17, 2024. The Company has paid $141.2 million in cash dividends since May 2023
First quarter net income was $11.1 million, or $0.30 per basic share. Adjusted net income(1) was $8.4 million, or $0.23 per basic share
Adjusted EBITDA(1) of $14.7 million for the three-month period ended March 31, 2024
Adjusted G&A(1) was $2.8 million, or $2.03 per Boe for the three-month period ended March 31, 2024
Net cash provided by operating activities of $15.7 million for the three-month period ended March 31, 2024
Generated $14.5 million of free cash flow(1) for the three-month period ended March 31, 2024, which represents a conversion rate of approximately 99% relative to adjusted EBITDA(1)
As of March 31, 2024, the Company had $208.5 million of cash and cash equivalents, including restricted cash
Approximately $2.7 million in interest income for the quarter ended March 31, 2024

Financial Results & Update

Profitability & Realized Pricing

For the three months ended March 31, 2024, the Company reported net income of $11.1 million, or $0.30 per basic share, and net cash provided by operating activities of $15.7 million. After adjusting for certain items, the Company’s adjusted net income(1) amounted to $8.4 million, or $0.23 per basic share, adjusted operating cash flow(1) totaled $17.5 million and adjusted EBITDA(1) was $14.7 million for the quarter. The Company defines and reconciles adjusted net income, adjusted operating cash flow, adjusted EBITDA, and other non-GAAP financial measures to the most directly comparable Generally Accepted Accounting Principles in the United States (“GAAP”) measure in supporting tables at the conclusion of this press release.

For the three months ended March 31, 2024, the Company generated approximately $14.5 million of free cash flow(1). This represents a conversion rate of approximately 99% relative to adjusted EBITDA for the three months ended March 31, 2024.

First quarter realized oil, natural gas, and natural gas liquids prices were $75.08 per Bbl, $1.25 per Mcf and $23.65 per Bbl, respectively.

Operating Costs

During the first quarter of 2024, lease operating expense (“LOE”) was $10.9 million or $7.92 per Boe. The Company continues to focus on its operating costs and safely maximizing the value of its asset base through prudent expenditure programs, cost management efforts, and continuous pursuit of initiatives that safely drive cost efficiency in the field. The Company successfully managed the operational impacts of seasonal cold weather throughout the first quarter of 2024, which impacted the timing of expense workover activities, but were not outside of the Company’s range expectations for this time of year.

For the three months ended March 31, 2024, general and administrative expense (“G&A”) was $3.3 million, or $2.42 per Boe.

Liquidity & Capital Structure

As of March 31, 2024, the Company had $208.5 million of cash and cash equivalents, including restricted cash, diversified across multiple significant, well-capitalized financial institutions. The Company has no outstanding term or revolving debt obligations.

Dividend Program

In January 2024, the Board of Directors approved a one-time cash dividend of $1.50 per share of the Company’s common stock, which was paid on February 20, 2024 to shareholders of record as of the close of business on February 5, 2024. The aggregate total payout was approximately $55.6 million. Additionally, in March 2024, the Board of Directors increased the Company’s on-going quarterly dividend to $0.11 per share which was first paid on March 29, 2024, to shareholders of record as of the close of business on March 15, 2024. The aggregate total payout was $4.1 million. The $0.11 per share dividend is subject to quarterly approval by the Board of Directors. Dividend payments for the three-month period ended March 31, 2024 totaled $59.7 million, which included $0.1 million of dividends on vested stock awards.

On May 2, 2024, the Board of Directors declared a $0.11 per share cash dividend payable on May 31, 2024 to shareholders of record on May 17, 2024.

Operational Results & Update

Production & Revenue

Production totaled 1,376 MBoe (15.1 MBoed, 15% oil, 58% natural gas and 27% NGLs) for the three months ended March 31, 2024. Revenues totaled $30.3 million (51% oil, 20% natural gas and 29% NGLs) for the first quarter of 2024. While production in the first quarter of 2024 was impacted by seasonal cold weather, our projected long-term decline rates remain stable due to the nature of the Company’s asset base and the continued focus on production optimization efforts.

Production Optimization Program

The Company continues to optimize its stable, low-decline production base, which has an estimated single-digit annual PDP decline rate over the next ten years. The Company continuously evaluates the potential for high-return projects that further enhance its asset base. Such projects include, but are not limited to, workovers, artificial lift improvements and conversions from less efficient systems, recompletions of “behind pipe” pay in vertical section of existing wells, and the restimulation of existing intervals and previously bypassed unstimulated intervals in existing wells. When evaluating these and other options, the Company continues to ensure that all projects meet high rate of return thresholds and remains capital disciplined as the commodity price landscape changes.

Outlook

SandRidge will continue to focus on growing the cash value and generation capability of its asset base in a safe, responsible and efficient manner, while exercising prudent capital allocations to projects it believes provide high rates of returns in the current commodity price outlook. These near-term projects will be focused on artificial lift conversions to more efficient and cost-effective systems and other capital-efficient workovers while preserving future development and expanded well reactivations, benefited by our 99% held by production acreage position that extends the option value to initiate projects in favorable commodity price environments, to achieve high rates of return. The Company will continue to monitor forward-looking commodity prices, results, costs and other factors that could influence returns on investments, which will continue to shape its disciplined development decisions in 2024 and beyond.

SandRidge will also continue to maintain the optionality to execute on value accretive merger and acquisition opportunities that could bring synergies, leverage the Company’s core competencies, complement its portfolio of assets, seek to further utilize its approximately $1.6 billion of net operating losses (“NOLs”), or otherwise yield attractive returns for its shareholders.

Environmental, Social, & Governance (“ESG”)

SandRidge maintains its Environmental, Social, and Governance (“ESG”) commitment, to include no routine flaring of produced natural gas and transporting over 95% of its produced water via pipeline instead of truck. Additionally, SandRidge maintains an emphasis on the safety and training of our workforce. We have personnel dedicated to the close monitoring of our safety standards and daily operations.

Conference Call Information

The Company will host a conference call to discuss these results on Wednesday, May 8, 2024 at 10:00 am CT. The conference call can be accessed by registering online in advance at https://registrations.events/direct/Q4I231505 at which time registrants will receive dial-in information as well as a conference ID. At the time of the call, participants will dial in using the participant number and conference ID provided upon registration. The Company’s latest presentation is available on the Company’s website at investors.sandridgeenergy.com.

A live audio webcast of the conference call will also be available via SandRidge’s website, investors.sandridgeenergy.com, under Presentation & Events. The webcast will be archived for replay on the Company’s website for at least 30 days.

Contact Information
Investor Relations
SandRidge Energy, Inc.
1 E. Sheridan Ave. Suite 500
Oklahoma City, OK 73104
[email protected]

About SandRidge Energy, Inc.

SandRidge Energy, Inc. (NYSE: SD) is an independent oil and gas company engaged in the development, acquisition, and production of oil and gas assets. Its primary area of operations is the Mid-Continent region in Oklahoma and Kansas. Further information can be found at sandridgeenergy.com.

-Tables to Follow-

 

Operational and Financial Statistics
Information regarding the Company’s production, pricing, costs and earnings is presented below (unaudited):

 

Capital Expenditures

The table below presents actual results of the Company’s capital expenditures for the three months ended March 31, 2024 (unaudited):

Capitalization

The Company’s capital structure as of March 31, 2024 and December 31, 2023 is presented below:

 

 

 

Non-GAAP Financial Measures

This press release includes non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.

