CRC - Earnings call 3 2023 | California Resources Corporation

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Operator

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

Joanna Park

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

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

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

Francisco Leon

a low leading of on business. business, different We're executing Thank natural and oil and decline company. advancing kind our carbon what Joanna. you, continues be to energy our CRC cash shareholder returns gas demonstrate and management flow high increasing generating to it means

energy to and our We are carbon cash these strengths, with are core doing demonstrate innovative goals.Cash our decarbonization its and this help working flow. fronts.Starting California flow, quarterly all provide meet XXXX California progress solutions all on substantial while results to

reductions shareholder and will key expand drivers quarter, lower on progressed barrels and targeting $X barrel.Nelly free day by we E&P to the for year production structure rate deliver During the the savings cost X% business X% approximately remain our carbon. efforts, equivalent to the cost flow. producing that are and decline business for have XX,XXX entry transformation on exit million to our third cover We achieved expected results, of return to generating of strong to cash $XX $XX business continued run our annual expectation per XXXX.Moving of progress per oil our million track to-date, on with cost

reach California. and role expand strengthen CCS in as to leader market We for our continue our the

applications XX% with on as permit our I A California permit published Class submitted is X other of our and CTV permits pore queue recently EPA advantage can all by through demonstrated with Our tracker over our project the by of we the draft multiple VI Region first-mover the shows classics in to-date the EPA. show state. first in be develop to seen year-end.Additional growing parts space in track in progress receive leadership

product strong line Management competitive injection facilities.The will creating co-located of pipeline away. to as Angeles tax broader transported range.Further, designed and of reservoirs lower Los are greenfield reduce CTV the Elk and project land with low partnerships in industrial with to our to new to sequestration potentially several and a and our has and of are ownership, to for pleased to that Agreement many cryogenic that mineral new centers other will JV's also allow develop combined and even and per largest Hills at storage the metric make CRC in their flow production Hills new derisk quicker greenfield EBITDA propane utilizing recovery, tons a as economics and gas facility CCS projects proximity California a COX XXXX. California. California power Central capture state's Park well demand cash control carbon renewable we our RNG production facilities XXXX have Hills. of we own metric with to end the lower in project the and result, state processes to at and Hills. in benefit our of energy the space storage-only Hills services. I an CDMA COX With NLC announced grow California.CRC Energy and we our the our of energy aspects our of in plan sequester thousands have reserved which $XX added plant means, gas gas future injection intensity We market this Clean of targeting while variables capture transport gas leading of at natural products XXX,XXX CTV the Elk of believe can permanently during announce the benefit play from providing capture the at our improved I where COX the positioned install landscape. first for this cost CCS are expertise. and access generated carbon and from a to others products contribution that than CRC CTV proximity will CTV at a process will own this land important which, the be separation helped CRC's pore natural enables COX for gas have plant.Today, The market. provides electricity to ton We of decarbonized Dioxide our partner. will further plant, local finally, some commercial-scale the equipment our the Elk position, decarbonize to favorable tons to processing FID carbon a provide from use We This help and of project per project Energy for energy the supply inventory. an to energy to our option half to in new also pre-combustion natural U.S.We intensity to first to an from advantages market at the our virtual innovative Brownfield conventional XXX,XXX gas Furthermore, are application through year expects will get advantage reservoir want projects Elk will of versus COX by expected or and all-in gas sequester will Hills communities.And the of California CTV transition. energy Carbon renewable great products or is renewable to we from CTV capturing project solutions with project, per for our now will by production I to our benefits with year CTV and partners. Energy, the is constructed adoption in XX% natural plant, that of in Q in increase and local positioning are $XX This the the the reservoir.The our paying CTV Park CCS our new online, storage the opportunities the an us COX end-user Once permit fee fuels energy key the projects with unique and We energy, role efficiency previously a major CRC CTV key access an in with or by credits CRC development Clean processing carbon CTV the the JV at Bay emissions is effectively CDMA, Valley cryogenic by the supply storage sell to Elk the reduce operational intensity earn can effectively this higher developing XX producer their COX park park Elk with at fastest decarbonized Area, be miles storage proposed anticipates also track employment announced deals incentives first enable reservoir.We

our and Sacramento natural in expect in and current to Western past future to intensity sourced gas As several TCF We're have responsibly which such, CRC primarily our oil plans existing we finalizing inventory. Joaquin. this X on we positioning, validate third-party fields the process develop of low pursuing have developing inventory in we identified XXXX.Over methane resource.Further for gas production, years, incremental has in to the resource high-grading of San designation our our focused and and of are the

