CRC - Earnings call transcript Q1 2024 | California Resources Corporation

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Operator

Good day, and welcome to the California Resources Corporation First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.I would like now to turn the conference over to Joanna Park, Vice President of Investor Relations and Treasurer. Please go ahead.

Joanna Park

Welcome to California Resources Corporation's First Quarter 2024 Conference Call. Prepared remarks today will come from our President and CEO, Francisco Leon; and our CFO, Nelly Molina.

we available remarks, questions. take prepared our will to be your Following limit primary statements include expectations. one questions based one current Please to today and your follow-up.Our remarks on forward-looking our due filings. factors materially our differ may and in results described Actual in earnings release SEC to obligation with these statements no Aera. new result as discuss also update events.We future or will to our undertake a of We information pending merger read on contains you to our May important XXXX, encourage proxy issued definitive We statement it X, as information. merger other will be and our relevant and the on this website. website of Copies documents available SEC's

discussed solicitation information as their comparable directly individuals Additional in night, non-GAAP the participating measures today about financial be GAAP measures provided will directors in our our and to our officers the also website. proxy proxy statement.Last reconciling we such most and merger on provided our information interests financial

a We quarterly Francisco. also new over presentation.I'll now release our to earnings the call issued and turn

Francisco Leon

thanks Welcome, for Thank us. everyone, you, and Joanna. joining

cash our our statement and the toward to I'll durability from strong Californians.For energy to our passed carbon the quarter low first key hit deliver to in of filing We CRC's and assets our SEC incremental decarbonization our We three, execution builds have the our announcement energy goals. of returns; running the remain long-term on topics: strengthens shareholder the solutions management closing and During California quality the advantage made shareholders of close. be merger continued few conventional advantage and Aera to ground transaction in We period begin. flow carbon scale, position and Aera team; and provide midyear update HSR on definitive of free transaction strategy our with solidify this position. This XXXX, proxy our good key and our remain pending our operational milestones a and and XXXX it such discussion, strength merger. tracking our waiting with the will a of opportunities the to sustainable and as and execute expands needs.So significantly progress the operational the are highlighting today's highly business XXXX ability let's differentiated our we focused and strategy intensity how two, an excellence on one, unlock and confident accretive

the while operating X-rig program, quarter, entry our exit, the base. During demonstrating strength production remained gross to flat asset of a

high lend and associated Our at which the stable steamfloods, significant new low means on in portfolio waterfloods steep initial cost Conventional efficient production, reservoirs fraction a declines. also conventional with to profiles bring by with consists of reservoirs well. contrast an and of a production workover with production followed unconventional provides potential, reservoirs decline to of to themselves

artificial offset maintenance performed addition and operations workovers, well the In our team decline optimizations to helped even production further. that lift

As $XX quarter and in the workover in such, base and of large production predictability was CRC able capital financial first million cash achieve in to result.Our to invest provides stability. flow PDP this also just drilling

entry the health court the to should Slide payout address prepare water and assessments revised year. revised on the zoning the We Similar decline free currently sometime a from multi-rig in program Kern support capital via our be drilling EIR our the expect and $XX $XXX X%. to million County EBITDAX quarter exit revised Total pathways. investments County's XXXX $XXX We point adopt total X-rig and update nearly an million our expected for shareholders this XX by through $XXX to range details as buybacks permitting foundation expect the Board following strong continues EIR, in approximately this of million, deck carbon X% an adjusted stay navigate program key XXXX, in to year.As the currently needed of production of dividend our Our closing our we balance between and to of year, to the X%. X and expected to our remaining County alternative carbon Kern ordinance diligently we the million intensity net second And lower The million $XXX items: well annualized half these flow. energy program to returns, of future. a a forward, progressing million $XX agricultural on and solutions could results remain to program. and increases of At cash running efforts, further distributed Aera court for the team share dividends sufficient from of activity we that evaluate and process the supply the we year's energy set a to have look analysis. improvement paths April. XXXX.Separate for and initiative repurchase EIR to $XX local cash business yield lower cash generated which the ordered throughout toward for impacts, merger.As much in this County to first to that on in the These delivered year-end of today, focused financial delays. on not lifted have implies strong are to intends providing these March, seen mitigation work the is maintain of estimate for XXXX trial around the as the in deliver remainder certify drilling million

through XXXX. First, our X-rig us approvals allow current a to support program

basis requirements CEQA new field-level which drill review, be a conditional Second, the CEQA the County to for conducting a issued. permit form would meet a use and by approving permit can

