Rayonier (RYN) 2025 Conference Summary Company Overview - Rayonier is one of three publicly traded timber REITs, positioning itself as a pure play timber REIT without exposure to downstream wood products manufacturing [4][3] - The company owns or leases approximately 2,500,000 acres of timberland, generating a sustainable yield of about 10,000,000 tons annually [4][5] - A recent agreement to sell its New Zealand business will reduce acreage by about 400,000 acres and sustainable yield by approximately 2,500,000 tons [5][4] Financial Performance - In 2024, approximately 70% of adjusted EBITDA came from timber segments, with the remaining 30% from real estate [5][6] - The company has seen significant pricing dislocations in timber REITs, with Rayonier trading at over a 30% discount to estimated net asset value [2][2] Market Trends and Opportunities - The energy transition and the need for renewable power are expected to drive increased demand for land and timber [6][7] - The U.S. housing market is significantly underbuilt, with estimates of 3,000,000 to 6,000,000 units of underbuilt supply, suggesting a constructive long-term outlook for housing starts [8][7] - Rayonier is evolving into a land resources company, focusing on maximizing the value of its portfolio through alternative land uses and real estate development [9][10] Land Use Optimization - Transitioning land use can significantly increase value; for example, converting timberland into carbon capture and storage leases could increase value by up to 5x, while solar leases could increase it by up to 10x, and improved development use could increase it by up to 15x [9][10] - Rayonier aims to execute the highest value end use for every acre, whether for timber production, land-based solutions, or real estate [10][11] Competitive Advantages - Rayonier has a best-in-class timberland portfolio located in attractive markets, particularly in the U.S. South [11][12] - The company has a differentiated real estate platform with a strong track record of optimizing high and better use (HBU) values [11][12] Real Estate Development - The company has seen significant growth in HBU values, with average prices per acre increasing from about $2,800 to $4,500 from 2015-2017 to 2021-2024 [20][19] - Rayonier's development pipeline includes 120,000 acres in Northeast Florida and Southeast Georgia, focusing on areas with strong market demand [21][21] Land-Based Solutions - The demand for carbon capture and storage (CCS) is projected to grow significantly, with U.S. demand expected to increase from 25 million tons to over 300 million tons in the next decade [30][29] - Rayonier has expanded its solar development options from 7,000 acres in 2021 to 39,000 acres by the end of 2024, indicating strong growth potential in this area [28][27] Asset Disposition Strategy - Rayonier announced a $1,000,000,000 asset disposition target, with total announced divestitures reaching $1,450,000,000, exceeding the original target [34][42] - The company plans to use proceeds from the New Zealand sale for share buybacks, which are seen as a compelling opportunity given the stock's discount to private market value [44][43] Environmental and Risk Management - Rayonier manages risks associated with natural disasters through geographic dispersion of its assets, which minimizes the impact of events like hurricanes and forest fires [55][54] - The company has experienced minor impacts from past hurricanes, with salvage activities expected to normalize markets in the long term [57][58] Tariffs and Market Dynamics - Anticipated increases in duties on Canadian lumber production are expected to shift production to the U.S. South, potentially improving pricing power for sawtimber and pulp [60][61]

