CRC - Earnings call 2 2023 | California Resources Corporation

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Operator

Good day, and welcome to the California Resources Corporation Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Joanna Park, Vice President of Investor Relations and Treasurer. Please go ahead.

Joanna Park

Welcome to the California Resources Corporation Second Quarter 2023 Conference Call. executive are Executive President Financial Vice well CRC's call Officer; Chief Officer; today's as Molina, Manuela President entire on Francisco and Leon, Executive as Participating team. and Chief we I'd like Relations of website, our provided in the section have crc.com. to Investor slides that highlight slides information operations on These and results. quarter second provide additional our our

press are as We've in information financial non-GAAP directly some reconciling also filings. in well based expectations. most on as financial on we factors SEC release GAAP Actual differ measures measures in comparable release. our forward-looking statements results and earnings provided our earnings periodic making due our discussed website Today, described to current our the to could

prepared we a that have questions a over limit now ask allotted to reminder, their of participants call the at will and to that, As I our Francisco. With And one remarks. turn follow-up. primary for we time Q&A additional the end

Francisco Leon

carbon you, Joanna. CRC, are our strengths Thank cash At and California. flow, clear;

gas oil cash our sell long-lived reserves. markets provide predictable of pricing our our from which flows assets. base flows we cash low-decline have First, produce large from U.S., production carbon and the into a the premium as some Further, in These with and the access we to compared realizations U.S. intensity that advantaged to natural assets of strength comes the lowest rest high-quality,

a knowledge Carbon an benefits to of and and the surface Our in advantage. Brookfield mover storage surface second which quality our was carbon for from us position to the permit provide with reservoirs venture leads our extensive early strength CCS. is EPA. carbon submitted with the continue large acreage our competitive advantage joint TerraVault, nation TerraVault geological applications CRC's serve mineral platform,

our interest and of combined dioxide X Additionally, XXXX. CDMAs current our emitters. by of tons to agreements good towards we of per date, executed management injection represents progress potential X tons which a year, port XXX,XXX our injection from future year-end rate carbon space To have attract target reservations XX% of metric significant or storage million continues year CCS for of and per

strength regulatory is fifth throughout and standards state in industry state's with far and incentives record decarbonization attractive track economy safe barriers in state. offers solutions the world, ability California's the under energy The well-positioned landscape. to CRC At operation the and ambitious environmental right is of to operate to high surpass is third be the entry. largest California's needs the CRC, Our world help market also state. production. the California. the advance local we to demonstrates provider proudly our reductions long a emission drive goals energy highest has transition our the navigate that California to energy with

transformation to continue organizational in we business we're more the all our our perspective, to improvements rate operational the great an and looking for out From of and our progress future current reflect run of annualized structure. needs goal optimizations, improve and technologies are evaluating cost our aspects $XX cost operational transformation recalibrate of make business, drive is efforts now our new to Therefore, targeting and to approach The on or million savings. system.

processes Initial our focused and around warehousing actions our business on model. have services, programs key well chemical

be but we results. in before targeted 'XX shareholder and the are to maximize reflected rental cash further strategy on business and we practices current the our in our operations aligning locations. for can flows to improvement see and in in Note savings also guidance provided not from that returns. these are how and utilize our By equipment field in opportunities year-end our the included enhance execute place initiatives we long-term today, We our and contractors environment 'XX strategy, to

favorable and the 'XX, brings we Beach quarter million. of total $XX operating generated in cash our XX demand quarter year-to-date rig A cash In X the and free $XXX flow of flow per produced combination underpinned of workover to strong day rigs. Long XX,XXX and pricing BOE in million second free

of second the our During we common of and dividends. our cash in our free to our million quarter, shareholders return to shares $XX This repurchased in $XX million shareholders represents paid XXX% flow the quarter.

returned XX% CRC or market of May to has Since $XXX shareholders nearly cap. our million 'XX, current our nearly

with line expectations. Our to reservoirs continue perform in

from our Our sharing which our observed results, variations excludes storage stable contracts levels. production gross production Long and NGL performance is from in best Beach

our our productivity stacked quarter-over-quarter of of demonstrates program. flat gross efficacy pay maintenance and Our downhole production the

As drill and new sidetracks. to a on to of deepenings [indiscernible] new continue Despite reminder, from workovers, X% but approvals receive drilling we continue to in lack remain permit track we entry for permits, decline. exit to to a deliver see X% production permits delays

to is permits on high-return highlights at ability even efficiency maintain development and Our levels. plan recompletion manage XXXX lower and activity reservoirs focused in CRC's hand activity workover capital and our

a the due volumes up our typically end On production store produced the sell during to production second came in at our maximizing cash flows. on lower while ended basis, of periods, the storing net of total NGL higher range, demand midpoint quarter oil We to guidance NGLs.