Reconciliation of Net Cash Provided by Operating Activities to Adjusted Operating Cash Flow

The Company defines Adjusted operating cash flow as net cash provided by operating activities before changes in operating assets and liabilities as shown in the following table. Adjusted Operating cash flow is a supplemental financial measure used by the Company’s management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company’s ability to internally fund exploration and development activities or incur new debt. The Company also uses this measure because operating cash flow relates to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, Adjusted operating cash flow allows the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. This measure should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with GAAP.

Reconciliation of Free Cash Flow

The Company defines free cash flow as net cash provided by operating activities plus net cash (used in) provided by investing activities less the cash flow impact of acquisitions and divestitures. Free cash flow is a supplemental financial measure used by the Company’s management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company’s ability to internally fund exploration and development activities or incur new debt. This measure should not be considered in isolation or as a substitute for net cash provided by operating or investing activities prepared in accordance with GAAP.

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

The Company defines EBITDA as net income before income tax (benefit) expense, interest expense, depreciation and amortization – other and depreciation and depletion – oil and natural gas. Adjusted EBITDA, as presented herein, is EBITDA excluding items that management believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.

Adjusted EBITDA is presented because management believes it provides useful additional information used by the Company’s management and by securities analysts, investors, lenders, ratings agencies and others who follow the industry for analysis of the Company’s financial and operating performance on a recurring basis and the Company’s ability to internally fund exploration and development activities or incur new debt. In addition, management believes that adjusted EBITDA is widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas industry. The Company’s adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA

Reconciliation of Net Income Available to Common Stockholders to Adjusted Net Income Available to Common Stockholders

The Company defines adjusted net income as net income excluding items that management believes affect the comparability of operating results and are typically excluded from published estimates by the investment community, including items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.

Management uses the supplemental measure of adjusted net income as an indicator of the Company’s operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net income is not a measure of financial performance under GAAP and should not be considered a substitute for net income available to common stockholders.

Reconciliation of General and Administrative to Adjusted G&A

The Company reports and provides guidance on Adjusted G&A per Boe because it believes this measure is commonly used by management, analysts and investors as an indicator of cost management and operating efficiency on a comparable basis from period to period and to compare and make investment recommendations of companies in the oil and gas industry. This non-GAAP measure allows for the analysis of general and administrative spend without regard to stock-based compensation programs and other non-recurring cash items, if any, which can vary significantly between companies. Adjusted G&A per Boe is not a measure of financial performance under GAAP and should not be considered a substitute for general and administrative expense per Boe. Therefore, the Company’s Adjusted G&A per Boe may not be comparable to other companies’ similarly titled measures.

The Company defines adjusted G&A as general and administrative expense adjusted for certain non-cash stock-based compensation and other non-recurring items, if any, as shown in the following tables:

Cautionary Note to Investors – This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are neither historical facts nor assurances of future performance and reflect SandRidge’s current beliefs and expectations regarding future events and operating performance. The forward-looking statements include projections and estimates of the Company’s corporate strategies, future operations, development plans and appraisal programs, drilling inventory and locations, estimated oil, natural gas and natural gas liquids production, price realizations and differentials, hedging program, projected operating, general and administrative and other costs, projected capital expenditures, tax rates, efficiency and cost reduction initiative outcomes, liquidity and capital structure and the Company’s unaudited proved developed PV-10 reserve value of its Mid-Continent assets. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A – “Risk Factors” of our Annual Report on Form 10-K and in comparable “Risk Factor” sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.

SandRidge Energy, Inc. (NYSE: SD) is an independent oil and gas company engaged in the development, acquisition and production of oil and gas properties. Its primary area of operations is the Mid-Continent region in Oklahoma and Kansas. Further information can be found at www.sandridgeenergy.com.

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SOURCE SANDRIDGE ENERGY, INC.

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The post SANDRIDGE ENERGY, INC. ANNOUNCES FINANCIAL AND OPERATING RESULTS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2024 AND DECLARES $0.11 PER SHARE CASH DIVIDEND appeared first on Energy News Beat.

 

Energy News Beat

LONG BEACH, Calif., May 07 /BusinessWire/ — California Resources Corporation (NYSE:CRC) today reported financial and operating results for the first quarter 2024. The Company plans to host a conference call and webcast on Wednesday, May 8th at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time). Participation details can be found within this release. In addition, supplemental slides are posted to CRC’s website at www.crc.com.

First Quarter 2024 Highlights:

Returned $79 million to shareholders through share repurchases and dividends
Reported $87 million of net cash from operating activities
Net cash provided by operating activities before changes in operating assets and liabilities, net1 of $92 million includes $25 million of costs related to the Aera transaction and incremental energy costs due to scheduled power plant major maintenance
Reported net loss of $10 million, or $0.14 per diluted share. When adjusted for items analysts typically exclude from estimates (including mark-to-market adjustments of $59 million, one-time costs for Aera Merger of $13 million and increased power and fuel costs due to power plant shutdown of $21 million all of which is before taxes), the Company’s adjusted net income1 was $54 million, or $0.75 per diluted share
Generated an adjusted EBITDAX1 of $149 million and $33 million of free cash flow1
Flat entry to exit gross production of 94 thousand barrels of oil equivalent per day (MBoe/d) after investing drilling and workover capital of $22 million
Delivered average quarterly net production of 76 MBoe/d and net oil production of 48 thousand barrels of oil per day (MBo/d)
The Carbon TerraVault JV achieved the milestone for the second installment related to “CTV I – 26R” reservoir pore space contribution in the amount of $46 million. See CTV’s First Quarter 2024 Update press release for additional information
Announced the expiration of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with respect to the pending combination upon the completion of which Aera Energy, LLC (Aera) and its operating affiliate Aera Energy Services Company will be indirect wholly-owned subsidiaries of CRC (Aera Merger)
Received “Grade A” certification through MiQ’s Methane Emissions Performance Standard for CRC’s operating assets in Los Angeles and Orange Counties

“Our solid first quarter performance adds to CRC’s historical track record of unwavering commitment to shareholder returns and effective cost management,” said Francisco Leon, CRC’s President and Chief Executive Officer. “CRC’s improved cost structure demonstrates the fundamental improvements we’ve made to our business, reflecting our readiness to combine with Aera while driving a higher level of efficiency and effectiveness throughout the organization. I want to thank all of our employees as the foundation of CRC’s continued success comes from their ongoing diligent efforts and hard work”

“With company’s operations successfully scaled to generate free cash flow, our advantaged balance sheet position has allowed us to accelerate the return of capital to shareholders and return more than double of our quarterly free cash flow1 back to investors,” continued Leon. “Looking ahead to the remainder of the year, we remain focused on closing the Aera Merger, further expanding our carbon management business and continuing to provide innovative energy solutions to meet California’s energy needs.”

First Quarter 2024 Financial and Operating Summary

Net loss for the period was $10 million, or $0.14 per diluted share of common stock, and adjusted net income1 was $54 million, or $0.75 per diluted share. The Company reported first quarter net cash from operating activities of $87 million. Adjusted EBITDAX1 was $149 million. Net cash provided by operating activities before changes in operating assets and liabilities, net1, of $92 million includes Aera Merger expenses of $13 million and incremental energy costs due to the scheduled Elk Hills power plant major maintenance of $12 million. CRC generated $33 million of free cash flow1 during the quarter.

CRC’s gross production in the first quarter averaged 94 MBoe/d. Net production averaged 76 MBoe/d, including net oil production of 48 MBo/d. A longer than expected Elk Hills power plant major maintenance, challenging weather conditions and PSC effects adversely affected net production in the first quarter of 2024 by 1.5 MBoe/d from previously issued guidance. Average realized oil prices during the quarter were 98% of Brent.

Operating costs in the first quarter of 2024 were $176 million compared to $186 million in the fourth quarter of 2023 primarily due to lower electricity and natural gas prices.

