California Resources (CRC) 10-Q31 Oct 142014 Q3 Quarterly reportFinancial data

Company Profile

Document_and_Entity_Informatio

Document and Entity Information (USD $)	9 Months Ended
Document and Entity Information (USD $)	Sep. 30, 2014
Document and Entity Information	'
Entity Registrant Name	'California Resources Corp
Entity Central Index Key	'0001609253
Document Type	'10-Q
Document Period End Date	30-Sep-14
Amendment Flag	'false
Current Fiscal Year End Date	'--12-31
Entity Current Reporting Status	'Yes
Entity Filer Category	'Non-accelerated Filer
Entity Common Stock, Shares Outstanding	1,000
Common stock, per share par value (in dollars per share)	$0.01
Document Fiscal Year Focus	'2014
Document Fiscal Period Focus	'Q3

COMBINED_AND_CONSOLIDATED_COND

COMBINED AND CONSOLIDATED CONDENSED BALANCE SHEETS (USD $)	Sep. 30, 2014	Dec. 31, 2013
In Millions, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
CURRENT ASSETS	'	'
Cash and cash equivalents	$105	$0
Trade receivables, net	441	30
Inventories	72	75
Other current assets	279	149
Total current assets	897	254
PROPERTY, PLANT AND EQUIPMENT	22,580	20,972
Accumulated depreciation, depletion and amortization	-7,855	-6,964
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	14,725	14,008
OTHER ASSETS	35	35
TOTAL ASSETS	15,657	14,297
CURRENT LIABILITIES	'	'
Accounts payable	584	448
Accrued liabilities	268	241
Total current liabilities	852	689
DEFERRED INCOME TAXES	3,404	3,122
OTHER LONG-TERM LIABILITIES	532	497
Liabilities, Noncurrent, Total	3,936	3,619
NET INVESTMENT	'	'
Net parent company investment	10,891	10,013
Accumulated other comprehensive income	-22	-24
Total net investment	10,869	9,989
TOTAL LIABILITIES AND NET INVESTMENT	15,657	14,297
Pro Forma	'	'
CURRENT ASSETS	'	'
Cash and cash equivalents	105	'
Trade receivables, net	441	'
Inventories	72	'
Other current assets	279	'
Total current assets	897	'
PROPERTY, PLANT AND EQUIPMENT	22,580	'
Accumulated depreciation, depletion and amortization	-7,855	'
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	14,725	'
OTHER ASSETS	35	'
TOTAL ASSETS	15,657	'
CURRENT LIABILITIES	'	'
Accounts payable	584	'
Accrued liabilities	268	'
Dividend payable to Occidental	6,000	'
Total current liabilities	6,852	'
DEFERRED INCOME TAXES	3,404	'
OTHER LONG-TERM LIABILITIES	532	'
Liabilities, Noncurrent, Total	3,936	'
NET INVESTMENT	'	'
Net parent company investment	4,891	'
Accumulated other comprehensive income	-22	'
Total net investment	4,869	'
TOTAL LIABILITIES AND NET INVESTMENT	$15,657	'

COMBINED_AND_CONSOLIDATED_COND1

COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF INCOME (USD $)	3 Months Ended		9 Months Ended
In Millions, unless otherwise specified	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
REVENUES	'	'	'	'
Oil and gas net sales to related parties	$421	$1,040	$2,560	$3,027
Oil and gas net sales to third parties	630	20	678	63
Other revenue	41	47	115	115
TOTAL REVENUES	1,092	1,107	3,353	3,205
COSTS AND OTHER DEDUCTIONS	'	'	'	'
Production costs	262	244	780	717
Selling, general and administrative expenses	87	73	243	212
Depreciation, depletion and amortization	304	288	886	853
Taxes other than on income	56	32	163	141
Exploration expense	25	41	71	81
Other Expenses	39	37	109	106
TOTAL COSTS AND OTHER DEDUCTIONS	773	715	2,252	2,110
INCOME BEFORE INCOME TAXES	319	392	1,101	1,095
Provision for income taxes	-131	-157	-444	-438
NET INCOME	$188	$235	$657	$657

COMBINED_AND_CONSOLIDATED_COND2

COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (USD $)	3 Months Ended			9 Months Ended
In Millions, unless otherwise specified	Sep. 30, 2014	Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME	'	'		'		'
NET INCOME	$188	$235		$657		$657
Other comprehensive income (loss) items:	'	'		'		'
Unrealized losses on derivatives	'	-1	[1]	-2	[1]	-1	[1]
Pension and postretirement gains	'	1	[2]	1	[2]	3	[2]
Reclassification to income of realized losses (gains) on derivatives	'	'		3	[3]	-1	[3]
Other comprehensive income, net of tax	'	'		2		1
Comprehensive income	$188	$235		$659		$658

[1]	Net of tax of zero for each of the three months ended September 30, 2014 and 2013, and $1 and zero for the nine months ended September 30, 2014 and 2013, respectively.
[2]	Net of tax of zero and $(1) for the three months ended September 30, 2014 and 2013, respectively, and zero and $(2) for the nine months ended September 30, 2014 and 2013.
[3]	Net of tax of zero for each of the three months ended September 30, 2014 and 2013, and $(2) and $1 for the nine months ended September 30, 2014 and 2013, respectively.