taking natural as power manage with market. wholesale optimize at well the XXX-megawatt the to level power delivery fields us the converting volumes to natural into market. Hills side, gas costs field [indiscernible] and surrounding Elk to the ability power power as We're for gas incremental to between our of On power provides plant

and gas natural very again once Our had a activities marketing strong quarter.

advantage and resources our a strong able to better team had versus was The much prices taking quarter. As very delivery double results than Citygate maintain. margin quarterly of expectations guidance again by prices, gas gas held once field-level transportation and marketing activities natural the up we

in returned generation abundance and natural this California as inventories levels more capacity second Looking should gas fall. generation ahead, competes with gas-fired natural our marketing of seasonal of the and summer half gas moderate natural margins to 'XX the hydro

Moving to carbon management.

for [ per ton Fuels project. storage Clean project fifth During curve confirms gasoline This the of only XX of project. CDMA EBITDA our ] to economic Verde executed our XX further metric renewable per type with quarter, we our

We also for than project. tons the more Cypress expanded blue Anticipated for from previously now XXX,XXX the capacity per COX reserve year hydrogen XXX,XXX announced metric project. for doubled injection to Lone has our

These applications build-out, EPA. queue Park quarter XXX addition a CTV with bringing of to acreage million Intec benefit agreement coal which facilities, are at permanent capacity year provides planned our Elk in tons. signed COX our and Net located on within for permit continuing Industrial storage. potential application be for submissions with storage Hills, has surface a to end, submitted XX another co-location The tons application of unique cumulative CTV's to offering permit for the midstream VI metric we COX earlier their position permit metric of Zero Post this X, our capacity million in Class the storage permit storage, at

continue traction from conversations project We as emission another the to data for see classics various encouraging Indiana point draft yet for to positive the draft CCS potential a as is provides the target our remain and approval of and other We year-end. EPA well technology with optimistic progress. for stakeholders. industry by support continue from sources EPA our and permit EPA The in permit recent

our progress each evaluate to Carbon quarter. continue strong business. of management make the we TerraVault separation to Lastly, carbon continues

stages. However, early in we're still the

update certain FID approval, Nelly CRC's line in a for flows financial milestones We on continue first sight over COX permit of And an and before potential [ important cash I'll to pass to provide look such ] considering it separation. and project outlook. to injection position as now to

Manuela Molina

Thank you, again, welcome and Francisco, everyone.

Our balance sheet condition. solid remains in

expanded we cash. the with million million million. of RBL our quarter, net total commitments million which includes liquidity, by $XX to quarter in bringing our the During We commitment $XXX $XXX ended $XXX

position modest charge a XXx. while our X.Xx leverage reflects net very Our leverage coverage exceeds of fixed

of strength key our of prices, the Given our a financial keeping cyclical nature commodity is strategy. the pillar

year forward, are guidance. Looking maintaining full our we production

mentioned our half X% reservoirs in are expectations, in second the in anticipate before, modest which our with informed Francisco our declines X% of to history. the are with previously of decline. performing decades of disclosed line range As We annual operating by year line

Regarding conditions a our and XXXX between projects heavier cash flow. of current weighting expected to activity. timing be million higher executing permits. program second oil capital to our due dynamic under maximizing year $XXX in and million with our the our and natural on $XXX response take the volatility on production focused and approach Oil commodity focus projects half range will existing a and workover continue capital We of reaffirm in free using mainly development gas price program, to we activity to maintaining

prices at softened While the the during street quarter. forward second remained level, commodity healthy

for well commodity strong Our gas natural updated date our guidance marketing our as differentials. price outlook as activities reflects to

oversupply market global trends The reflect seasonal pricing NGL quarterly and the markets environment.

natural on reflects price levels average, the of second registered quarter full the in On 'XX. normalized spikes half unprecedented in to the side, our also guidance but gas year the first the return the

As expected expenses are year. cost range in second the a XXXX million the operating by of result, operating the top of of energy-related guidance we our to half end due the lower lowering $XX

narrowing free cash range to the guidance are flow $XXX we Additionally, of million. for our $XXX to million the year

that an [ and Mcf you NYMEX ] our remind price $X.XX estimated of guidance is on based XXXX barrel $XX.XX me price. per Let per Brent

more cost With to initiatives priorities of run are business respected in balance. our the our it execution key million Francisco. that, turn the will to responsible of or of half year the of [indiscernible]AG I and in stewardship best being transformation Our the second XXXX our $XX rate financial reduce users back