Capital in the first quarter of 2024 was lower than previously issued guidance due to anticipated facility and workover spend, and totaled $54 million. CRC ran a one-rig program in the San Joaquin basin during the period.

First Quarter 2024 Financial Results

Certain prior period balances related to NGL marketing activities have been reclassified to conform to CRC’s 2024 presentation. For the three months ended December 31, 2023, CRC reclassified $4 million related to NGL storage activities from other revenue to revenue from marketing of purchased commodities on the condensed consolidated statement of operations. CRC also reclassified $3 million of NGL processing fees from other operating expenses, net to costs related to marketing of purchased commodities.

Selected Production, Price Information and Results of Operations

1st Quarter

4th Quarter

($ in millions)

2024

2023

Average net oil production per day (MBbl/d)

48

50

Realized oil price with derivative settlements ($ per Bbl)

$

77.17

$

71.34

Average net NGL production per day (MBbl/d)

11

11

Realized NGL price ($ per Bbl)

$

50.50

$

49.08

Average net natural gas production per day (Mmcf/d)

105

130

Realized natural gas price with derivative settlements ($ per Mcf)

$

3.90

$

4.66

Average net total production per day (MBoe/d)

76

83

Margin from marketing of purchased commodities ($ millions)

$

20

$

29

Margin from electricity sales ($ millions)

$

7

$

24

Net gain (loss) from oil commodity derivatives ($ millions)

$

(71

)

$

119

Selected Financial Statement Data and non-GAAP measures:

1st Quarter

4th Quarter

($ and shares in millions, except per share amounts)

2024

2023

Statements of Operations:

Revenues

Total operating revenues

$

454

$

726

Selected Expenses

Operating costs

$

176

$

186

General and administrative expenses

$

57

$

66

Adjusted general and administrative expenses1

$

49

$

55

Taxes other than on income

$

38

$

33

Transportation costs

$

20

$

18

Operating Income (loss)

$

(4

)

$

283

Interest and debt expense

$

(13

)

$

(13

)

Income tax benefit (provision)

$

9

$

(79

)

Net (loss) Income

$

(10

)

$

188

EPS, Non-GAAP Measures and Select Balance Sheet Data

Adjusted net income1

$

54

$

67

Weighted-average common shares outstanding – diluted

69.0

72.3

Net loss (income) per share – diluted

$

(0.14

)

$

2.60

Adjusted net income1 per share – diluted

$

0.75

$

0.93

Adjusted EBITDAX1

$

149

$

179

Net cash provided by operating activities

$

87

$

131

Net cash provided by operating activities before changes in operating assets and liabilities, net1

$

92

$

104

Capital investments

$

54

$

66

Free cash flow1

$

33

$

65

Cash and cash equivalents

$

403

$

496

Pending Aera Merger

On February 7, 2024, CRC entered into a definitive agreement and plan of merger (Merger Agreement) to combine with Aera in an all-stock transaction with an effective date of January 1, 2024. Aera is a leading operator of mature fields in California, primarily in the San Joaquin and Ventura basins, with high oil-weighted production. At closing, Aera’s owners will receive 21.2 million shares of CRC’s common stock plus an additional number of shares determined by reference to the dividends declared by CRC having a record date between the effective date and closing. CRC also agreed to assume Aera’s outstanding long-term indebtedness of $950 million. CRC expects to repay a significant portion of this indebtedness with cash on hand and borrowings under its revolving credit facility. CRC expects to refinance the balance through one or more debt capital markets transactions and, only to the extent necessary, borrowings under a bridge loan facility.

On March 26, 2024, CRC announced the expiration of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with respect to the pending Aera Merger.

On May 7, 2024, CRC filed the definitive proxy statement for the Aera Merger with the SEC. Closing of the Aera Merger is subject to certain closing conditions, including among others, regulatory approvals and CRC shareholder approval, and is expected to close around mid-year 2024.

For more information about this transaction please visit: https://www.crc.com/news/news-details/2024/California-Resources-Corporation-to-Combine-with-Aera-Energy/default.aspx

2024 Capital Outlook, Second Quarter 2024 Guidance and Capital Program2

CRC’s 2024 guidance estimates exclude the pending Aera Merger. The Company intends to update guidance after the transaction closes.

Following the March 2024 Court of Appeals decision in the Kern County Environmental Impact Report matter, CRC expects its 2024 capital program to range between $200 million and $240 million under current permitting conditions. Of this amount, $165 million to $185 million is related to oil and natural gas development (including $20 million to $25 million for maintenance at CRC’s Elk Hills gas processing plant), $20 million to $25 million is for carbon management projects and $15 million to $30 million is for corporate and other (including $10 million to $15 million related to maintenance at CRC’s Elk Hills power plant). In 2024, CRC expects to run a one rig program while executing projects using existing permits.

2024 PRELIMINARY OUTLOOK2

TOTAL 2024E

Net Production (MBoe/d)

75 – 79

Oil Production (%)

~61%

Capital ($ millions)

$200 – $240

Drilling & completions, workover ($ millions)

$100 – $110

Facilities ($ millions)

$45 – $50

Maintenance of gas processing and power plants at Elk Hills ($ millions)

$30 – $40

Carbon management business ($ millions)

$20- $25

Corporate & other ($ millions)

$5 – $15

CRC expects its second quarter capital program to range between $50 million to $57 million. The program includes capital of $45 million to $49 million related to oil and natural gas development (including $4 million to $8 million related to maintenance at CRC’s Elk Hills gas processing plant), $3 million to $5 million related to carbon management projects and $2 million to $3 million related to corporate and other activities.

CRC expects to produce 74 to 78 MBoe/d (~61% oil) in the second quarter of 2024. The table below provides highlights of the Company’s second quarter 2024 guidance. See Attachment 2 for complete information on CRC’s second quarter 2024 guidance.

CRC GUIDANCE2

Total

2Q24E

CMB

2Q24E

E&P, Corp. & Other 2Q24E

Net Production (MBoe/d)

74 – 78

74 – 78

CMB Expenses and Operating Costs ($ millions)

$170 – $183

$10 – $13

$160 – $170

General and Administrative Expenses ($ millions)

$56 – $64

$1 – $3

$55 – $61

Adjusted General and Administrative Expenses1 ($ millions)

$49 – $57

$1 – $3

$48 – $54

Capital ($ millions)

$50 – $57

$3 – $5

$47 – $52

Margin from Marketing of Purchased Commodities ($ millions) 3

$5 – $15

$5 – $15

Electricity Margin ($ millions)4

$34 – $42

$34 – $42

Shareholder Return

CRC is committed to returning significant cash to shareholders through dividends and repurchases of its common stock.

During the first quarter of 2024, CRC repurchased 1.1 million shares for $58 million or an average price of $53.26 per share. Post quarter end and through May 3, 2024, CRC repurchased an additional 0.3 million shares for $15 million or an average price of $54.80. Since the inception of the Share Repurchase Program in May 2021 through May 3, 2024, 16.2 million shares have been repurchased for $675 million at an average price of $41.61 per share. These total repurchases represent 19% of CRC’s shares outstanding at its bankruptcy emergence in October 2020.

In February 2024, CRC’s Board of Directors approved a $250 million increase of the Share Repurchase Program, bringing the aggregate program to $1.35 billion, and extended the program through December 31, 2025. Adjusting for this increase, CRC has approximately $675 million of capacity remaining under the repurchase program as of May 7, 2024.

On May 7, 2024, CRC’s Board of Directors declared a quarterly cash dividend of $0.31 per share of common stock. The dividend is payable to shareholders of record on May 31, 2024 and will be paid on June 14, 2024. Post closing of the Aera Merger, and subject to Board approval, CRC expects to increase its quarterly dividend.

