Earnings call transcript Q4 2022

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Operator

Good day, and welcome to the California Resources Corporation Fourth Quarter Earnings Conference Call. [Operator Instructions].

And now I would like to turn the conference over to Joanna Park. Please, Joanna, go ahead.

Joanna Park

Welcome to California Resources Corporation's Fourth Quarter 2022 Conference Call. Executive are Executive President Financial Vice well the call Officer; Chief Officer; today's as Leon, Francisco President entire on Mark and McFarland, Executive as Participating Committee. and Chief we I'd like Relations of website, our provided on our section have www.crc.com. to Investor slides that highlight slides information operations into These and results. quarter provide additional our fourth

as most GAAP financial measures have information non-GAAP reconciling release. comparable We in financial measures earnings our directly website well also provided discussed as our to the on

based statements in on expectations. Today, and we forward-looking are to periodic described making could results factors in other due our current differ filings. and some Actual release SEC our risk XX-K earnings

As of additional allotted our the prepared a remarks. we end at [Operator have time for reminder, Instructions]. Q&A

over that, Mac. to With the I will now call turn

Mark McFarland

Good and joining everyone, Thank Well, thank Joanna. great. today. us you, for you morning,

in Over the following the from focused to free our through restructuring, we cash returned company's an cash dividends. the flow XXX% in evolved XX% and its that highest company's since XXXX. on point, emergence assets of outstanding And flow financial of late shareholders emergence enterprise past CRC our returning repurchases and shares into share years, we have to in generating Case shareholders. the X-plus bought we back XXXX, cash from

for We a also opportunity saw a have carbon built and that. management tremendous solid business around

do, to evolve. continue company we company any should As as any focused --

realignment a our adapt we the and to look announcing on and we business strategic circumstances build strong of As operations forward XXXX structure current to company's are momentum. and to beyond,

possible cash highest can are to cash simply, to business so that the we focused generating said shareholders. from have As E&P before, we and it our I flow per share return on say

expect free free shares million guidance, if more of you cash $X.XX fully diluted our per That of of if flow that share, XXXX would buy million share shares toggles we XXXX, outstanding a shares flow back take decline average higher. per assets of which in Another flow of we free XX.X the low That XX% cash XX.X the January, diluted drive fully of the $XXX is cash share deliver in we per even us case $XXX of outstanding delivered flow any increase in in to the results roughly cash the you be before the have during our and $X million is million would end cash year, and midpoint available the the the business. and in of in flow of 'XX free benefit would point, XXXX. And the and at take we XXXX. to

In management alignment, to we connection changes our with the E&P strategic of businesses. Board announcing separation management eventual and support are carbon the and

to cutting activity company taking costs we also By are growth. share can plan We energy we drive per levels, of believe our to these steps, financial and accelerate increase create flexibility to different match flow kind returns. a cash and we shareholder

the from Leon, to Board corporate growth I management our the Board back continue of carbon the Carbon serve subsidiary, the structure, I to will Francisco and on CEO, succeed CRC as will management TerraVault chair day-to-day With will and of the continued business. me step be formed newly will role. devoted which the revised will of overseeing

and subsidiary structuring the storage well and and of provide expertise new financial we California. James Chapman, carbon CRC board. on will business relevant also the existing in corporate Two nonexecutive Bremner the technologies, in with as for commercialization insight into Together, provide movers will knowledge to as provide serve Directors, early Andrew capture

is Francisco CRC forward. the the side-by-side, spent right great years great more confident to than to And friendships. tremendous and the opportunity X with us going work he and at having forged time this had exciting with person people working I've of I lead many am

I'll now to to position we're more share Francisco? it our taking the business steps on details over Francisco to turn for success.