Francisco Leon

flow, CRC's and on Thank strengths To capital California. value cash for to carbon open progress call joining summarize, us on you, that provides capability. is today. questions. generation free the founded balance Thank We'll a at are solid cash a disciplined Operator? future. unique towards in path our way now and a CCS CRC and decarbonized the shareholders sheet you proposition for line California TerraVault carbon Nelly. participate CRC's is flow allocation, continued

Operator

Capital [Operator Scott Markets. Instructions] first comes question from Hanold RBC with The

Scott Hanold

X first my that I with the all the to provide indicated. For process permit can was on update Indiana if Class permit had respect question, you an you wondering

like year-end could differences a had compare of of kind that any go -- and get to any your for are confidence So what if versus draft in kind between all and theirs just in permit. doing So contrast or compare that timeframe if and through you there just they there? to can target the if are the and get Indiana of differences you trying you receiving contrast to sense those

Francisco Leon

'XX. yes, the big So CTV permit are the A in California for with first in still year-end for CTV, regularly we engaging We're EPA draft catalyst hope and general. big the targeting for California. before we're catalyst

the into of X talked to don't EPA. they in But we Best X so tell with filed a the a lot of Region did. We are visibility We're we different both -- headquarters. before that dealing permit part Region is with dealing and Indiana. can we we have

So how a but stand to and for was we from to timeline get permit they the say little hard did good bit to application them, took the longer ultimately, that there. steps really where as

of that lot feel discussions the So feel I like we and I good draft much on the this a won't to progress made EPA the still on comment get very in just permit. target permit with year. technical

Scott Hanold

refer the when just just Got of fair? talking Is progress, we to suitability it. [indiscernible]. about and like the you're that technical reservoir And

Francisco Leon

on getting done I through I But have make of And the things the ultimately, the I There's feel is eagerly but draft final there's waiting community an number Gold have think fair. only for exceptional for there's EPA And That's off the prepared. sign CRC, space mean that going decision -- we more permits. permit. on the EPA Chris of not a the assurances, CCS is move the job waiting that we're permits. financial support. to rest they and team us that as that

Scott Hanold

same kind I'm of my keep think, aspect, to line questioning. support to, community especially to a be get being But help I big in you the what is Okay. And after you of the give of for going lifting specifically sort going next obviously, of I on us comment question, kind you the are through? period California. a do correct? like CRC the doing of community get support But to that at that and Because draft there's think sense received can effort

Francisco Leon

draft underway those fee is incorporated. team granted permit the the a at have there's public that After our time California. a areas of -- also public communities. the after critical the neighborhood simple for to Their project getting is final is own remote successful working Hills correct. granted, comments, in public. in right And first Kern the stakeholders. parallel and first project support get all our diligently a concern that's field first period gets project, discussion for This then the we're the place we is from comment to are the XXX% the working gets Yes, Elk We're from that County, permit and at in of from we're any in

-- right counterparty time spend be we we So as that it we leaders there. and the to and see, do is community we we're plans, with leading -- feel community support

And sequential EPA to the and be level so got that the feel process. we're not Planning also that a so are is again, permits Kern a the good started a it's to gives us look very already at at going to County once us, sign there. County working with local off. Kern required and much the support Commission go to We're We

to progressing every but forward motion, we getting So and respect a started. things in lot look are of in

Operator

of comes question Kalei next America. Bank with The Akamine from

Kaleinoheaokealaula Akamine

first my on just question, want I to hit And production.

I were seeing constraints process. high declines expecting permitting because Kern we of single-digit the see you're into to that by So year, coming County year-end this on think the

years? new So performance? help better question -- the is? I'm it base hoping seeing. what drivers it and decline that what really, production better nub portfolio [ ] of Is trying the understand Is well you're the kind the of prior underlying to to the the it Or of my unmitigated that performance from you some are us understand tailwind is can is

Francisco Leon

summarized you answer question think really I your So well. the that in

best that's you the way gross if of reservoir. could ultimately at performance quarter-over-quarter, the production, So judge to look the and

