Cover
Cover | 9 Months Ended |
Sep. 30, 2022 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Sep. 30, 2022 |
Document Transition Report | false |
Entity File Number | 001-36478 |
Entity Registrant Name | California Resources Corp |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 46-5670947 |
Entity Address, Address Line One | 1 World Trade Center, Suite 1500 |
Entity Address, City or Town | Long Beach |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 90831 |
City Area Code | 888 |
Local Phone Number | 848-4754 |
Title of 12(b) Security | Common Stock |
Trading Symbol | CRC |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Bankruptcy Proceedings, Reporting Current | true |
Entity Common Stock, Shares Outstanding | 73,470,932 |
Entity Central Index Key | 0001609253 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 358 | $ 305 |
Trade receivables | 289 | 245 |
Inventories | 59 | 60 |
Assets held for sale | 3 | 22 |
Receivable from affiliate | 32 | 0 |
Other current assets | 143 | 121 |
Total current assets | 884 | 753 |
PROPERTY, PLANT AND EQUIPMENT | 3,126 | 2,845 |
Accumulated depreciation, depletion and amortization | (392) | (246) |
Total property, plant and equipment, net | 2,734 | 2,599 |
INVESTMENT IN UNCONSOLIDATED SUBSIDIARY | 14 | 0 |
DEFERRED TAX ASSET | 230 | 396 |
OTHER NONCURRENT ASSETS | 124 | 98 |
TOTAL ASSETS | 3,986 | 3,846 |
CURRENT LIABILITIES | ||
Accounts payable | 305 | 266 |
Liabilities associated with assets held for sale | 2 | 21 |
Fair value of derivative contracts | 254 | 270 |
Accrued liabilities | 371 | 297 |
Total current liabilities | 932 | 854 |
NONCURRENT LIABILITIES | ||
Long-term debt, net | 591 | 589 |
Fair value of derivative contracts | 26 | 132 |
Asset retirement obligations | 397 | 438 |
Other long-term liabilities | 185 | 145 |
STOCKHOLDERS' EQUITY | ||
Preferred stock (20,000,000 shares authorized at $0.01 par value) no shares outstanding at September 30, 2022 and December 31, 2021 | 0 | 0 |
Common stock (200,000,000 shares authorized at $0.01 par value) (83,406,002 and 83,389,210 shares issued; 73,470,932 and 79,299,222 shares outstanding at September 30, 2022 and December 31, 2021) | 1 | 1 |
Treasury stock (9,935,070 shares held at cost at September 30, 2022 and 4,089,988 shares held at cost at December 31, 2021) | (395) | (148) |
Additional paid-in capital | 1,301 | 1,288 |
Retained earnings | 876 | 475 |
Accumulated other comprehensive income | 72 | 72 |
Total stockholders' equity | 1,855 | 1,688 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 3,986 | $ 3,846 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized shares (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, outstanding shares (in shares) | 0 | 0 |
Common stock, authorized shares (in shares) | 200,000,000 | 200,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, issued shares (in shares) | 83,406,002 | 83,389,210 |
Common stock, outstanding shares (in shares) | 73,470,932 | 79,299,222 |
Treasury stock (in shares) | 9,935,070 | 4,089,988 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
REVENUES | ||||
Oil, natural gas and NGL sales | $ 680 | $ 549 | $ 2,026 | $ 1,459 |
Net gain (loss) from commodity derivatives | 243 | (125) | (419) | (603) |
Total operating revenues | 1,125 | 588 | 2,025 | 1,255 |
OPERATING EXPENSES | ||||
Operating costs | 214 | 190 | 586 | 523 |
General and administrative expenses | 59 | 51 | 163 | 147 |
Depreciation, depletion and amortization | 50 | 54 | 149 | 160 |
Asset impairments | 0 | 25 | 2 | 28 |
Taxes other than on income | 44 | 36 | 120 | 113 |
Exploration expense | 1 | 2 | 3 | 6 |
Accretion expense | 10 | 13 | 32 | 39 |
Other operating expenses, net | 5 | 4 | 28 | 31 |
Total operating expenses | 536 | 468 | 1,405 | 1,298 |
Net gain on asset divestitures | 2 | 2 | 60 | 4 |
OPERATING INCOME (LOSS) | 591 | 122 | 680 | (39) |
NON-OPERATING (EXPENSES) INCOME | ||||
Reorganization items, net | 0 | (1) | 0 | (5) |
Interest and debt expense, net | (13) | (14) | (39) | (40) |
Net loss on early extinguishment of debt | 0 | 0 | 0 | (2) |
Other non-operating expenses, net | 1 | 0 | 3 | (3) |
INCOME (LOSS) BEFORE INCOME TAXES | 579 | 107 | 644 | (89) |
Income tax provision | (153) | 0 | (203) | 0 |
NET INCOME (LOSS) | 426 | 107 | 441 | (89) |
Net income attributable to noncontrolling interest | 0 | (4) | 0 | (13) |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK | $ 426 | $ 103 | $ 441 | $ (102) |
Net income (loss) attributable to common stock per share | ||||
Basic (in dollars per share) | $ 5.75 | $ 1.26 | $ 5.77 | $ (1.23) |
Diluted (in dollars per share) | $ 5.58 | $ 1.25 | $ 5.62 | $ (1.23) |
Weighted-average common shares outstanding | ||||
Basic (in shares) | 74.1 | 81.6 | 76.4 | 82.6 |
Diluted (in shares) | 76.3 | 82.4 | 78.5 | 82.6 |
Sales of purchased natural gas | ||||
REVENUES | ||||
Revenue not from contract with customer | $ 113 | $ 95 | $ 220 | $ 241 |
OPERATING EXPENSES | ||||
Costs of sales | 98 | 53 | 186 | 144 |
Electricity sales | ||||
REVENUES | ||||
Revenue not from contract with customer | 88 | 65 | 171 | 131 |
Other revenue | ||||
REVENUES | ||||
Revenue not from contract with customer | 1 | 4 | 27 | 27 |
Electricity generation expenses | ||||
OPERATING EXPENSES | ||||
Costs of sales | 42 | 29 | 99 | 70 |
Transportation costs | ||||
OPERATING EXPENSES | ||||
Costs of sales | $ 13 | $ 11 | $ 37 | $ 37 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income (loss) | $ 426 | $ 107 | $ 441 | $ (89) | |
Net income attributable to noncontrolling interest | 0 | (4) | 0 | (13) | |
Other comprehensive income: | |||||
Actuarial gain associated with pension and postretirement plans | [1] | 0 | 17 | 0 | 17 |
Net prior service cost credit | [1] | 0 | 65 | 0 | 65 |
Comprehensive income (loss) attributable to common stock | $ 426 | $ 185 | $ 441 | $ (20) | |
[1]No associated tax has been recorded for the components of other comprehensive income (loss) for the three and nine months ended September 30, 2021. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Reclassification of realized losses on pension and postretirement to income, tax | $ 0 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive (Loss) Income | Equity Attributable to Common Stock | Equity Attributable to Noncontrolling Interests |
Beginning balance at Dec. 31, 2020 | $ 1,182 | $ 1 | $ 0 | $ 1,268 | $ (123) | $ (8) | $ 1,138 | $ 44 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net (loss) income | (89) | (102) | (102) | 13 | ||||
Share-based compensation | 10 | 10 | 10 | |||||
Distributions to noncontrolling interest holders | (50) | (50) | ||||||
Redemption of noncontrolling interest | 0 | 7 | 7 | (7) | ||||
Repurchases of common stock | (84) | (84) | (84) | |||||
Issuance of common stock | 2 | 2 | 2 | |||||
Other | (1) | (1) | (1) | |||||
Other comprehensive income | 82 | 82 | 82 | |||||
Ending balance at Sep. 30, 2021 | 1,052 | 1 | (84) | 1,286 | (225) | 74 | 1,052 | 0 |
Beginning balance at Jun. 30, 2021 | 915 | 1 | (45) | 1,273 | (328) | (8) | 893 | 22 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net (loss) income | 107 | 103 | 103 | 4 | ||||
Share-based compensation | 4 | 4 | 4 | |||||
Distributions to noncontrolling interest holders | (19) | (19) | ||||||
Redemption of noncontrolling interest | 0 | 7 | 7 | (7) | ||||
Repurchases of common stock | (39) | (39) | (39) | |||||
Issuance of common stock | 2 | 2 | 2 | |||||
Other comprehensive income | 82 | 82 | 82 | |||||
Ending balance at Sep. 30, 2021 | 1,052 | 1 | (84) | 1,286 | (225) | 74 | $ 1,052 | $ 0 |
Beginning balance at Dec. 31, 2021 | 1,688 | 1 | (148) | 1,288 | 475 | 72 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net (loss) income | 441 | 441 | ||||||
Share-based compensation | 14 | 14 | ||||||
Repurchases of common stock | (247) | (247) | ||||||
Cash dividend ($0.17 per share) | (40) | (40) | ||||||
Other | (1) | (1) | ||||||
Ending balance at Sep. 30, 2022 | 1,855 | 1 | (395) | 1,301 | 876 | 72 | ||
Beginning balance at Jun. 30, 2022 | 1,517 | 1 | (315) | 1,296 | 463 | 72 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net (loss) income | 426 | 426 | ||||||
Share-based compensation | 6 | 6 | ||||||
Repurchases of common stock | (80) | (80) | ||||||
Cash dividend ($0.17 per share) | (13) | (13) | ||||||
Other | (1) | (1) | ||||||
Ending balance at Sep. 30, 2022 | $ 1,855 | $ 1 | $ (395) | $ 1,301 | $ 876 | $ 72 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | |||
Aug. 03, 2022 | May 04, 2022 | Feb. 23, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | |||||
Dividends declared, common stock (in dollars per share) | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOW FROM OPERATING ACTIVITIES | ||||
Net income (loss) | $ 426 | $ 107 | $ 441 | $ (89) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Depreciation, depletion and amortization | 50 | 54 | 149 | 160 |
Deferred income tax provision | 137 | 0 | 166 | 0 |
Asset impairments | 0 | 25 | 2 | 28 |
Net (gain) loss from commodity derivatives | (243) | 125 | 419 | 603 |
Net payments on settled commodity derivatives | (182) | (99) | (604) | (220) |
Net loss on early extinguishment of debt | 0 | 0 | 0 | 2 |
Net gain on asset divestitures | (2) | (2) | (60) | (4) |
Other non-cash charges to income, net | 15 | 17 | 42 | 46 |
Changes in operating assets and liabilities, net | 34 | (45) | 21 | (70) |
Net cash provided by operating activities | 235 | 182 | 576 | 456 |
CASH FLOW FROM INVESTING ACTIVITIES | ||||
Capital investments | (107) | (51) | (304) | (128) |
Changes in accrued capital investments | (4) | 5 | 5 | 18 |
Proceeds from asset divestitures, net | 3 | 11 | 79 | 13 |
Acquisitions | 0 | (53) | (17) | (53) |
Distribution related to the Carbon TerraVault JV | 12 | 0 | 12 | 0 |
Capitalized joint venture transaction costs | (12) | 0 | (12) | 0 |
Other | (1) | 0 | (1) | (1) |
Net cash used in investing activities | (109) | (88) | (238) | (151) |
CASH FLOW FROM FINANCING ACTIVITIES | ||||
Proceeds from Revolving Credit Facility | 0 | 0 | 0 | 16 |
Repayments of Revolving Credit Facility | 0 | 0 | 0 | (115) |
Proceeds from Senior Notes | 0 | 0 | 0 | 600 |
Debt issuance costs | 0 | 0 | 0 | (13) |
Repurchases of common stock | (80) | (39) | (247) | (84) |
Common stock dividends | (13) | 0 | (39) | 0 |
Proceeds from warrants exercised | 0 | 2 | 0 | 2 |
Distributions paid to a noncontrolling interest holder | 0 | (19) | 0 | (50) |
Issuance of common stock | 1 | 0 | 1 | 0 |
Net cash used in financing activities | (92) | (56) | (285) | (144) |
Increase in cash and cash equivalents | 34 | 38 | 53 | 161 |
Cash and cash equivalents—beginning of period | 324 | 151 | 305 | 28 |
Cash and cash equivalents—end of period | 358 | 189 | 358 | 189 |