Kern footprint County allows outside for Third, of our in development. broad multi-basin and

to of of XXXX.Moving We are remain an closing on potential to in the focused targeting return a second the half Aera, activity level we increased merger.

path climate supply in $XXX X before zones of that are transformational together infrastructure shareholders. ability to to with our similar our create the the date, ambitious declines have synergies assets synergies $XX producing to adding burden annual work transaction months G&A, COX This optimizations. million synergies to to energy to remain pore and identify conventional this deliver create ability also with around Golden To expands low growing our confident a these million deliver us and transaction businesses help CRC's, from expect run teams long-term XX% to Aera goals.We management platform, gives for within in asset Aera's the meaningful production premium scale rate its and durability combined worked strengthen corporate our royalty capture meaningful capital. significant California's closing. space further We carbon value great and and CRC The State multi-stack of co-located to meet meet and chain leading XX% opportunities needs.

We transaction mid-XXXX, we Grade recently we'll MiQ's sustainability highlights received through are Counties. and methane certification CRC's This and dedication in high business, reduction operating to in a detailed methane targeting close the more post guidance performance and our Angeles our of rating Orange standard Los provide monitoring A close.Regarding in our from emissions operations. standards, sustainability to the assets continuous

XXXX. XX XXXX. further from to California require to goals XXXX our I and XXXX Kern has on new from CTV methane initial goal the this we Carbon County comments exceed the our environmental CRC's for in years our schedule. and County reduce a the by XXXX a Planning methane XXXX, continuation goals baseline, surpassed methane one ahead execution baseline announced goal also the set emissions XX% by the period, TerraVault, lower then reduction We based set process would an of We set by permit received March in reminder, this the Commission XX% to during recommended XX further XXXX year. goal by comment to As that emissions state.Turning of hearing that XX, the August public review,

our These a workshops expect EPA's need on more comments for reminder, to gold a worked the desired of in standard quarter, California's first continue permitting public County unsurprisingly, and for U.S.The last with period comments. cover EPA detail. our the XX outcome call are workshops, quarter EPA-Kern the this voluntary were manner kind quarter the me consider County opportunity highest approach, to received this us begin And public result process, time COX undoubtedly of XXXX.And of CTV facilitated we the XXXX XXXX, Nelly? half the the communicated over is standards, and same in natural in with FID supports hand window sets to of X public a extension not, maximize let with second it along in hand were As EPA Kern in I permits from a in final those permit as on of enabling permitting. that Kern the complies California have more end by the the previously days, our and turn performance the the advancing which in Nelly to environmental in the joint of held CTV XX guidance for the which the sequestration the public to voluntarily comment. engagement the as that to County CCS now, to meet second target first and

Manuela Molina

adjusted natural impacted XXXX, barrels power at allowed of net from scheduled team of to flows, oil as Production diluted The execution our equivalent In barrels impacts the scope decline.Moving cash divestiture The plant. day, of reflected activities initial of $X.XX operations back a reliability of downtime of gas turnaround cash to XX,XXX the share day expanded, was cash operating within power longer nominal the per sales well Hills April. but $XX and $XX also early strong share. all we We major guidance, at as was in at guidance our net beyond Thanks, operations resumed Results Round oil produced million. first maintenance XX,XXX plant volumes million field income, and Elk non-operated maintenance Mountain, to range. the Francisco. of per the increase our a quarter or first generated volumes our quarter for of the flow. per reflected amidst

quarter was with letter facility. a million, and generated connection $X.X our first borrowing by become of million commitment $X.X improve merger $XX revolver will from the available leverage $XXX [ in expenditures million with to will effective base cash the capacity capital flow million we million. cash increase $X.X $XXX to during credit ratio a liquidity, X.Xx.In secured million total and Those in which and the our invested and during under Aera of $XX ended merger, closing balance quarter million workover maintained to billion borrowing ] commitment increases increase the $XXX billion. billion with upon liquidity of our from the March million. $XXX of Our sheet revolver capital quarter.We our $XX with We We our free $XXX includes strong of of