But some quarter-over-quarter. at reservoir noise flat were the storage to in have we contract. go the gross way the always production you like NGL -- have have and sharing quarter don't the you you production and to So we look is

is So -- we tailwind, we when had a year. X started it and rigs the

from some those performance there's of wells. So benefit

Wilmington it's with focused Field up development of the extremely Long well, curve. wells Beach, performing Our plan, have current type on which is kind in

the the we're able So able we're as day, move workovers, The has it's that shallow that base as maintenance PDP to quality at well. the mitigate dollars helps and our base But able as right? through of time. do we're of end asset, very naturally And the to decline of a underlying to downhole capital decline. OpEx over

what low the fading a end with we to all activities effect that we in it's at the want is of the of So activity out would think the the start the -- having day, decline year. still from initial starts some the support

we're see a X% X% has do we with I in good December. to look way the the responded base about results entry you decline. exit from to the January pretty the So with performance feel But the and that number, if happy production year-to-date. to of

Kaleinoheaokealaula Akamine

business. My management goes second appreciate I Francisco. that question the Awesome. color, carbon to

XXXX. I going Now state the in understand to that the legislation expected I pipelines, works in define some that's help that's regulations there's the on and that's COX now think

around majority capture maybe build located you projects. is Because offtake own those where aren't are third trying understand the meaningful? I'm the on So may impact of are to new your that with moment, your the be situated at the plants that property to perhaps have what as parties on they regulations considering

Francisco Leon

Yes.

happening for on there happening is Bill framework XXX a We to a So legislators session effectively on and a still support to lot California the is discussion and that see in get get trailer some put in pipeline there's get of the of way. build place. among to -- lot framework open. CCS Senate their This work significant what's to regulation

happening. progress. this year. next happening that I do So see wouldn't see We do year We conversations it's say versus

see have So and to session finishes. ability until the I it we timeline how put a wouldn't to

the legacy an connectivity we the price brownfield of why an to commercial you about, is existing a And piece really the split which out. negotiations if important needs Greenfields But it's emission projects [ is good think places So we -- points have but X okay, between is sink have is critical. I the economics, COX both ultimately, One X state. at with how things. CCS. we're the multiple legislation on X ], normal pipeline way without having between to That discussion throughout discovery overcoming of the that on we're come And be permitted important of a parties. are fence any going that sides understand to and gap in the going to the source you think not an that regulated, still and which is a of that's have

accelerate to But the input we're going Greenfield Greenfield have be always we regulation place thinking project and -- going on towards the for to on projects, it's in be all makers is aspects, at wait through going the challenging hopefully put providing way decision stakeholders to our that can't to more way We a projects end. can co-located. tremendous us this alongside get CCS. the working the there is Now a

and fact, into see. projects in that We is to Blue something X bring transition California now the energy which renewable have really hydrogen, DME. near-term, that's a to right? the way And gasoline wants

sources brings So to that's you're trailer that And But wait see. it an their help literally to very alignment good we something that's one-stop come shop. looking going be progress vaults. XXX points way provide as It's going to we we're much to this to important play. and a aspect showcase for right, the regulations -- into to connect to the built between all see emission storage that is

Operator

Pendleton The with Stifel. next from Nate question comes

Nathaniel Pendleton

you CCS impacted your recent starting separating comment on on TerraVault? My how the has level, M&A first Carbon view can or at question, space if a high in

Francisco Leon

there's heading certainly validation, team. of lot a other combinations. was -- this It's [ in investment I a CCS. where I particular the lead where we a space see of the M&A there important it's to we hard think to the in go ] Yes. is knew of Does dollars industry for good It's in predict to mean from lot Denbury toward investor interest than that on space. moving here

there. in in think pursue. to be definitely I to be as we're timelines. ultimately, to clear is validation going And that But to be we're good heading going CCS I see here different all We're going point markets that it's different it a to just stay.

I be the needs the -- terms of say and don't think focus focused of control or on get the separation, flow. not to construction expand current of be whether first we permits that not outside would really in need the to Now cash footprint, to I things we into start and able line We from need get EPA. we to sight that our

I think way. early-stage to an at the that be are of the at the day, going industry lot it's every looking end with step a of -- of we're people watching

look the do take it years but start been tremendous. showing So best to And We way and shown step just we've is catalyst. the the it in accelerate by permit step M&A is catalyst. that the a X don't as progress. I to progress ultimately, the -- has see

permit be that people lot situation but only to EPA of going gets the in other moving with a I are what is things think not ourselves, for space. the this

Nathaniel Pendleton

your for And I and -- on sites TerraVault CTV could Or you additional do looking as mentioned sites? significant provide far a at you cadence adding Slide Carbon have outlook beyond believe, for XX, date addressable to market Slide the with color as any your XX, new X? sequestration target projects you

