Core Insights - California Resources (CRC) is entering 2026 with an improved regulatory environment, a clear integration strategy, and a conservative balance sheet, despite facing challenges such as lower production and higher costs [1][10] Regulatory Environment - California's 2025 policy changes have created a favorable regulatory landscape, including tighter permitting frameworks and extended Cap-and-Invest programs, which are expected to enhance project visibility and accelerate approvals [2] Berry Merger - CRC's all-stock merger with Berry is anticipated to close in Q1 2026, targeting annual synergies of $80–$90 million, with significant production and acreage additions, while maintaining pro forma leverage below 1X [3][10] Financial Position - CRC has over $1.1 billion in liquidity, minimal net leverage, and extended debt maturities to 2029, supporting a 5% increase in quarterly dividends and ongoing stock repurchases [4][10] Near-Term Challenges - The company is experiencing production declines, with Q3 2025 net production averaging 137 Mboe/d, and increased operating costs due to the merger with Aera Energy and elevated taxes [5][10] Q4 and 2026 Guidance - For Q4, CRC projects production of 131–135 Mboe/d, with capital expenditures estimated at $115 million, while the 2026 capex framework is set at $280–$300 million, indicating a focus on stabilizing volumes [6][10] Market Position - CRC holds a short-term Zacks Rank of 3 (Hold) and a VGM Score of A, reflecting strong value and momentum characteristics, with a constructive outlook for 2026 driven by policy shifts and the Berry merger [7][10] Peer Comparison - Matador Resources and Murphy Oil, both ranked 3, offer competitive value characteristics and dividend income, appealing to investors seeking balanced return profiles alongside CRC [9]

Core Viewpoint - California Resources Corporation (CRC) has experienced a 3.2% increase in share price since the last earnings report, outperforming the S&P 500, but there are concerns about whether this positive trend will continue leading up to the next earnings release [1] Financial Performance - Total operating revenues for Q3 2025 were $855 million, a 37% decrease year over year from $1,353 million in Q3 2024, and below the Zacks Consensus Estimate of $879 million [2] - Adjusted EPS was $1.46, down 3% year over year from $1.50 in Q3 2024, but exceeded the Zacks Consensus Estimate of $1.31 [2] - Net income fell to $64 million, an 81% decline year over year from $345 million in Q3 2024 [8] Production and Operations - Net oil production was 107 MBbl/d, a 5% decrease year over year from 113 MBbl/d, and below the Zacks Consensus Estimate of 108 MBbl/d [3] - Total production of oil and natural gas was 137 Mboe/d, flat quarter over quarter but down 6% year over year from 145 Mboe/d [8] Revenue Drivers - The decline in revenue was primarily due to a shift in commodity derivative outcomes, resulting in a net loss in Q3 2025 compared to a substantial gain in Q3 2024, accounting for approximately $498 million of the year-over-year revenue difference [4] - Oil realizations were strong, with oil prices at 97% of Brent and gas prices at a premium to NYMEX, while the oil mix was approximately 78% [4] Segment Performance - Carbon management operations recorded a segment loss as CRC continued to invest in permitting and early-stage project work [5] - Electricity margins improved due to favorable pricing and operating conditions, while marketing margins from purchased commodities remained stable [5] Balance Sheet and Liquidity - CRC ended the quarter with $180 million in cash and cash equivalents, with total liquidity exceeding $1.1 billion [6] - Operating cash flow was $279 million, and capital investments totaled $91 million [6] - The quarterly dividend was increased by 5% to $0.405 per share, with over $200 million remaining for buyback authorization through mid-2026 [6] Management Outlook - Management projects net production for Q4 2025 to be between 131–135 Mboe/d, with oil comprising about 78% [7] - Operating costs are expected to be around $310 million, with adjusted EBITDAX guidance at $240 million at the midpoint [7] - Capital spending is forecasted at approximately $115 million, with reaffirmed 2025 capital expenditure guidance of $280–$330 million [7] - The pending Berry merger is anticipated to generate $80–$90 million in annual synergies within 12 months [9] Industry Context - California Resources operates within the Zacks Oil and Gas - Exploration and Production - United States industry, where Magnolia Oil & Gas Corp has seen a 9.6% gain over the past month [13] - Magnolia Oil & Gas reported revenues of $324.93 million for the last quarter, reflecting a year-over-year change of -2.5% [14]

Core Viewpoint - The former Attorney General of Louisiana, Charles C. Foti, Jr., and Kahn Swick & Foti, LLC are investigating the proposed sale of Berry Corporation to California Resources Corporation to assess the adequacy of the price and process involved in the transaction [1]. Summary by Relevant Sections Proposed Transaction Details - Under the terms of the proposed transaction, shareholders of Berry Corporation will receive 0.0718 shares of California Resources Corporation for each share of Berry they own [1]. Investigation Purpose - Kahn Swick & Foti, LLC aims to determine whether the consideration offered to Berry shareholders is adequate or if it undervalues the company [1]. Contact Information - Interested parties can contact Kahn Swick & Foti, LLC for discussions regarding their legal rights related to the proposed sale [2].