From October 2020 through May 7, 2024, CRC has returned $905 million of cash to its stakeholders, including $675 million in share repurchases, $175 million of dividends and $55 million in principal of its Senior Notes repurchases.

Balance Sheet and Liquidity Update

In connection with the Merger Agreement, on February 9, 2024, CRC entered into a second amendment to its Revolving Credit Facility to permit CRC to incur debt under a bridge loan facility that may be used in connection with closing the Aera Merger.

In March 2024, CRC entered into a third amendment to its Revolving Credit Facility. The amendment facilitated certain matters with respect to the Aera Merger, including the postponement of the regular spring borrowing base redetermination until the fall of 2024 and certain other amendments.

Additionally, CRC obtained commitments from its existing lenders and certain new lenders to amend CRC’s Revolving Credit Facility upon closing of the Aera Merger. These commitments include increasing its borrowing base from $1.2 billion to $1.5 billion, increasing the aggregate commitment amount from $630 million to $1.1 billion, and other matters.

As of March 31, 2024, CRC had liquidity of $880 million, which consisted of $403 million in cash and cash equivalents plus $477 million of available borrowing capacity under its Revolving Credit Facility (which is after $153 million of outstanding letters of credit).

Acquisitions and Divestitures

In March 2024, CRC sold its 0.9-acre Fort Apache real estate property in Huntington Beach, California for a purchase price of $10 million and recognized a $6 million gain.

Sustainability

In April, 2024, CRC received a “Grade A” certification through MiQ’s Methane Emissions Performance Standard for CRC’s operating assets in Los Angeles and Orange Counties. MiQ is an independent not-for-profit established to facilitate a rapid reduction in methane emissions from the oil and gas sector. This certification is the first “Grade A” independently certified gas (ICG) designation that MiQ has presented to oil and natural gas operating assets in California and the Rocky Mountain region. The achievement further demonstrates CRC’s dedication to its ESG goals and sustainability platform. CRC plans to continue to work with MiQ to expand its ICG certifications to operations in the San Joaquin and Sacramento basins.

Board Changes

On May 3, 2024, CRC’s shareholders elected one new Board member, Christian S. Kendall.

Mr. Kendall is the former President and Chief Executive Officer of Denbury. Prior to joining Denbury in 2015, Mr. Kendall worked at Noble Energy, Inc., where he served as a member of Noble’s executive management and operations leadership team as Senior Vice President, Global Operations Services. Prior to that, Mr. Kendall served in several other executive and management roles of increasing responsibility with Noble beginning in 2001. Mr. Kendall’s career in the oil and natural gas industry began in 1989 at Mobil Oil Corporation. Mr. Kendall has served as the Chairman of the Board of the Dallas Division of the American Heart Association and is a member of National Petroleum Council. Mr. Kendall holds a Bachelor of Science degree in Engineering with a Civil Specialty from the Colorado School of Mines and has also completed the Advanced Management Program at the Harvard Business School. Please see www.crc.com for more details.

As previously disclosed, Julio M. Quintana, who has served as a member of CRC’s Board of Directors since October 2020, did not seek reelection as a Director at the 2024 Annual Meeting. CRC thanks Mr. Quintana for his outstanding leadership, knowledge, and contributions to the Company throughout his tenure on the Board of Directors and wish him all the best.

Upcoming Investor Conference Participation

CRC’s executives will be participating in the following events in May through July 2024:

Goldman Sachs Ninth Annual Leveraged Finance and Credit Conference on May 13 and 14 in Rancho Palos Verdes, CA
2024 Citi Energy & Climate Technology Conference on May 14 to 15 in Boston, MA
TD Cowen’s 2nd Annual Sustainability Week on May 21 held virtually
Stifel 2024 Cross Sector Insights Conference on June 3 in Boston, MA
RBC Capital Markets Global Energy, Power & Infrastructure Conference on June 5 in New York, NY
BofA Securities Energy Credit Conference on June 6 in New York, NY
2024 JP Morgan Energy, Power & Renewables Conference on June 17 to 18 in New York, NY
2024 TD Calgary Energy Conference on July 9 to 10 in Calgary, AB, Canada

CRC’s presentation materials will be available the day of the events on the Events and Presentations page in the Investor Relations section on www.crc.com.

Conference Call Details

A conference call is scheduled for Wednesday, May 8, 2024 at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time). To participate in the call, please dial (877) 328-5505 (International calls please dial +1 (412) 317-5421) or access via webcast at www.crc.com 15 minutes prior to the scheduled start time to register. Participants may also pre-register for the conference call at https://dpregister.com/sreg/10187009/fbc013eb9d. A digital replay of the conference call will be archived for approximately 90 days and supplemental slides for the conference call will be available online in the Investor Relations section of www.crc.com.

1 See Attachment 3 for the non-GAAP financial measures of operating costs per BOE (excluding effects of PSCs), adjusted net income (loss), adjusted net income (loss) per share – basic and diluted, net cash provided by operating activities before changes in operating assets and liabilities, net, adjusted EBITDAX, free cash flow and adjusted G&A, including reconciliations to their most directly comparable GAAP measure, where applicable. For the 2Q24 estimates of the non-GAAP measure of adjusted general and administrative expenses, including reconciliations to its most directly comparable GAAP measure, see Attachment 2.

2 2Q24 guidance assumes Brent price of $86.17 per barrel of oil, NGL realizations as a percentage of Brent consistent with prior years and a NYMEX gas price of $1.78 per mcf. CRC’s share of production under PSC contracts decreases when commodity prices rise and increases when prices fall.

3 Margin from Marketing of Purchased Commodities is calculated as the difference between Revenue from Marketing of Purchased Commodities and Costs Related to Marketing of Purchased Commodities

4 Electricity Margin is calculated as the difference between Electricity Sales and Electricity Generation Expenses

About California Resources Corporation

California Resources Corporation (CRC) is an independent energy and carbon management company committed to energy transition. CRC produces some of the lowest carbon intensity production in the US and is focused on maximizing the value of its land, mineral and technical resources for decarbonization by developing CCS and other emissions reducing projects. For more information about CRC, please visit www.crc.com.

About Carbon TerraVault

Carbon TerraVault Holdings, LLC (CTV), a subsidiary of CRC, provides services that include the capture, transport and storage of carbon dioxide for its customers. CTV is engaged in a series of carbon capture and storage (CCS) projects that inject CO2 captured from industrial sources into depleted underground reservoirs and permanently store CO2 deep underground. For more information about CTV, please visit www.carbonterravault.com.

Additional Information and Where to Find It

This communication may be deemed to be solicitation material in respect of the transactions contemplated by the merger agreement pursuant to which California Resources Corporation (“CRC”) has agreed to combine with Aera Energy, LLC (“Aera”) (the “Merger Agreement”), including the proposed issuance of CRC’s common stock pursuant to the Merger Agreement. In connection with the transaction, CRC filed a proxy statement on Schedule 14A with the U.S. Securities and Exchange Commission (“SEC”), as well as other relevant materials. Following the filing of the definitive proxy statement, CRC mailed the definitive proxy statement and a proxy card to its stockholders. INVESTORS AND SECURITY HOLDERS OF CRC ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CRC, AERA, THE TRANSACTION AND RELATED MATTERS. Investors and security holders will be able to obtain copies of the proxy statement (when available) as well as other filings containing information about CRC, Aera and the transaction, without charge, at the SEC’s website, www.sec.gov. Copies of documents filed with the SEC by CRC will be available, without charge, at CRC’s website, www.crc.com.

