California Resources lowers annual earnings guidance on production dip
The oil and gas producer reported a positive free cash flow of $114 million for the second quarter.
California Resources (CRC), the independent energy producer, reported a swing to positive free cash flow of $114 million in the second quarter. The result followed a negative $32 million in the prior quarter.
Adjusted EBITDAX rose to $338 million from $304 million in the first quarter. The increase occurred despite a decline in net total production, which fell to 149 MBoe/d from 154 MBoe/d.
Price volatility impacted the company's realized returns. The realized oil price without derivative settlements increased to $91.55 per Bbl from $74.53 per Bbl in the previous quarter. Conversely, the realized natural gas price decreased to $1.84 per Mcf from $3.56 per Mcf.
Capital investments rose to $149 million from $131 million in the first quarter, driven by a 25% increase in drilling activity. However, the company reduced its expected full-year 2026 drilling, completions, and workover capital by $10 million to a range of $370 million to $390 million. California Resources also lowered its long-term maintenance capital outlook for those activities by approximately 5% to a range of $450 million to $475 million, which included reducing the rig count from seven to six.
Full-year 2026 Adjusted EBITDAX guidance midpoint was lowered to $1,250 million, compared to a previous midpoint of $1,450 million reported in the first quarter.
The company achieved over 100% of its annual Berry merger synergy targets, totaling $103 million in annualized savings, six months ahead of schedule. It also reported first carbon dioxide injection and revenue at Carbon TerraVault I.
California Resources announced a definitive purchase agreement to acquire Crimson Midstream Holdings, LLC for $63 million in cash. The company also entered a partnership with Beacon Data Centers to develop the Golden Valley Technology Hub data center project.
To optimize its capital structure, the company issued $550 million of 7.250% senior notes due 2035 to redeem all remaining 8.250% senior notes due 2029. The transaction resulted in a $28 million loss on extinguishment.