Francisco Leon

Thanks, I and my focus Mac, you we XXXX on to XXXX the deliver in cover release them our everyone, deck. and actions documents taking of on and per provided enhance and yearly will in to the earnings rather analysis call. financial our share we results returns business. about value But that and joining for to information and to I guidance our the will quarterly cash are operational for attachments also comments the refer stronger slide than you, and call. have thank shareholder flow first, maximize detailed this those our

financial as But our free over year-end of showcase portfolio $XXX cash resilient valuable flow, and strong, with very were of helping you results will see, assets. XXXX million

As we what's all to and chapter, evolve. priorities, on of the front XXXX us delivered look our of at we in next continue must in

plan here's XXXX. So for our

in downhole We and servicing our are combined plan projects help hand. going permits to developing well focus and our maintenance, declines. returning with the with development on base reduce production That, highest drilling will

Slide with We projects presentation. will the $XXX paybacks. you do in can is our per capital a run constitutes program This Wilmington with XXXX on in as E&P rigs, of short X.X and permits million based for CapEx XX to see field rate which reducing by as this our of hand on annum investment high program, demonstrated rate-of-return

OpEx with maintenance, a decline deliver total X dollars company. by rig to X% our program, to expect increasing capital count adding our We're to for the maintenance which, X% also XX, we to downhole combined

high-impact incremental have wells that to can we service expenditure We very operating to backlog and make to after us little engineering that dollars. X,XXX about return with return a go investments of allow and

we're year-end, E&P other nonenergy operating and business, level. all to and Given activity E&P adjusted levels XX% corporate our looking other costs across costs X% also aligning to to reduced by cost activity G&A our reduce by

safety over high that We the implemented company to years. maintaining believe standards and additional have has while strategies in well operational positioned achieve achieved successfully identify and the reductions is past, similar CRC and cost the the

flexibility, ways the company. operating pursuing To financial to also our potential our return the flexibility revisions of separation program the we a to intend that achieve we're Clearly, a enable ongoing plan, for $XXX on help replace operate bolster the our and notes million high-yield company's stand-alone and TerraVault capital extend or will basis having sourcing future this to refinance option shareholder Carbon increase RBL. addition business. financial broaden In to to

remaining expect And return due E&P us to focus of free flow assets, ability our CRC's a a this, flow continued cash to on cash billion, of Our such, the our quality has program authorized XXXX, maximizing of shareholders costs, million dry as flow cash continuing total to we With in XXXX, powder. with plan confidence XX% generate $XXX of and to total per for to share. production $X.X XXX% maintain our more intend and to our of the and increase cash cash to this projections. of repurchase Board million gives share $XXX track high record of we in shareholders XXX% Of in flow than million. free after-tax corporate returning $XXX

can we will we share persist basis. repeat count and can a we We make that If improving and forward, the conditions of and we deliver structure financial metrics that approximately appropriate our ensure per market a that of If in $XXX drilling confident plan completion operating million will are going expect reductions cost to capital. XXXX our on assume capital lower we beyond, this rig X.X we plan.

in which future business about excited flow to of separate cash really working take quality, am low our and shareholders. high leading TerraVault, look the we our I the unlock will and with to CRC -- E&P generating low talented potential Carbon company's to decline, which unlock for intensity to the forward will delivering full value steps team our help carbon California

in years these look him his forward of thank to to I now business. working Operator? us the Thank Mac open our X on you call for carbon your want joining moment to and line for last and today. the for CRC, a take you accelerate the to thank We'll management questions. growth for leadership interest with

Operator

[Operator Instructions].

comes RBC Scott from first Capital. Hanold from Our question

Scott Hanold

this and in Francisco, your on the well-deserved, to congrats congrats on leadership and promotion, the point Mac, future. all

multifaceted in ongoing litigation sense of that's also hand? give give permits in But you us the that to first of total have changed place. go in just basins? to and -- rig to it decision sense moves is X.X view a this a permitting. that And your much runway going those give you opinion? give of shot a Kern a And my do around on a Can but me County? And many count drove us that see what XXXX? to of question has the question, here. good have could maybe then in sense like little you how bit changed lower So pace, be outside let to activity how like Has us you And a

Francisco Leon

Scott, thanks question. and for words the your nice

weeks we were to what Kern issued what process go-forward getting ago that's what basis, few the did investors around looking do the our today of County. the and So on after from when all would to was plan we X-K appeal a showcase think be And feedback a I in we today.