We net preserving natural barrels XX,XXX to natural equivalent quarterly equivalent due relatively are XX% Elk and second pricing per financial on our oil. production barrels our to oil natural reflecting day, oil expected production and plant. modest is power. range and flexibility per the will Hills consumed we sequential supply and to XX,XXX of balance declines. less and between We sheet softer objectives.Turning solar gas a remain of of have environment around in growing gas anticipate sold deliver gross committed strategic day production to at solid to This power expected Net seasonal is result to to believe XX,XXX quarter, average flat

whereas actual and you our the gross conditions, sales me capability represent volumes volumes on our remind that net market reflect production can and production performance. reservoir fluctuate based Let

to and I'll his $XX to focus to will Francisco We on for the final continue operating capital expect quarter it in second $XX that, to in pass on million efficiencies.With remarks. deploy million

Francisco Leon

the of of I'm accomplishments conclusion, Thank In you, proud entire Nelly. the organization.

to that the a Over combining The testament company, that progress our lines ability for next a the increased our great generate hard-to-abate the drilling an our best unlocking to with months, Aera key towards flow about come.Thanks decarbonize to made stronger half have years well please injection first-ever to today. in by am and the am is positioned a California-focused clearing and offer. to both CRC to people focus there.I integration work sustainable sectors return the and of on work while of XX California XXXX. organization, great milestones the returns, the is cash our efforts the optimistic and targeted their is build team, will excited activity Aera teams team Aera second permit.CRC for of E&P business CTV over execution team merger, by to competitive time the is I also XX closely closing questions. level synergies. deliver the California's open Operator, your years to COX for encouraged

Operator

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

Scott Hanold

was I what I you're color classics little bit more the hearing we give could a with wondering on, Yes. if permit. guess,

is timeframe. You August obviously for EIR an set indicated Kern that County's

So, and that And as is EIR your you just final issue it Kern give in August? understand maintain at your permits understanding and that draft respective the of their -- will you generally, coming confidence is time the to hearings injection? the discussion do first points FID good what those timeline, County your pretty as EPA out well same

Francisco Leon

EPA yes, exactly County, County, as if talked is is up. be the permit the which and which confidence if conditional for the summer. for the -- is we permit, subsurface is going a the we We absolutely timeline about -- know for more there. Scott, above-the-ground they're we really lack know permit, look of months and EPA now you Kern an behind of The August the ultimately and of about at to targeted -- don't with think track to use, EPA. which a couple be And today, synced on we that's

final on our finish the get line then on that project. FID So away to really is getting permit first there to confidence right and to the

changed. that So, hasn't

about If year. we of last you talked in remember, second earnings the the permit call, of receipt the half

we we're U.S, a standard kind it's permitting the time there's creating that.When in of So take because that gold we much for lot at still look important very targeting stake. CCS the of

pore of billion X have We tons metric space.

We million injection. of XX tons have

everything comes. else will permit set that for first the stage that So,

unfold this on I hard to passes. more it's grow timelines that is meet would opportunities. say the to where continues time say in I -- to the the And the would engagement process, announce also given opportunities communities. we the on quarter-over-quarter publicly, excitement permitting have confidence So emitter the emitter there on as with

is space becoming more poor that So, valuable.

check getting to is FID boxes, just level team of needs is a permit high. our and but So matter excited It's a the first get confidence we're that line the to year. this of finish to to this on it, working lot

Scott Hanold

Yes. unfolding. that that, emitter opportunities there And opportunities? referring to of more are just to some Is said brownfield you more clarify