Francisco Leon

[ million with of XXX of XXX in we of space so million XX. once the we of Once you better permit with much we've this. targeting and you're saw projects, there once be port to submission seen have -- added XXR, at pretty to of What the -- we're in which the discussions we're terms that. you're what did able collect we're ] as So the is, CTV expand aspect more data, tons a to in land capacity part We that's position, X. with EPA, sense is you permitted

those It's what submitting. catalyst, port space we're started be But permitting bringing about always is fields. what the want expand process. going to there's I into COX on. to now critical secured think the So That's the pursue. the in that else and next for to beyond is we've what we're -- we that's focused room We

over year per There's million tons emissions. XX of

moment, If emissions you up we're tons to is to about million adds XX our talking tons to at able emissions. $X space get to of a about add year. that every ultimately of think on the us combined single We port per it counterparty basis, million

Xx our the of about we're as coverage talking counterparties in terms capacity. the terms of So COX we're that Xx of in were to

So right? we getting start some that finalizing At run to is point, space And other start then restart we going you parties. the again. deals to port with out, have it's important reservations,

our We there's a is do. do, port be Now going to think XXX it's our that ultimately we near-term space can more million to Xx lot but target tons.

to the ability pretty connect with it that I on we because good got else, focused really everything feel think shape. dots the So in like we emitters

Operator

Kumar The next question Mizuho. Nitin comes with from

Nitin Kumar

start with the to things. OpEx. the target on going I'm mentioned oil million side and Francisco, of gas $XX you

we the said million? have at reduce to to not that But look you that. by of expecting a cost get impact this and you are you're I that, an on you I date? know But could project made to progress As where aren't numbers, year. the $XX really guiding sense you

Francisco Leon

And on have tremendous was we I yes, really than organization, team but do better Are we a about And the see stepped with have this I the better. there and others the a can to said, and like we better in here we're to is after the we past? really up Omar, if could feel challenge tremendous me in we so who do getting team, have initiative. it. Nitin, do question, excited team opportunities challenge. that the can

looking things you the there's of the design. of in looking some we've the things that work some at improve. it good from gave way We're kind an we're challenging We're close that to may other contract, for actually places kind looking we contracting was to model organizational bring We're a outsource relationships key we had to So opportunity where There's we at warehousing as vendors. it examples some model. the at of company, a looking test with now independent at decade could time in-house.

I have going look the going process. ways cost to improve think for structure. I team from done not the commitment to be a won We're the this to is always But is and that

of and quarter doing finality then big And the a reduce of really a so we this in continue get $XX could cost. incorporating guidance, to first is new the be terms That's technology business. this driver, stage that's here And through CRC And so that where lot we a work to we're interesting things that the ways energy we working to example. improve XXXX in to CTV to things there's might in reach start to the million, into cost our going can on like big structure. energy, a going future. California the can to benefit our if with cost exposure grid, for

to for us, we able a great workovers over assets question We footprint. are such able rig those low decline. wells, We But we're of have I without do side part why to tracks, very right? a spread and to were site, as on have think drilling have wells also answers the large that do out to of having a lot we're

go-forward think So basis. suited coming, technology, up Gen AI are incorporating like on for ], a to things I well we're be but particularly looking [ some at of those going and things that technologies we're drone

can team flows. we where plus a structure is to -- and summarize, down and to a drive that's the We lot to do line get to to try from have bring have we can cash of a we continue million because $XX we higher the look commitment sight. It's more. ultimately to operations anyways, at cost what think So think we

Nitin Kumar

it. Got

CMB [ the about XX talked side, On type per million curve of ]. you the MMtpa

you You're but close the curve signed. which that a XXX,XXX might XXX. of be first so, sense shot, any This tracking are long part first in to the of million to CDMA or type

Francisco Leon

that is the only. all Yes. make far, of I of our entirety projects all Nitin, amount mean, storage that I think greenfield so X

So that curve. the points lower end the towards of type

the storage-only built X XX the -- we way All XX So facility. requirement capital to where is are projects. of will those for into projects bracket a it's about capture think the the that is lower And working have a towards component EBITDA. storage that we to

concentration So you existing higher plant, to you attach already of COX it's projects to life. don't also have plus technology a so bring embedded you have these capture that an as into or much

because going to less So really attractive look less you're to by capital When make even those be capital projects, EBITDA. they able the are at requirement. intensive, -- you lower returns, with returns

has end the you full a higher service, higher transportation we equipment, return. we from levels the curve. to order in to levels we have all storage is CCS model also higher a and therefore, that need capital the make where curve opposite The way where type is the from and of emitter, to of that to incentives the as commitments capture part the go of type do point to the That we higher -- a to that contribution an and installation point a the would

this So means capital. and case but in good returns low end the really now, focusing on we're lower lower end, right

do the what end can. that's pursue spectrum. So to both gets as state Brownfield the -- of from need California, existing support can project many achieve as ultimately decarbonize projects. we're in industry projects with well-positioned That's to ends as successful really we think the we're We of we happy we want and be much we what if this those Brownfield can. At as going a business to the is the we day,