Second Lien Notes | ||||
CASH FLOW FROM FINANCING ACTIVITIES | ||||
Repayments of senior debt | 0 | 0 | 0 | (200) |
EHP Notes | ||||
CASH FLOW FROM FINANCING ACTIVITIES | ||||
Repayments of senior debt | $ 0 | $ 0 | $ 0 | $ (300) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION We are an independent oil and natural gas exploration and production company operating properties exclusively within California. We are committed to energy transition and have some of the lowest carbon intensity production in the United States. We are in the early stages of permitting several carbon capture and storage projects in California. Our subsidiary Carbon TerraVault is expected to build, install, operate and maintain CO 2 capture equipment, transportation assets and storage facilities in California. In August 2022, Carbon TerraVault entered into a joint venture with BGTF Sierra Aggregator LLC (Brookfield) to pursue certain of these opportunities (Carbon TerraVault JV) . See Note 2 Accounting Policy and Disclosure Changes for our accounting policy related to joint ventures and investments in unconsolidated subsidiaries and Note 8 Investments and Related Party Transactions for more information on the Carbon TerraVault JV. Separately, we are evaluating the feasibility of a carbon capture system to be located at our Elk Hills power plant. Except when the context otherwise requires or where otherwise indicated, all references to ‘‘CRC,’’ the ‘‘Company,’’ ‘‘we,’’ ‘‘us’’ and ‘‘our’’ refer to California Resources Corporation and its subsidiaries. In the opinion of our management, the accompanying unaudited financial statements contain all adjustments necessary to fairly present our financial position, results of operations, comprehensive income, equity and cash flows for all periods presented. We have eliminated all significant intercompany transactions and accounts. We account for our share of oil and natural gas producing activities, 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 our condensed consolidated financial statements. We have prepared this report in accordance with generally accepted accounting principles (GAAP) in the United States and the rules and regulations of the U.S. Securities and Exchange Commission applicable to interim financial information which permit the 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 presented not misleading. The preparation of financial statements in conformity with GAAP requires management to select appropriate accounting policies and make informed estimates and judgments regarding certain types of financial statement balances and disclosures. Actual results could differ. Management believes that these estimates and judgments provide a reasonable basis for the fair presentation of our condensed consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2021 (2021 Annual Report). The carrying amounts of cash and on-balance sheet financial instruments, other than debt, approximate fair value. Refer to Note 6 Debt |
ACCOUNTING POLICY AND DISCLOSUR
ACCOUNTING POLICY AND DISCLOSURE CHANGES | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
ACCOUNTING POLICY AND DISCLOSURE CHANGES | ACCOUNTING POLICY AND DISCLOSURE CHANGES Accounting Policy Update Joint Ventures and Investments in Unconsolidated Subsidiaries We may enter into joint ventures that are considered to be a variable interest entity (VIE). A VIE is a legal entity that possesses any of the following conditions: the entity's equity at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support, equity owners are unable to direct the activities that most significantly impact the legal entity's economic performance (or they possess disproportionate voting rights in relation to the economic interest in the legal entity), or the equity owners lack the obligation to absorb the legal entity's expected losses or the right to receive the legal entity's expected residual returns. We consolidate a VIE if we determine that we have (i) the power to direct the activities of the VIE that most significantly impact its economic performance and (ii) the obligation to absorb losses or the right to receive benefits from the VIE that are more than insignificant to the VIE. If an entity is determined to be a VIE but we do not have a controlling interest, the entity is accounted for under either the cost or equity method depending on whether we exercise significant influence. See Note 8 Investments and Related Party Transactions for more information on the Carbon TerraVault JV. These evaluations are highly complex and involve management judgment and may involve the use of estimates and assumptions based on available information. The evaluation requires continual assessment. Investments in unconsolidated entities are assessed for impairment whenever changes in the facts and circumstances indicate a loss in value may have occurred, which is other than temporary. Recently Adopted Accounting and Disclosure Changes ASC Topic 848, Reference Rate Reform contains guidance for applying U.S. GAAP to contracts, hedging relationships and other transactions that are impacted by reference rate reform. Under this guidance, we elected to account for the February 2022 amendment of our Revolving Credit Facility described in Note 6 Debt |
SUPPLEMENTAL BALANCE SHEET INFO
SUPPLEMENTAL BALANCE SHEET INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
SUPPLEMENTAL INFORMATION [Abstract] | |
SUPPLEMENTAL BALANCE SHEET INFORMATION | SUPPLEMENTAL BALANCE SHEET INFORMATION Other current assets — Other current assets includes the following: September 30, December 31, 2022 2021 (in millions) Amounts due from joint interest partners $ 39 $ 47 Fair value of derivative contracts 64 6 Prepaid expenses 14 16 Greenhouse gas allowances 14 31 Natural gas margin deposits 5 12 Other 7 9 Other current assets $ 143 $ 121 Other noncurrent assets — Other noncurrent assets includes the following: September 30, December 31, 2022 2021 (in millions) Operating lease right-of-use assets $ 40 $ 43 Deferred financing costs - Revolving Credit Facility 7 11 Emission reduction credits 11 11 Prepaid power plant maintenance 26 21 Fair value of derivative contracts 25 1 Deposits and other 15 11 Other noncurrent assets $ 124 $ 98 Accrued liabilities — Accrued liabilities includes the following: September 30, December 31, 2022 2021 (in millions) Accrued employee-related costs $ 64 $ 61 Accrued taxes other than on income 43 30 Asset retirement obligations 78 51 Accrued interest 9 19 Lease liability 12 11 Premiums due on derivative contracts 64 57 Liability for settlement payments on derivative contracts 48 25 Amounts due under production-sharing contracts 9 14 Income taxes payable 17 — Marketing prepayments 4 5 Other 23 24 Accrued liabilities $ 371 $ 297 Other long-term liabilities — Other long-term liabilities includes the following: September 30, December 31, 2022 2021 (in millions) Compensation-related liabilities $ 34 $ 38 Postretirement and pension benefit plans 54 59 Lease liability 32 37 Premiums due on derivative contracts 13 5 Contingent liability related to Carbon TerraVault JV put and call rights 46 — Other 6 6 Other long-term liabilities $ 185 $ 145 |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION We paid $20 million of U.S. federal income tax payments during the nine months ended September 30, 2022. We did not make U.S. federal and state income tax payments during the three months ended September 30, 2022 or the three and nine months ended September 30, 2021. Interest paid, net of capitalized amounts was $21 million and $23 million for the three months ended September 30, 2022 and 2021, respectively. Interest paid, net of capitalized amounts was $43 million and $27 million for the nine months ended September 30, 2022 and 2021, respectively. For the three and nine months ended September 30, 2022, we made a non-cash contribution of $2 million to the Carbon TerraVault JV to satisfy a capital call. See Note 8 Investments and Related Party Transactions |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Materials and supplies, which primarily consist of well equipment and tubular goods used in our oil and natural gas operations, are valued at weighted-average cost and are reviewed periodically for obsolescence. Finished goods include produced oil and NGLs in storage, which are valued at the lower of cost or net realizable value. Inventories, by category, are as follows: September 30, December 31, 2022 2021 (in millions) Materials and supplies $ 53 $ 54 Finished goods 6 6 Inventories $ 59 $ 60 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT As of September 30, 2022 and December 31, 2021, our long-term debt consisted of the following: September 30, December 31, 2022 2021 Interest Rate Maturity (in millions) Revolving Credit Facility $ — $ — SOFR plus 3%-4% ABR plus 2%-3% April 29, 2024 Senior Notes 600 600 7.125% February 1, 2026 Principal amount $ 600 $ 600 Unamortized debt issuance costs (9) (11) Long-term debt, net $ 591 $ 589 Revolving Credit Facility On October 27, 2020, we entered into a Credit Agreement with Citibank, N.A., as administrative agent, and certain other lenders. This credit agreement currently consists of a senior revolving loan facility (Revolving Credit Facility) with an aggregate commitment of $602 million, which we are permitted to increase if we obtain additional commitments from new or existing lenders. This amount includes $110 million of additional commitments from new lenders that joined this facility in February 2022 and September 2022. Our Revolving Credit Facility also includes a sub-limit of $200 million for the issuance of letters of credit. Letters of credit were issued to support ordinary course marketing, insurance, regulatory and other matters. The borrowing base is redetermined semi-annually and was reaffirmed at $1.2 billion on October 25, 2022. The borrowing base takes into account the estimated value of our proved reserves, total indebtedness and other relevant factors consistent with customary reserves-based lending criteria. The amount we are able to borrow under our Revolving Credit Facility is limited to the amount of the commitment described above. In February 2022, we amended our Revolving Credit Facility to replace the benchmark rate from the London Interbank Offered Rate to the secured overnight financing rate (SOFR). We can elect to borrow at either an adjusted SOFR rate or an alternate base rate (ABR), subject to a 1% floor and 2% floor, respectively, plus an applicable margin. The ABR is equal to the highest of (i) the federal funds effective rate plus 0.50%, (ii) the administrative agent prime rate and (iii) the one-month SOFR rate plus 1%. The