However, continued XXXX, gas relative aging premium with rest California's other to due country. experience This, the the states through pricing continues from expected volatility infrastructure. to market demand reliance and will gas likely imported strong to coupled lead to on the of significant

gas CRC, Our supply.At teams and transition. need responsibly lead energy the local development to potential untapped meet working to on unlock natural CRC's determined sourced to with we're are this plans

enable provide outlook. our an to We are and carbon solutions help CRC's providing that Nelly fuels.And management on products preliminary replacement and operational now to position improving renewable our points committed update financial and to on and Nelly? over it important financial pass I'll several XXXX

Manuela Molina

in increase financial of Shifting full Thank prices Results to quarter and results, we plan production again, another welcome year the in meant operational you, our year-to-date. cash and results quarterly reflect narrowed due we guidance oil flow. on ]. executed have impact and our to greater strong a during guidance line with modestly free were averaged by price the of also quarter to The per the largely delivered production compared impacted our production.Brent [ XXXX Francisco, everyone. effect oil $XX.XX barrels the nearly a net had for contracts cash price The oil to $X to barrel quarter assumption set million $XX.XX in guidance. $XX difference sharing in increase contributed flow, used but CRC's on to PSE X,XXX down

nearly work identify rate time. believe least at can auctioned million further expect continues of savings XXXX.Our $XX we our initiatives all beginning and We over run transformation see in to business have of level we and opportunities

we price.Since dividend X.X% $XXX quarter dividend share the stock To year commitment demonstrate solid the to authorized $X.XX bringing an quarterly our dividends $X.XX an balance confidence of dividend XXXX, the as while We This expect our stock with reflects for increase shareholder increasing liquidity. cash of our consecutive our increasing exit and approximately by through at are returned a buybacks in future third the to end result, year-end fixed year. the per position And over with to a XX%, million. $XXX our per by and ample we dividend million sheet returns, share. and yield have Board annual has performance a third

the balance to XXXX. million to Our we premium outstanding place our our of amount outstanding of have XX% delevered capacity of the share repurchase through CRC our addition amount million principal year company's our calendar in billion a the share repurchases million. program by shares at debt sheet repurchasing $XXX XXXX.In $X.X of remaining notes, $XXX $XX has end slight stock of June at buybacks, reducing to with the

increasing an in anticipate Looking we half of ahead year. second level XXXX, drilling next the of to activity

first by this to We utilizing updated EIR. of paths field-level County resolution the have Kern various beyond achieve EIR.The is

the is The within pursuing new considerable Sacramento natural inventory and robust hydrocarbons in drilling to existing of reserves. by developing has bypass Basin. access projects second CRC finally, from wellbores. through expertise And gas sidetracks more sidetracks a

increasing to executed the the activity portfolio from committed reserves fields and U.S., the over target optionality sidetracks XXXX its diverse islands, which have Wilmington extensive and of of benefit for have ] [ level operating in one we our THUMS the oil X,XXX field.CRC expertise. We reflects our from our largest is of

will combined on a to of CISO front, major both $XX major Elk Elk marketplace.In expected plant revenue to CRC will X-year investment capacity expected ] maintenance facilities which by capital approximately our an very set XXXX, consistently of revenue, million contracted gas beginning and we electricity Increased Hills is a have for and asset the generating we of reduce our year, first important both gas revenue processing is $XX through next require of offset million CISO operations feet increase us approximately volumes a day [ downtime addition to have In scheduled supplied and activities. Hills per activity has This plant the of is cubic of the these which million. flow 'XX.The capacity the for line. to for one approximately capacity maintenance the power power at quarter in energy increased Grid. at our XX

business We both solutions California.Francisco, to and to strategy back on you. conventional the energy continue our provider for transition advancing energy our be