Core Points - California Resources Corporation (CRC) announced a donation of $200,000 to support food security efforts across California [1][2] - The funds will be distributed to local food banks and community organizations, focusing on areas where CRC has operational presence [2][3] - Since 2015, CRC has contributed nearly $20 million to local nonprofits, emphasizing its commitment to community well-being alongside energy development [3] Company Commitment - CRC's President and CEO, Francisco Leon, highlighted the importance of supporting local communities and partnering with organizations that provide essential resources [2] - The company is coordinating with community partners and local officials to ensure effective allocation of resources [2] - CRC's approach reflects its belief that responsible energy development and community well-being are interconnected [3][4] Community Impact - Local leaders expressed gratitude for CRC's contributions, emphasizing the positive impact on families and the community [3] - The donation aims to strengthen the safety net for vulnerable populations, including children, seniors, and working families [3] - CRC's ongoing investment in local communities is part of its broader commitment to environmental stewardship and energy transition [4]

Group 1 - The article does not provide any specific content related to a company or industry [1]

Core Insights - California Resources Corporation (CRC) has received a 'Grade A' certification from MiQ for its methane emissions performance in Ventura County, reinforcing its leadership in emissions transparency and commitment to California's climate goals [1][2][3] Group 1: Certification and Commitment - CRC is the only oil and natural gas producer in California and the Rocky Mountain Region to achieve MiQ certification, having previously earned a 'Grade A' for its Los Angeles Basin assets in 2024 [1][2] - The certification reflects CRC's high rankings in company practices, monitoring technology deployment, and methane intensity, demonstrating its commitment to lower emissions energy production [3] Group 2: Leadership and Future Plans - CRC's President and CEO, Francisco Leon, emphasized the importance of independent verification in showcasing the company's dedication to meeting high standards for methane emissions while supporting California's energy needs [2] - The company plans to continue collaborating with MiQ to certify its production across California, indicating a proactive approach to emissions management [2] Group 3: MiQ's Role - MiQ is recognized as a global leader in methane emissions certification, aiming to accelerate reductions in methane emissions from the oil and gas sector through credible and transparent certification systems [3][6] - The independent certification process provides trusted data on emissions, ensuring accountability and incentivizing improvements within the industry [4]

Core Viewpoint - The article discusses the recent volatility in the stock market and highlights four companies that have recently increased their dividends, providing potential investment opportunities for cautious investors seeking steady income amidst economic uncertainty [2][3]. Economic Context - Major stock indexes have reached all-time highs, but investor sentiment remains low due to a lack of economic data from the government shutdown, the impact of tariffs imposed by President Trump, and uncertainty regarding a potential interest rate cut by the Federal Reserve [2][4]. - The Federal Reserve recently cut interest rates by 0.25 percentage points, but this did not positively affect stock prices, as Chairman Jerome Powell expressed doubts about further cuts this year [4][5]. - The ongoing government shutdown has deprived investors of key economic data, contributing to fears of a recession as the labor market continues to shrink [6]. Company Highlights - **CDW Corporation**: Announced a dividend of $0.63 per share, with a dividend yield of 1.76%. Over the past five years, CDW has increased its dividend six times, with a payout ratio of 26% of earnings [9][8]. - **California Resources Corporation**: Declared a dividend of $0.41 per share, yielding 3.32%. The company has increased its dividend four times in the last five years, with a payout ratio of 34% of earnings [11][10]. - **Exxon Mobil Corporation**: Announced a dividend of $1.03 per share, yielding 3.47%. Exxon has increased its dividend five times over the past five years, with a payout ratio of 57% of earnings [13][12]. - **Entergy Corporation**: Declared a dividend of $0.64 per share, yielding 2.49%. Entergy has increased its dividend six times in the last five years, with a payout ratio of 59% of earnings [14][12].