COMBINED_AND_CONSOLIDATED_COND3

COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $)	3 Months Ended		9 Months Ended
In Millions, unless otherwise specified	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME	'	'	'	'
Unrealized losses on derivatives, tax	$0	$0	$1	$0
Pension and postretirement gains, tax	0	-1	0	-2
Reclassification to income of realized losses (gains) on derivatives, tax	$0	$0	($2)	$1

COMBINED_AND_CONSOLIDATED_COND4

COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
In Millions, unless otherwise specified	Sep. 30, 2014	Sep. 30, 2013
CASH FLOW FROM OPERATING ACTIVITIES	'	'
NET INCOME	$657	$657
Adjustments to reconcile net income to net cash provided by operating activities:	'	'
Depreciation, depletion and amortization	886	853
Deferred income tax provision	262	197
Other noncash charges to income	22	42
Dry hole expenses	52	51
Changes in operating assets and liabilities, net	12	103
Net cash provided by operating activities	1,891	1,903
CASH FLOW FROM INVESTING ACTIVITIES	'	'
Capital expenditures	-1,569	-1,180
Acquisitions and other	-69	-35
Net cash used by investing activities	-1,638	-1,215
CASH FLOW FROM FINANCING ACTIVITIES	'	'
Distributions to Occidental, net	-148	-688
Net cash used by financing activities	-148	-688
Increase in cash and cash equivalents	105	'
Cash and cash equivalents-beginning of period	0	'
Cash and cash equivalents-end of period	$105	'

COMBINED_AND_CONSOLIDATED_COND5

COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Parenthitical) (USD $)	1 Months Ended
In Millions, unless otherwise specified	Aug. 31, 2014
COMBINED AND CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS	'
Transfer of trade receivables	$400
Transfer of Liabilities and Accruals	$80

The_SpinOff_And_Summary_Of_Sig

The Spin-Off And Summary Of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2014
THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	'
THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	'
	NOTE 1.THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

	The Separation and Spin-Off

	On February 14, 2014, Occidental Petroleum Corporation (Occidental) announced that its board of directors had authorized management to pursue the spin-off of the California business, into a stand-alone, publicly traded company. On October 2, 2014 our board of directors and Occidental’s board of directors each approved execution of the spin-off in accordance with a Separation and Distribution Agreement and several other agreements. In conjunction with the spin-off, Occidental received a private letter ruling from the Internal Revenue Service to the effect that based on certain facts, assumptions, representations, and understandings set forth in the ruling, certain aspects of the transactions that will be undertaken in preparation for, or in connection with, the spin-off will not cause the distribution to be taxable to Occidental or its affiliates. Occidental intends to distribute, on a pro rata basis, at least 80.1% of our common stock to the Occidental stockholders as of the record date for the spin-off. Upon completion of the spin-off, we will be an independent publicly traded company. The spin-off is, among other things, subject to the satisfaction or waiver by Occidental, in its sole discretion, of certain conditions to the spin-off. Each Occidental shareholder will receive 0.4 of a share of our stock for every one share of Occidental stock held at the close of business on the record date of November 17, 2014. Our registration statement on Form 10 describing the spin-off was declared effective by the U.S. Securities and Exchange Commission (SEC) on October 16, 2014.

	We are an oil and gas exploration and production company operating properties exclusively within the State of California. Additionally, we gather, process and market oil and gas products, and produce and sell power. We were incorporated in Delaware as a wholly-owned subsidiary of Occidental on April 23, 2014. During September 2014, Occidental transferred to us certain material existing assets, operations and liabilities of the California business. Prior to the spin-off we will have distributed to Occidental approximately $6.0 billion, any cash on our balance sheet immediately prior to the spin-off and settled any outstanding loans with Occidental existing as of the date of the spin-off, generally from the debt proceeds discussed in Note 8.

	Except when the context otherwise requires or where otherwise indicated, (1) all references to ‘‘CRC,’’ the ‘‘Company,’’ ‘‘we,’’ ‘‘us’’ and ‘‘our’’ refer to California Resources Corporation and its subsidiaries or the California business, (2) all references to the ‘‘California business’’ refer to Occidental’s California oil and gas exploration and production operations and related assets, liabilities and obligations, which we either have assumed or will assume in connection with the spin-off, and (3) all references to ‘‘Occidental’’ refer to Occidental Petroleum Corporation, our parent company, and its subsidiaries, other than us.

	Basis of Presentation

	The accompanying combined and consolidated condensed financial statements were prepared in connection with the spin-off and were derived from the consolidated financial statements and accounting records of Occidental. These combined and consolidated condensed financial statements reflect the historical results of operations, financial position and cash flows of the California business. We account for our share of oil and gas exploration and production ventures, in which we have a direct working interest, by reporting our proportionate share of assets, liabilities, revenues, costs and cash flows within the relevant lines on the balance sheets and statements of income and cash flows.