Francisco Leon

Nelly. you, Thank

and As remain of as we catalysts flow, strengths. see we look our a CRC kind XXXX, number energy to carbon remain California disciplined building for of company.Cash different exciting core and we a on focused

value We our deliver meaningful to shareholders. continue to

now carbon lowest goals climate industry-leading its line for the open and for California oil questions. us the We reach the gas call the are energy are joining on helping producing for management solutions.Thank of Operator? and intensity We'll some state today. you carbon through

Operator

[Operator Instructions] of question Bank comes Today's Akamine Kalei with first America. from

Kaleinoheaokealaula Akamine

couple. a got I've

advance. I apologize in So

permitting to of one quarter. was want constraints I that first that more The provision seems your a to one but housekeeping a message in there the be maybe already worse. though. anticipated, CapEx nature, interpreting there's the have market gotten in the a constraints understand why new maybe Presumably, were is

it, some clear while first we're and can be thoughts on you at early could that if helpful. wondering maybe So up 'XX

Francisco Leon

Yes.

year. expect CapEx, the facility spend some end we just in to here So were quarter third of that there's the the -- finish there before delays

So on projects that timing it's really out. facilities the nothing we some more than of laid

laid read into wouldn't of much catalysts in that. And So I out we big too see. that XXXX, some the we've

We our associated some as a account important We're incremental a to but of run new million power most still an we savings. of keep plant. The ways together business barrel.We reduction not to aspects that put going that annualized that. about bringing have you at resource model ready have cost next down out cost plant we And -- of structure, and rate capacity there's team efforts, take is which also a 'XX, we're there. with And reducing in. effectively year.First around see of one for into work, we looking we're million executed not did $XX those adequacy stopping guidance transformation $XX by $X on where brought to phenomenal job contract working some the

we reminder, on that a about million $XX As in -- XXXX. per plan research year adequacy makes

So grid. the for a be doubling on of that almost this payment standby is to

some also have running coming we make to the plant, we which really maintenance have of up a want next it's shape. So exciting sure year.We tip-top in catalysts

So as disclosed that we well.

have in So X you of a new should We back normalized rigs, half we still to to activity. what in around or view bit go of next don't the program X is a that expect second X-rig rate a terms more have half any first still year the that assume run little we the permits. year, of drilling year, information

Kaleinoheaokealaula Akamine

little framing this That's of question very Got it. is I bit gas. clear. on My a to And second out. natural time spend want

apologize for I So parts. multiple the

So very California are I guess, tight. first, the dynamics obviously in

has guess, a couple I'm taking value us But Just the years balances very implies $XX.And that frames price this something wondering ready you and help skill, now oil Permian California the could albeit you off, there's think about place direct price, that looking your right? do think what it link can Basin, for it is?And think gets the to when in do your at how pick has when with on is think with you So get opportunity today before then all understand actually chart, first term that kind And a do has well, what about what then sort post-COVID. next, at bag? low change How I of much the gas build-out I it oil infrastructure and it compete does gas, you opportunity? of a you you changed slide this growth longer call still can about activity and friction have in that way. of constraints? you the really the maybe

Francisco Leon

think I you Kalei, framing. on Yes, got the right it

gas largest residential long-term commercial is consumed. economy, a gas dynamics, other not market It's contracts. the of for of state the and and a XX% California import the needs underscore from needs We're industrial the California gas gas lot to natural beyond states. as the Just today. over We brought more under fifth

comes baseload we in lot energy solutions to And the So facilities gas. to a find a to number power. the reason introduces of ways with a And is other pricing -- big perspective to the And of to now risks built California that better Coast we'll better find West it of has state. an pricing. and U.S.So parts export might be that have LNG problem competing there's in big our the commitment is from

at, comes went near years, the by other there's okay, effort.Also resource, that a locations near that RSE highlighted contrast gas we this -- gas we're year, want of but of and that started highlight all importing. we -- results haven't can same, designation, the to And is and are existing more we number emissions Not gas announcing basins earlier in states. is the making fugitive that high-grade past the fracked. pursuing other the we're are that's that in gas out from fields, of really our We within looking couple customers facilities, today,

oil You to the the to very, there premium carbon want with going to want run to to for in that to California-produced for oil. California, natural economics. talk This low looking long is wells. to going stay convinced more structurally par and local We're the shareholders needs the of be we're state good providing we're can And that prospects the is persist years our be CRC-produced.So that on that to gas talked we the decades.The state multiple be not oil haven't having good be strong excited in oil mean we in we're intensity potential gas critical.So and which will our needs contribute not returns very gas ready expect I out, before, the the and right be being there's drill about ability our it we doesn't to the to positioning equation here for to can provide We're near both. as the gas But term. really is but side -- -- forward about the the make very the and it come. about we've that resource of bringing feel to about of we We're really and assets. of a structural laid just