Financial Performance - Total operating revenues for Q3 2025 were $855 million, a decrease of 36.8% compared to $1,353 million in Q3 2024[12]. - Net income for Q3 2025 was $64 million, down 81.5% from $345 million in Q3 2024[12]. - Operating income for Q3 2025 was $98 million, a significant decrease of 81.0% from $518 million in Q3 2024[12]. - The company reported a basic net income per share of $0.76 for Q3 2025, down from $3.86 in Q3 2024[12]. - Net income for the three months ended September 30, 2025, was $64 million, compared to $345 million for the same period in 2024, reflecting a decrease of approximately 81.5%[23]. - For the nine months ended September 30, 2025, net income was $351 million, slightly up from $343 million in 2024, indicating a growth of about 2.3%[23]. - Total operating revenues for the nine months ended September 30, 2025, were $2,272 million, compared to $2,321 million in the same period of 2024, showing a slight decrease of 2.1%[78][81]. - Basic earnings per share (EPS) for the nine months ended September 30, 2025, was $4.00, a decrease from $4.54 in the same period of 2024[93]. Revenue Breakdown - Oil, natural gas, and natural gas liquids sales decreased to $715 million in Q3 2025 from $870 million in Q3 2024, representing a decline of 17.8%[12]. - For the nine months ended September 30, 2025, oil, natural gas, and natural gas liquids sales totaled $2,265 million, down from $1,729 million in the same period of 2024, reflecting an increase of 31.0%[78][81]. - Revenue from marketing of purchased commodities for the three months ended September 30, 2025, was $58 million, an increase of 14% compared to $51 million in 2024[96]. - Electricity revenue surged by $43 million to $101 million in Q3 2025, attributed to higher resource adequacy revenues compared to Q2 2025[143]. - Electricity revenue increased by $61 million to $181 million for the nine months ended September 30, 2025, compared to $120 million for the same period in 2024, a rise of 50.8%[157]. Expenses and Costs - Total costs and other for the three months ended September 30, 2025, were $756 million, compared to $835 million in the same period of 2024, reflecting a decrease of about 9%[106][107]. - Operating expenses totaled $2,193 million for the nine months ended September 30, 2025, compared to $1,776 million for the same period in 2024, reflecting an increase of 23.4%[160]. - General and administrative expenses for the nine months ended September 30, 2025, were $40 million, compared to $21 million in the same period of 2024, indicating an increase of 90.5%[79][76]. - Interest expense for the nine months ended September 30, 2025, was $8 million, up from $3 million in the same period of 2024, reflecting a rise of 166.7%[79][76]. - Taxes other than income rose to $187 million for the nine months ended September 30, 2025, up from $162 million in the same period of 2024, an increase of 15.4%[166]. Assets and Liabilities - Total current assets decreased to $812 million as of September 30, 2025, down from $1,024 million at December 31, 2024, a reduction of 20.7%[11]. - Total assets decreased to $6,751 million as of September 30, 2025, compared to $7,135 million at December 31, 2024, a decline of 5.4%[11]. - Long-term debt, net, decreased to $889 million as of September 30, 2025, from $1,132 million at December 31, 2024, a reduction of 21.5%[11]. - The company’s total stockholders' equity as of September 30, 2025, was $3,443 million, a decrease from $3,538 million at December 31, 2024, a decline of 2.7%[11]. - Total current liabilities as of September 30, 2025, were $917 million, a decrease from $980 million as of December 31, 2024[103]. Mergers and Acquisitions - The Aera Merger, completed on July 1, 2024, involved the issuance of shares valued at $1,141 million and the settlement of Aera's debt amounting to $990 million[37]. - The company plans to merge with Berry Corporation in an all-stock transaction, expected to enhance its oil-weighted reserves and sustainable cash flows[32]. - The Berry Merger is expected to close in the first quarter of 2026, with existing stockholders anticipated to own approximately 94% of the combined company[121][123]. Cash Flow and Investments - The company reported cash flow from operating activities of $279 million for the three months ended September 30, 2025, compared to $220 million for the same period in 2024, representing an increase of approximately 26.8%[23]. - Capital investments for the three months ended September 30, 2025, totaled $91 million, up from $79 million in 2024, marking a rise of about 15.2%[23]. - Capital investment for the nine months ended September 30, 2025, totaled $202 million, compared to $167 million for the same period in 2024, reflecting a 20.9% increase[85]. - Cash flow used in financing activities was $589 million for the nine months ended September 30, 2025, compared to cash flow provided of $351 million in the same period in 2024[206]. Market and Commodity Prices - The average daily Brent oil price for the three months ended September 30, 2025, was $68.13 per barrel, compared to $81.79 per barrel for the same period in 2024, a decrease of approximately 17%[126]. - The average daily NYMEX Henry Hub price for the nine months ended September 30, 2025, was $3.39 per MMBtu, compared to $2.10 per MMBtu for the same period in 2024, reflecting an increase of approximately 61%[126]. Future Outlook - The company expects to generate operating cash flow to return cash to shareholders through dividends and share repurchases based on current commodity prices and planned capital programs for 2025[191]. - The company anticipates maintaining a four drilling rig capital program throughout 2026, contingent on obtaining new permits expected to be available post-SB 237 enactment[137]. - The company expects to retain flexibility in its 2026 capital plan to adjust for changes in commodity prices and market factors[199].