Participants in Solicitation

CRC and its directors and executive officers may be deemed to be participants in the solicitation of proxies in connection with the transaction. Information about the directors and executive officers of CRC is set forth in the proxy statement for CRC’s 2024 Annual Meeting of Stockholders, which was filed with the SEC on March 21, 2024. Investors may obtain additional information regarding the interest of such participants by reading the proxy statement regarding the transaction when it becomes available.

Forward-Looking Statements

This document contains statements that CRC believes to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical facts are forward-looking statements, and include statements regarding its future financial position, business strategy, projected revenues, earnings, costs, capital expenditures and plans and objectives of management for the future. Words such as “expect,” “could,” “may,” “anticipate,” “intend,” “plan,” “ability,” “believe,” “seek,” “see,” “will,” “would,” “estimate,” “forecast,” “target,” “guidance,” “outlook,” “opportunity” or “strategy” or similar expressions are generally intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements. Additionally, the information in this report contains forward-looking statements related to the recently announced Aera Merger.

Although CRC believes the expectations and forecasts reflected in its forward-looking statements are reasonable, they are inherently subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond the company’s control. No assurance can be given that such forward-looking statements will be correct or achieved or that the assumptions are accurate or will not change over time. Particular uncertainties that could cause CRC’s actual results to be materially different than those expressed in its forward-looking statements include:

fluctuations in commodity prices, including supply and demand considerations for CRC’s products and services;
decisions as to production levels and/or pricing by OPEC or U.S. producers in future periods;
government policy, war and political conditions and events, including the military conflicts in Israel, Ukraine and Yemen and the Red Sea;
the ability to successfully integrate the business of Aera once the Aera Merger is completed;
the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the Aera Merger that could reduce anticipated benefits or cause the parties to abandon the Aera Merger;
the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;
the possibility that the stockholders of CRC may not approve the issuance of new shares of common stock in the Aera Merger;
the ability to obtain the required debt financing pursuant to CRC’s commitment letters and, if obtained, the potential impact of additional debt on its business and the financial impacts and restrictions due to the additional debt;
regulatory actions and changes that affect the oil and gas industry generally and CRC in particular, including (1) the availability or timing of, or conditions imposed on, permits and approvals necessary for drilling or development activities or its carbon management business; (2) the management of energy, water, land, greenhouse gases (GHGs) or other emissions, (3) the protection of health, safety and the environment, or (4) the transportation, marketing and sale of the company’s products;
the impact of inflation on future expenses and changes generally in the prices of goods and services;
changes in business strategy and CRC’s capital plan;
lower-than-expected production or higher-than-expected production decline rates;
changes to CRC’s estimates of reserves and related future cash flows, including changes arising from the inability to develop such reserves in a timely manner, and any inability to replace such reserves;
the recoverability of resources and unexpected geologic conditions;
general economic conditions and trends, including conditions in the worldwide financial, trade and credit markets;
production-sharing contracts’ effects on production and operating costs;
the lack of available equipment, service or labor price inflation;
limitations on transportation or storage capacity and the need to shut-in wells;
any failure of risk management;
results from operations and competition in the industries in which CRC operates;
the ability to realize the anticipated benefits from prior or future efforts to reduce costs;
environmental risks and liability under federal, regional, state, provincial, tribal, local and international environmental laws and regulations (including remedial actions);
the creditworthiness and performance of CRC’s counterparties, including financial institutions, operating partners, CCS project participants and other parties;
reorganization or restructuring of CRC’s operations;
the ability to claim and utilize tax credits or other incentives in connection with CRC’s CCS projects;
the ability to realize the benefits contemplated by CRC’s energy transition strategies and initiatives, including CCS projects and other renewable energy efforts;
the ability to successfully identify, develop and finance carbon capture and storage projects and other renewable energy efforts, including those in connection with the Carbon TerraVault JV, and the ability to convert CRC’s CDMAs to definitive agreements and enter into other offtake agreements;
the ability to maximize the value of CRC’s carbon management business and operate it on a stand alone basis;
the ability to successfully develop infrastructure projects and enter into third party contracts on contemplated terms;
uncertainty around the accounting of emissions and the ability to successfully gather and verify emissions data and other environmental impacts;
changes to CRC’s dividend policy and share repurchase program, and the ability to declare future dividends or repurchase shares under its debt agreements;
limitations on CRC’s financial flexibility due to existing and future debt;
insufficient cash flow to fund CRC’s capital plan and other planned investments and return capital to shareholders;
changes in interest rates;
CRC’s access to and the terms of credit in commercial banking and capital markets, including the ability to refinance its debt or obtain separate financing for its carbon management business;
changes in state, federal or international tax rates, including the ability to utilize net operating loss carryforwards to reduce CRC’s income tax obligations;
effects of hedging transactions;
the effect of CRC’s stock price on costs associated with incentive compensation;
inability to enter into desirable transactions, including joint ventures, divestitures of oil and natural gas properties and real estate, and acquisitions, and the ability to achieve any expected synergies;
disruptions due to earthquakes, forest fires, floods, extreme weather events or other natural occurrences, accidents, mechanical failures, power outages, transportation or storage constraints, labor difficulties, cybersecurity breaches or attacks or other catastrophic events;
pandemics, epidemics, outbreaks, or other public health events, such as the COVID-19 pandemic; and
other factors discussed in Part I, Item 1A – Risk Factors in CRC’s 2023 Annual Report.

CRC cautions you not to place undue reliance on forward-looking statements contained in this document, which speak only as of the filing date, and it undertakes no obligation to update this information. This document may also contain information from third party sources. This data may involve a number of assumptions and limitations, and CRC has not independently verified them and does not warrant the accuracy or completeness of such third-party information.

Attachment 1

SUMMARY OF RESULTS

1st Quarter

4th Quarter

1st Quarter

($ and shares in millions, except per share amounts)

2024

2023

2023

Statements of Operations:

Revenues

Oil, natural gas and NGL sales

$

429

$

483

$

715

Net (loss) gain from commodity derivatives

(71

)

119

42

Revenue from marketing of purchased commodities

74

71

187

Electricity sales

15

42

68

Other revenue

7

11

12

Total operating revenues

454

726

1,024

Operating Expenses

Operating costs

176

186

254

General and administrative expenses

57

66

65

Depreciation, depletion and amortization

53

55

58

Asset impairment

–

–

3

Taxes other than on income

38

33

42

Exploration expense

1

1

1

Costs related to marketing of purchased commodities

54

42

124

Electricity generation expenses

8

18

49

Transportation costs

20

18

17

Accretion expense

12

11

12

Carbon management business expenses

8

17

5

Other operating expenses, net

37

21

8

Total operating expenses

464

468

638

Net gain on asset divestitures

6

25

7

Operating (Loss) Income

(4

)

283

393

Non-Operating (Expenses) Income

Interest and debt expense

(13

)

(13

)

(14

)

Loss from investment in unconsolidated subsidiary

(3

)

(3

)

(2

)

Net loss on early extinguishment of debt

–

(1

)

–

Other non-operating income (loss), net

1

1

(1

)

(Loss) Income Before Income Taxes

(19

)

267

376

Income tax benefit (provision)

9

(79

)

(75

)

Net (Loss) Income

$

(10

)

$

188

$

301

Net (loss) income per share – basic

$

(0.14

)

$

2.74

$

4.22

Net (loss) income per share – diluted

$

(0.14

)

$

2.60

$

4.09

Adjusted net income

$

54

$

67

$

193

Adjusted net income per share – basic

$

0.78

$

0.98

$

2.71

Adjusted net income per share – diluted

$

0.75

$

0.93

$

2.63

Weighted-average common shares outstanding – basic

69.0

68.7

71.3

Weighted-average common shares outstanding – diluted

69.0

72.3

73.5

Adjusted EBITDAX

$

149

$

179

$

358

Effective tax rate

45

%

30

%

20

%

1st Quarter

4th Quarter

1st Quarter

($ in millions)