-- is effectively all concentrated rigs the field. X.X Wilmington has the So in

the you San Basin, and As Kern operate Basin Sacramento then Joaquin know, we County, X L.A. -- in fields basins, X Basin. the

so to the go around us other litigation So that is X County, gives basins. Kern only to these optionality

there. of a activity lot independent to we LA kind in the permits. have basin in process Wilmington we're focusing the get So field. runway And of It's

this around changed okay, process. replaced. to on full go we appeal some , what we're permitting the those there, is, working around process, individual obviously, get also We really -- So field but remember, and good said we Kern permits Nothing individual if plans news has get County-wide can can we to still right? fields a is alternative

So view do to nothing's was but on. through continues case we would changed, the in provide appeal a what shareholders we're our we process that, wanted really to and that what drags working

the deliver to rigs the We've So communicated we go-forward a drag if to we already to on continues we when there's and think on. story. can impact, the appeal upside process basis X.X us, saw

Scott Hanold

you follow-up it And the Okay. have and about how the going And you Classics that is to lot a us you repositioning transpire? go bit you question, management Or you I you're strategic different line? And is time give my get permit to could view process? that mean, of think separate EPA And kind or teams? businesses. like get the company. then a to the more to is path? the questions X Do longer of for So separation here, color. what of talk I little I but ask in path shorter separating obviously, there the down there's a first sounds appreciate the it hand on all of vision have as of could your

Francisco Leon

that. we team, haven't we better. and the Mac fantastic consolidated. talk And basis. We X time out a integrated, a built Yes, I the excited Carbon -- as specific TerraVault. we understand Scott. They to each together a and how it's to very we No, business, Right now, better they put want all about members other to think of want go-forward but is understand on line, advancing businesses all investors, of it's

So Carbon TerraVault Board by take having we beginning then moving wanted into sub to to but Mac the direct start. -- much creating to Board, a of at steps into the The more seat the level. is back oversight

So to help that standpoint. him continue oversight have to from and that allows that

to and at allocated and the we of right right We're think a run X of thoughts to that, there. should today steps options running going looking share the the be But it's our few at also messaging we separately. and the looking business, the starts the to We were structuring cost businesses day, time taking initial about have TerraVault. of assets the flexibility has take and around Carbon capital decisions. end all people sure the get with additional maybe Mac making at some to But it

Mark McFarland

of subsidiary and about will advance This businesses that excited many. over So TerraVault you're and potentially just we helping first over really the look, time. that. And time But vision these to Look, Carbon Board that be separated. exactly I'm sharing is step right. have run X mature a need the

respect a we're business, lot it commercialization and is to meet to ready of As not different to excited eventual lot you between about we're what upon change stand you X takes dependent tissue, to challenge, It activities or look but I'm going there's it. with of work, the connective Class happens up a X It's an road. do and separation the a any at how we time, looking just of start if that. will, businesses, down effectuate into over of that

Scott Hanold

Okay.

or Is would to happen, see we separated soon I And are Understood. assume Okay. that to pretty financials the going here? going be that going forward?

Francisco Leon

much future. giving start to intent of more the visibility the that's into in and near Yes, structure financial the business the the cost

Operator

question from Our Pendleton Nate Stifel. from comes next

Nathaniel Pendleton

Francisco. Congratulations

Francisco Leon

Nate. Thanks,

Nathaniel Pendleton

first hub. you compared Carbon my speak Air source perspective economic view to your an and planned TerraVault Direct you going to the projects announcement recent point about how DAC an potential from question, opportunity Capture For for regarding the Can capture for forward?

Francisco Leon

Yes, Chris Gould consortium. absolutely, DAC about question. I'm answer to who's to that the Chris. to And architect excited the We're very Nate. let ahead, going Go the

Chris Gould

share that. Yes, happy to

value of in the Capture, obviously at of be the XX% coming down neighborhood Direct a the emissions curve, starts removals did a to runway, requirements billion very and this wind cost that in opportunity, building So past. actually. and for XX% came for It's see have technology the DOE of DOE in proposition like It's with long out over We the of to maturing the for $X.X Air solar California to a stages Capture time. that's opportunity for funding right? worldwide Air the the beginning opportunity estimated Direct much

annum a opportunity XXXX, has So CTV. size tonnes north XX Capture scale The evidence of it. the emissions of significant state per that's million and through of set, and it's for Air my the of for the target substantial, leading Direct knowledge, to

to it's DOE come progress. great we So and us think a with for opportunity in funding the

for You'll tonne. Air or from $XXX the per incentives Direct know that XXQ Capture

to and are sorts they program. California zero XXX fulfill purchase goals. direct that that largest So in is instruments of very companies net credits largest to removal these are home the incentives concentration eager and to the addition And that, offset of from companies carbon Fortune their to tech in

Nathaniel Pendleton

really helpful. That's

Mark McFarland

It's Mac.