Nitin Kumar

Got X If sneak can it. last Great. I one.

there? expect restart Just in any the next said updates update second on the that year. But Kern any permitting you County know permitting? to half had you I of

Francisco Leon

hearing pushes final be this That's scheduled of still sometime the -- the year. timeline beginning year. the to appeal that be we're at. decision We a QX And to a in process in anticipate of decision next a

back 'XX. to looking So in half of activity to be second the normal we're

no So going get real than very to we changes here other scheduled think soon. hearing the is

about report. reminder, challenged the What's and doing We're environmental plans quarter the level. is CEQA X to field Joaquin impact in County. our a ability of on Kern outside working fields we're we're of of our for in for have being level also drill Basin the EIRs wells undeveloped, San Kern to proved that collectively As inventory alternative field County and but core XX% looking

get back all-of-the-above next an the it's half by So of track us year. strategy on to second

Operator

from Mariani comes Leo Roth question MKM. next with The

Leo Mariani

Can the just guide about third production you in the guys quarter. talk

you a quarter, did net. day So second XX,XXX barrels

a about of third quarter some in second guys half, You is sort the XX that but the dots just us there? connect of to talked kind modest implies seeing help guide declines your you increase. XX Can

Francisco Leon

yes, sell. so some -- we not we the the -- NGLs that are recovering Leo, basically to able were of

on sales shift basis, So that a happens.

absent So we affects the your XX movements -- third quarter. barrels XX to in the for price right big any PSC that's range, that see

So some that the fourth quarter. does decline in imply further

Leo Mariani

helpful. form like And than looks are I XXX% where situation sheet is sort that on, just anomaly? That's as Is on just free the dividends quarter, cash of guys then the the macro say, potentially mean, second of sort of flow you comfortable in the and depending balance you based then to paid of the of more shareholders well guys that, doing your stock an here. Okay. Or the strength it in out buybacks. as

Francisco Leon

dividend, -- higher so XXXX. $X.XX returns have though at do about our allocation We're a QX, than and very but every the with mean flow strategy, evaluate we it's Year-to-date, year, over a quarter. Last flow average best QX capital order and had QX method share. is to XX%. closer do fixed high I provide and even we free XX. XXX% if we comfortable but cash to at you about value and per if shareholders to XXX%, we're in look cash you of Yes. We QX paid we're very

So of that's what then of act component. more the value. there rest most return we gives on business where look looking and market the the where see in fixed we how is is the We company, that's it best for at is the that the on. a do And based discretionary and

over you XXX% to haven't like in we on backwards, the quarter assess XXXX, year. we because are. buybacks, we're closer we been for right where but the been So prescriptive now, But to if but we have XX% look shareholder every

Leo Mariani

existing the kind you But as the Okay. kind is X about there any if sort far deals that wrong, correct in as are on in with there know, just only -- you're can And sale on board then for guys competitive of Huntington you certainly, And me area? working of I information put you on parcel the out also, that Beach here the the could any I'm competition have also, deals. That's comment landscape on would helpful. CCS some helpful. of deals be then update ones provide California of

Francisco Leon

Apache, Yes, back I'll which with question. the Huntington [ first, in ] go our CCS then the to and is I'll come Ford parcel X acre Beach

We're many are progress. converting project. we real a conditions. you going -- abandonment. through requirements, We're estate oilfield There's making to looking at have market we So regulatory components but to an also at look

So we're X. all working through

make be for As decision think the before, us down XX this that we to property, we the is look which as we what the acres bigger said good gives street. really ultimately a

So this way bidder. get and make from all to and the law highest sold waters it's the the acre we a ultimately sure understand requirements best into and test good the

So we're working through that.

be going because do. think we're beginning, that want a We And a lot to There's lot I would by through year-end, we of working to to things just something the that said do we've cushion. of we was it. this said, provide not from

to I abandonment. have remove. There's wells think site. reported -- time we There's few we we a on I started on last working facilities

process of is ongoing. has all and begun So that

So conditions look sale market later results back that year, of to hold. assuming report to this the