Kaleinoheaokealaula Akamine

the demand. spending So much constraints clarify, could infrastructure few next do is dollars grow capital you today? you how change address just How infrastructure on piece? over without additional And I then material much the the to And could California in greater power guess just you you spend years? can think

Francisco Leon

base to about that to San when bit to It's numbers. Joaquin, tends into put at Buena we and Hills wet gas, be more, Vista. But Western too a highlight little early resource primarily just it Elk the Yes. talk

those fields but A deeper for a to So facilities already formations, it's infrastructure about a place, little in that have very for known being the drilling bit productive of lot long wells. time. us

it's gas on So those wells. refocusing

NGLs Sacramento, dry of that's that added gas. We you to have production.As the from benefit move north generating

So markets very limited proven lot of gas processing place. already in Markets, out there. requirements, a infrastructure

gas, So we into disclose, We're we drilling. permits need economics of putting in mean, state it -- quantities, big to pricing whereas going the I decide getting around you -- this. again, the the We changed this pace but in think want we and here was about very of the rest still develop the per more I in what also is but change positioning.What's consumes it after talked that $XX a about state short earlier natural what year, and California, gas towards still projects moving Mcf of feel, it's started saw the $X. about to the can country we excited

is XX% more So a import state that to premium XXx than gas. imported. a decides in

You problem winter, see. security energy should a having and aging storage you the being more storage to state. that fields susceptible isolated moderate better on the Otherwise, we local a dependent need imports, think, in storage. least not and call wake-up in and expanded at That capacity very is volatility that was end have a market realization gas that in At the that infrastructure.So for state. be strong. of still to think you're of help The But I the production, need shocks I And is again, we very that solution a going more prices. some day, risk just demand store. and the it's got a terms we'll California that can of this

Operator

Capital with And our Scott comes today from Hanold next question RBC Markets.

Scott Hanold

to respect the a sidetracks mentioned, talking permitting in that? drilling, With the Basin for little exploring more and and for then different? were drilling EIR and the in half doing you're you Sacramento need looking gas you When about the sidetracks Or to at I Kern process obviously 'XX bit like and field-level of is do permits second the obviously, EIRs. more County kind you prepared potentially mean, some get comments your

Francisco Leon

We've of the permits state do not the need It's only other CRC the different this, in seen You sidetrack little using pursuing process. but operators have a most Scott. bit inventory. for sidetrack, been

next relatively very to looking quarter, than here be on in likely progresses. So for going Still as anticipate hearing that County high year confidence first to year. we're the much Kern more first the multiple able EIR, half options unlock resolution of

the getting other moving updates don't still back is forward. It's different the is years. need new to. of the the but wells next permitting the to drilling completed sidetrack. an doing have all exciting we the that's briefs We It's some that done process, and decision with from we've ultimately agencies likely year.But multiple industry see any satisfy comfortable that. line opportunity, have expectation requirements been So to early in that The very over in we something to than paths

a said, as that's feel product you different counties, will forward.And for different we needs well. the there as Basin path be Sacramento So out

advancing there year. So growing fronts comes a that next and of more comfortable all we're we're difficult and in which to first, the half one second handicap solution will more but be

Scott Hanold

Okay. again, pursuing Basin gas And permits to you -- sidetracks [indiscernible]. Sacramento getting the you're in getting wells, actively in are you then just are permits for and clarify the

this you're is that still that a working right So fair through Or that statement? point something at all doing you're EIR in that now. towards? Kern County parallel Is with that hoping comes