Consolidation in the Oil Industry - A consolidation wave has occurred in the oil sector, with ExxonMobil initiating a $64.5 billion acquisition of Pioneer Natural Resources and Chevron planning to buy Hess for $60 billion [1][2] BP's Strategic Shifts - BP has faced challenges and undergone two significant strategy shifts, initially pledging to cut capital spending on oil and gas projects by 40% to focus on clean energy [4] - Due to a recovery in oil prices and underperformance, BP has revised its strategy, reducing renewable investment from $5 billion to $1.5 billion to $2 billion annually while increasing oil and gas capital investment to $10 billion per year [5][6] BP's Production Goals - BP aims to increase its overall oil and gas output to an average of 2.5 million barrels of oil equivalent (BOE) per day by 2030, up from less than 2.4 million BOE last year [6] Comparison with Competitors - BP's strategy contrasts with U.S. oil giants like Exxon and Chevron, which have clear multi-year strategies for shareholder value growth, including Exxon's $140 billion investment plan and Chevron's focus on advantaged assets [7][8] Potential Takeover Interest - BP's underperformance has made it a potential takeover target, with companies like Shell, Exxon, Chevron, TotalEnergies, and Adnoc Gas reportedly considering acquisitions [10][12] - Shell has expressed hesitance, preferring stock repurchases over acquiring BP, citing the need to stabilize its own operations first [11] Challenges to Acquisition - BP's significant debt of $77 billion, partly from the Deepwater Horizon disaster, poses a challenge for potential acquirers, as it could negatively impact their balance sheets [13] - Regulatory scrutiny in the U.K. may also hinder any acquisition attempts, as there may be resistance to foreign control of BP [13] Investment Appeal - Despite speculation around a potential acquisition, BP's shifting strategy and financial challenges make it a less appealing investment compared to Exxon and Chevron, which have more defined growth strategies [14]

Financial Performance - The company generated $328 million of Adjusted EBITDAX, exceeding guidance[3] - Shareholder returns totaled $135 million, representing 103% of 1Q25 Free Cash Flow[3, 4] - Net leverage stands at 0.7x 2025E Net Leverage, reflecting a strengthened financial position[3] Operational Highlights - Net production reached 141 MBOE/D in 1Q25, with oil comprising 79% of the total[6, 7] - Non-energy operating costs decreased by 7% QoQ, achieving 74% of Aera merger-related synergies[3] - Approximately 70% of the remaining 2025 estimated net production is hedged at a floor price of around $67 per barrel Brent, ensuring cash flow stability[3] Synergies and Cost Structure - The company is targeting to realize $185 million of the $235 million of Aera merger-related synergies by the end of 2025[10] - A roughly 15% improvement in the 2025 estimated controllable cost structure is expected compared to the pro forma 2023 baseline[10] Carbon Management - The company is targeting first CO2 sequestration from the Elk Hills Cryogenic Gas Plant by the end of 2025[10] - The company received California's first EPA Class VI permits for CTV I – 26R, with permits becoming effective February 3, 2025[54]

Core Insights - California Resources Corporation (CRC) reported a strong start to 2025, returning a record $258 million to stakeholders while maintaining balance sheet strength and flat quarter-over-quarter total net production [3][5][10] - The company reaffirmed its production, capital investment, and adjusted EBITDAX guidance for 2025, indicating confidence in its operational strategy and market positioning [1][7] Financial Performance - In Q1 2025, CRC reported net income of $115 million and adjusted net income of $98 million, with adjusted EBITDAX of $328 million [5][6] - Total operating revenues for Q1 2025 were $912 million, an increase from $877 million in Q4 2024 [6][28] - The company generated $186 million in net cash from operating activities and $131 million in free cash flow [5][6] Production and Pricing - Average net production was 141 thousand barrels of oil equivalent per day (MBoe/d), with 79% of production being oil [5][6] - Realized oil price was $72.01 per barrel, while realized natural gas price was $4.12 per Mcf [4][5] Shareholder Returns - CRC returned $258 million to stakeholders in Q1 2025, including $100 million in share repurchases and $35 million in dividends [5][9] - The company has returned approximately $1,195 million to shareholders since mid-2021 [10] Capital Investments and Guidance - Capital investments in Q1 2025 totaled $55 million, with plans to run a one rig program in the first half and a two rig program in the second half of 2025 [7][8] - The company expects net production for Q2 2025 to be between 133 - 137 MBoe/d and adjusted EBITDAX between $275 - $290 million [8][34] Balance Sheet and Liquidity - As of March 31, 2025, CRC had $199 million in available cash and $983 million in borrowing capacity, totaling $1,182 million in liquidity [11][12] - The company redeemed $123 million of its 2026 Senior Notes in February 2025 and plans to redeem the remaining $122 million in 2025 [11]