	The combined and consolidated statements of income for periods prior to the spin-off include expense allocations for certain corporate functions and centrally-located activities historically performed by Occidental. These functions include executive oversight, accounting, treasury, tax, financial reporting, finance, internal audit, legal, risk management, information technology, government relations, public relations, investor relations, human resources, procurement, engineering, drilling, exploration, marketing, ethics and compliance, and certain other shared services. These allocations are based primarily on specific identification of time or activities associated with us, employee headcount or our relative size compared to Occidental. Our management believes the assumptions underlying the combined and consolidated condensed financial statements, including the assumptions regarding allocating expenses from Occidental, are reasonable. However, the financial statements may not include all of the actual expenses that would have been incurred, may include duplicative costs and may not reflect our combined and consolidated results of operations, financial position and cash flows had we operated as a stand-alone public company during the periods presented. Actual costs that would have been incurred if we had been a stand-alone company prior to the spin-off would depend on multiple factors, including organizational structure and strategic and operating decisions. There may be some additional non-recurring costs of operating as a stand-alone company, which are not expected to be material.

	The assets and liabilities in the combined and consolidated financial statements are presented on a historical cost basis. We have eliminated all of our significant intercompany transactions and accounts. We have historically participated in Occidental’s centralized treasury management program and not incurred any debt. Prior to September 2014, excess cash generated by our business was distributed to Occidental, and our cash needs were provided by Occidental, in the form of a contribution. Starting September 2014, we are no longer distributing our excess cash to Occidental and Occidental agreed to provide us a line of credit for our cash needs, through the spin-off, at an annual interest rate of 0.36%. As part of the spin-off, we expect to pay to Occidental any balance on the line of credit and any cash on our balance sheet immediately prior to the spin-off date. There was not any balance due to Occidental under the line of credit as of September 30, 2014.

	In the opinion of our management, the accompanying financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present our financial position as of September 30, 2014, and the statements of income, comprehensive income, and cash flows for the three and nine months ended September 30, 2014 and 2013, as applicable. The income and cash flows for the periods ended September 30, 2014 and 2013 are not necessarily indicative of the income or cash flows you should expect for the full year.

	Certain prior year amounts have been reclassified to conform to the 2014 presentation.

	We have prepared this report pursuant to the rules and regulations of the SEC applicable to interim financial information, which permit omission of certain disclosures to the extent they have not changed materially since the latest annual financial statements. We believe our disclosures are adequate to make the information not misleading. You should read this Form 10-Q together with our annual financial statements for the year ended December 31, 2013, included in our registration statement on Form 10.

	In a manner similar to initial public offerings, we have included the effect of dividends to be paid to Occidental prior to the spin-off without other spin-off effects in the Pro Forma Adjusted September 30, 2014 Combined and Consolidated Condensed Balance Sheet.

	Share and Earnings Per Share Information

	Immediately after the completion of the spin-off, we will issue and have outstanding no more than approximately 387 million shares in aggregate, or 0.4994 of a share of CRC stock for each Occidental share outstanding at the related record date. This estimate is based on approximately 775 million shares of Occidental common stock outstanding as of September 30, 2014, and assuming distribution of at least 80.1% of our common stock to shareholders of Occidental using a ratio of 0.4 of a share of CRC stock for each share of Occidental common stock. As a result, we expect to distribute approximately 310 million shares to Occidental shareholders, with the remaining outstanding shares to be retained by Occidental. The actual number of shares of our common stock to be distributed will be calculated on November 17, 2014, the record date. Occidental will dispose of the remaining up to 19.9% of CRC common stock within eighteen months following the spin-off.

	The following table presents the calculation of pro forma basic and diluted EPS for the three and nine months ended September 30, 2014 and 2013, based on the most recently available number of Occidental common shares outstanding, using the distribution mechanics described above:

			Three months ended					Nine months ended
			September 30,					September 30,
	(in millions, except per-share amounts)		2014			2013		2014		2013
	Net income		$	188		$	235	$	657	$	657
	Number of basic and diluted shares		387			387		387		387
	Basic and diluted EPS		$	0.49		$	0.61	$	1.70	$	1.70

	We estimate a de minimis impact from dilutive shares, including from any underlying share-based awards issued in connection with the replacement of outstanding Occidental share-based awards. However, the actual number of dilutive shares will not be determined until after the spin-off.

	Capitalization

	The following table sets forth (i) our historical capitalization as of September 30, 2014 and (ii) our pro forma adjusted capitalization assuming the incurrence of debt and the distributions to Occidental were effective as of September 30, 2014:

			September 30, 2014
			Historical			Pro Forma Adjusted
			(in millions)
	Debt Outstanding
	Long-term debt:
	Revolving Credit Facility		$	—		$	65
	Term Loan Facility		—			1,000
	5% notes due 2020		—			1,000
	5 1/2% notes due 2021		—			1,750
	6% notes due 2024		—			2,250
	Total Debt Outstanding		—			6,065

	Net Investment / Stockholder’s Equity
	Common stock, par value $0.01		—			4
	Additional paid-in capital		—			4,887
	Net investment		10,891			—
	Accumulated other comprehensive income (loss)		(22		)	(22		)
	Net Investment / Stockholder’s Equity		10,869			4,869
Total Capitalization		$	10,869		$		10,934

We expect to borrow an additional $300 million to $350 million under our revolving credit facility, including borrowings of approximately $200 million we expect to incur prior to the spin-off to repay Occidental for the acquisition of oil and gas properties and between $100 million and $150 million of borrowings that we expect to incur concurrently with, or shortly after, the spin-off to fund our working capital requirements as a stand-alone company. As of September 30, 2014, on a pro forma basis giving effect to the incurrence of debt, the spin-off, the $6 billion of distributions to Occidental and these additional $300 million to $350 million of borrowings, we expect to have the ability to incur from $1.585 billion to $1.635 billion of additional borrowings under our revolving credit facility.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2014
Inventories	'
INVENTORIES	'
	NOTE 2.INVENTORIES