applicable margin is adjusted based on the borrowing base utilization percentage and will vary from (i) in the case of SOFR loans, 3% to 4% and (ii) in the case of ABR loans, 2% to 3%. The unused portion of the facility is subject to a commitment fee of 0.50% per annum. We also pay customary fees and expenses. Interest on ABR loans is payable quarterly in arrears. Interest on SOFR loans is payable at the end of each SOFR period, but not less than quarterly. In April 2022, we amended our Revolving Credit Facility to, among other things, modify the minimum hedge requirement and the restricted payment and investment covenants contained in the Revolving Credit Facility. As a result of this amendment, the rolling hedge requirement as described in Part II, Item 8 – Financial Statements and Supplementary Data, Note 4 Debt in our 2021 Annual Report has been modified. As amended, our Revolving Credit Facility requires us to maintain hedges on a minimum amount of crude oil production (determined on (i) the date of delivery of annual and quarterly financial statements and (ii) the date of delivery of a reserve report delivered in connection with an interim borrowing base redetermination) of no less than (i) in the event that our Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement) is greater than 2:1 as of the end of the most recent fiscal quarter test period, 50% of our reasonably anticipated oil production from our proved developed producing reserves for each quarter during the period ending the earlier of (1) the maturity date of the Revolving Credit Facility and (2) 12 months after the delivery of the compliance certificate for the relevant test period and (ii) in the event that our Consolidated Total Net Leverage Ratio is less than or equal to 2:1 but greater than 1:1 as of the end of the most recent fiscal quarter test period, 33% of our reasonably anticipated oil production from our proved developed producing reserves for each quarter during the period ending the earlier of (1) the maturity date of the Revolving Credit Facility and (2) 12 months after the delivery of the compliance certificate for the relevant test period. The foregoing minimum hedge requirements do not apply to the extent that our Consolidated Total Net Leverage Ratio is less than or equal to 1:1 as of the last day of the most recently ended fiscal quarter test period. Furthermore, the restricted payment and investments covenants were modified to permit unlimited investments and/or restricted payments so long as (i) no Default, Event of Default or Borrowing Base Deficiency shall have occurred and be continuing under the Revolving Credit Facility at the time of such investment or restricted payment, (ii) the undrawn availability under the Revolving Credit Facility at such time is not less than 30.0% of the total commitment and (iii) the Consolidated Total Net Leverage Ratio is less than or equal to 1.5:1. At September 30, 2022, we were in compliance with all financial and other debt covenants under our Revolving Credit Facility and Senior Notes. Fair Value |
DIVESTITURES AND ACQUISITIONS
DIVESTITURES AND ACQUISITIONS | 9 Months Ended |
Sep. 30, 2022 | |
Acquisitions And Divestitures [Abstract] | |
DIVESTITURES AND ACQUISITIONS | DIVESTITURES AND ACQUISITIONS Divestitures Ventura Basin Transactions During the second quarter of 2021, we entered into transactions to sell our Ventura basin assets. The transactions contemplate multiple closings that are subject to customary closing conditions. During the three and nine months ended September 30, 2022, we recorded a gain of $2 million and $12 million, respectively, related to the sale of certain Ventura basin assets. We did not close transactions during the three months ended September 30, 2022. The amount recognized in the three and nine months ended September 30, 2022 included $2 million and $6 million, respectively, of additional earn-out consideration on closings that occurred in the second half of 2021 and the first half of 2022. In addition, we also received $2 million to secure performance of well abandonment which we expect to release to the buyer once the abandonment obligations are met. As a result, we recorded a liability of $2 million included as accrued liabilities on our condensed consolidated balance sheet as of September 30, 2022. See Part II, Item 8 – Financial Statements and Supplementary Data, Note 3 Divestitures and Acquisitions in our 2021 Annual Report for additional information on the Ventura basin transactions. The closing of the sale of our remaining assets in the Ventura basin is subject to final approval from the State Lands Commission, which we expect to receive prior to the end of the first quarter of 2023. These remaining assets, consisting of property, plant and equipment and associated asset retirement obligations, are classified as held for sale on our condensed consolidated balance sheet as of September 30, 2022. Lost Hills Transaction On February 1, 2022, we sold our 50% non-operated working interest in certain horizons within our Lost Hills field, located in the San Joaquin basin, recognizing a gain of $49 million. We retained an option to capture, transport and store 100% of the CO 2 from steam generators across the Lost Hills field for future carbon management projects. We also retained 100% of the deep rights and related seismic data. CRC Plaza In June 2022, we sold our commercial office building located in Bakersfield, California for net proceeds of $13 million, recognizing no gain or loss on sale. We also leased back a portion of the building with a term of 18 months. In the second quarter of 2022, prior to the sale we recorded a $2 million impairment charge to write down the carrying value to fair value, which was determined based on a market approach (using Level 3 inputs in the fair value hierarchy). In the three months ended September 30, 2021, we also recorded an impairment charge of $25 million related to the write-down of the same commercial office building to fair value, which was determined based on a market approach (using Level 3 inputs in the fair value hierarchy). The decline in value of the commercial office building at that time primarily related to limited demand for office space of this size and type in the Bakersfield market and general trends in commercial real estate due to the COVID-19 pandemic. We do not own any other commercial office buildings. Other During the nine months ended September 30, 2022, we sold non-core assets recognizing a $1 million loss. During the three months ended September 30, 2021, we sold unimproved land for $11 million in proceeds recognizing a $2 million gain. During the nine months ended September 30, 2021, we sold non-core assets, including unimproved land, for $13 million in proceeds recognizing a $4 million gain. Acquisitions During the nine months ended September 30, 2022, we acquired properties and land easements for carbon management activities for approximately $17 million. There were no acquisitions for the three months ended September 30, 2022. In August 2021, we purchased the 90% working interest held by Macquarie Infrastructure and Real Assets Inc (MIRA) in certain oil and natural gas properties in the San Joaquin basin for $53 million, before purchase price adjustments and transaction costs. Refer to Part II, Item 8 – Financial Statements and Supplementary Data, Note 3 Divestitures and Acquisitions in our 2021 Annual Report for more information on the acquisition . There were no other acquisitions for the three and nine months ended September 30, 2021. |
INVESTMENTS AND RELATED PARTY T
INVESTMENTS AND RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS AND RELATED PARTY TRANSACTIONS | INVESTMENTS AND RELATED PARTY TRANSACTIONS In August 2022, we entered into the Carbon TerraVault JV with Brookfield for the development of a carbon management business in California. We hold a 51% interest in the Carbon TerraVault JV and Brookfield holds a 49% interest. We determined that the Carbon TerraVault JV is a VIE; however, we share decision-making power with Brookfield on matters that most significantly impact the economic performance of the joint venture. Therefore, we account for our investment in the Carbon TerraVault JV under the equity method of accounting. See Note 2 Accounting Policy and Disclosure Changes for more information on the VIE consolidation model. Transactions between us and the Carbon TerraVault JV are related party transactions. As part of the formation of the Carbon TerraVault JV, we contributed rights to inject CO 2 into the 26R reservoir in our Elk Hills field for permanent CO 2 storage (26R reservoir) and Brookfield committed to make an initial investment of $137 million, payable in three equal installments with the last two installments subject to the achievement of certain milestones. Brookfield contributed the first $46 million installment of their initial investment to the Carbon TerraVault JV during the three months ended September 30, 2022. This amount may, at our sole discretion, be distributed to us or used to satisfy future capital contributions, among other items. During the three months ended September 30, 2022, $12 million of the initial investment was distributed to us (and used to pay transaction costs related to the formation of the joint venture) and $2 million was used to satisfy a capital call. This $14 million is reflected on our condensed consolidated balance sheet as an investment in an unconsolidated subsidiary at September 30, 2022. The remaining $32 million is reported as a receivable from affiliate on our condensed consolidated balance sheet as of September 30, 2022. Because the parties have certain put and call rights with respect to the 26R reservoir, if certain milestones are not met, the $46 million initial investment by Brookfield is reflected as a contingent liability in other long-term liabilities on our condensed consolidated balance sheet as of September 30, 2022. The Carbon TerraVault JV has an option to participate in certain projects that involve the capture, transportation and storage of CO 2 in California. This option expires upon the earlier of (1) August 2027, (2) when a final investment decision has been approved by the Carbon TerraVault JV for storage projects representing in excess of 5 million metric tons per annum (MMTPA) in the aggregate, or (3) when Brookfield has made contributions to the joint venture in excess of $500 million (unless Brookfield elects to increase its commitment). |
LAWSUITS, CLAIMS, COMMITMENTS A
LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES | LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES We 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 for these items at September 30, 2022 and December 31, 2021 were not material to our condensed consolidated 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 cannot be accurately determined. |
DERIVATIVES
DERIVATIVES | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES We maintain a commodity hedging program primarily focused on crude oil to help protect our cash flows, margins and capital program from the volatility of commodity prices. We did not have any derivative instruments designated as accounting hedges as of and for the three and nine months ended September 30, 2022 and 2021. Unless otherwise indicated, we use the term "hedge" to describe derivative instruments that are designed to achieve our hedging requirements and program goals. Currently, we may not hedge more than 85% of reasonably anticipated total forecasted production of crude oil, natural gas and NGLs from our oil and gas properties for a 48-month period, except that we may purchase puts and floors up to 100% of such production. The percentage of our crude oil production hedged is calculated exclusive of offsetting positions on our derivative contracts. See Note 6 Debt for more information on an amendment to our Revolving Credit Facility and our hedging requirements. Summary of open derivative contracts — We held the following Brent-based crude oil contracts as of September 30, 2022: Q4 Q1 Q2 Q3 Q4 2024 Sold Calls Barrels per day 25,167 18,322 17,837 17,363 5,747 — Weighted-average price per barrel $ 57.82 $ 57.28 $ 60.00 $ 57.06 $ 57.06 $ — Swaps Barrels per day 17,263 14,620 14,475 14,697 24,094 1,492 Weighted-average price per barrel $ 58.79 $ 67.36 $ 66.36 $ 66.27 $ 69.14 $ 79.06 Net Purchased Puts (a) Barrels per day 25,167 18,322 17,837 17,363 5,747 1,724 Weighted-average price per barrel $ 64.47 $ 76.25 $ 76.25 $ 76.25 $ 76.25 $ 75.00 Sold Puts Barrels per day 1,348 — — — — — Weighted-average price per barrel $ 32.00 $ — $ — $ — $ — $ — (a) Purchased puts and sold puts with the same strike price have been presented on a net basis. We held natural gas swaps for 25,000 MMBTU per day at a weighted-average price of $7.74 per MMBTU for the fourth quarter of 2022. The outcomes of the derivative positions are as follows: • Sold calls – we make settlement payments for prices above the indicated weighted-average price per barrel. • Swaps – we make settlement payments for prices above the indicated weighted-average price per barrel and receive settlement payments for prices below the indicated weighted-average price per barrel. • Net purchased puts – we receive settlement payments for prices below the indicated weighted-average price per barrel. • Sold puts – we make settlement payments for prices below the indicated weighted-average price per barrel. We use combinations of these positions to increase the efficacy of our hedging program and, subject to certain conditions, meet the requirements of our Revolving Credit Facility. The majority of our derivative positions for the remainder of 2022 and 2023 were entered into subsequent to our emergence from bankruptcy to comply with the hedging requirements of our Revolving Credit Facility that were applicable at the time. Fair value of derivatives — The following tables present the fair values on a recurring basis (at gross and net) of our outstanding commodity derivatives as of September 30, 2022 and December 31, 2021: September 30, 2022 Classification Gross Amounts at Fair Value Netting Net Fair Value Assets (in millions) Other current assets - Fair value of derivative contracts $ 85 $ (21) $ 64 Other noncurrent assets - Fair value of derivative contracts 28 (3) 25 Liabilities Current - Fair value of derivative contracts (275) 21 (254) Noncurrent - Fair value of derivative contracts (29) 3 (26) $ (191) $ — $ (191) December 31, 2021 Classification Gross Amounts at Fair Value Netting Net Fair Value Assets (in millions) Other current assets - Fair value of derivative contracts $ 33 $ (27) $ 6 Other noncurrent assets - Fair value of derivative contracts 12 (11) 1 Liabilities Current - Fair value of derivative contracts (297) 27 (270) Noncurrent - Fair value of derivative contracts (143) 11 (132) $ (395) $ — $ (395) Our derivative contracts are measured at fair value using industry-standard models with various inputs, including quoted forward prices, and are classified as Level 2 in the required fair value hierarchy for the periods presented. We recognized fair value changes on derivative instruments each reporting period in net loss from commodity derivatives on our condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021. The changes in fair value result from the relationship between our existing positions, volatility, time to expiration, contract prices and the associated forward curves. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic and diluted earnings per share (EPS) were calculated using the treasury stock method for the three and nine months ended September 30, 2022 and 2021. Our restricted stock unit (RSU) and performance stock unit (PSU) awards are not considered participating securities since the dividend rights on unvested shares are forfeitable. For basic EPS, the weighted-average number of common shares outstanding excludes shares underlying our equity-settled awards and warrants. For diluted EPS, the basic shares outstanding are adjusted by adding potential common shares, if dilutive. The following table presents the calculation of basic and diluted EPS, for the three and nine months ended September 30, 2022 and 2021: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (in millions, except per-share amounts) Numerator for Basic and Diluted EPS Net income (loss) $ 426 $ 107 $ 441 $ (89) Less : net income attributable to noncontrolling interests — (4) — (13) Net income (loss) attributable to common stock $ 426 $ 103 $ 441 $ (102) Denominator for Basic EPS Weighted-average shares 74.1 81.6 76.4 82.6 Potential Common Shares, if dilutive: Warrants 0.7 — 0.7 — Restricted Stock Units 0.8 0.4 0.7 — Performance Stock Units 0.7 0.4 0.7 — Denominator for Diluted EPS Weighted-average shares 76.3 82.4 78.5 82.6 EPS Basic $ 5.75 $ 1.26 $ 5.77 $ (1.23) Diluted $ 5.58 $ 1.25 $ 5.62 $ (1.23) The following table presents potentially dilutive weighted-average common shares which were excluded from the denominator for diluted EPS in the periods presented: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (in millions) Shares issuable upon exercise of warrants (a) — 4.3 — 4.3 Shares issuable upon settlement of RSUs — — — 0.9 Shares issuable upon settlement of PSUs — — — 0.6 Total antidilutive shares — 4.3 — 5.8 (a) Diluted earnings per share for the three and nine months ended September 30, 2021 excludes 4.3 million common shares issuable upon exercise of warrants that were out-of-the-money based on the average stock price for those periods. See Note 14 Stockholders' Equity for information on the terms of the warrant s. |
PENSION AND POSTRETIREMENT BENE
PENSION AND POSTRETIREMENT BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
PENSION AND POSTRETIREMENT BENEFIT PLANS | PENSION 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 months ended September 30, 2022 and 2021: Three months ended September 30, Three months ended September 30, 2022 2021 Pension Postretirement Pension Postretirement (in millions) (in millions) Service cost - benefits earned during the period $ — $ 1 $ — $ 1 Interest cost on projected benefit obligation 1 — 1 — Expected return on plan assets (1) — — — Curtailment gain — — — (1) Amortization of prior service cost credit — (2) — — Net periodic benefit costs $ — $ (1) $ 1 $ — Nine months ended September 30, Nine months ended September 30, 2022 2021 Pension Postretirement Pension Postretirement (in millions) (in millions) Service cost - benefits earned during the period $ 1 $ 2 $ 1 $ 3 Interest cost on projected benefit obligation 1 1 1 2 Expected return on plan assets (1) — (1) — Curtailment gain — — — (1) Amortization of prior service cost credit — (5) — — Net periodic benefit costs $ 1 $ (2) $ 1 $ 4 We made contributions of approximately $1 million for the three months ended September 30, 2022 and contributed approximately $2 million to our defined benefit plans during the nine months ended September 30, 2022. We contributed approximately $1 million and $2 million to our defined benefit plans during the three and nine months ended September 30, 2021, respectively. We expect to satisfy minimum funding requirements with insignificant contributions to our defined benefit pension plans during the remainder of 2022. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESThe difference between the U.S. federal statutory tax rate of 21% and our effective tax rate of 26% for the three months ended September 30, 2022 primarily relates to California state taxes, partially offset by the benefit of federal tax credits. The difference between the U.S. federal statutory tax rate of 21% and our effective tax rate of 32% for the nine months ended September 30, 2022 primarily relates to California state taxes and an increase in the valuation allowance related to a capital loss realized on the Lost Hills divestiture, the deductibility of which is limited to future capital gains partially offset by the benefit of federal tax credits. We did not record an income tax benefit for the three and nine months ended September 30, 2021, because we maintained a full valuation allowance against our net deferred tax assets given our anticipated future earnings trends at that time. Realization of our deferred tax assets is subjective and remains dependent on a number of factors including our ability to generate sufficient taxable income, including capital gains, in future periods. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Share Repurchase Program Our Board of Directors has authorized a Share Repurchase Program to acquire up to $650 million of our common stock through June 30, 2023. As of September 30, 2022, we have repurchased an aggregate 9,935,070 shares of our common stock for $395 million, at an average price of $39.74 per share, since inception of the Share Repurchase Program in May 2021.The repurchases may be effected from time-to-time through open market purchases, privately negotiated transactions, Rule 10b5-1 plans, accelerated stock repurchases, derivative contracts or otherwise in compliance with Rule 10b-18, subject to market conditions. The Share Repurchase Program does not obligate us to repurchase any dollar amount or number of shares and our Board of Directors may modify, suspend, or discontinue authorization of the program at any time. See Note 16 Subsequent Events for information on an increase and extension to our Share Repurchase Program. For the three months ended September 30, 2022, we repurchased 1,921,181 shares of our common stock for $80 million at an average price of $41.78 per share. For the nine months ended September 30, 2022, we repurchased 5,845,082 shares of our common stock for $247 million at an average price of $42.29 per share. For the three months ended September 30, 2021, we repurchased 1,151,596 shares of our common stock for $39 million at an average price of $33.42 per share. For the nine months ended September 30, 2021, we repurchased 2,591,799 shares of our common stock for $84 million at an average price of $32.39 per share. Shares repurchased were held as treasury stock as of September 30, 2022. Dividends On February 23, 2022, our Board of Directors declared a quarterly cash dividend of $0.17 per share of common stock. The dividend was payable to shareholders of record at the close of business on March 7, 2022 and $13 million was paid on March 16, 2022. On May 4, 2022, our Board of Directors declared a quarterly cash dividend of $0.17 per share of common stock. The dividend was payable to shareholders of record at the close of business on June 1, 2022 and $13 million was paid on June 16, 2022. On August 3, 2022, our Board of Directors declared a quarterly cash dividend of $0.17 per share of common stock. The dividend was payable to shareholders of record at the close of business on September 1, 2022 and $13 million was paid on September 16, 2022. Future cash dividends, and the establishment of record and payment dates, are subject to final determination by our Board of Directors each quarter after reviewing our financial performance and position. See Note 16 Subsequent Events for information on future cash dividends. Warrants We reserved an aggregate 4,384,182 shares of our common stock for warrants which are exercisable at $36 per share through October 26, 2024. As of September 30, 2022, we had outstanding warrants exercisable into 4,295,434 shares of our common stock (subject to adjustments pursuant to the terms of the warrants). The Warrant Agreement contains customary anti-dilution adjustments in the event of any stock split, reverse stock split, stock dividend and certain other distributions. The warrant holder may elect, in its sole discretion, to pay cash or to exercise on a cashless basis, pursuant to which the holder will not be required to pay cash for shares of common stock upon exercise of the warrant but will instead receive fewer shares. See Part II, Item 8 – Financial Statements and Supplementary Data, Note 10 Equity in our 2021 Annual Report for a description of our warrants and Note 14 Chapter 11 Proceedings for more information on the issuance of these warrants pursuant to our joint plan of reorganization. We did not issue any shares of our common stock in exchange for warrants during the three months ended September 30, 2022. During the nine months ended September 30, 2022, we issued an insignificant number of shares of our common stock in exchange for warrants. During the three and nine months ended September 30, 2021, we issued 47,416 shares of common stock and received approximately $2 million related to warrants exercised. Employee Stock Purchase Plan In May 2022, our shareholders approved a new California Resources Corporation Employee Stock Purchase Plan (ESPP), which took effect in July 2022. The ESPP provides our employees with the ability to purchase shares of our common stock at a price equal to 85% of the closing price of a share of our common stock as of the first or last day of each fiscal quarter, whichever amount is less. The maximum number of shares of our common stock which may be issued pursuant to the ESPP is subject to certain annual limits and has a cumulative limit of 1,250,000 shares. As of September 30, 2022, 16,480 shares were issued under our ESPP. BSP JV Our development joint venture with Benefit Street Partners (BSP JV) contemplated that BSP contributed funds for the development of our oil and natural gas properties in exchange for preferred interests in the BSP JV. In September 2021, BSP's preferred interest was automatically redeemed in full under the terms of the joint venture agreement. Prior to redemption, BSP's preferred interest was reported in equity on our condensed consolidated balance sheets and BSP's share of net income (loss) was reported in net income attributable to noncontrolling interest on our condensed consolidated statements of operations. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION We derive most of our revenue from sales of oil, natural gas and NGLs, with the remaining revenue primarily generated from sales of electricity and marketing activities related to storage and managing excess pipeline capacity. The following table provides disaggregated revenue for sales of produced oil, natural gas and NGLs to customers: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (in millions) Oil $ 494 $ 413 $ 1,527 $ 1,124 Natural gas 120 69 294 161 NGLs 66 67 205 174 Oil, natural gas and NGL sales $ 680 $ 549 $ 2,026 $ 1,459 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Dividends On November 2, 2022, our Board of Directors increased the cash dividend policy to anticipate a total annual dividend of $1.13, payable to shareholders in quarterly increments of $0.2825 per share of common stock. The actual declaration of future cash dividends, and the establishment of record and payment dates, is subject to final determination by our Board of Directors each quarter after reviewing our financial performance and position. Also on November 2, 2022, our Board of Directors declared a quarterly cash dividend of $0.2825 per share of common stock. The dividend is payable to shareholders of record at the close of business on December 1, 2022 and is expected to be paid on December 16, 2022. Share Repurchase Program On November 2, 2022, our Board of Directors increased the Share Repurchase Program by $200 million to $850 million and extended the program through December 31, 2023. In October 2022, we repurchased 682,792 shares of our common stock for $29 million, at an average price of $42.19 per share. As of October 31, 2022, we have repurchased an aggregate 10,617,862 shares of our common stock for $424 million, at an average price of $39.89 per share, since the inception of the Share Repurchase Program in May 2021. After giving effect to the increase, there was approximately $426 million of capacity under our Share Repurchase Program as of October 31, 2022. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | We are an independent oil and natural gas exploration and production company operating properties exclusively within California. We are committed to energy transition and have some of the lowest carbon intensity production in the United States. We are in the early stages of permitting several carbon capture and storage projects in California. Our subsidiary Carbon TerraVault is expected to build, install, operate and maintain CO 2 capture equipment, transportation assets and storage facilities in California. In August 2022, Carbon TerraVault entered into a joint venture with BGTF Sierra Aggregator LLC (Brookfield) to pursue certain of these opportunities (Carbon TerraVault JV) . See Note 2 Accounting Policy and Disclosure Changes for our accounting policy related to joint ventures and investments in unconsolidated subsidiaries and Note 8 Investments and Related Party Transactions for more information on the Carbon TerraVault JV. Separately, we are evaluating the feasibility of a carbon capture system to be located at our Elk Hills power plant. Except when the context otherwise requires or where otherwise indicated, all references to ‘‘CRC,’’ the ‘‘Company,’’ ‘‘we,’’ ‘‘us’’ and ‘‘our’’ refer to California Resources Corporation and its subsidiaries. In the opinion of our management, the accompanying unaudited financial statements contain all adjustments necessary to fairly present our financial position, results of operations, comprehensive income, equity and cash flows for all periods presented. We have eliminated all significant intercompany transactions and accounts. We account for our share of oil and natural gas producing activities, 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 our condensed consolidated financial statements. We have prepared this report in accordance with generally accepted accounting principles (GAAP) in the United States and the rules and regulations of the U.S. Securities and Exchange Commission applicable to interim financial information which permit the 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 presented not misleading. The preparation of financial statements in conformity with GAAP requires management to select appropriate accounting policies and make informed estimates and judgments regarding certain types of financial statement balances and disclosures. Actual results could differ. Management believes that these estimates and judgments provide a reasonable basis for the fair presentation of our condensed consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2021 (2021 Annual Report). The carrying amounts of cash and on-balance sheet financial instruments, other than debt, approximate fair value. Refer to Note 6 Debt |
Variable Interest Entities and Joint Ventures | Joint Ventures and Investments in Unconsolidated Subsidiaries We may enter into joint ventures that are considered to be a variable interest entity (VIE). A VIE is a legal entity that possesses any of the following conditions: the entity's equity at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support, equity owners are unable to direct the activities that most significantly impact the legal entity's economic performance (or they possess disproportionate voting rights in relation to the economic interest in the legal entity), or the equity owners lack the obligation to absorb the legal entity's expected losses or the right to receive the legal entity's expected residual returns. We consolidate a VIE if we determine that we have (i) the power to direct the activities of the VIE that most significantly impact its economic performance and (ii) the obligation to absorb losses or the right to receive benefits from the VIE that are more than insignificant to the VIE. If an entity is determined to be a VIE but we do not have a controlling interest, the entity is accounted for under either the cost or equity method depending on whether we exercise significant influence. See Note 8 Investments and Related Party Transactions for more information on the Carbon TerraVault JV. These evaluations are highly complex and involve management judgment and may involve the use of estimates and assumptions based on available information. The evaluation requires continual assessment. |