Just of a couple things.

capture. XXQ, said, if that issue look, revenues, as to Chris technical count the all, TerraVault credits, the First if will, like through economics, as or revenues, highest you at something the on of the look you the are through but more but that just Carbon they're to that per we going parts important, enough of are because But other not it's know, go there there. in And to capturing. to any we're forms credits about than carbon million are event, DAC -- XXQ there you as that's talking

low very and air the sequestering. concentration So out of

been together, excited That And very DAC it's has DOE -- one advancing consortium put that here said, and of exciting. Chris we're this put the the to through that the put DOE's -- we're request. we work about and the in hubs really and together very, to the in and responding has hope California consortium,

expected. beyond getting you the that all of and local tremendous DAC I has our far has government, the participants the there. done been response breadth greater mean, job it, tell it'd communities, I expectations. through are will the And consortium Chris than be it to the I a rest colleges, ever whether

for really going So momentum built, I'm just looking opportunity Chris forward here on the it's and to what has a tremendous us. keeping

Nathaniel Pendleton

Absolutely. Thanks for the color.

staying follow-up, conversations a color you my management future carbon CDMA for around As agreements? on any provide business or the they're moment. with progressing how Can

Francisco Leon

been -- a those million more the permits in of the the the talking X projects. And we've blue excited able Then ammonia. emitters. types several about in just came some We're but we've a around hub. matter months, the as greenfield hydrogen, queue. blue of Yes, the confident all and of And of couple position saw, tons we're -- it's CDMAs with you been Nate. we share We of state the DAC to leading to some in of mean, have developments [indiscernible], I of -- with

we're So of lot deal a getting flow.

we add emitter he on turn who's to more the any Jay the front, if I'll can So wants maybe leading Bys, to it -- discussions color.

Jay Bys

both exciting think, to and time with actually arrangements with continuing I business. Francisco responsible to be announced really But the we'll the date, and is We're gotten be just greenfield in market trying as emitters arrangements announce we've subsequent that pleased. to terms. existing just But We're pretty It's conversations No, captured a in Francisco. emitters. Thanks, Nate, we've detailed parameters regard. think the I when be it. to going to

Francisco Leon

the I the And that we time to emitters, through go have the at guess discovery, raised, of I the last existing Yes. day. price end point takes

of different than CCS in rest Our are the country very the incentives we and around the conditions receive. that California

it. still commercial time, but really So We're We're these emissions. take but building focus there's model. that negotiations, we point on having no source will

focused We're CalCapture. really on through emissions our made our studies. on good own FEED very some also We progress

going be I think viable that's to a project. really

we and So more talking we're to before seeing just of of time we're to about can lot emitters but come, talk -- deal I matter like flow a incremental said, of activity there. lot and a a

Operator

now MKM. We Leo ROTH Mariani from have from question a

Leo Mariani

kind the here. on Just business the wanted up to of future follow E&P of

X% talking obviously in kind decline about are of guys X% production. of this to the You type

do get long-term that. all more to information given stave it strategy off. a to going of the more that for a you around little oil Do California see to best You're wanted as your I been friendly to gas company and just this bit companies? hasn't that

a remarks continues. for persist, if was out, strategy made as in guys finally kind in situation I of would comment see you think, original Do flat go gets but back market the handful that permitting 'XX, plan the more the your of plan? years, straightened for this whatever holding You likely you this production of reason, is next perhaps conditions which the or, prepared long-term this potentially to a

