Why One Florida Fund Opened a $4 Million Bet on California Resources Despite a 15% Stock Slide

Core Insights - California Resources Corporation is a prominent independent energy company focused on oil and natural gas exploration and production in California, leveraging its scale and integrated operations to meet regional energy demand [1][2] Company Overview - The company operates an integrated model that includes exploration, production, gathering, processing, and sales, generating revenue primarily from energy commodity sales and power generation [2] - California Resources Corporation produces and markets crude oil, natural gas, and natural gas liquids, and also generates and sells electricity to utilities and the grid [2] Financial Performance - As of the latest report, shares of California Resources Corporation were priced at $44.04, reflecting a 14.5% decline over the past year, underperforming the S&P 500's 15% return during the same period [3] - In the third quarter, the company generated $279 million in operating cash flow and $188 million in free cash flow, supporting balance sheet repair and shareholder returns [6] - Production remained steady at 137 thousand barrels of oil equivalent per day, with oil constituting approximately 78% of volumes, while adjusted EBITDAX reached $338 million for the quarter [7] Recent Developments - Kore Advisors LP established a new stake in California Resources Corporation, acquiring 75,141 shares worth about $4 million, which represents 4.6% of the fund's assets under management [4][5] - The company raised its quarterly dividend by 5% to $0.405 per share and redeemed all remaining 2026 senior notes, extending maturities and reducing near-term risk [6] Strategic Focus - California Resources Corporation is prioritizing free cash flow, dividends, and debt reduction over aggressive growth, which is seen as a prudent strategy in a sector characterized by boom-and-bust cycles [8]