Francisco Leon

have the for really okay, reservation of interesting. take right? permit, I'd announcement So special, this the [ the to and emitters, is really greenfield it's that discounts I ahead more as a having. that We premature market emitter -- focus scarcity and the really, like a permit, where injection of anybody say terms brand-new to would in start permit different you It's in all closer right coming I finish on first conversations above, model, you're you space. years ]. we're the business The of when basis else then and get that. to us that think, more types, line, pore deals of without want announce all are saying, is to and first a more to getting brownfields to permit, greenfields, now getting of industries to again, a to get

Scott Hanold

talking when could some fruit you legacy the due before, well. CRC's about as kind But Aera -- near-term demand guess, a of imminent, some us synergistic see and Okay. the on fruit of talked opportunities the some low-hanging we between summer. Can combined us But question I sense softness is remind I company? give could Aera are of fairly some kind in the what closing like where see of were pickup next to obviously, My can in specifically, you and natural And gas of the we there to we are on months. mentioned solar what think benefit low-hanging benefits? the had you I Nelly couple the with maybe in think near-term assets follow-up that

Francisco Leon

low-hanging a lot there's Yes, of fruit.

lot each in $XXX water of that entity. to If of These you independently it's talked billion flows. coming of at or combined there's other. we number. before, whether from power, XX added already would synergies, gas place, together A capacity, a treatment as of companies are look great that run have been value be lot facilities annual are X upside years rate, million run the that And that's $X to about

opportunity should how Now we have Kern side an the of County look. western to reimagine

there. So to the a it more in detailed I'll a there's lot to But Omar what couple of Excited of share turn specifics provide Hayat to a months. we're maybe few examples seeing.

Omar Hayat

in Francisco. earlier Scott, X going mentioned G&A. Yes. supply around like really chain focused comments, Francisco his Thanks, synergies the are to areas: be infrastructure, and

even more. are our is move but to So lowering to some legacy here to on operations. these we to -- ours. get an oil cost what looking gas, for plan give ability at trying connectivity build that, we examples connectivity in There's are an infrastructure, fields, we you more we what And operations we invest doing improvement of fields. the is see margin close that between or across to leverage of already the through specific Aera's want proximity power, products water to and what either And to and the our is

Aera net Hills So, operations. potential close fields could and and steamflood Similarly, lower cost. them example, Elk a of plant, there from there move a power be Aera their that are the consumer to of gas to because away there PG&E in provide are own power is our our for proximity where power

net are a producer. We

is County to we a for treatment even operate well. improve there So lot possibility agricultural water. for here we our Kern demand in at various that with then blends an county on, And in some opportunities water use, see and explore to as moving beneficial there margins of to a oil given look

similarly, infrastructure.And our happen essentially what's will scale is that So in supply going that's size. on to double chain,

at the can for at model in-sourcing looking to opportunities look some differently. of that services. So, lends operating then some the itself We

bring the combined at as from look footprint, an and and also the well. opportunities X company. obvious G&A there one. And practices the overlapping see outsourcing to best some Obviously, with will is companies we material learn We

Francisco Leon

Yes.

best So G&A teams perspective. the plan of a the from is to migrate combined to

working commitment so, get to $XX And months. million synergies of the going first it. we're to X within And the is, we're

about we're low-hanging There a is So of and is excited it. there opportunity, fruit. a lot

Operator

Our next question of comes America. from from Kalei Akamine Bank

Kaleinoheaokealaula Akamine

use My first question is cash. of on the

this that there, is result. I performance balance The support from think, makes So the given sense the had think buyback context the EIR lag. and I the sheet, quarter some

competing seeing feel in. So are now we now for priorities with I leverage. cash like with lean you Aera that there respect like But to closing,

guess, your the cash wondering as Aera. motivations post of program I about rough with the So contours backdrop, those

Francisco Leon

Yes.

ratio I finish the Aera think, we definitely, need refinance look to opportunistically the sheet. getting of to Kalei, to is the leverage from to pretty to cash amount business we going quickly. the to tremendous. on this absolutely But a get we think improve And than We're line, X.Xx is get our debt. the commitment And balance debt. there less can fairly generation

subject dividend, at we're And after continue both so, see program. look the And final CCS the get and shares. we the you buy to fantastic and which lag tool, as oil to and Board our approval, the to have the permits performance, to opportunity, I looking going is gas closing. aggressively stock to increase repurchase on then, an share in

So I a to more overarchingly, say I come. probably would there's change. it's wouldn't say,

to ] of then levels that. [ back to anything a more good have related We'll We cash address continue focus the merger, down quickly, on distributing track and returning the we'll debt And get cash doing Aera to record shareholders. shareholders.