Financial Data and Key Metrics Changes - For Q3 2025, the company reported net production of 137,000 boe per day, with 78% being oil, remaining roughly flat quarter over quarter [12] - Adjusted EBITDAX was $338 million, and free cash flow before changes in working capital was $231 million, indicating strong cash flow generation [12] - The company raised $400 million to refinance Berry's debt ahead of the merger, demonstrating financial agility [13] - Net leverage stood at 0.6 times, with total liquidity exceeding $1.1 billion, showcasing a robust balance sheet [14] - The company increased its dividend by 5%, reflecting confidence in its business and cash generation [15] Business Line Data and Key Metrics Changes - The exploration and production (E&P) business continues to perform well, with a revised annual base decline assumption of 8%-13%, down from 10%-15% [4][12] - The carbon capture and storage (CCS) business is advancing, with the first CO2 injection expected in early 2026 at the Elk Hills project [6][8] Market Data and Key Metrics Changes - California's energy and regulatory environment is improving, with new legislation supporting oil and gas permitting and extending the Cap and Invest program through 2045 [3][4] - The California Public Utilities Commission estimates that power capacity needs to double by 2035 to meet demand, indicating a significant opportunity for the company [8][10] Company Strategy and Development Direction - The company is focused on disciplined growth, operational efficiency, and capital allocation to enhance shareholder value [15][19] - The merger with Berry Corporation is expected to create meaningful synergies and enhance operational scale [5][17] - The company aims to play a leading role in California's energy transition, focusing on clean, reliable power solutions [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's position in California's energy revival, citing improved regulatory frameworks and strong production performance [3][4] - The company anticipates continued stable production and lower costs in Q4 2025, with a modest increase in capital spending [16][17] - The preliminary 2026 plan includes hedging two-thirds of expected production at a Brent floor price of $64 per barrel, ensuring cash flow stability [17] Other Important Information - The company has seven Class VI permits under active review with the EPA, aiming to expand its statewide storage network for CCS [8] - The company is exploring partnerships to develop carbon management solutions and enhance its power generation capabilities [11][60] Q&A Session Summary Question: Can you discuss the MOU with Capital Power and the next steps for the PPA? - Management noted that the market is heating up with more opportunities, and they are focused on building a hub to serve data centers and the grid at scale [23][24] Question: What is driving the improvement in PDP decline rates? - The improvement is attributed to owning high-quality conventional assets and effective management practices, including injection and surveillance technologies [28][29] Question: Can you elaborate on the decarbonized power opportunity in Kern County? - Management highlighted the potential for retrofitting existing power plants for CCS and the ability to connect these plants with storage sites, creating a decarbonized power hub [34][35] Question: How does the company plan to ramp up production for gas assets? - The focus will primarily be on oil production, with natural gas being a secondary priority depending on market demand and capital allocation [68][69] Question: What is the capital plan for 2026? - The preliminary plan includes running four rigs with a capital expenditure of $280 million-$300 million, focusing on workovers and sidetracks [72][74]

Financial Performance & Strategy - CRC's 3Q25 net total production was 137 MBOE/D, with 78% oil[12] - 3Q25 Adjusted EBITDAX was $338 million[12] - Net Operating Cash Flow Before WC Changes was $322 million in 3Q25[12] - Shareholder returns YTD25 totaled $454 million[12], including $32 million in dividends in 3Q25[23] - The company repaid $122 million of 2026 Senior Notes at par[12] - CRC exited 3Q25 with a leverage ratio of 0.6x[12] - The company raised its dividend by 5% for the 4th consecutive annual increase[12] Merger & Synergies - CRC announced a strategic merger with BRY, expected to close in 1Q26[12] - The BRY merger is estimated to generate annual synergies of $80-$90 million within 12 months post-close[12] - To refinance BRY's debt at close, CRC raised $231 million[12] Carbon Management & Power - CRC is working with MiQ to expand ICG certifications across its operations in California[12] - A new agreement with Capital Power includes up to 3 MMTPA of CO2 emissions[12] - CTV and CPX plan to jointly evaluate and develop CCS solutions for Capital Power's La Paloma facility[33] Guidance & Hedging - 4Q25E net production is guided at 131-135 MBOE/D, with approximately 78% oil[52] - Approximately 70% of remaining 2025E net oil production is hedged with an average Brent floor price of ~$67 per barrel[49] - Approximately 70% of remaining 2025E internal fuel consumption is hedged at an average natural gas price of ~$4 per MMBtu[51]