Francisco Leon

No, a getting clear. we be out But we fronts year, no, permit laid are received the haven't new that still back fronts. we're pursuing on all to this solutions track. all very pursuing towards We as

plans XXXX. EIR, working for or -- back EIR, level forward of the County And on to phone on field getting all Kern are them. above, the next all in of we of all Kern the the outside look So year with is drilling County, yes, February sidetracks our team

Scott Hanold

it. maybe business. CMB on bit little a the Got then And

there have the that about be, And I went contracted guys obviously, now guess, yourselves you gas out first with brownfield it'd Elk Hills plant. talked You the for.

economics economic JV? as like are, that this with eligible? sharing benefit still So XXQ a on the in is does there the And that work to parameters. through are right CRC to if some LCFS discussed you understanding, process well? how by itself kind bit credit already You I'm now little just your these curious, of

Francisco Leon

is. There

into So capture to CRC because a project, system. on do the way the from ultimately this is what little equipment. a investing the scale capture It's -- we bigger is bit think different this about we'll pre-combustion

CGPX So plant and low the piece functioning with with already capital operating. cryogenic requirements a of equipment

that is available We'll But an CRC CRC add-on on this to that's for LCFS facility, We'll on capital -- look to that all [ expense.So and low there's will the So for plant the pre-combustion are CCS. a plant itself. to we look the for XXQ. incentives look ]. yes, top of that, benefits

We A specifically bit expect of a production NGL, more higher yield propane. little well. as

reducing You I emissions should system.So we plant we carbon emissions the tax not of the -- but mean, reduction. the the should entirely, are reducing expect are

to [ things be right? projects to CRC, great this to of very proof case. to CRC multiple is asking terms not So ability solve way importantly, is a way terms working. fee are there the ] be the get of what are and CCS. to of JV, to there storage ultimately CCS. about but and CRC fastest [ should that XXXX, in CCS, it's benefits are feasibility I earns the the as showcase of a nice a is lot XX the it the one of the all And beyond a nice a out is credit way state the specific that we this to the the So project, questions fee That's control ] there will in on what accrues ground good wish aspects in CCCI capture XXQ. economics system win, we had earn great pay, the But for are to by shareholders.So consistent the We think to point, -- well pay there others the very

answer. having points helpful more is to control that get very to So

Operator

And Mariani with from ROTH MKM. question our comes next Leo

Leo Mariani

around of thrown out that few A you've questions here. some numbers these

roughly sort so state kind kind adequacy that basically the electricity I first this to margins million kind next saying there?I'm 'XX really around the guess kind of get that's check sure this amount sort of to 'XX you one flow amount? in on being $XX if versus or of you sort make understand free power, understood trying cutting from far you're So I or guys maybe Does your state. that the 'XX. of sort business producing, on been that's a payment doubling selling the if get that.Is of is in And just mechanics are the for I this of wanted of resource the check money year? through are that. of don't if then maybe doubles just for of you all standby don't you you

Just of be some here help around great. the would mechanics kind

Francisco Leon

question. Great

California big that energy as of you penetration So and has of know, renewable XX/X. doesn't the state work a

state. So from sure you require the in baseload different sources make to the lights on are

that resource it independent if Bys, Jay adequacy they what he it ago, to me regulators few to power the be means. this around California over a years through and on utilities adequacy producers thoughts pay more program into So turn has standby.Let entered

Jay Bys

in state to state particular for the capacity is is have in back to capacity. CAISO Just to be really actually clear, in Anybody load. the load required serving that not paying

that's capacity whether necessary the have back utility to an load, or a to they secure So which up aggregator, they're the serving.

So want do make resolute certain backing maybe But to very want they and up to more they had their -- they back in the CAISO load. by are, extent be this has to using their partly fact, there become much available.Historically, this people capacity how treatment would and that CRC parties marketplace. up lax supply paying been which

is that And have So you're seeing the readily a times the capacity price fact marketplace. that's reflective at available this all we of an value attractive the to asset true of today. market that's certainly

Francisco Leon

more, And just clarify. to Leo, one just to add

is we So X/X XXX our own power and into that in to We oilfield X/X megawatts CAISO Hills. for utilities. at use about consumption available and to of have sell the Elk

to and keep this So long guarantee program. to be power commodity up want to to of in showcase way otherwise. a the supply that adequacy you is way this struggling state long resource that to it's that's kind another And