Francisco Leon

yes. Leo,

how into we what I I get So kept 'XX. yes, we ran able will in rigs, of when X perform out years was beyond we're market the see not flat. is, guidance say kind think XXXX, going to for But to production

challenge company from going would the as terms clear new we maybe manage how today in the What's right? what of the not is, in highlight forward, to appeal hoping -- process new think I to model, market. that clear, we're and So this the it's

low of lot CRC lot numbers, And decline maintain a PDP. assets, right? flow. the business our the value to rigs never to needs -- flow you We're cash I really ability the our on very to production capital-intensive through and want that a So that is concentrated in to can highlight of see have for a generate

is we the near in not you year the the extremely but In generation some it's dollar unless plan hold going to we're good with production, all rig. we flow and buy going business we year this of It's to but to X.X permits, think the -- be we high, get shares. a back appeals rigs the deliver the take process, where have can a to outcome don't can see every X.X a term enough cash for

So going with where a beyond what is end in and to a permits up, 'XX we set can we limited XXXX do doing in think right we don't going to this 'XX know do now, with rig permits, we're we what can prove of approve X.X more but going I program.

Leo Mariani

Okay.

I -- way. a in if phrasing So this just maybe different

'XX, in If you guys decline? unlimited permits you would laying be production had the

Francisco Leon

So doing we would had be did what we in a we XXXX. full permit

Leo Mariani

Okay. get That's what I was for at. trying to

And this have California sounds I but I Everything some Obviously, Okay. some California, not and following opportunities speaking, gas year. in oil. for out just field, to generally pretty in the that, believe. in plan obviously Why it is permits been think, up have, prices focused on like drill there the Wilmington then to as been on gas very robust. have do volatile, try well

Francisco Leon

very, around flowing. per strong Mcf particular, $XX very prices January, we No, saw, that's Yes. gas natural in in

We about a more we Bcf produce we're consume. know, you natural of XX -- a than producer net gas. As long

time. guidance. if natural around the We're the Jay, and And are the we're doing -- see flowed January to in to that guidance. here very don't is February difficult see But a QX In and natural coming can more that's -- gas comments to seasonal that with By numbers. expecting quarter in want add gas know, anticipated inventory. and what so any very and you see we're through trying always, board, And first in develop you we other more doing we it's on gas February. it part bring plan of on realizations of we But way, gas focused the quarterly those those in now it's I definitely, strong. to prices question

Jay Bys

Okay. a to kind month most of gas to index what on of realizations happened sales speak December, and first the our generally market in we basis.

for we the during example, ran prices to when mid-month, were of So not month participate. up December, there

state. that roughly and process. in month us sales approach in consumed of positive served XX% obviously, natural a in Francisco's us that in January impact. forward, our We'd California Now first that's served point, we have of where well plan larger figure impact comes February. of in well to can gas To pretty to the again to and going out have that part out from XX% like

Francisco Leon

thing to Maybe add. Mac more has one

Mark McFarland

it a I I producer. long Yes. of that's the was and to Leo, a being wanted and back in Feb. result than We benefit just consume. address mean more natural Jan go nice something. gas produce we And

of the front with has rig will, out gas, it's question the fuel, are in here. count. possibility it's a You at and permits front plan of we've associated good Kern circumstances based had because posed a that And in one off for or reduced needed hand and out circumstances about way, is Unfortunately, grid uncertainty the in in laid viewed the a us road. a you least associated that the hypotheticals. permits We hypothetical the transitionary that Obviously, with any the that's future, the as have that if of are about the County or question in gas we in in down drill any electrical of is deal deal outcome being don't us. additional

reality, in situation we cash? that have that do maximize is, the do vision. good we what we're And generation? is then And all nonhypothetical reality the so cash flow with how is we look dealing But And that's circumstances time. what with is, to at do

Operator

from of We have Bank from Akamine question now Kalei a America.

Kalei Akamine

is question cost. first My on

group. at could, efforts Pre-COVID, your as you the screened has my yet always of you you're much guys CRC possibly focusing did in understanding here. that So higher peer as the end cost is unit

premise different year optimizing you today? Or cost to declining ask X% under between to are business? now are you costs? permanent Because want you I what maybe differently, this Are declining cutting X%. understand your structure it a guys guys around what's So and

Francisco Leon

Yes. No, Kalei.