Kaleinoheaokealaula Akamine

will that's 'XX? do leverage be metric and we the about you that that you strong. have, the between sweep as you suspicion balance probably target that cash that split head currently trends have you quarterly debt very the buyback But think is How in towards still as reduction. that My think cash

Francisco Leon

the Yes. transaction I on is, date is the effective one guess, remember, clarification X/X/XX.

the already that's used go. Aera's there's system with to being delever cash balance we So in already as sheet

objective get we X.Xx after be track once So and the have care closing a to few prime take on before we will But do to leverage shareholders. cash or things closing. think get to closing the to to distribute I post

'XX did we permits we'll what when oil in 'XX. no what That's that's for do So have in and gas. into 'XX we and

Kaleinoheaokealaula Akamine

guidance? wondering to appreciate coming pro [ had ] and your I'll Got you yours. it. Closing you leave ARO a for CapEx, of that guidance, mirror question a that. I and basically is forma My it And month Aera, goes it thoughts program closed is about any there. OpEx have or within so, But up on updated included. second suggested 'XX

Francisco Leon

haven't company. we the guidance, combined 'XX for Yes. communicated

delivered capital, of You our view quarter, of midpoint have so million in first a the have XX,XXX to production, CRC BOEs basically, for day, $XXX continuation CRC. per what for million $XXX the we and

So XXXX guidance. we'll update

We any Aera's the year. in expecting second run to fields on the not rigs half of are

meantime, and and track. year. objective the get program program low but be to the 'XX. I That would see back company. back on full have numbers million of see, every keep for permits we say, to it's So until the X-rig do on we the low slides, get that basis. investment workovers million a on once get a as back $XXX we you and basis capital would combined able in to to plus a capital, can drilling, once the invest combined to And What increased about program maintenance see we can light of production That but we're capital some completions production on the be flat, a facilities, relative for $XXX to ability we permits, varies would

Kaleinoheaokealaula Akamine

a In an Aera the expectations drilling the are on rate? asset for for oil 'XX, of absence decline your what program

Francisco Leon

Yes.

workovers sidetracks last and basically CRC's And OpEx. year. are increased and I from Aera XXXX workovers with both from low of, what year. get what capital decline. And average So this you that similar, the we see really X% as rock, about [ said, on showed can mid-single XX.X%, That's assets -- doing on and and ] did And that's decline the get it, we corporate very decline effectively rate is Aera's of slides, good you -- can into call for digits the you'll Aera companies. these

would this last combined between a something running year. X X% with X% So X I year expect for on companies. basis based the to rig similar on

Operator

Stifel. Our from Nate comes of Pendleton question next

Nathaniel Pendleton

Can My quite and that given first your on power demand California position market? CRC, recently. center question, for has you in AI perspective the natural see data dominant provide topical you been your opportunity gas the

Francisco Leon

definitely, watching it Nate, unfold.

centers -- land. what for If have power, need at power. room. need They at data the need all carbon-free XX/X they looking water. you Elk are We it They they're looking look but running also They is Hills. for provide

We have at well. it as Belridge

where If are be the you to power have look to California CCS. develop plant, reliable at gas-fired to down only don't specifically, we're plants X you ability nuclear, an with power sources of going carbon-free natural

So data forward. solution keep in a fascinating we have is think And advance Elk project, opportunity to California. look we becomes power the to perfect the which centers Hills our and CalCapture,

So, happening. what of on the I'll it perspective early Gould maybe we're conversations to center data turn seeing give are to Chris And a side.