Leo Mariani

bit Maybe phrase such variables Okay. say try power much business? are pretty million next it If extra in the this same are little XXXX year the does rate other can at just the you in all getting plant a to XXXX the runs let's and costs, an as I $XX input cetera, et as same differently. in pricing,

Francisco Leon

That's just contracted already typically, the Correct. that These XXXX. the in what quarter. That's capacity -- what team exactly that third are got the for on. comes we has executed payment and now

incremental an it's Correct. cash. of $XX So million

Leo Mariani

the next sense, Or just on half I million an the just of second that $XX expecting seeing are ]? of incremental turns year, kind of calendar that's wanted then X the [ you you're numbers? in And to $XX already Great. Okay. think million which get you do 'XX savings, cost a when some

Francisco Leon

a it modeling Leo. I apply in perspective, XXXX, From would

We costs, reductions this that severance some you modal take there's -- but you a as quarter, offsets, of. are right? you that seeing there's savings go cost have number things through, to to already There's big of care have

full the So see you plus will million of $XX for XXXX. impact the

Leo Mariani

the there kind then helpful. And lastly, guys, in That's of any pipeline on side there COX on update is Okay. state? regulation the

Francisco Leon

Yes.

of beginning in Senate cleanup which the the conversation for Bill around looking California. we're So language is around pipelines XXX,

for regulation. have to next That'll new of beginning the year budget no ultimately legislature opportunity the for the We framework We're are the there's set to -- COX increase language. state gets by update. the when next the anticipating pass

view our that excited wait greenfield terms why projects, new energy So year we'll that's project about our Elk next is information.But of at we're excited about are that for the Hills. cannot project transition early and that storage captured to the look in

as passed. all We get we the wait pipeline regulation of to things have the make ability to reality like COX a this for

emissions top of of growing being us get there's in from from flows an really the of rest really market pipeline, able gives the on advantage the the this terms of terms support over in So the the this of feel to legislators. we good from administration, cash the co-location reservoirs business.But

hoping progress again, in next some So front. made we of get when year is beginning that

Operator

Nate comes with today question next our And Pendleton from Stifel.

Nathaniel Pendleton

some provide how the you're pore insight we for the easements, space? competition type can think into And seeing for and the spending should trending into business land carbon of management about future? the on that Regarding you spending that in California planned

Francisco Leon

Nate, yes.

the land to areas we we minerals, business. a happen we we the place, In to the all build state, $XX in of Hills, to of do accounted is for to we've have elements strategy of easements right of move other landholdings. you're acquire size quarter it.So the anticipated space of expand the emissions. year have have some But aspects CCS parts business the multiple make the seeing the pore million surface, all have to our state that So in around ] in [ as fourth to different the the sure to that we one boom and this Elk for of

make business as get ready to we can were in reality we state, other develop to over get that land buying permits, we time. As ready the of we submit parts the

details as a So lot more that's doing But what of that intensity CTV see, to is.It's III. deck, what you predict CTV our you II difficult what you if been the go specific to at spend see and that forward. can slide we've can through going

where building we we're don't permits. So sites, new we're submitting --

projects building competitive.So for see is competition reservoirs category of a immediately looking the can queue. position we that competition strongest a they're the in rights. necessarily for easement but don't know the that we IV, perfect this the in submitting We seen is, we're say, land would market permits, there. have The out where we out is We V, there I there wave are have to that those VI and CTV next long where

looking that big CCS build own Some are to developers platform. their

-- is specific demand there land, space. for that's there pore is out being without who's demand to So there, as for

are but do about You register, don't feel we can building the are the we really for business to see projects or grow scale out demand. for big what we we this hear good so the we're our necessarily beyond too But it and multiple they that just laid market. public companies not because and building positioning

Nathaniel Pendleton

to for use And potential number CTV CCS. of you the Got it. in the that have plan a equity for projects ownership

high can including RNG for an various at a the So investment making projects, decision your speak the level, facility? at to you NLC framework

Francisco Leon

Yes, absolutely.