We the inflationary of we'll did margins. We taken over are definitely, cost focused the continue in driving years. be like can that lot business last and see, need a we've else, pressures those have be inflationary cost. everybody And pressures of couple to offset to -- the on that maintain so we cost

committed cost production, I we're to we're obviously So of do. always -- a we align think a kind what in continue to lower just where of it's That's the that just evaluate cost the that to cost. year structure like long-term need viability the It's on this we focus we're to but business, guiding right? year something that's production, for saying, to

Kalei Akamine

is the What at sustaining CapEx the moment?

Francisco Leon

the Say again, what -- mind, was you again. if don't it

Kalei Akamine

sustaining is capital production flat? needed CapEx, the the What to business hold -- hold

Francisco Leon

ultimately keeps parts. exit. run There's production program that to Yes. different we moving to that's entry to this to what and -- there's X% we're flat. we're and the and is, wish we $XXX more said, said what And X% us keep OpEx -- a decline. rate, about CapEx of a like flat Well, guiding seeing then hold helps But is million we production

Kalei Akamine

is Got it. Huntington monetization. My Beach second on question the

is pathway sale? the asset was remediation sale land the readying you worth that that thought to ultimately the And was this what executing on net that cost. do think $X billion, What and less is value So about for today? pre-bankruptcy

Francisco Leon

estate there's question. the in lot is, there's we're fantastic sell I can what a have things example, assets past estate lot or Yes. a to because in assets, a in And turned that that the we've on a Hills, through for Elk park. work into and be focused it's think property mid-tier real we but industrial as portfolio smaller Yes, answered we of real or

our do a So lot can we with fields.

Field going portfolio is Beach most doing what starting appropriate process, surface needed from the Huntington probably to future which there the we're most largest, of entitlement We to started abandonment. best attractive a the and is The we're that use the use development. is change But forward. piece

it's a and valuable, oil, producing very still field. profitable We're very

We're monetizing land. where bigger go. piece right the on So smaller the to that steps. But we're property we're the the plans to taking assess ultimately inform focused of helps trying for now,

Kalei Akamine

difficult gas going you estate? be Do think that land of production to it's the the real or and use to to get commercial from to rights change oil development

Francisco Leon

We I in mean don't happens California. it lot a know.

can look to there's used number that's some been land can see work other variable, done, big purposes. a of it's these Kalei, we starting projects And that and line -- for oil, the for is developments, were you but the that's for You time -- some get do.

Kalei Akamine

for congratulations Francisco, both guys. of you

Francisco Leon

Thanks Kalei.

Mark McFarland

Thank you.

Operator

Our next question GoldenTree. from comes from Eric Seeve

Eric Seeve

Congratulations to the can QX title we the and announcement changes. of already for guidance, to the respect of average you is, us and question us on sense cadence production should cadence both QX, -- the with for you exit an give rate can a you've production, QX production a where you given where, give the first My sense of QX XXXX not beyond guidance, but level? expect just

Francisco Leon

we through we're started into carries -- had full-time as went X obviously, rigs. year the expecting, exited go -- this year that we to as last are said, we Wilmington. reducing rig the through year. moderate so year Eric, decline X in year. a a the We the And Yes. And very now activity now

zone the put that should will that that the can over work to that we dollar efficient few and quarters, step-down next ultimately, brand-new existing a same in just you new I is a different we dollars. that we will, it's mean, tell because most I add OpEx be think using wellbore, declining, maintenance back capital that can an downhole So activity which need be and around we we is to means take wellbore online, then third workovers, followed by well.

to and that's decline on decline, to a be looking now, backing new X% we're, to activity offset more capital the of by needed to for able the that's So the fully X% drilling, right year-over-year.

Eric Seeve

Okay.

quarter. of And suggest gradually XX,XXX. is stepping guidance full around be the per Is twists is the -- for day. that, to fair see BOE sort for of there given fair And XX,XXX per to will and here? so sort of production we hey, that unexpected guidance about I appreciate you midpoint X,XXX you've way is of progression could sure, guess BOE for a and down just a around sort But That year, that know I that way for QX, maybe the think don't midpoint around day investors obviously, would a and the turns.