2024

2023

2023

Cash Flow Data:

Net cash provided by operating activities

$

87

$

131

$

310

Net cash used in investing activities

$

(49

)

$

(42

)

$

(61

)

Net cash used in financing activities

$

(131

)

$

(72

)

$

(79

)

March 31,

December 31,

($ in millions)

2024

2023

Selected Balance Sheet Data:

Total current assets

$

839

$

929

Property, plant and equipment, net

$

2,793

$

2,770

Deferred tax asset

$

139

$

132

Total current liabilities

$

594

$

616

Long-term debt, net

$

541

$

540

Noncurrent asset retirement obligations

$

429

$

422

Stockholders’ Equity

$

2,093

$

2,219

GAINS AND LOSSES FROM COMMODITY DERIVATIVES

1st Quarter

4th Quarter

1st Quarter

($ millions)

2024

2023

2023

Non-cash derivative (loss) gain

$

(59

)

$

168

$

107

Net payments on settled commodity derivatives

(12

)

(49

)

(65

)

Net (loss) gain from commodity derivatives

$

(71

)

$

119

$

42

CAPITAL INVESTMENTS

1st Quarter

4th Quarter

1st Quarter

($ millions)

2024

2023

2023

Facilities (1)

$

14

$

20

$

9

Drilling

15

16

25

Workovers

7

11

6

Total E&P capital

36

47

40

CMB (1)

4

4

1

Corporate and other

14

15

6

Total capital program

$

54

$

66

$

47

(1) Facilities capital includes $0, $1 million and $1 million in the first quarter of 2024 and fourth and first quarter of 2023, respectively, to build replacement water injection facilities which will allow CRC to divert produced water away from a depleted oil and natural gas reservoir held by the Carbon TerraVault JV. Construction of these facilities supports the advancement of CRC’s carbon management business and CRC reported these amounts as part of adjusted CMB capital in this Earnings Release. Where adjusted CMB capital is presented, CRC removed the amounts from facilities capital and presented adjusted E&P, Corporate and Other capital.

Attachment 2

2024 PRELIMINARY OUTLOOK

Total 2024E

Net Production (MBoe/d)

75 – 79

Oil Production (%)

~61%

Capital ($ millions)

$200 – $240

CRC GUIDANCE

Total

2Q24E

CMB

2Q24E

E&P, Corp. & Other 2Q24E

Net Production (MBoe/d)

74 – 78

74 – 78

Oil Production (%)

~61%

~61%

CMB Expenses & Operating Costs ($ millions)

$170 – $183

$10 – $13

$160 – $170

General and Administrative Expenses ($ millions)

$56 – $64

$1 – $3

$55 – $61

Adjusted General and Administrative Expenses ($ millions)

$49 – $57

$1 – $3

$48 – $54

Capital ($ millions)

$50 – $57

$3 – $5

$47 – $52

Margin from Marketing of Purchased Commodities ($ millions) (1)

$5 – $15

$5 – $15

Electricity Margin ($ millions) (2)

$34 – $42

$34 – $42

Other Operating Revenue & Expenses, net ($ millions)

$0 – $5

$0 – $5

Transportation Costs ($ millions)

$14 – $17

$14 – $17

Taxes Other Than on Income ($ millions) (3)

$44 – $46

$44 – $46

Interest and Debt Expense ($ millions)

$13 – $15

$13 – $15

Commodity Assumptions:

Brent ($/Bbl)

$86.17

$86.17

NYMEX ($/Mcf)

$1.78

$1.78

Oil – % of Brent:

97% – 99%

97% – 99%

NGL – % of Brent:

50% – 55%

50% – 55%

Natural Gas – % of NYMEX:

89% – 93%

89% – 93%

1) Margin from Marketing of Purchased Commodities is calculated as the difference between Revenue from Marketing of Purchased Commodities and Costs Related to Marketing of Purchased Commodities.

(2) Electricity Margin is calculated as the difference between Electricity Sales and Electricity Generation Expenses.

(3) Other Operating Revenue & Expenses, net is calculated as the difference between Other Revenue and Other Operating Expenses, net. Current guidance does not include estimated Aera Merger and integration expenses of $30 – $40 million dependent on the timing of close.

See Attachment 3 for management’s disclosure of its use of these non-GAAP measures and how these measures provide useful information to investors about CRC’s results of operations and financial condition.

ESTIMATED ADJUSTED GENERAL AND ADMINISTRATIVE EXPENSES RECONCILIATION

2Q24 Estimated

Consolidated

CMB

E&P, Corporate & Other

($ millions)

Low

High

Low

High

Low

High

General and administrative expenses

$

56

$

64

$

1

$

3

$

55

$

61

Equity-settled stock-based compensation

(6

)

(5

)

(6

)

(5

)

Other

(1

)

(2

)

(1

)

(2

)

Estimated adjusted general and administrative expenses

$

49

$

57

$

1

$

3

$

48

$

54

Attachment 3

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

To supplement the presentation of its financial results prepared in accordance with U.S generally accepted accounting principles (GAAP), management uses certain non-GAAP measures to assess its financial condition, results of operations and cash flows. The non-GAAP measures include adjusted net income (loss), adjusted EBITDAX, E&P, Corporate & Other adjusted EBITDAX, CMB adjusted EBITDAX, net cash provided by operating activities before changes in operating assets and liabilities, net, free cash flow, E&P, Corporate & Other free cash flow, CMB free cash flow, adjusted general and administrative expenses, operating costs per BOE, and adjusted total capital among others. These measures are also widely used by the industry, the investment community and CRC’s lenders. Although these are non-GAAP measures, the amounts included in the calculations were computed in accordance with GAAP. Certain items excluded from these non-GAAP measures are significant components in understanding and assessing CRC’s financial performance, such as CRC’s cost of capital and tax structure, as well as the effect of acquisition and development costs of CRC’s assets. Management believes that the non-GAAP measures presented, when viewed in combination with CRC’s financial and operating results prepared in accordance with GAAP, provide a more complete understanding of the factors and trends affecting the Company’s performance. The non-GAAP measures presented herein may not be comparable to other similarly titled measures of other companies. Below are additional disclosures regarding each of the non-GAAP measures reported in this earnings release, including reconciliations to their most directly comparable GAAP measure where applicable.

ADJUSTED NET INCOME (LOSS)

Adjusted net income (loss) and adjusted net income (loss) per share are non-GAAP measures. CRC defines adjusted net income as net income excluding the effects of significant transactions and events that affect earnings but vary widely and unpredictably in nature, timing and amount. These events may recur, even across successive reporting periods. Management believes these non-GAAP measures provide useful information to the industry and the investment community interested in comparing CRC’s financial performance between periods. Reported earnings are considered representative of management’s performance over the long term. Adjusted net income (loss) is not considered to be an alternative to net income (loss) reported in accordance with GAAP. The following table presents a reconciliation of the GAAP financial measure of net income and net income attributable to common stock per share to the non-GAAP financial measure of adjusted net income and adjusted net income per share.