think an So together. gives a coming our those great to option new to markets and markets participate. into I us how access are made commercially, decision That team retain

to agreements understanding at Energy projects, as we their the Clean forward the and new franchise. our bring these Elk CCS success Hills, of enable the critical we in is their offtake As develop Park of technology value proposition and

the projects with to So going alongside projects to Brookfield. There's projects.We be invest there's these going the that are going that there have certainly, fit. -- of some option and to appetite are some better be more mature are be to in an

of points, scalability We positioning go together. the we have. the pricing the we that in understand markets, the So

it's to have think return if then feel in. longer we strong take see a may to not.So little there's a if us we option. the to then So bit something And going you'll they're good we it's invest opportunity, develop,

year track energy we're scale I I state, we're producer a attractive to approaching here to advantages market, being project that as first in clean going a develop again, Cypress. very all to decision in about Lone the a next low-cost think at the park.So first it's offering feel early face the the potentially that between fast talked given FID hydrogen decision. we

First, Class the we'll on permit decision to project. make get the we VI a then and have

at very how to different. and of requirements capital So them the and to California. different behind are through play because I having going the is It's we're so market are looking projects funding ability in do every the different, it. think the be like difficult to But project their prescriptive that's

Operator

from Scott And Citi. our at next Gruber comes question

Scott Gruber

well? just per as qualification the include Elk EBITDA on color LCFS? at project consider And the does to Hills on LCFS just ton, tap there, market that process does $XX Or staying the million some the range it million economic capture $XX plant, gas to and XXQ the outlook Just also credits? of

Francisco Leon

for Scott, $XX as the value yes, range in is storage-only what see $XX the pore to being we the so of million California projects. million space for

So pass-through the are There or with JV. space that's pay happening be it's that negotiations be Those may is emissions for between what cash. are that's There the rate our pore this of credits. to may whether a and and signaling. emissions, third-party the emitters

you So that ultimately this so is pathway feeds combination look field before providing electrons a in ton. Then LCFS over to get for that to molecules $XXX oil LCFS. the mix. an power the to for for apply it goes that and is, think this and for case power XXQ, number, going because X.I We plant you're qualifies a and tax a per it is the this of feel project bringing carbon it's into to gross lower the by could we're way about you project up be which after-tax way, the think

So form project.We're California throughout starting carbon any emissions to group has also we're industrial that paying taxes. pay the for tax of carbon Any state. those

and before, an emissions offset this the being greenhouse CRC. about and reducing So economics as ways, the ton unlevered we Big The gas at the as economics between this we And give propane now. discussed, return range, right? incremental to we look for JV $XX XX% I $XX right as can of what X -- that's economics but the yield.So cost to by per we for less disclose there's see talked have you an XX%. an to are, to

definitely It's project. good credit, but we per twofold; but also that a of top will the avoidance consistent see anticipated. in project there's participation be in propane. be Could added tax.So all is more in the beyond JV, It of increases this on a CRC good basis. around capital ton carbon that and XXQ. economics, also So brings which returns benefits a thing that, our light on But

this So the system is capital for end. on lower

very strong returns board. see the we across So

Scott Gruber

that clean Beach us cost the all step better the for and like then at of XX sense P&A get P&A, property, rezone wells next the that? have your property, activity to it costs appreciate the then Huntington sales. It And color. And to up parcel year. ready the with you associated sense Can costs asset on all Do I to on looks the for going with the up turning wells is XX-acre a associated you just ultimately, to a sale? that? what's give

Francisco Leon

for the Thanks question. Yes.

really property. X acre good So we're making the progress on

it's So Huntington it focused as there. We've on another we more X is abandonment which is -- to abandon away, to acres. That's blocks large X going We're abandoned to -- Apache. we're XX field about a acre.We to as are completed be monetize. take referred that that's there. producing Beach, really in which Fort the reminder, good going the we and wells have But we field progress of making time

once to site for in offers the completing looking surface be call So sold regulators dollar by we of the We're to that's the ] we to what city done. cost and for question like quarter.So ag have here to answer to is We're fourth more that in when about working abandonment. the get would the established ready wanted per that's a and all process But specifically, the applied your value making with to be to do, progress. with [ we're we talk market, focus well line I as and we of to process we're a property feel some the as good kind to the all-in can abandonment read So bigger So XX-acre that right? an of time give on X the property. the this to ultimately looks acre, through, right to well, in give part X alongside to now answer the like acre right? sale world, is want

So more to come.