Francisco Leon

mean numbers. quoted you I Yes. your

about We there. the maybe there think of differences some terms have in to it, obviously ranges, way that's But right.

then year a So we last have very decline from after but QX, gradual benefits you in that. that would production coming expect

Eric Seeve

And sure Great. to make I Okay. understand. just want

about year. rig X.X to that X the for X? Does talked X, rig You mean and program stepping in just QX then X down throughout quarters rigs and a X

Francisco Leon

We with X Wilmington. at now X entered we rigs we of year rigs, X to exited stepped rig which this QX 'XX, Yes. means in in in but on just

that's right. So

Eric Seeve

I around the would permitting some only understand, active. run seems permitting the like X there? in ideal more L.A. it in of obviously, given to X Basin, there, an And -- dynamics like be the But Joaquin only there? San X It rig Basin seem now. issues time why rig Why

Francisco Leon

Yes.

this to in -- maximize done of asset at And really the to looked this this cash it's we a year, we've wanted ability we flow. -- year As like before.

you Sometimes forward you and accelerate and sometimes you press activity away. back

and basis. So this ranking dollars because in best and a on obviously, the returns downhole portfolio were workovers we we're capital the OpEx maintenance felt year,

capital that where that's putting would it returns it's rig what Wilmington dollar. for and that just think to attractive, in getting for and be best for OpEx And year not be workovers. use another we dollars the at the we to mean doesn't So wanted the we're thought we relative are every

Mark McFarland

Eric, with the key think I to said. year the Francisco reduce that rigs want what it's to to Mac. echo And just this I uncertainty. X.X is

So lines, this year. rig based put change, of is after right of hand. the But as go flow, year, and to for we stabilize the cash rig consider different those. a forth Francisco last maximize going if off that said, then we circumstances we'll the through a forward, as several lines, plan in now, And plan permits wanted

Operator

MKM. ROTH question from a follow-up We from Mariani have Leo

Leo Mariani

follow on of the to very quickly up X the wanted separation Just businesses.

understand me about much eventually But here guys Do groundwork separately. you you pretty get these sounds are the preliminary envision steps So be down here. sort the color separate clearly carbon around on company what laying management Just involved potentially businesses it there's you here. and talked a trying getting like intent more the to little the separate vision might public a of business to bit road? being on some businesses

Francisco Leon

company. value I will on we tell Great were Leo, if on don't because I I clearly lot. that you, it And value question. focused of working and know at stock look if what the reflected carbon at are reserves you the is look would I there we and the the in the value maximizing management, company, very the of a I price. think we then of look at answer don't if the the it's PDP of company, think we

that take to the to need line to in we're that. and work the here. optimal sure the make time through what still have unlock to is, going we But outcome So steps we form what

Leo Mariani

appreciate thinking of on And doing with just How you least focus anticipate a of then hedging, I capital, guys less -- on now for CapEx? Okay. are kind that. less at hedging given less about forward just that? would less the you sort

Francisco Leon

Yes.

to of we starting we talked went that hedges past the put off. we in there were And to are those about place in bankruptcy. roll a hedges the had So when lot

lot So hedges. we're where the bankruptcy of 'XX, seeing have in particular of in the we impact that benefit, don't a

to this needed oil. hedging in are. on how assess to the 'XX adequately year We progresses see -- where of that's as this basis. is guarantee see we'll continue think we we to hedged, market we able We'll point, at there's go-forward in what feel the invest the We'll But, we an is returns amount be of and a as year terms the 'XX. how of and behaving business what progresses think

Operator

our turn remarks. any concludes over go ahead. I session. closing And this Francisco like would to conference to back question-and-answer Please, Leon, the Francisco, for

Francisco Leon

in. look I week a our various of for forward in. lot conferences, seeing listening to and for everybody, the shareholders thanks at next tuning Thanks, Great.

Operator

The presentation. attending now you for conference today's Thank has concluded.

You may now disconnect.

Joanna Park	VP, IR
Mark McFarland	President, CEO & Director
Francisco Leon	EVP & CFO
Chris Gould	EVP & Chief Sustainability Officer
Jay Bys	EVP & Chief Commercial Officer
Scott Hanold	RBC Capital Markets
Nathaniel Pendleton	Stifel, Nicolaus & Company
Leo Mariani	ROTH MKM Partners
Kalei Akamine	Bank of America Merrill Lynch
Eric Seeve	GoldenTree Asset Management

California Resources (CRC) 24 Feb 232022 Q4 Earnings call transcript