Recently Adopted Accounting and Disclosure Changes | Recently Adopted Accounting and Disclosure Changes ASC Topic 848, Reference Rate Reform contains guidance for applying U.S. GAAP to contracts, hedging relationships and other transactions that are impacted by reference rate reform. Under this guidance, we elected to account for the February 2022 amendment of our Revolving Credit Facility described in Note 6 Debt |
SUPPLEMENTAL BALANCE SHEET IN_2
SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
SUPPLEMENTAL INFORMATION [Abstract] | |
Schedule of Other Current Assets, Net | Other current assets includes the following: September 30, December 31, 2022 2021 (in millions) Amounts due from joint interest partners $ 39 $ 47 Fair value of derivative contracts 64 6 Prepaid expenses 14 16 Greenhouse gas allowances 14 31 Natural gas margin deposits 5 12 Other 7 9 Other current assets $ 143 $ 121 |
Schedule of Other Noncurrent Assets | Other noncurrent assets includes the following: September 30, December 31, 2022 2021 (in millions) Operating lease right-of-use assets $ 40 $ 43 Deferred financing costs - Revolving Credit Facility 7 11 Emission reduction credits 11 11 Prepaid power plant maintenance 26 21 Fair value of derivative contracts 25 1 Deposits and other 15 11 Other noncurrent assets $ 124 $ 98 |
Schedule of Accrued Liabilities | Accrued liabilities includes the following: September 30, December 31, 2022 2021 (in millions) Accrued employee-related costs $ 64 $ 61 Accrued taxes other than on income 43 30 Asset retirement obligations 78 51 Accrued interest 9 19 Lease liability 12 11 Premiums due on derivative contracts 64 57 Liability for settlement payments on derivative contracts 48 25 Amounts due under production-sharing contracts 9 14 Income taxes payable 17 — Marketing prepayments 4 5 Other 23 24 Accrued liabilities $ 371 $ 297 |
Schedule of Other Long-term Liabilities | Other long-term liabilities includes the following: September 30, December 31, 2022 2021 (in millions) Compensation-related liabilities $ 34 $ 38 Postretirement and pension benefit plans 54 59 Lease liability 32 37 Premiums due on derivative contracts 13 5 Contingent liability related to Carbon TerraVault JV put and call rights 46 — Other 6 6 Other long-term liabilities $ 185 $ 145 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories, by category, are as follows: September 30, December 31, 2022 2021 (in millions) Materials and supplies $ 53 $ 54 Finished goods 6 6 Inventories $ 59 $ 60 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | As of September 30, 2022 and December 31, 2021, our long-term debt consisted of the following: September 30, December 31, 2022 2021 Interest Rate Maturity (in millions) Revolving Credit Facility $ — $ — SOFR plus 3%-4% ABR plus 2%-3% April 29, 2024 Senior Notes 600 600 7.125% February 1, 2026 Principal amount $ 600 $ 600 Unamortized debt issuance costs (9) (11) Long-term debt, net $ 591 $ 589 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Open Derivative Contracts | We held the following Brent-based crude oil contracts as of September 30, 2022: Q4 Q1 Q2 Q3 Q4 2024 Sold Calls Barrels per day 25,167 18,322 17,837 17,363 5,747 — Weighted-average price per barrel $ 57.82 $ 57.28 $ 60.00 $ 57.06 $ 57.06 $ — Swaps Barrels per day 17,263 14,620 14,475 14,697 24,094 1,492 Weighted-average price per barrel $ 58.79 $ 67.36 $ 66.36 $ 66.27 $ 69.14 $ 79.06 Net Purchased Puts (a) Barrels per day 25,167 18,322 17,837 17,363 5,747 1,724 Weighted-average price per barrel $ 64.47 $ 76.25 $ 76.25 $ 76.25 $ 76.25 $ 75.00 Sold Puts Barrels per day 1,348 — — — — — Weighted-average price per barrel $ 32.00 $ — $ — $ — $ — $ — |
Summary of Fair Value of Derivatives | The following tables present the fair values on a recurring basis (at gross and net) of our outstanding commodity derivatives as of September 30, 2022 and December 31, 2021: September 30, 2022 Classification Gross Amounts at Fair Value Netting Net Fair Value Assets (in millions) Other current assets - Fair value of derivative contracts $ 85 $ (21) $ 64 Other noncurrent assets - Fair value of derivative contracts 28 (3) 25 Liabilities Current - Fair value of derivative contracts (275) 21 (254) Noncurrent - Fair value of derivative contracts (29) 3 (26) $ (191) $ — $ (191) December 31, 2021 Classification Gross Amounts at Fair Value Netting Net Fair Value Assets (in millions) Other current assets - Fair value of derivative contracts $ 33 $ (27) $ 6 Other noncurrent assets - Fair value of derivative contracts 12 (11) 1 Liabilities Current - Fair value of derivative contracts (297) 27 (270) Noncurrent - Fair value of derivative contracts (143) 11 (132) $ (395) $ — $ (395) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted EPS | The following table presents the calculation of basic and diluted EPS, for the three and nine months ended September 30, 2022 and 2021: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (in millions, except per-share amounts) Numerator for Basic and Diluted EPS Net income (loss) $ 426 $ 107 $ 441 $ (89) Less : net income attributable to noncontrolling interests — (4) — (13) Net income (loss) attributable to common stock $ 426 $ 103 $ 441 $ (102) Denominator for Basic EPS Weighted-average shares 74.1 81.6 76.4 82.6 Potential Common Shares, if dilutive: Warrants 0.7 — 0.7 — Restricted Stock Units 0.8 0.4 0.7 — Performance Stock Units 0.7 0.4 0.7 — Denominator for Diluted EPS Weighted-average shares 76.3 82.4 78.5 82.6 EPS Basic $ 5.75 $ 1.26 $ 5.77 $ (1.23) Diluted $ 5.58 $ 1.25 $ 5.62 $ (1.23) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents potentially dilutive weighted-average common shares which were excluded from the denominator for diluted EPS in the periods presented: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (in millions) Shares issuable upon exercise of warrants (a) — 4.3 — 4.3 Shares issuable upon settlement of RSUs — — — 0.9 Shares issuable upon settlement of PSUs — — — 0.6 Total antidilutive shares — 4.3 — 5.8 (a) Diluted earnings per share for the three and nine months ended September 30, 2021 excludes 4.3 million common shares issuable upon exercise of warrants that were out-of-the-money based on the average stock price for those periods. See Note 14 Stockholders' Equity for information on the terms of the warrant s. |
PENSION AND POSTRETIREMENT BE_2
PENSION AND POSTRETIREMENT BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Benefit Costs | 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 months ended September 30, 2022 and 2021: Three months ended September 30, Three months ended September 30, 2022 2021 Pension Postretirement Pension Postretirement (in millions) (in millions) Service cost - benefits earned during the period $ — $ 1 $ — $ 1 Interest cost on projected benefit obligation 1 — 1 — Expected return on plan assets (1) — — — Curtailment gain — — — (1) Amortization of prior service cost credit — (2) — — Net periodic benefit costs $ — $ (1) $ 1 $ — Nine months ended September 30, Nine months ended September 30, 2022 2021 Pension Postretirement Pension Postretirement (in millions) (in millions) Service cost - benefits earned during the period $ 1 $ 2 $ 1 $ 3 Interest cost on projected benefit obligation 1 1 1 2 Expected return on plan assets (1) — (1) — Curtailment gain — — — (1) Amortization of prior service cost credit — (5) — — Net periodic benefit costs $ 1 $ (2) $ 1 $ 4 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue | The following table provides disaggregated revenue for sales of produced oil, natural gas and NGLs to customers: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (in millions) Oil $ 494 $ 413 $ 1,527 $ 1,124 Natural gas 120 69 294 161 NGLs 66 67 205 174 Oil, natural gas and NGL sales $ 680 $ 549 $ 2,026 $ 1,459 |
SUPPLEMENTAL BALANCE SHEET IN_3
SUPPLEMENTAL BALANCE SHEET INFORMATION - Other Current Assets (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Other current assets | ||
Amounts due from joint interest partners | $ 39 | $ 47 |
Fair value of derivative contracts | 64 | 6 |
Prepaid expenses | 14 | 16 |
Greenhouse gas allowances | 14 | 31 |
Natural gas margin deposits | 5 | 12 |
Other | 7 | 9 |
Other current assets | $ 143 | $ 121 |
SUPPLEMENTAL BALANCE SHEET IN_4
SUPPLEMENTAL BALANCE SHEET INFORMATION - Other Noncurrent Assets (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
SUPPLEMENTAL INFORMATION [Abstract] | ||
Operating lease right-of-use assets | $ 40 | $ 43 |
Deferred financing costs - Revolving Credit Facility | 7 | 11 |
Emission reduction credits | 11 | 11 |
Prepaid power plant maintenance | 26 | 21 |
Fair value of derivative contracts | 25 | 1 |
Deposits and other | 15 | 11 |
Other noncurrent assets | $ 124 | $ 98 |
SUPPLEMENTAL BALANCE SHEET IN_5
SUPPLEMENTAL BALANCE SHEET INFORMATION - Accrued Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Accrued liabilities current [abstract] | ||
Accrued employee-related costs | $ 64 | $ 61 |
Accrued taxes other than on income | 43 | 30 |
Asset retirement obligations | 78 | 51 |
Accrued interest | 9 | 19 |
Lease liability | 12 | 11 |
Premiums due on derivative contracts | 64 | 57 |
Liability for settlement payments on derivative contracts | 48 | 25 |
Amounts due under production-sharing contracts | 9 | 14 |
Income taxes payable | 17 | 0 |
Marketing prepayments | 4 | 5 |
Other | 23 | 24 |
Accrued liabilities | $ 371 | $ 297 |
SUPPLEMENTAL BALANCE SHEET IN_6
SUPPLEMENTAL BALANCE SHEET INFORMATION - Other Long-Term Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
SUPPLEMENTAL INFORMATION [Abstract] | ||
Compensation-related liabilities | $ 34 | $ 38 |
Postretirement and pension benefit plans | 54 | 59 |
Lease liability | 32 | 37 |
Premiums due on derivative contracts | 13 | 5 |
Contingent liability related to Carbon TerraVault JV put and call rights | 46 | 0 |
Other | 6 | 6 |
Other long-term liabilities | $ 185 | $ 145 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Supplemental Cash Flow Elements [Abstract] | ||||
Taxes paid | $ 0 | $ 0 | $ 20 | $ 0 |
Interest paid, net of capitalized amounts | 21 | 23 | 43 | 27 |
Dividends | 1 | $ 0 | 1 | $ 0 |
Contribution from noncontrolling interest | $ 2 | $ 2 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Materials and supplies | $ 53 | $ 54 |
Finished goods | 6 | 6 |
Inventories | $ 59 | $ 60 |
DEBT - Schedule of Long-Term De
DEBT - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | |
Feb. 25, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Debt | |||
Principal amount | $ 600 | $ 600 | |