	Inventories as of September 30, 2014 and December 31, 2013, consisted of the following (in millions):

		2014		2013
	Materials and supplies	$	64	$	73
	Finished goods	8		2
	Total	$	72	$	75

Other_Information

Other Information	9 Months Ended
Other Information	Sep. 30, 2014
OTHER INFORMATION	'
OTHER INFORMATION	'
	NOTE 3.OTHER INFORMATION

	Other current assets include amounts due from joint interest partners of approximately $137 million and $97 million at September 30, 2014 and December 31, 2013, respectively. Other long-term liabilities include asset retirement obligations of $380 million and $388 million at September 30, 2014 and December 31, 2013, respectively.

	Other revenue and other expenses mainly comprise third party sales and the associated costs, respectively, of the portion of electricity generated by our power plant that is sold to third parties.

	Acquisitions

	In the third quarter of 2014, we entered into an agreement with a third-party seller to purchase oil and gas properties in the Ventura Basin for approximately $200 million. The acquisition closed during the fourth quarter of 2014.

Derivatives

Derivatives	9 Months Ended
Derivatives	Sep. 30, 2014
Derivatives	'
DERIVATIVES	'
	NOTE 4.DERIVATIVES

	Objective & Strategy

	We only occasionally hedge our oil and gas production, and, when we do so, the volumes are usually insignificant.

	Cash-Flow Hedges

	We entered into financial swap agreements in November 2012 for the sale of a portion of our natural gas production. These swap agreements hedged 50 MMcf of natural gas per day beginning in January 2013 and extending through March 2014 and qualified as cash-flow hedges. The weighted-average strike price of these swaps was $4.30. The gross and net fair values of these derivatives as of December 31, 2013 were not material, as determined using Level 2 inputs in the fair value hierarchy. There were no cash-flow hedges as of September 30, 2014.

	The after-tax gains and losses recognized in, and reclassified to income from, Accumulated Other Comprehensive Income (AOCI) for derivative instruments classified as cash-flow hedges for the nine month periods ended September 30, 2014 and 2013, and the ending AOCI balances for each period were not material. The gains and losses reclassified to income were recognized in net sales, and the amount of the ineffective portion of cash-flow hedges was immaterial for the nine months ended September 30, 2014 and 2013.

	There were no fair value hedges as of and during the three and nine month periods ended September 30, 2014 and 2013.

Lawsuits_Claims_Contingencies_

Lawsuits, Claims, Contingencies And Commitments	9 Months Ended
Lawsuits, Claims, Contingencies And Commitments	Sep. 30, 2014
LAWSUITS, CLAIMS, CONTINGENCIES AND COMMITMENTS	'
Lawsuits, Claims, Contingencies and Commitments	'
	NOTE 5.LAWSUITS, CLAIMS, CONTINGENCIES AND COMMITMENTS

	We or certain of our subsidiaries are involved, in the normal course of business, in lawsuits, environmental and other claims and other contingencies that seek, among other things, compensation for alleged personal injury, breach of contract, property damage or other losses, punitive damages, civil penalties, or injunctive or declaratory relief. We accrue reserves for currently outstanding lawsuits, claims and proceedings when it is probable that a liability has been incurred and the liability can be reasonably estimated. Reserve balances at September 30, 2014 and December 31, 2013 were not material to our balance sheets as of such dates. We also evaluate the amount of reasonably possible losses that we could incur as a result of these matters. We believe that reasonably possible losses that we could incur in excess of reserves accrued on our balance sheet would not be material to our consolidated financial position or results of operations.

	In connection with the spin-off, we will be required to indemnify Occidental for taxes incurred as a result of the failure of the spin-off or certain transactions undertaken in preparation for, or in connection with, the spin-off, to qualify as tax-free transactions under the relevant provisions of the Internal Revenue Code of 1986, as amended, to the extent caused by our breach of certain tax-related representations or covenants made in connection with the spin-off. We also have agreed to pay 50% of any taxes arising from the spin-off or related transactions to the extent that the tax is not attributable to the fault of either party. However, if we receive an increase in the tax basis of our depletable, depreciable or amortizable assets as a result of any such tax being imposed, we will pay to Occidental an amount equal to any reduction in our tax liability attributable to such basis increase at the time such reduction in tax liability arises. In addition, we and Occidental will indemnify each other in a manner principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of the remaining Occidental business with Occidental.

	Our off-balance sheet contractual obligations as of September 30, 2014, increased by approximately $92 million, or 13% since December 31, 2013. This increase is largely to support our capital program, including to secure drilling rigs, services and transportation commitments.