Operator

Parks from Tuohy Research. today question Brothers Noel with next our comes Investment And

Noel Parks

I be vendor discussion project widely really In I'm was characterize your things. not you a with about but equipment pre-combustion system, capture if the or talked little what available? storage that? in of of you technology systems, couple sort it. bit a who curious about a -- or as proprietary can Just the familiar of capture those the for Is about something that using you'd that's

Francisco Leon

It's technology. available. an amine yes, It's,

works. we it turn CRC the over to work. doing more me but doing be Omar. will the provide Go ahead, to Let will be details, Omar

Omar Hayat

on It's point we but where execute cryogenic repurposing, that with the our gas not bit place adding can a little this are was put color a ago, in to plant we get equipment Just new to years to an several technology. technology. more the It's project. plant it amine

answer to proof in a your question, So is this place.

Francisco Leon

viability some take of to be nationally technology lot the to the prove of it's we parts and within emission within our to which know know cost including -- a there's end it have created what to places things XXXX. variables of to in we And proven in CCS. moving our the the because fast injecting us a of lot concerns COX.But what the we excited other is in So ultimately is And place, a the into gets one and control, capital us interstate lot this gets day, track really this of what at going have Elk opportunity terms to at injecting We field Hills a pipelines be. a from work. of away by all here capture, about that's of going

So I'm it. about really excited

Noel Parks

talk also program for something third-party to certification track you I which was RSG using regime about year. on or for just next curious you hear being interesting And that? Great. are

Francisco Leon

big I don't but be the know companies, it, to talk USA X if companies there's them. one it about confidentiality bound some national -- would be [indiscernible] would of one we're on of

Noel Parks

that exploration opportunity you're ag I much in like different different sort the once. the at treatment would industrial sources whether you Okay. is in waste can projects, putting are general opportunities, process of be you've Great. capture in of about on But tell all question. disclosed a parts of state. or lot is sort carbon And water together And know don't from see wonder, moving the just sort already along as gas you just the that how of great. clear, type anything described specifically I that there going ones a It's it's your plant, in of you me of there far of the

Francisco Leon

Yes, absolutely.

the additional lack then wants here. the advance ag clean there's trying that that we We'll clean waste, it you over But part issues we have that's up for turn fires to the a who of doing money of the strategy forest in happen. I'll with part he announced the the the to and forest of management. for California forest spend looking synergies And state, have have lot what we turn we're into waste. between comments any I about overall is are maybe of energy.So it to that like of today partnering So objective, Chris lot what like said, that can here. of are management Gould we talk can And companies part a NLC we're and to has

Chris Gould

Yes.

build They're the to the of ag Valley. waste at the close in see utilizing in these very up renewable why for of Central these they our to are that, that's you of of waste and look production you terms proximity on several when Just including reservoirs, are feedstocks projects fuels, NLC.

product the reservoirs west, are of space the in So out streams. where location. first trimmings, help strategically doing through solve true as with forest in important the to It's that state challenge makes Francisco V. Northern in That advantage as is forest are are reservoirs advantaged same a for feel are. proximity that addition it huge and in in region located a where the waste and it as these to mentioned, feedstock, towards that products created waste and the where that which core that reservoirs we we near the the sense and a very are we can a again, that strategically is for demand we location, to Area relative by the California Bay using mover these get that doing And very to CTV II we're such feedstock. storage location, that.So and our the We're to have located.The centers CTV greenfields proximity

Operator

And over today. the back time to the for team ladies turn conference closing any all to management I'd and questions gentlemen, remarks. like for we have that's the

Francisco Leon

Thank joining today. us for you

in everybody conferences in look also several forward We will seeing We to and early presenting XXXX. again. Thanks November soon. December and at be investor

Operator

today's all attending presentation. Thank concludes Ladies today's call. thank this gentlemen, for and conference you. you We

your You may have day. now and disconnect a wonderful lines

California Resources (CRC) 2 Nov 232023 Q3 Earnings call transcript