Unamortized debt issuance costs | (9) | (11) | |
Long-term debt, net | 591 | 589 | |
Senior Notes (Unsecured) | |||
Debt | |||
Principal amount | $ 600 | 600 | |
Interest rate | 7.125% | ||
Revolving Credit Facility | Line of Credit | |||
Debt | |||
Principal amount | $ 0 | $ 0 | |
Revolving Credit Facility | Line of Credit | Secured Overnight Financing Rate | Minimum | |||
Debt | |||
Interest rate added to variable rate basis | 3% | 3% | |
Revolving Credit Facility | Line of Credit | Secured Overnight Financing Rate | Maximum | |||
Debt | |||
Interest rate added to variable rate basis | 4% | 4% | |
Revolving Credit Facility | Line of Credit | Alternative Base Rate | Minimum | |||
Debt | |||
Interest rate added to variable rate basis | 2% | ||
Revolving Credit Facility | Line of Credit | Alternative Base Rate | Maximum | |||
Debt | |||
Interest rate added to variable rate basis | 3% |
DEBT - Narrative - Revolving Cr
DEBT - Narrative - Revolving Credit Facility (Details) - Line of Credit - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | |||
Oct. 27, 2020 | Feb. 25, 2022 | Sep. 30, 2022 | Oct. 25, 2022 | Apr. 29, 2022 | |
Revolving Credit Facility | |||||
Debt instrument | |||||
Line of credit facility, maximum borrowing capacity | $ 602 | ||||
Line of credit facility, increase in current borrowing capacity | $ 110 | ||||
Margin increase, additional increase each subsequent fiscal quarter | 0.50% | ||||
Debt instrument, covenant leverage ratio | 1.5 | ||||
Derivative, hedging percent | 30% | ||||
Revolving Credit Facility | Subsequent Event | |||||
Debt instrument | |||||
Borrowing base | $ 1,200 | ||||
Revolving Credit Facility | Secured Overnight Financing Rate | |||||
Debt instrument | |||||
Interest rate floor | 1% | ||||
Revolving Credit Facility | Alternative Base Rate | |||||
Debt instrument | |||||
Interest rate floor | 2% | ||||
Revolving Credit Facility | Federal Funds Rate | |||||
Debt instrument | |||||
Interest rate added to variable rate basis | 0.50% | ||||
Revolving Credit Facility | LIBOR | |||||
Debt instrument | |||||
Interest rate added to variable rate basis | 1% | ||||
Revolving Credit Facility | Derivative Instrument, Period One | Crude Oil Hedge Positions | |||||
Debt instrument | |||||
Derivative, allocation percent | 50% | ||||
Revolving Credit Facility | Derivative Instrument, Period Two | |||||
Debt instrument | |||||
Derivative, hedging percent | 33% | ||||
Revolving Credit Facility | Derivative Instrument, Period Two | Crude Oil Hedge Positions | |||||
Debt instrument | |||||
Derivative period | 12 months | ||||
Revolving Credit Facility | Maximum | |||||
Debt instrument | |||||
Debt instrument, covenant leverage ratio | 2 | ||||
Revolving Credit Facility | Maximum | Secured Overnight Financing Rate | |||||
Debt instrument | |||||
Interest rate added to variable rate basis | 4% | 4% | |||
Revolving Credit Facility | Maximum | Alternative Base Rate | |||||
Debt instrument | |||||
Interest rate added to variable rate basis | 3% | ||||
Revolving Credit Facility | Maximum | ABR Applicable Margin | |||||
Debt instrument | |||||
Interest rate added to variable rate basis | 3% | ||||
Revolving Credit Facility | Minimum | |||||
Debt instrument | |||||
Debt instrument, covenant leverage ratio | 1 | ||||
Revolving Credit Facility | Minimum | Secured Overnight Financing Rate | |||||
Debt instrument | |||||
Interest rate added to variable rate basis | 3% | 3% | |||
Revolving Credit Facility | Minimum | Alternative Base Rate | |||||
Debt instrument | |||||
Interest rate added to variable rate basis | 2% | ||||
Revolving Credit Facility | Minimum | ABR Applicable Margin | |||||
Debt instrument | |||||
Interest rate added to variable rate basis | 2% | ||||
Letters of Credit | |||||
Debt instrument | |||||
Line of credit facility, maximum borrowing capacity | $ 200 |
DEBT - Fair Value (Details)
DEBT - Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Fair value of debt | $ 564 | $ 623 |
DIVESTITURES AND ACQUISITIONS (
DIVESTITURES AND ACQUISITIONS (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Feb. 01, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Aug. 31, 2021 | |
Business Acquisition [Line Items] | ||||||||
(Loss) gain on disposition of business | $ 2 | $ 4 | ||||||
Proceeds from asset divestitures, net | $ 3 | 11 | $ 79 | 13 | ||||
Carbon Acquisitions | ||||||||
Business Acquisition [Line Items] | ||||||||
Total spend | 0 | 17 | ||||||
Joint Venture With Macquarie Infrastructure And Real Assets Inc | Joint Venture With Macquarie Infrastructure And Real Assets Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Joint venture working interest acquired | 90% | |||||||
Purchased of working interest share conveyed assets | 53 | 53 | ||||||
Other Acquisitions | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchased of working interest share conveyed assets | $ 0 | $ 0 | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Ventura Basin | ||||||||
Business Acquisition [Line Items] | ||||||||
Gain on sale of assets | 2 | 12 | ||||||
Gain from additional earn-out | 2 | 6 | ||||||
Amount received to secure performance of abandonment obligations | 2 | |||||||
Liability for abandonment obligation payments | $ 2 | 2 | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Lost Hills, San Joaquin Basin | ||||||||
Business Acquisition [Line Items] | ||||||||
Gain on sale of assets | $ 49 | |||||||
Joint venture working interest acquired | 50% | |||||||
Option retained to capture carbon emissions, percent | 100% | |||||||
Percent of deep rights and related seismic data retained | 100% | |||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | CRC Plaza | ||||||||
Business Acquisition [Line Items] | ||||||||
Gain on sale of assets | $ 0 | |||||||
Proceeds from sale of buildings | $ 13 | |||||||
Sales leaseback portion of the building | 18 months | |||||||
Impairment charge | $ 2 | |||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Other Divestitures | ||||||||
Business Acquisition [Line Items] | ||||||||
(Loss) gain on disposition of business | $ (1) |
INVESTMENTS AND RELATED PARTY_2
INVESTMENTS AND RELATED PARTY TRANSACTIONS (Details) MT in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 03, 2022 USD ($) installment MT | Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||
Contribution from noncontrolling interest | $ 2 | $ 2 | ||
INVESTMENT IN UNCONSOLIDATED SUBSIDIARY | 14 | 14 | $ 0 | |
Contingent liability related to Carbon TerraVault JV put and call rights | 46 | 46 | 0 | |
Receivable from affiliate | 32 | 32 | $ 0 | |
Carbon TerraVault JV | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Interest in joint venture | 51% | |||
Contribution from noncontrolling interest | 12 | |||
INVESTMENT IN UNCONSOLIDATED SUBSIDIARY | 14 | 14 | ||
Contingent liability related to Carbon TerraVault JV put and call rights | 46 | 46 | ||
Receivable from affiliate | 32 | $ 32 | ||
Carbon TerraVault JV | Brookfield | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Interest in joint venture | 49% | |||
Initial investment | $ 137 | |||
Number of installments | installment | 3 | |||
Number of installments subject to certain milestones | installment | 2 | |||
Contribution from noncontrolling interest | 46 | |||
Metric tons of carbon per annum | MT | 5 | |||
Committed amount | $ 500 | |||
Carbon TerraVault JV | Brookfield | Calls | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Contribution from noncontrolling interest | $ 2 |
LAWSUITS, CLAIMS, COMMITMENTS_2
LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES (Details) | 1 Months Ended |
Oct. 31, 2020 platform | |
Commitments and Contingencies Disclosure [Abstract] | |
Number of offshore platforms with decommissioning obligations defaulted | 2 |
Offshore platforms with decommissioning obligations defaulted percentage | 37.50% |
Offshore platforms with decommissioning obligations defaulted period since interest sold | 30 years |
DERIVATIVES - Narrative (Detail
DERIVATIVES - Narrative (Details) - Revolving Credit Facility - Line of Credit | 9 Months Ended | |
Sep. 30, 2022 | Apr. 29, 2022 | |
Derivatives | ||
Derivative, hedging percent | 30% | |
48 Month Period | ||
Derivatives | ||
Derivative, hedging percent | 85% | |
Derivative period | 48 months | |
48 Month Period | Crude Oil Hedge Positions | ||
Derivatives | ||
Debt instrument, floor interest rate | 100% |
DERIVATIVES - Commodity Price R
DERIVATIVES - Commodity Price Risk (Details) bbl in Thousands | Sep. 30, 2022 bbl / d bbl $ / barrel |
Crude Oil | Calls | Q4 2022 | |
Derivatives | |
Daily volume | bbl / d | 25,167 |
Weighted-average price (in dollars per barrel) | 57.82 |
Crude Oil | Calls | Q1 2023 | |
Derivatives | |
Daily volume | bbl / d | 18,322 |
Weighted-average price (in dollars per barrel) | 57.28 |
Crude Oil | Calls | Q2 2023 | |
Derivatives | |
Daily volume | bbl / d | 17,837 |
Weighted-average price (in dollars per barrel) | 60 |
Crude Oil | Calls | Q3 2023 | |
Derivatives | |
Daily volume | bbl / d | 17,363 |
Weighted-average price (in dollars per barrel) | 57.06 |
Crude Oil | Calls | Q4 2023 | |
Derivatives | |
Daily volume | bbl / d | 5,747 |
Weighted-average price (in dollars per barrel) | 57.06 |
Crude Oil | Calls | 2024 | |
Derivatives | |
Daily volume | bbl / d | 0 |
Weighted-average price (in dollars per barrel) | 0 |
Crude Oil | Swaps | Q4 2022 | |
Derivatives | |
Daily volume | bbl / d | 17,263 |
Weighted-average price (in dollars per barrel) | 58.79 |
Crude Oil | Swaps | Q1 2023 | |
Derivatives | |
Daily volume | bbl / d | 14,620 |
Weighted-average price (in dollars per barrel) | 67.36 |
Crude Oil | Swaps | Q2 2023 | |
Derivatives | |
Daily volume | bbl / d | 14,475 |
Weighted-average price (in dollars per barrel) | 66.36 |
Crude Oil | Swaps | Q3 2023 | |
Derivatives | |
Daily volume | bbl / d | 14,697 |
Weighted-average price (in dollars per barrel) | 66.27 |
Crude Oil | Swaps | Q4 2023 | |
Derivatives | |
Daily volume | bbl / d | 24,094 |
Weighted-average price (in dollars per barrel) | 69.14 |
Crude Oil | Swaps | 2024 | |
Derivatives | |
Daily volume | bbl / d | 1,492 |
Weighted-average price (in dollars per barrel) | 79.06 |
Crude Oil | Puts | Purchased | Q4 2022 | |
Derivatives | |
Daily volume | bbl / d | 25,167 |
Weighted-average price (in dollars per barrel) | 64.47 |
Crude Oil | Puts | Purchased | Q1 2023 | |
Derivatives | |
Daily volume | bbl / d | 18,322 |
Weighted-average price (in dollars per barrel) | 76.25 |
Crude Oil | Puts | Purchased | Q2 2023 | |
Derivatives | |
Daily volume | bbl / d | 17,837 |
Weighted-average price (in dollars per barrel) | 76.25 |
Crude Oil | Puts | Purchased | Q3 2023 | |
Derivatives | |
Daily volume | bbl / d | 17,363 |