Retirement_and_Postretirement_

Retirement and Postretirement Benefit Plans	9 Months Ended
	Sep. 30, 2014
Retirement and Postretirement Benefit Plans	'
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS	'
	NOTE 6.RETIREMENT AND POSTRETIREMENT BENEFIT PLANS

	The following table sets forth the components of the net periodic benefit costs for our defined benefit pension and postretirement benefit plans for the three- and nine-month periods ended September 30, 2014 and 2013 (in millions):

	Three months ended September 30,	2014					2013
	Net Periodic Benefit Costs	Pension			Postretirement		Pension			Postretirement
		Benefit			Benefit		Benefit			Benefit
	Service cost	$	1		$	1	$	1		$	1
	Interest cost	1			—		1			—
	Expected return on plan assets	(1		)	—		(1		)	—
	Recognized actuarial loss	—			1		1			1
	Total	$	1		$	2	$	2		$	2

	Nine months ended September 30,	2014					2013
	Net Periodic Benefit Costs	Pension			Postretirement		Pension			Postretirement
		Benefit			Benefit		Benefit			Benefit
	Service cost	$	3		$	3	$	3		$	3
	Interest cost	3			2		3			2
	Expected return on plan assets	(4		)	—		(3		)	—
	Recognized actuarial loss	1			1		3			2
	Total	$	3		$	6	$	6		$	7

	We did not make any contributions in either of the three- month or nine-month periods ended September 30, 2014 and 2013, to our defined benefit pension plans.

RelatedParty_Transactions

Related-Party Transactions	9 Months Ended
	Sep. 30, 2014
RELATED-PARTY TRANSACTIONS	'
RELATED-PARTY TRANSACTIONS	'

	NOTE 7.RELATED-PARTY TRANSACTIONS

	During the three- and nine-month periods ended September 30, 2014 and 2013, we entered into the following related-party transactions (in millions):

		Three months ended				Nine months ended
		September 30,				September 30,
		2014		2013		2014		2013
	Sales	$	421	$	1,040	$	2,560	$	3,027
	Allocated costs for services provided by affiliates	$	43	$	33	$	120	$	100
	Purchases	$	45	$	43	$	165	$	129

	Through July 2014, substantially all of our products were sold to Occidental’s marketing subsidiaries at market prices and were settled at the time of sale to those entities. Beginning August 2014, we started marketing our own products directly to third parties.

	The statements of income include expense allocations for certain corporate functions and centrally-located activities historically performed by Occidental. These functions include executive oversight, accounting, treasury, tax, financial reporting, finance, internal audit, legal, risk management, information technology, government relations, public relations, investor relations, human resources, procurement, engineering, drilling, exploration, marketing, ethics and compliance, and certain other shared services. Charges from Occidental for these services are reflected in selling, general and administrative expenses.

	Purchases from related parties reflect products purchased at market prices from Occidental’s subsidiaries and are used in our operations. These purchases are included in production costs. There are no significant related party receivable or payable balances at September 30, 2014 and 2013.

	Starting September 2014, Occidental agreed to provide us a line of credit for our cash needs, through the spin-off, at an annual interest rate of 0.36%. As part of the spin-off, we expect to pay to Occidental any balance on the line of credit and any cash on our balance sheet immediately prior to the spin-off date. There was not any balance due to Occidental under the line of credit as of September 30, 2014.

Debt

Debt	9 Months Ended
Debt	Sep. 30, 2014
Debt	'
DEBT	'
	NOTE 8.DEBT

	Senior Notes
	On October 1, 2014, we issued $5.00 billion in aggregate principal amount of our senior notes, including $1.00 billion of 5% senior notes due January 15, 2020 (the 2020 notes), $1.75 billion of 5 1/2% senior notes due September 15, 2021 (the 2021 notes) and $2.25 billion of 6% senior notes due November 15, 2024 (the “2024 notes” and together with the 2020 notes and the 2021 notes, the ‘‘notes’’), in a private placement. The notes were issued at par and initially are fully and unconditionally guaranteed on a senior unsecured basis by all of our material subsidiaries. We used the net proceeds from the private placement to make a $4.95 billion cash distribution to Occidental in October 2014.

	We will pay interest on the 2020 notes semi-annually in cash in arrears on January 15 and July 15 of each year, beginning on July 15, 2015. We will pay interest on the 2021 notes semi-annually in cash in arrears on March 15 and September 15 of each year, beginning on March 15, 2015. We will pay interest on the 2024 notes semi-annually in cash in arrears on May 15 and November 15 of each year, beginning on May 15, 2015.

	In connection with the private placement of the notes, we granted the initial purchasers certain registration rights under a registration rights agreement. The indenture governing the notes also provides for special mandatory redemption if Occidental does not complete the spin-off on or prior to January 31, 2015, at a redemption price equal to the issue price plus accrued and unpaid interest.

	Credit Facilities
	On September 24, 2014, we entered into a credit agreement with a syndicate of lenders (the Credit Agreement), providing for (i) a senior term loan facility (the Term Loan Facility) and (ii) a senior revolving loan facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Credit Facilities”). The Credit Facilities mature on the fifth anniversary of the date the initial aggregate commitment under the Term Loan is funded and the commitments under the Revolving Facility become available for borrowings (the Funding Date). Any borrowings under these facilities will be subject to certain customary conditions.

	The aggregate initial commitments of the lenders under the Revolving Credit Facility are $2.0 billion and under the Term Loan Facility are $1.0 billion. The Revolving Credit Facility includes a sub-limit of $400 million for the issuance of letters of credit. We expect the Funding Date to occur prior to the spin-off. We will be required to repay the Term Loan Facility in equal quarterly installments equal to 2.5% (10.00% per annum) of the principal amount of the Term Loan Facility beginning on March 31, 2016. We intend to use proceeds from the Credit Facilities to make a $1.05 billion distribution to Occidental prior to the spin-off, settle any outstanding loans with Occidental as of the date of the spin-off and fund any working capital needs.