1st Quarter

4th Quarter

1st Quarter

($ millions, except per share amounts)

2024

2023

2023

Net (loss) income

$

(10

)

$

188

$

301

Unusual, infrequent and other items:

Non-cash derivative loss (gain)

59

(160

)

(107

)

Asset impairment

–

–

3

Severance and termination costs

–

–

1

Aera Merger transaction fees

10

–

–

Aera Merger integration fees

3

–

–

Increased power and fuel costs due to power plant shutdown

21

–

–

Net loss on early extinguishment of debt

–

1

–

Net gain on asset divestitures

(6

)

(25

)

(7

)

Other, net

2

16

3

Total unusual, infrequent and other items

89

(168

)

(107

)

Income tax (benefit) provision of adjustments at effective tax rate

(25

)

47

30

Income tax (benefit) provision – out of period

–

–

(31

)

Adjusted net income

$

54

$

67

$

193

Net (loss) income per share – basic

$

(0.14

)

$

2.74

$

4.22

Net (loss) income per share – diluted

$

(0.14

)

$

2.60

$

4.09

Adjusted net income per share – basic

$

0.78

$

0.98

$

2.71

Adjusted net income per share – diluted

$

0.75

$

0.93

$

2.63

ADJUSTED EBITDAX

CRC defines Adjusted EBITDAX as earnings before interest expense; income taxes; depreciation, depletion and amortization; exploration expense; other unusual, infrequent and out-of-period items; and other non-cash items. CRC believes this measure provides useful information in assessing its financial condition, results of operations and cash flows and is widely used by the industry, the investment community and its lenders. Although this is a non-GAAP measure, the amounts included in the calculation were computed in accordance with GAAP. Certain items excluded from this non-GAAP measure are significant components in understanding and assessing CRC’s financial performance, such as its cost of capital and tax structure, as well as depreciation, depletion and amortization of CRC’s assets. This measure should be read in conjunction with the information contained in CRC’s financial statements prepared in accordance with GAAP. A version of Adjusted EBITDAX is a material component of certain of its financial covenants under CRC’s Revolving Credit Facility and is provided in addition to, and not as an alternative for, income and liquidity measures calculated in accordance with GAAP.

The following table represents a reconciliation of the GAAP financial measures of net income and net cash provided by operating activities to the non-GAAP financial measure of adjusted EBITDAX. CRC has supplemented its non-GAAP measures of consolidated adjusted EBITDAX with adjusted EBITDAX for its exploration and production and corporate items (Adjusted EBITDAX for E&P, Corporate & Other) which management believes is a useful measure for investors to understand the results of the core oil and gas business. CRC defines adjusted EBITDAX for E&P, Corporate & Other as consolidated adjusted EBITDAX less results attributable to its carbon management business (CMB).

1st Quarter

4th Quarter

1st Quarter

($ millions, except per BOE amounts)

2024

2023

2023

Net (loss) income

$

(10

)

$

188

$

301

Interest and debt expense

13

13

14

Depreciation, depletion and amortization

53

55

58

Income tax (benefit) provision

(9

)

79

75

Exploration expense

1

1

1

Interest income

(6

)

(7

)

(4

)

Unusual, infrequent and other items (1)

89

(168

)

(107

)

Non-cash items

Accretion expense

12

11

12

Stock-based compensation

5

6

7

Post-retirement medical and pension

1

1

1

Adjusted EBITDAX

$

149

$

179

$

358

Net cash provided by operating activities

$

87

$

131

$

310

Cash interest payments

21

1

23

Cash interest received

(6

)

(7

)

(4

)

Cash income taxes

22

41

–

Exploration expenditures

1

1

1

Adjustments to changes in operating assets and liabilities

24

12

28

Adjusted EBITDAX

$

149

$

179

$

358

E&P, Corporate & Other Adjusted EBITDAX

$

162

$

199

$

367

CMB Adjusted EBITDAX

$

(13

)

$

(20

)

$

(9

)

Adjusted EBITDAX per Boe

$

21.47

$

23.57

$

44.55

(1) See Adjusted Net Income (Loss) reconciliation.

FREE CASH FLOW AND SUPPLEMENTAL CASH FLOW MEASURES

Management uses free cash flow, which is defined by CRC as net cash provided by operating activities less capital investments, as a measure of liquidity. The following table presents a reconciliation of CRC’s net cash provided by operating activities to free cash flow. CRC supplemented its non-GAAP measure of free cash flow with (i) net cash provided by operating activities before changes in operating assets and liabilities, net, (ii) adjusted free cash flow, and (iii) free cash flow of exploration and production, and corporate and other items (Free Cash Flow for E&P, Corporate & Other), which it believes is a useful measure for investors to understand the results of CRC’s core oil and gas business. CRC defines Free Cash Flow for E&P, Corporate & Other as consolidated free cash flow less results attributable to its carbon management business (CMB). CRC defines adjusted free cash flow as net cash provided by operating activities less adjusted capital investments.

1st Quarter

4th Quarter

1st Quarter

($ millions)

2024

2023

2023

Net cash provided by operating activities before changes in operating assets and liabilities, net

$

92

$

104

$

316

Changes in operating assets and liabilities, net

(5

)

27

(6

)

Net cash provided by operating activities

87

131

310

Capital investments

(54

)

(66

)

(47

)

Free cash flow

$

33

$

65

$

263

E&P, Corporate and Other

$

50

$

84

$

270

CMB

$

(17

)

$

(19

)

$

(7

)

Adjustments to capital investments:

Replacement water facilities(1)

$

–

$

1

$

1

Adjusted capital investments:

E&P, Corporate and Other

$

50

$

61

$

45

CMB

$

4

$

5

$

2

Adjusted free cash flow:

E&P, Corporate and Other

$

50

$

85

$

271

CMB

$

(17

)

$

(20

)

$

(8

)

(1) Facilities capital includes $0, $1 million and $1 million in the first quarter of 2024 and fourth and first quarter of 2023, respectively, to build replacement water injection facilities which will allow CRC to divert produced water away from a depleted oil and natural gas reservoir held by the Carbon TerraVault JV. Construction of these facilities supports the advancement of CRC’s carbon management business and CRC reported these amounts as part of adjusted CMB capital in this press release. Where adjusted CMB capital is presented, CRC removed the amounts from facilities capital and presented adjusted E&P, Corporate and Other capital.

ADJUSTED GENERAL & ADMINISTRATIVE EXPENSES

Management uses a measure called adjusted general and administrative (G&A) expenses to provide useful information to investors interested in comparing CRC’s costs between periods and performance to our peers. CRC supplemented its non-GAAP measure of adjusted general and administrative expenses with adjusted general and administrative expenses of its exploration and production and corporate items (adjusted general & administrative expenses for E&P, Corporate & Other) which it believes is a useful measure for investors to understand the results or CRC’s core oil and gas business. CRC defines adjusted general & administrative Expenses for E&P, Corporate & Other as consolidated adjusted general and administrative expenses less results attributable to its carbon management business (CMB).

1st Quarter

4th Quarter

1st Quarter

($ millions)

2024

2023

2023

General and administrative expenses

$

57

$

66

$

65

Stock-based compensation

(5

)

(6

)

(7

)

Information technology infrastructure

(2

)

(4

)

(3

)

Other

(1

)

(1

)

–

Adjusted G&A expenses

$

49

$

55

$

55

E&P, Corporate and Other adjusted G&A expenses

$

47

$

53

$

52

CMB adjusted G&A expenses

$

2

$

2

$

3

OPERATING COSTS PER BOE

The reporting of PSC-type contracts creates a difference between reported operating costs, which are for the full field, and reported volumes, which are only CRC’s net share, inflating the per barrel operating costs. The following table presents operating costs after adjusting for the excess costs attributable to PSCs.