Chris Gould

uniquely of Silicon for Francisco. data Thanks, that in high is and a centers got our And concentration and Nate, the reservoirs. with footprint it's to a LA, leader a CTV thanks Yes, in technology, our unpack bit, question. that Valley just Yes. overlaps California national for obviously, Sacramento.

so you Valley. know I XXX about from from Sacramento II LA, are through XX or CTV is XX all or Silicon So and miles CTV to miles V

Francisco co-locators, which uniquely growth baseload sourcing hyperscale referenced that and/or storage and different that by facilities, are do around we're that a what with large take which, data megawatt of to of centers, opportunity positioned you volumes energy. as co-locating and injection carbon-free are smaller range So know, to advantage either

that. about excited very So,

the could a at ultimately, we we're underway. the solution deliver early that with. Francisco and As is discussions range the as discussions scale gigawatt which advancing mentioned, something like opposed to range in megawatt And

Nathaniel Pendleton

it. conditional use could potential provide great can Got such support? those those limitations XX, for as for such programs potential permits a that the I Slide detail follow-up, opportunity. my upper around use the some the of referencing appreciate permits you detail. County And size to Kern on It's

Francisco Leon

good So, potential.

-- use So having, Front. and CUPs permits, as only CRC Hills, Aera several about QX, well. the queue in in Elk we not Kern conditional talked Buena has Vista the

still that opportunity we're determined back format. through. of moving what have be to we of in number That's injectors, the take that's the We in we'll that some to places packaging lot go CUPs field-specific off where working to good quickly. And in effectively of of of is state of how So the best the will ultimately to kind be works time. terms of year, next that's said, but the going The other a how get permit wells, don't rest programs. still agency. as It half ground. programs, And of ability it's see more the the a process CalGEM second using confidence lead to

well. we though a today, good Even it's see permit ready working as the this it's CUPs. So not very to solution using

Operator

next Betty Jiang comes of Our question Barclays. from

Wei Jiang

County to the -- conditional when just about, permit, wanted permitting use use approach, Francesco, sorry, more. I on it and guess, the the you conditional comes permits just a of is multi-basin it that what X completely Kern that the resolution, involved -- on bit the get Kern or you a follow-up Kern more litigation legislatures detail the guys down question I some compensate into bit -- County in the you talked what you're other beyond -- just will the -- hurdles able that the in the permits need whether offset a providing these that be that's currently and can could get seeing organization in the County? options to

Francisco Leon

Long Sacramento. attention in procedure. Kern the and San CalGEM lead which the of primarily be agency their agency, effectively, all process We're sure and through of making County. The we're operating requirements and with CalGEM in in Joaquin We're so the that's is we'll what's Kern given lead from a new perspective. regulation process been standard a is County County, challenged the beyond courts. in been And the they to in is Basin, Beach. outside Kern working Betty, But has terms had basins. through the working Ventura, in as that yes, multiple Aera, now, checking we're They're

There Kern of County, going we're at a compensated this to more to gives And year to more and year. to enough are that sidetracks but know is and show but it is Not hard the to run under come We're program outside confidence that be stage. that's progress and there's discussions progress so, Kern X-rig able County, some upside next there, process. be working as actually CalGEM, through, this permits us what starting than know in the say this up. just it's that they've CalGEM ongoing. loss could receiving and We

Wei Jiang

receive the Got we the third And how plant, -- just in to injection through plant? And the carbon follow-up of install walk the Brookfield will be have for be about comes hydrogen should on cryo looking the business. first the you for next should what we by when expect catalyst payment believe next for I I Brookfield? it it. to a think plant to payment and the for FID management which followed terms when Can

Francisco Leon

X-plus have a progress. kind And payment Yes, XXR, to Betty, years now Brookfield, looked ago things first system we to in milestones. we that's set dropped staggered the to called we up joint how as so decided -- reservoirs a dropped in and as one tied unknowns to of a there venture, we were as first were lot with of a going we

received we December. First the permit, in which payment was for draft

finalized the The comment second public in was Brookfield's satisfaction. to permit came period and as completed

is payment the third reaching effectively final FID. and permit The around

either It conversation that earlier, can getting to that's XXX,XXX FID. back gas So half within later plant, execute that's play tons if the in how and place year. out per in for already that's permit field beginning this that can It's But I a depends our expect you that is right year. plant, something are in processing which the things capture of And would we to next terms my COX we year quickly. looking year, of -- this of we go final second on of boundaries. the away, project CRC-owned just