	If the spin-off is not consummated by January 31, 2015 and within five business days after the Funding Date, the Credit Facilities will automatically terminate and all amounts thereunder will become due and payable.

	Borrowings under the Credit Facilities will bear interest at either a LIBOR rate or an alternate base rate (equal to the greatest of (i) the administrative agent’s prime rate, (ii) the one-month LIBOR rate plus 1.00% and (iii) the federal funds effective rate plus 0.50%), at our election, in each case plus an applicable margin. This applicable margin is based on our most recent leverage ratio and will vary from (a) in the case of LIBOR loans, 1.50% to 2.25% and (b) in the case of alternate base rate loans, from 0.50% to 1.25%. The unused portion of the Revolving Credit Facility is subject to commitment fees ranging from 0.30% to 0.50% per annum.

	All obligations under the Credit Facilities initially will be guaranteed jointly and severally by all of our wholly-owned material subsidiaries, and will be unsecured while we maintain our credit ratings at the minimum levels defined in the Credit Agreement. The assets and liabilities of subsidiaries not guaranteeing the debt are de minimis.

	The Credit Agreement will also require us to maintain the following financial covenants evidenced as of the last day of each fiscal quarter: (a) a leverage ratio of no more than 4.50 to 1.00 and (b) an interest expense ratio of no less than 2.50 to 1.00.

The_SpinOff_And_Summary_Of_Sig1

The Spin-Off And Summary Of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2014
THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	'
Basis of Presentation	'
	Basis of Presentation

	The accompanying combined and consolidated condensed financial statements were prepared in connection with the spin-off and were derived from the consolidated financial statements and accounting records of Occidental. These combined and consolidated condensed financial statements reflect the historical results of operations, financial position and cash flows of the California business. We account for our share of oil and gas exploration and production ventures, in which we have a direct working interest, by reporting our proportionate share of assets, liabilities, revenues, costs and cash flows within the relevant lines on the balance sheets and statements of income and cash flows.

	The combined and consolidated statements of income for periods prior to the spin-off include expense allocations for certain corporate functions and centrally-located activities historically performed by Occidental. These functions include executive oversight, accounting, treasury, tax, financial reporting, finance, internal audit, legal, risk management, information technology, government relations, public relations, investor relations, human resources, procurement, engineering, drilling, exploration, marketing, ethics and compliance, and certain other shared services. These allocations are based primarily on specific identification of time or activities associated with us, employee headcount or our relative size compared to Occidental. Our management believes the assumptions underlying the combined and consolidated condensed financial statements, including the assumptions regarding allocating expenses from Occidental, are reasonable. However, the financial statements may not include all of the actual expenses that would have been incurred, may include duplicative costs and may not reflect our combined and consolidated results of operations, financial position and cash flows had we operated as a stand-alone public company during the periods presented. Actual costs that would have been incurred if we had been a stand-alone company prior to the spin-off would depend on multiple factors, including organizational structure and strategic and operating decisions. There may be some additional non-recurring costs of operating as a stand-alone company, which are not expected to be material.

	The assets and liabilities in the combined and consolidated financial statements are presented on a historical cost basis. We have eliminated all of our significant intercompany transactions and accounts. We have historically participated in Occidental’s centralized treasury management program and not incurred any debt. Prior to September 2014, excess cash generated by our business was distributed to Occidental, and our cash needs were provided by Occidental, in the form of a contribution. Starting September 2014, we are no longer distributing our excess cash to Occidental and Occidental agreed to provide us a line of credit for our cash needs, through the spin-off, at an annual interest rate of 0.36%. As part of the spin-off, we expect to pay to Occidental any balance on the line of credit and any cash on our balance sheet immediately prior to the spin-off date. There was not any balance due to Occidental under the line of credit as of September 30, 2014.

	In the opinion of our management, the accompanying financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present our financial position as of September 30, 2014, and the statements of income, comprehensive income, and cash flows for the three and nine months ended September 30, 2014 and 2013, as applicable. The income and cash flows for the periods ended September 30, 2014 and 2013 are not necessarily indicative of the income or cash flows you should expect for the full year.

	Certain prior year amounts have been reclassified to conform to the 2014 presentation.

	We have prepared this report pursuant to the rules and regulations of the SEC applicable to interim financial information, which permit omission of certain disclosures to the extent they have not changed materially since the latest annual financial statements. We believe our disclosures are adequate to make the information not misleading. You should read this Form 10-Q together with our annual financial statements for the year ended December 31, 2013, included in our registration statement on Form 10.

	In a manner similar to initial public offerings, we have included the effect of dividends to be paid to Occidental prior to the spin-off without other spin-off effects in the Pro Forma Adjusted September 30, 2014 Combined and Consolidated Condensed Balance Sheet.