1st Quarter

4th Quarter

1st Quarter

($ per BOE)

2024

2023

2023

Energy operating costs (1)

$

8.07

$

8.65

$

15.56

Gas processing costs (2)

0.58

0.60

0.62

Non-energy operating costs

17.15

15.24

15.43

Operating costs

$

25.80

$

24.49

$

31.61

Costs attributable to PSCs

Excess energy operating costs attributable to PSCs

$

(0.99

)

$

(1.01

)

$

(1.19

)

Excess non-energy operating costs attributable to PSCs

(1.55

)

(1.32

)

(1.04

)

Excess costs attributable to PSCs

$

(2.54

)

$

(2.33

)

$

(2.23

)

Energy operating costs, excluding effect of PSCs (1)

$

7.08

$

7.64

$

14.37

Gas processing costs, excluding effect of PSCs (2)

0.58

0.60

0.62

Non-energy operating costs, excluding effect of PSCs

15.60

13.92

14.39

Operating costs, excluding effects of PSCs

$

23.26

$

22.16

$

29.38

(1) Energy operating costs consist of purchased natural gas used to generate electricity for operations and steamfloods, purchased electricity and internal costs to generate electricity used in CRC’s operations.

(2) Gas processing costs include costs associated with compression, maintenance and other activities needed to run CRC’s gas processing facilities at Elk Hills.

Attachment 4

PRODUCTION STATISTICS

1st Quarter

4th Quarter

1st Quarter

Net Production Per Day

2024

2023

2023

Oil (MBbl/d)

San Joaquin Basin

30

32

35

Los Angeles Basin

18

18

20

Total

48

50

55

NGLs (MBbl/d)

San Joaquin Basin

11

11

11

Total

11

11

11

Natural Gas (MMcf/d)

San Joaquin Basin

90

114

119

Los Angeles Basin

1

1

1

Sacramento Basin

14

15

16

Total

105

130

136

Total Production (MBoe/d)

76

83

89

Gross Operated and Net Non-Operated

1st Quarter

4th Quarter

1st Quarter

Production Per Day

2024

2023

2023

Oil (MBbl/d)

San Joaquin Basin

34

36

39

Los Angeles Basin

24

25

26

Total

58

61

65

NGLs (MBbl/d)

San Joaquin Basin

11

11

12

Total

11

11

12

Natural Gas (MMcf/d)

San Joaquin Basin

128

129

135

Los Angeles Basin

7

8

7

Sacramento Basin

17

18

20

Total

152

155

162

Total Production (MBoe/d)

94

98

103

Attachment 5

PRICE STATISTICS

1st Quarter

4th Quarter

1st Quarter

2024

2023

2023

Oil ($ per Bbl)

Realized price with derivative settlements

$

77.17

$

71.34

$

63.04

Realized price without derivative settlements

$

80.16

$

82.00

$

78.68

NGLs ($/Bbl)

$

50.50

$

49.08

$

58.88

Natural gas ($/Mcf)

Realized price with derivative settlements

$

3.90

$

4.66

$

21.56

Realized price without derivative settlements

$

3.90

$

4.66

$

21.56

Index Prices

Brent oil ($/Bbl)

$

81.84

$

82.69

$

82.22

WTI oil ($/Bbl)

$

76.96

$

78.32

$

76.13

NYMEX average monthly settled price ($/MMBtu)

$

2.24

$

2.88

$

3.42

Realized Prices as Percentage of Index Prices

Oil with derivative settlements as a percentage of Brent

94

%

86

%

77

%

Oil without derivative settlements as a percentage of Brent

98

%

99

%

96

%

Oil with derivative settlements as a percentage of WTI

100

%

91

%

83

%

Oil without derivative settlements as a percentage of WTI

104

%

105

%

103

%

NGLs as a percentage of Brent

62

%

59

%

72

%

NGLs as a percentage of WTI

66

%

63

%

77

%

Natural gas with derivative settlements as a percentage of NYMEX contract month average

174

%

162

%

630

%

Natural gas without derivative settlements as a percentage of NYMEX contract month average

174

%

162

%

630

%

Attachment 6

FIRST QUARTER 2024 DRILLING ACTIVITY

San Joaquin

Los Angeles

Ventura

Sacramento

Wells Drilled

Basin

Basin

Basin

Basin

Total

Development Wells

Primary

2

–

–

–

2

Waterflood

–

–

–

–

–

Steamflood

–

–

–

–

–

Total (1)

2

–

–

–

2

(1) Includes steam injectors and drilled but uncompleted wells, which are not included in the SEC definition of wells drilled.

Attachment 7

OIL HEDGES AS OF MARCH 31, 2024

Q2 2024

Q3 2024

Q4 2024

1H 2025

2H 2025

Sold Calls

Barrels per day

30,000

30,000

29,000

28,000

27,500

Weighted-average Brent price per barrel

$90.07

$90.07

$90.07

$86.88

$86.90

Swaps

Barrels per day

8,875

8,875

5,500

3,500

3,250

Weighted-average Brent price per barrel

$79.28

$80.10

$77.45

$72.81

$72.50

Purchased Puts

Barrels per day

30,000

30,000

29,000

28,000

27,500

Weighted-average Brent price per barrel

$65.17

$65.17

$65.17

$61.43

$61.45

Source: Rbcrichardsonbarr.com

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The post California Resources Reports First Quarter 2024 Financial and Operating Results appeared first on Energy News Beat.

 

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HOUSTON, May 7, 2024 /PRNewswire/ — Chord Energy Corporation (NASDAQ: CHRD) (“Chord”, “Chord Energy” or the “Company”) today reported financial and operating results for the first quarter 2024.

The post Chord Energy Reports First Quarter 2024 Financial and Operating Results, Declares Base and Variable Dividends, Issues Second Quarter Outlook and Provides Update on Pending Combination with Enerplus appeared first on Energy News Beat.

 

Energy News Beat

NEW YORK, May 7 (Reuters) – Oil prices closed slightly lower on Tuesday on signs of easing supply concerns, while market participants shifted their focus to U.S. stockpiles data due later today and Wednesday.

Brent crude futures settled 17 cents lower at $83.16 a barrel, and U.S. West Texas Intermediate crude futures closed 10 cents lower at $78.38.

The U.S. Energy Information Administration on Tuesday raised its forecasts for this year’s world oil and liquid fuels output and lowered its demand expectations, pointing to a well-supplied market as opposed to prior forecasts that showed under-supply.

The premium of the first-month Brent contract to the six-month contract slipped to $2.90 a barrel on Tuesday, the lowest since mid-February, another sign of market participants betting on easing supply tightness.

Current inventory data shows crude oil and petroleum supplies are running 1.1 million barrel per day above forecasts in developed economies, according to an analysis by energy brokerage StoneX.

“Global inventories remain in a building phase and has accelerated recently,” StoneX analyst Alex Hodes wrote to clients on Tuesday.

Last week, Brent and WTI had their steepest weekly losses in three months as weak U.S. jobs data fueled hopes for interest rate cuts.

Oil prices found some support on Tuesday from a U.S. government solicitation to buy more than 3 million barrels of oil for the Strategic Petroleum Reserve (SPR), but the focus remained on U.S. oil storage reports due on Tuesday and Wednesday, Mizuho analyst Robert Yawger said.

“We need to see refiners running more barrels heading into peak summer driving season. If the inventories data goes in the wrong direction, the SPR and the rest of it does not matter,” Yawger said.

U.S. crude oil inventories could have fallen by about 1.2 million barrels in the week to May 3, according to a Reuters poll of analysts.

The American Petroleum Institute will post its weekly U.S. oil and fuel inventories data after 4:30 p.m. ET (2030 GMT), and the U.S. Energy Information Administration’s weekly update on stockpiles is due on Wednesday.

Oil traders largely looked past escalating tensions in the Middle East, where the Israeli military seized control of the Rafah border crossing between the Gaza Strip and Egypt and its tanks pushed into the southern Gazan town of Rafah, as mediators struggled to secure a ceasefire agreement.

“Instead, their focus appears directed towards the uncertainties surrounding global economic growth prospects and the anticipated impact of sluggish growth on oil demand,” said Ricardo Evangelista, senior analyst at financial brokerage ActivTrades.

Source: Reuters.com

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