Weighted-average price (in dollars per barrel) | 76.25 |
Crude Oil | Puts | Purchased | Q4 2023 | |
Derivatives | |
Daily volume | bbl / d | 5,747 |
Weighted-average price (in dollars per barrel) | 76.25 |
Crude Oil | Puts | Purchased | 2024 | |
Derivatives | |
Daily volume | bbl / d | 1,724 |
Weighted-average price (in dollars per barrel) | 75 |
Crude Oil | Puts | Sold | Q4 2022 | |
Derivatives | |
Daily volume | bbl / d | 1,348 |
Weighted-average price (in dollars per barrel) | 32 |
Crude Oil | Puts | Sold | Q1 2023 | |
Derivatives | |
Daily volume | bbl / d | 0 |
Weighted-average price (in dollars per barrel) | 0 |
Crude Oil | Puts | Sold | Q2 2023 | |
Derivatives | |
Daily volume | bbl / d | 0 |
Weighted-average price (in dollars per barrel) | 0 |
Crude Oil | Puts | Sold | Q3 2023 | |
Derivatives | |
Daily volume | bbl / d | 0 |
Weighted-average price (in dollars per barrel) | 0 |
Crude Oil | Puts | Sold | Q4 2023 | |
Derivatives | |
Daily volume | bbl / d | 0 |
Weighted-average price (in dollars per barrel) | 0 |
Crude Oil | Puts | Sold | 2024 | |
Derivatives | |
Daily volume | bbl / d | 0 |
Weighted-average price (in dollars per barrel) | 0 |
Natural Gas and Natural Gas Liquids | Swaps | Q4 2022 | |
Derivatives | |
Daily volume | bbl | 25 |
Weighted-average price (in dollars per barrel) | 7.74 |
DERIVATIVES - Fair Value (Detai
DERIVATIVES - Fair Value (Details) - Commodity Contracts - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value of Derivatives | ||
Total derivatives | $ 0 | $ 0 |
Other current assets - Fair value of derivative contracts | ||
Fair Value of Derivatives | ||
Netting | (21) | (27) |
Other noncurrent assets - Fair value of derivative contracts | ||
Fair Value of Derivatives | ||
Netting | (3) | (11) |
Current - Fair value of derivative contracts | ||
Fair Value of Derivatives | ||
Netting | 21 | 27 |
Noncurrent - Fair value of derivative contracts | ||
Fair Value of Derivatives | ||
Netting | 3 | 11 |
Gross Amounts at Fair Value | ||
Fair Value of Derivatives | ||
Total derivatives | (191) | (395) |
Gross Amounts at Fair Value | Other current assets - Fair value of derivative contracts | ||
Fair Value of Derivatives | ||
Gross Amounts at Fair Value | 85 | 33 |
Gross Amounts at Fair Value | Other noncurrent assets - Fair value of derivative contracts | ||
Fair Value of Derivatives | ||
Gross Amounts at Fair Value | 28 | 12 |
Gross Amounts at Fair Value | Current - Fair value of derivative contracts | ||
Fair Value of Derivatives | ||
Gross Amounts at Fair Value | (275) | (297) |
Gross Amounts at Fair Value | Noncurrent - Fair value of derivative contracts | ||
Fair Value of Derivatives | ||
Gross Amounts at Fair Value | (29) | (143) |
Net Fair Value | ||
Fair Value of Derivatives | ||
Total derivatives | (191) | (395) |
Net Fair Value | Other current assets - Fair value of derivative contracts | ||
Fair Value of Derivatives | ||
Net Fair Value | 64 | 6 |
Net Fair Value | Other noncurrent assets - Fair value of derivative contracts | ||
Fair Value of Derivatives | ||
Net Fair Value | 25 | 1 |
Net Fair Value | Current - Fair value of derivative contracts | ||
Fair Value of Derivatives | ||
Net Fair Value | (254) | (270) |
Net Fair Value | Noncurrent - Fair value of derivative contracts | ||
Fair Value of Derivatives | ||
Net Fair Value | $ (26) | $ (132) |
EARNINGS PER SHARE - Calculatio
EARNINGS PER SHARE - Calculation of EPS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator for Basic and Diluted EPS | ||||
Net income (loss) | $ 426 | $ 107 | $ 441 | $ (89) |
Less: net income attributable to noncontrolling interests | 0 | (4) | 0 | (13) |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK | $ 426 | $ 103 | $ 441 | $ (102) |
Denominator for Basic and Diluted EPS | ||||
Weighted-average common shares outstanding — basic (in shares) | 74.1 | 81.6 | 76.4 | 82.6 |
Weighted-average common shares outstanding — diluted (in shares) | 76.3 | 82.4 | 78.5 | 82.6 |
EPS | ||||
Basic (in dollars per share) | $ 5.75 | $ 1.26 | $ 5.77 | $ (1.23) |
Diluted (in dollars per share) | $ 5.58 | $ 1.25 | $ 5.62 | $ (1.23) |
Warrants | ||||
Numerator for Basic and Diluted EPS | ||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares) | 0.7 | 0 | 0.7 | 0 |
Restricted Stock Units | ||||
Numerator for Basic and Diluted EPS | ||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares) | 0.8 | 0.4 | 0.7 | 0 |
Performance Stock Units | ||||
Numerator for Basic and Diluted EPS | ||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares) | 0.7 | 0.4 | 0.7 | 0 |
EARNINGS PER SHARE - Potentiall
EARNINGS PER SHARE - Potentially Dilutive Common Shares (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total antidilutive shares | 0 | 4,300,000 | 0 | 5,800,000 |
Potential common shares for warrants (in shares) | 4,300,000 | 4,300,000 | ||
Shares issuable upon exercise of warrants(a) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total antidilutive shares | 0 | 4,300,000 | 0 | 4,300,000 |
Shares issuable upon settlement of RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total antidilutive shares | 0 | 0 | 0 | 900,000 |
Shares issuable upon settlement of PSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total antidilutive shares | 0 | 0 | 0 | 600,000 |
PENSION AND POSTRETIREMENT BE_3
PENSION AND POSTRETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net periodic benefit costs: | ||||
Employer contributions to pension plan | $ 1 | $ 1 | $ 2 | $ 2 |
Decrease in obligation, pension and other postretirement benefits | 82 | |||
Other operating expenses, net | (5) | (4) | (28) | (31) |
Pension Benefit | ||||
Net periodic benefit costs: | ||||
Service cost - benefits earned during the period | 0 | 0 | 1 | 1 |
Interest cost on projected benefit obligation | 1 | 1 | 1 | 1 |
Expected return on plan assets | (1) | 0 | (1) | (1) |
Curtailment gain | 0 | 0 | 0 | 0 |
Amortization of prior service cost credit | 0 | 0 | 0 | 0 |
Net periodic benefit costs | 0 | 1 | 1 | 1 |
Postretirement Benefit | ||||
Net periodic benefit costs: | ||||
Service cost - benefits earned during the period | 1 | 1 | 2 | 3 |
Interest cost on projected benefit obligation | 0 | 0 | 1 | 2 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Curtailment gain | 0 | (1) | 0 | (1) |
Amortization of prior service cost credit | (2) | 0 | (5) | 0 |
Net periodic benefit costs | (1) | $ 0 | (2) | $ 4 |
Other operating expenses, net | $ 2 | $ 5 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory tax rate | 21% | 21% |
Effective tax rate | 26% | 32% |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 17 Months Ended | |||||||||||
Sep. 16, 2022 | Aug. 03, 2022 | Jun. 16, 2022 | May 04, 2022 | Mar. 16, 2022 | Feb. 23, 2022 | Jul. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | May 02, 2022 | Dec. 31, 2021 | Oct. 27, 2020 | |
Equity, Class of Treasury Stock [Line Items] | |||||||||||||||
Stock repurchase program authorized amount | $ 650 | ||||||||||||||
Treasury stock (in shares) | 9,935,070 | 9,935,070 | 9,935,070 | 4,089,988 | |||||||||||
Stock repurchase | $ 80 | $ 39 | $ 247 | $ 84 | $ 395 | ||||||||||
Average price (in dollar per share) | $ 41.78 | $ 33.42 | $ 42.29 | $ 32.39 | |||||||||||
Share repurchase (in shares) | 1,921,181 | 1,151,596 | 5,845,082 | 2,591,799 | |||||||||||
Dividends declared, common stock (in dollars per share) | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | ||||||||||
Dividends paid | $ 13 | $ 13 | $ 13 | ||||||||||||
Shares reserved for future issuance (in shares) | 4,384,182 | ||||||||||||||
Investment warrants, exercise price (in dollars per share) | $ 36 | ||||||||||||||
Warrant outstanding (in shares) | 4,295,434 | 4,295,434 | 4,295,434 | ||||||||||||
Shares of common stock issued (in shares) | 47,416 | 47,416 | |||||||||||||
Proceeds from warrants exercised | $ 0 | $ 2 | $ 0 | $ 2 | |||||||||||
Employee Stock Purchase Plan | |||||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||||
Purchase price of common stock | 85% | ||||||||||||||
Number of shares authorized (in shares) | 1,250,000 | ||||||||||||||
Shares issued (in shares) | 16,480 | ||||||||||||||
Share Repurchase Program | |||||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||||
Treasury stock (in shares) | 9,935,070 | 9,935,070 | 9,935,070 | ||||||||||||
Average price (in dollar per share) | $ 39.74 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of revenue | ||||
Oil, natural gas and NGL sales | $ 680 | $ 549 | $ 2,026 | $ 1,459 |
Oil | ||||
Disaggregation of revenue | ||||
Oil, natural gas and NGL sales | 494 | 413 | 1,527 | 1,124 |
Natural gas | ||||
Disaggregation of revenue | ||||
Oil, natural gas and NGL sales | 120 | 69 | 294 | 161 |
NGLs | ||||
Disaggregation of revenue | ||||
Oil, natural gas and NGL sales | $ 66 | $ 67 | $ 205 | $ 174 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 17 Months Ended | 18 Months Ended | ||||||||
Nov. 02, 2022 | Aug. 03, 2022 | May 04, 2022 | Feb. 23, 2022 | Oct. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Oct. 31, 2022 | May 02, 2022 | Dec. 31, 2021 | |
Subsequent Event [Line Items] | |||||||||||||
Dividends declared, common stock (in dollars per share) | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | ||||||||
Stock repurchase program authorized amount | $ 650 | ||||||||||||
Share repurchase (in shares) | 1,921,181 | 1,151,596 | 5,845,082 | 2,591,799 | |||||||||
Purchase of common share (in shares) | 9,935,070 | 9,935,070 | 9,935,070 | 4,089,988 | |||||||||
Average price (in dollar per share) | $ 41.78 | $ 33.42 | $ 42.29 | $ 32.39 | |||||||||
Stock repurchase | $ 80 | $ 39 | $ 247 | $ 84 | $ 395 | ||||||||
Share Repurchase Program | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Purchase of common share (in shares) | 9,935,070 | 9,935,070 | 9,935,070 | ||||||||||
Average price (in dollar per share) | $ 39.74 | ||||||||||||
Subsequent Event | Share Repurchase Program | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Stock repurchase program, increase in authorized amount | $ 200 | ||||||||||||
Stock repurchase program authorized amount | $ 850 | ||||||||||||
Share repurchase (in shares) | 682,792 | ||||||||||||
Purchase of common share (in shares) | 10,617,862 | 10,617,862 | |||||||||||
Average price (in dollar per share) | $ 42.19 | $ 39.89 | |||||||||||
Stock repurchase | $ 29 | $ 424 | |||||||||||
Capacity remaining | $ 426 | $ 426 | |||||||||||
Subsequent Event | Annual Dividend | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Dividends declared, common stock (in dollars per share) | $ 1.13 | ||||||||||||
Subsequent Event | Quarterly Dividend | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Dividends declared, common stock (in dollars per share) | $ 0.2825 |