So that's that. through working the update there. kind We're of

projects want out They their tend site CCS nearby we they're there. meaning EPA that own do. emissions you'll that reduce have permit the self-solutions, I that's of parties on competition. be and are submission not the that they do only There's can other out ones. website, if terms you In see to a a front, there's they you the more mean, to and identified how in see to trying to look of number for

have to haven't emissions yet, the the a least what the could free it you of seems Carbon We Coast, based to look we on has at competition. for competition. TerraVault -- all like Gulf state see as see going here, like being do do So out competitor this you're seen view where that But We not publicly. a quite not all. see come at

going counterparties acquire are parties state. to of EPA this to as and that is others to or in others successful think potential there are the very that they're see not that register don't land a start be we think, in trying undertaking business We we going that either you're -- some the maybe seeing permits,

ultimately about to core into we good to and is X hearing So the which feel we've what that to start within California. But if yes, be the coming wanted others have we what months, ties commitments. surprised about our date, established don't next you position

Operator

comes Tuohy Investment from next Research. Brothers question with Parks Noel The

Noel Parks

Just production, thinking industry. that very routes company of is that and I was course, couple you a that, observed the in and CCS a things. gas of a long young has oil

the and describe the like So and to these of mix of a are wondering, to transactions that the so done of deals? CCF. customer what -- negotiating the get for sense the to what is is get you've you in of the Sort were you to you or on trigger? each you're for -- deals past with issues are to deals leave train chug of that -- pull types when starting was date the things I sort these through walk you can the X far, along maybe can station kind just

Francisco Leon

Yes.

But in you don't of to with lot you a So California. transition have but product, Verde markets the we interest develop cases, kickstarting today. a have the the mean, market offtake. I we're -- of we like have in there's and or announced gasoline, project first And the you hydrogen all, of the also -- energy don't renewable don't lot

So energy take way. under and lot the to get investment Otherwise, working permits agencies we much that's drive very the the come and transition transition, needs of where need with but towards that, in I think longer. are to we're it, to that we to a that's committed to is going

Lone already that the some with is agreement working Cypress, through we're related how some the But in on that all And what going X this the we're from an that. -- the in into we to the like to existing really with precedent -- way that look terms have that right? in evolves. to hydrogen a agreements. conditions of point. have offtake we're market preserved So others, option offtake critical that's are good who's trying that, counterparties, our the and the we we understand blue basically CDMA But things cases, to to In into projects at do buy established invest

of network -- there's deep California, entire we Now that in very trucks we have -- mean to that for in of groups groups lot of stations lot a want that hydrogen the with but lot in something doesn't I think develop a very heavy state. like pockets X

So little it's that's of going of problem. to a chicken -- egg circular and the a require bit kind

that's are ultimately cost And We the have they're product that the offtakers they sell. then that readily a that available want -- don't form and you have hydrogen but ready building plans efficient to can go. in

bring of on to So together we're all trying projects. these that

to well be. us again, but it's aligned state the with -- So is asking where very

to And spear. space. to tip to the be time. take leader the the to create the markets, want some We it's want these want going in be of We so we but

right, Now And than we're land, get to final will focusing going it's brings there, there. you going sounds Brownfield, we that with because if a us you decision be think on about the again, maybe others. co-located to the areas reservoirs, where like to it's investment this not we're and already Greenfield, and because early much stage, closer own get

sure build-out still a pipeline. Brownfield the then you had capture facility a and existing an right make you have on you install If plant to project, on have the

said XXQ, not at the next agreements. just, our last to right? the is year, year there? providing and are these come this much have mass projects what XXXX -- critical significant the to year change, support what to through so going went Greenfield about Is together. we recap, that's projects. some to to to trying projects, of We end projects be there's and lot injection, IRA -- a to a That's we're because of products? going one on these support we're who's offtake lot better price. these buying actively What's of again, why positive But for get these the of a So capitalize looking happening these the be with a it's

X for catalyst Class things to going. gets a of us But lot permit is do. there's lot still of work ultimately, But the that a that

construction with of capital these and Brookfield. the market. permits, We the products and it's the a starting have get getting We matter to

Noel Parks

was for. also bit I looking you talked what a development. That's Great. And technology about

Post-injection post-injection have that as be just And vendors just injection sort any [ et or savings, you methods around of out might to about the Just little a cost but is COX, of bit was are that what forestalling just standardized? that modeling need. for that's ] that little the made cetera. sequestered, or can going largely of something if wondering sort in-house talking not COX, a I you doing if You're you're to advocate thinking there opposition I'm technology wondering, of about -- to bit have work a you applications costly, for zooming done just any -- double the worries question. talk of concerns about [indiscernible]

