California Resources (CRC) Q4 FY25 earnings call: guidance and Q&A

How does the 2P inventory relate to future permitting and sustaining production?

Francisco highlighted 23 years of 2P inventory (1.2 billion Boe), low geological risk with infill drilling, and stacked optionality with low royalty burden in Belridge. Permitting is back to normal cadence, allowing focus on resource.

“We said we have 23 years of inventory of 2P basis -- on a 2P basis in our disclosure. We operate about 4 of the largest oil fields in the U.S. You can add 3 more, so 7 have each well in place that exceeds 3 billion barrels of oil in place.”

asked by Scott Hanold · answered by Francisco Leon

Is the 4Q flat production a good rate for 2027 maintenance? What drives improved capital efficiency?

Clio explained the 2026 program aims for a 2% corporate decline, effectively flat production, with $280M-$300M D&C capital for 4 rigs. Capital efficiency improved with $9/Boe development cost, 4x MOIC, mid-40% returns at $65 Brent, and Berry integration absorbing 25,000 boe/d with no increase in capital/rigs.

“Our '26 program, it's highly competitive on a stand-alone basis at $9 per Boe of development cost. The program generates just shy of 4x multiple on invested capital. It generates mid-40% returns at $65 Brent and roughly a 3-year payout.”

asked by Scott Hanold · answered by Clio Crespy

What are the remaining approvals for CCS injection at Elk Hills, and what are key milestones for 2026?

Francisco stated construction is complete, commissioning underway, and CO2 captured. Awaiting final EPA approval for injection. Filed for CTV II (27 million tons capacity). Expecting more draft permits for previously filed projects in 2026.

“Construction is complete, commissioning and final approvals are underway. We have successfully captured our first CO2 from the plant to running it to the amine system. And we're working closely with the EPA through the final operational readiness and compliance steps.”

asked by Wei Jiang · answered by Francisco Leon

What market conditions are needed to crystallize the power to CCS opportunity, especially for data centers?

Francisco highlighted the need for decarbonized power for data centers in California, especially for inference and edge compute. CRC is advancing "Land Now" (permitted/powered land) with a data center developer and leveraging 2 GW of power portfolio. CCS derisking makes clean hourly matched energy offering a differentiator.

“If you look at the map, Elk Hills power plant, CTV I, CTV VII now are right at that intersection of 2 of the most attractive use cases for content, for virtual gaming. So whether that's -- it's Los Angeles, Las Vegas, these are where we see this very high demand center.”

asked by Wei Jiang · answered by Francisco Leon

What drives continued cost reductions, especially towards the 2027-2028 timeframe?

Clio explained $300M of structural cost reductions since 2023 (primarily Aera integration), which are durable. Targeting $450M cumulative savings by year-end '28, with 80% already executed or actioned, driven by field efficiencies, overhead, supply chain leverage, and C&J well services.

“Since 2023, we've delivered $300 million of structural cost reductions, and those are primarily driven by the Aera integration. That was around $235 million, and we achieved those ahead of schedule.”

asked by Zachary Parham · answered by Clio Crespy

How does CRC balance maintenance vs. growth and FCF generation beyond 2026?

Francisco emphasized disciplined, flexible growth through cycles. Clio detailed a maintenance framework beyond 2026: 7 rigs, $485M D&C capital to hold production flat at '26 exit rate, with an oil and gas breakeven of $58 Brent / $54 WTI, and fully burdened corporate breakeven of ~$60 Brent.

“When we look at beyond '26, we've outlined what a maintenance framework would look like. That's holding production flat at the '26 exit rate, and that would require 7 rigs and about $485 million of D&C and workover capital.”

asked by Zachary Parham · answered by Clio Crespy

Is Uinta non-core or will it be developed? Details on costs and inventory.

Francisco described Uinta as a high-quality option with 100,000 contiguous net acres and promising horizontal results. Currently optimizing and evaluating, but it must compete with California assets (4x MOIC) for capital. All options (development, partnership) are on the table.

“Ultimately, though, it will have to -- in order for us to scale it, it has to compete with full cycle returns across the broader portfolio and against the California assets. And that's a really high bar.”

asked by Joshua Silverstein · answered by Francisco Leon