The_Spin_off_And_Summary_Of_Si

The Spin off And Summary Of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2014
THE SPIN-OFF AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	'
Schedule of basic and diluted EPS	'


		Three months ended						Nine months ended
		September 30,						September 30,
	(in millions, except per-share amounts)	2014			2013			2014		2013
	Net income	$	188		$	235		$	657	$	657
	Number of basic and diluted shares	387			387			387		387
	Basic and diluted EPS	$	0.49		$	0.61		$	1.70	$	1.70


Schedule of capitalization	'


		September 30, 2014
		Historical			Pro Forma Adjusted
		(in millions)
	Debt Outstanding
	Long-term debt:
	Revolving Credit Facility	$	—		$	65
	Term Loan Facility	—			1,000
	5% notes due 2020	—			1,000
	5 1/2% notes due 2021	—			1,750
	6% notes due 2024	—			2,250
	Total Debt Outstanding	—			6,065

	Net Investment / Stockholder’s Equity
	Common stock, par value $0.01	—			4
	Additional paid-in capital	—			4,887
	Net investment	10,891			—
	Accumulated other comprehensive income (loss)	(22		)	(22			)
	Net Investment / Stockholder’s Equity	10,869			4,869
	Total Capitalization	$	10,869		$		10,934

Inventories_Tables

Inventories (Tables)	9 Months Ended
	Sep. 30, 2014
Inventories	'
Inventories (in millions)	'

		2014		2013
	Materials and supplies	$	64	$	73
	Finished goods	8		2
	Total	$	72	$	75

Retirement_and_Postretirement_1

Retirement and Postretirement Benefit Plans (Tables)	9 Months Ended
	Sep. 30, 2014
Retirement and Postretirement Benefit Plans	'
Components of the net periodic benefit cost (in millions)	'

	Three months ended September 30,	2014					2013
	Net Periodic Benefit Costs	Pension			Postretirement		Pension			Postretirement
		Benefit			Benefit		Benefit			Benefit
	Service cost	$	1		$	1	$	1		$	1
	Interest cost	1			—		1			—
	Expected return on plan assets	(1		)	—		(1		)	—
	Recognized actuarial loss	—			1		1			1
	Total	$	1		$	2	$	2		$	2

	Nine months ended September 30,	2014					2013
	Net Periodic Benefit Costs	Pension			Postretirement		Pension			Postretirement
		Benefit			Benefit		Benefit			Benefit
	Service cost	$	3		$	3	$	3		$	3
	Interest cost	3			2		3			2
	Expected return on plan assets	(4		)	—		(3		)	—
	Recognized actuarial loss	1			1		3			2
	Total	$	3		$	6	$	6		$	7

RelatedParty_Transactions_Tabl

Related-Party Transactions (Tables)	9 Months Ended
	Sep. 30, 2014
RELATED-PARTY TRANSACTIONS	'
Schedule of Related-Party Transactions (in millions)	'

		Three months ended				Nine months ended
		September 30,				September 30,
		2014		2013		2014		2013
	Sales	$	421	$	1,040	$	2,560	$	3,027
	Allocated costs for services provided by affiliates	$	43	$	33	$	120	$	100
	Purchases	$	45	$	43	$	165	$	129

The_SpinOff_And_Summary_Of_Sig2

The Spin-Off And Summary Of Significant Accounting Policies (Details) (USD $)

3 Months Ended

9 Months Ended

1 Months Ended

9 Months Ended

Share data in Millions, except Per Share data, unless otherwise specified

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Dec. 31, 2013

Oct. 01, 2014

Sep. 30, 2014

5.00% Senior notes due 2020

5.50% Senior notes due 2021

6.00% Senior notes due 2024

Scenario, Forecast

Pro Forma

Spinoff - CRC

Credit Facilities

Minimum Member

Maximum Member

Revolving credit facility

Term loan facility

5.00% Senior notes due 2020

5.50% Senior notes due 2021

6.00% Senior notes due 2024

Maximum Member

Scenario, Forecast

Revolving credit facility

Occidental Petroleum And Subsidiaries

Minimum Member

Maximum Member

Separation and Spin Off Transactions

Percentage of shares to be distributed to shareholders upon spin-off

80.10%

Period in which Occidental plans to dispose of the remaining 19.9% of CRC shares

'18 months

Ratio of shares of common stock to be distributed to shareholders

0.4

Cash dividend to be paid to Occidental prior to spin-off

$6,000,000,000

Basis of Presentation Abstract

Interest rate

0.36%

Share Information

Number of shares to be distributed to shareholders upon spin off

310

Number of shares to be outstanding upon spin-off

775

387

CRC Outstanding shares ratio to Occidental shares outstanding

0.4994

CRC percentage of shares to be disposed within 18 months following the spin-off

19.9

Earnings Per Share, Basic and Diluted.

Net income

188,000,000

235,000,000

657,000,000

Number of basic and diluted shares

387

Basic and diluted EPS

$0.49

$0.61

$1.70

Long Term Debt

Total Debt Outstanding

1,000,000,000

1,750,000,000

2,250,000,000

6,065,000,000

1,000,000,000

1,750,000,000

2,250,000,000

Debt Instrument, Interest Rate, Stated Percentage

5.00%

5.50%

6.00%

Amount outstanding under revolving credit facility

65,000,000

Net Investment/Stockholder's Equity

Common Stock, Par or Stated Value Per Share

$0.01

Common stock, par value $0.01

Additional paid-in capital

4,887,000,000

Net investment

10,891,000,000

Accumulated other comprehensive income (loss)