Francisco Leon

the No, that's pass question. I'll answer. Gould over to great it Chris provide to

Chris Gould

Yes.

first thing -- the that, Class permit. think it when I important most to is of understand EPA to part that's monitoring the X the comes

So out be you by to will. if what how dialed all done needs into, are spelled as to how those the requirements long, be -- sensitivities what to and for need

on and comes been there. all for lot of there's the through or with really to California. requirements, get guesswork way opportunities monitoring the that. the the a We it we'll and applications different those monitoring it a When a complying engaged to of fulfilling collaborations state basis with this there's heavily lot permit what do, know existing not of have of we new with other that sort universities years, conduct DOE, many technologies we've like so done particularly to have do in through that So

of prepared the requirements abundance emerging technologies. well very for complying different or existing with with feel we an permit So

Operator

from Hanold Scott RBC Markets. from follow-up a have we Capital And

Scott Hanold

real Francisco quick.

you're that shareholder just it obviously, to obviously, allocation obviously us do going you mentioned, And when the the got had so. mean look you've the last shareholder base value under You sort dividend where doing context, Now the of like step of creates the versus of returns, from does was in your been there. higher. are it like the of some think before or But where and share that in $XX, obviously, most to all about over what per the you for on play as at -- price return layup it the through decision, you a you on doing look how that kind at for buybacks, you're year year? I last it today into can stock the where And $XX walk is thought $XX process Like shareholders. right? that? --

Francisco Leon

So price dividend. like targets we [indiscernible] what's increase $XX the the your to so have option

the have We buybacks. with option continue to

the a just I at to X, we months, look able think a we decision. in to front make like last the for All quarter, we because buy are really lowest deploy comes X time table. make were buy share. we the options you debt. shares a really on and at did We cash $XX. history ability the from of to us the also then opportunistic good to if returns-oriented price were opportunities So the analysis, at the pick last look a That discretion We And can at the able average like look be that right? to we to over decision

very even even highest amount the and look the may ultimately, cash discretion the to do into return we're the some in in to there's shareholders, we we're very be quarter and it how like, actively, there and variability right? So run, at the Now long to the we amounts what committed. over to we -- of shareholders cash program though return committed though

a last XX that didn't we as the either income months, cash right, or net buybacks. governs -- of but to reminder, today, And we it's high-yield calculation. indenture talk XX% dividends about ability Now have via distribute the ultimately we it our

it. oil an commodity to price component there or So is price a

acts to the XX might bringing and you're a you're at but those commodity moment, with in committed cash prices bringing in, right? you as a you're much more it's So as returning with If dealing to dealing have discretion, high but prices difficult prescriptive, very from because very be as the the months last mechanism, and capping we caps very we're can. period of that to lower shareholders

Scott Hanold

one And real one to just me, close me. quick for that's No, for helpful. it out

like to legislation approvals about about working are Just for on some any -- thinking there CDMAs hydrogen at of -- Is either have gasoline you ammonia there is or a that specific obviously, all get Commission. be Planning we that? renewable something any should some or blue facility like other Greenfield projects towards. approvals or governs when you X think the that of County But these you or blue permit, you're at or your approved that have Kern Class which state even permits the

Francisco Leon

Yes. No.

permit. permit you California local and the very going a use Commission. County So a in closely and conditional conjunction critical That's working Kern with that's need Planning

projects. use County also solar Planning conditional energy for do wind the they permits that see of Commission but They're there because for all the oil spectrum, those on projects -- it's the all going working for Like be that in I that those Elk parallel Kern Hills. So have the are said ongoing at nice are before, to we're right? the aspects ones and and gas, conversations to

these Greenfield extension oversees projects So it's group the they do a be to of at that look permits. natural the and what

the locally, for to of the lot we the send plans, -- information that for. to inner you the in get with like working more EPA, California the provide a the lockstep you And I it. aware would to same workings, progress year of so of permit have So after one They're our to look this that's that working draft through we'll one said, so look share be but to we're approval.

in co-location. from Certainly, the be that's to move as going place would away we're the for be pipeline also near-term. That's the critical regulation we highlight. one to into So put I looking

road. going look Okay. And with in investor seeing forward us. through to be spending weeks We're everybody We a seeing Thanks in think to conferences person. of the number on that's a wrap. Thank you so the forward time to and look coming so you much for much. going

Operator

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

may disconnect. You now

California Resources (CRC) 1 Aug 232023 Q2 Earnings call transcript