-22,000,000

-24,000,000

-22,000,000

Net Investment / Stockholder's Equity

10,869,000,000

9,989,000,000

4,869,000,000

Total Capitalization

10,869,000,000

10,934,000,000

Additional borrowings under revolving credit facility

300,000,000

350,000,000

Repayment to Occidental for acquisition of oil and gas properties

200,000,000

Proceeds held for working capital needs

100,000,000

150,000,000

Amount outstanding under revolving credit facility

65,000,000

Additional borrowings available under revolving credit facility

$1,585,000,000

$1,635,000,000

Inventories_Details

Inventories (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
In Millions, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Inventories	'	'
Materials and supplies	$64	$73
Finished goods	8	2
Total	$72	$75

Other_Information_Details

Other Information (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014
In Millions, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013	Ventura Basin
Amount due from joint interest partners included in Other current assets	$137	$97	'
Asset retirement obligations included in Other long-term liabilities	380	388	'
Purchase agreement for acquisition of oil and gas properties	'	'	$200

Derivatives_Details

Derivatives (Details)	Sep. 30, 2014	Sep. 30, 2014	Sep. 30, 2013	Nov. 30, 2012
	Cash Flow Hedges	Fair Value Hedges	Fair Value Hedges	Natural Gas Swaps Through March 2014
	contract	contract	contract
Derivatives	'	'	'	'
Daily volume (in cubic feet)	'	'	'	50,000,000
Weighted-average strike price (in dollars per cubic foot)	'	'	'	0.0043
Number of hedges	0	0	0	'

Lawsuits_Claims_Contingencies_1

Lawsuits, Claims, Contingencies and Commitments (Details) (USD $)	9 Months Ended
In Millions, unless otherwise specified	Sep. 30, 2014
LAWSUITS, CLAIMS, CONTINGENCIES AND COMMITMENTS	'
Tax liability share percentage	50.00%
Increase in off-balance sheet contractual obligations	$92
Increase in off-balance sheet contractual obligations (as a percentage)	13.00%

Retirement_and_Postretirement_2

Retirement and Postretirement Benefit Plans (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net periodic benefit costs:	'	'	'	'
Employer contributions	$0	$0	$0	$0
Pension Benefit	'	'	'	'
Net periodic benefit costs:	'	'	'	'
Service cost	1,000,000	1,000,000	3,000,000	3,000,000
Interest cost	1,000,000	1,000,000	3,000,000	3,000,000
Expected return on plan assets	-1,000,000	-1,000,000	-4,000,000	-3,000,000
Recognized actuarial loss	'	1,000,000	1,000,000	3,000,000
Net periodic benefit cost	1,000,000	2,000,000	3,000,000	6,000,000
Postretirement Benefit	'	'	'	'
Net periodic benefit costs:	'	'	'	'
Service cost	1,000,000	1,000,000	3,000,000	3,000,000
Interest cost	'	'	2,000,000	2,000,000
Recognized actuarial loss	1,000,000	1,000,000	1,000,000	2,000,000
Net periodic benefit cost	$2,000,000	$2,000,000	$6,000,000	$7,000,000

RelatedParty_Transactions_Deta

Related-Party Transactions (Details) (USD $)	3 Months Ended		9 Months Ended
In Millions, unless otherwise specified	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net sales to related parties	$421	$1,040	$2,560	$3,027
Occidental Petroleum And Subsidiaries	'	'	'	'
Net sales to related parties	421	1,040	2,560	3,027
Allocated costs for services provided by affiliates	43	33	120	100
Purchases	45	43	165	129
Credit Facilities	'	'	'	'
Interest	0.36%	'	0.36%	'
Outstanding borrowings under line of credit	$0	'	$0	'

Debt_Details

Debt (Details) (USD $)

1 Months Ended

0 Months Ended

Oct. 31, 2014

Oct. 01, 2014

Sep. 24, 2014

Mar. 31, 2016

Sep. 24, 2014

Senior Notes

5.00% Senior notes due 2020

5.50% Senior notes due 2021

6.00% Senior notes due 2024

Credit Facilities

Term loan facility

Revolving credit facility

Letter of Credit

LIBOR

Alternate Base Rate

Prime Rate

Federal fund rate

Minimum Member

Maximum Member

Scenario, Forecast

Minimum Member

Maximum Member

LIBOR

Alternate Base Rate

LIBOR

Alternate Base Rate

Senior Notes

Aggregate principal amount

$5,000,000,000

Debt

1,000,000,000

1,750,000,000

2,250,000,000

Net Proceeds from private placement

4,950,000,000

Cash distribution to Occidental

4,950,000,000

Semi annual interest

'semi-annually

Line of Credit Facility

Senior term loan facility and senior revolving loan facility

'5 years

Debt Instrument, Interest Rate, Stated Percentage

5.00%

5.50%

6.00%

Maximum borrowing capacity

1,000,000,000

2,000,000,000

400,000,000

Cash dividend to be paid to Occidental prior to spin-off

$1,050,000,000

Percentage of principal amount repaid quarterly

'2.5% of the principal amount

Percentage of principal amount repaid annually

'10% of the principal amount

Variable rate basis

'LIBOR

'alternate base rate

'agent's prime rate

'federal funds effective rate

Variable rate basis

'one-month LIBOR

Interest rate added to variable rate basis(as a percent)

1.00%

0.50%

1.50%

0.50%

2.25%

1.25%

Commitment fees on unused portion of the Revolving Credit Facility

0.30%

0.50%

Credit agreement leverage ratio

4.5

Credit agreement interest expense ratio

2.5