conversations Brookfield a that EPA. of also of by the reservoir that has So be with the around the will declaration the FID payment. But triggers it last size condition the as of the project final

planned upsides numbers to are the for. seeing So we we had that

higher. the catch-up if provide why So third second first that the could is of to than payment the and that's be we a kind third and higher payment a payments, range reservoir

the in collect to that we to in once the JV. the we'll payment. of in on to news forward into we'll FID, Brookfield I a half But adding more to near more position final looking the get expect payments be Once get we permit. X all reservoirs second think update year term So and closer

Operator

comes The Leo next of Mariani question MKM. Roth from

Leo Mariani

production focus wanted I on the a little bit to here.

quarter? that's also all demand. And So did kind you plant. you some of production like could in of first guys it Elk but hoping some of the the you sounded like lower kind in how terms lower, here quantify, second so you're sounds of Hills certainly it back lose bit presumably, quarter mentioned first just in losing that maintenance a at guys quarter, gas and extended power I was came the that much in was production to little

anything there 'XX? PSC caused quantify lower presumably, help can prices of little you guidance and those bit. of with Is that you maybe then a production oil a impact. bring So And in why the a here to higher bit that guidance production the reasons also the guys little else are bit you some some lowered kind probably

Francisco Leon

quarter, turnaround first the gas. plant it's day, Leo, XXX about of was power barrels it per delay of the equivalent but yes, all

And this so, talked about, team is the -- the inspection. And an expanded an opportunity do functioning maintaining this to everything of sure doing every job the assets. turbines the impact to make we took review steam We have was there. and -- a was fantastic growing looking day. plant and is of at value as And in we that our -- does

running So, primarily that the the successfully. The XXX% impact plant -- at -- completed restarted, the that's are in those running first capacity. quarter. And got was is

a of finally the some contend storms, then, We mudslides effect. And with. had lot weather, PSC to also

we the So comes -- lower we're why got the range. end high for up range. back on the of and -- a But bit second turnaround April. kind it impacts.Now, little in end the at yes, More than first quarter running of are But more that's full of again, the the quarter little was a Elk in above struggled of oil. spillover around Hills. actually of Oil those bit gas the

issues price. you're a the -- we're is having second So at the back to higher for One second quarter. the Brent planning quarter first X for primary

we're a of the impact plant down. down in for as to prices again expect seeing being quarter it's lot production. in that allows a do power energy what you PSC is the that some correlated But PSC lower So inversely to capacity, to we're to generated the having take given And second seeing quarter. we're that solar second brings power --

the decided We a would basis. basis. basically, seasonal utilities, Aera. power go-forward for is plant the have to power our ramp aspect a grid the things California. -- than that gas advantages one we fixes merger a up of able there's having down we're on to do this send that we're It's Permian into specs rather I not seeing of temporary say So, unfold run is the the, some to in what again, of on but to in this for happens how environment, with plant. is And

then plus goes able the full plant. you're or plant gas from of into all As the megawatts capacity minus, put XXX the to

of you that bring in terms of you down less gas. that capacity, If then have consumption

you're effectively what's getting after sales and X to that The fields are basis. effectively the We're connected -- already that Aera's relief Belridge, a valve gives so, going as some that's move with on. so to a purchasing us fields on an pipeline, gas it of route point. closes, go-forward at gas a example. But offset And that they're the to to able that gas to merger not

So they're plant. with independent the issues

The turnaround. was one first a

provide maybe bit And to market. in little a more ask is one color I'll commentary just California. generation solar second Bys power The on Jay

Jay Bys

exporter course last become net over actually years. the of of has power California couple the Yes, a

that, going backdowns capture is with shoulder generation power Even to solar seeing we're State pricing fact, interesting north up It's to to in months. GHG-driven both and Washington on In this growing these wind out. there. play watch

down, we the and advantage have Fortunately, that our fence able off-spec rates, gas stream of streams power plant. do power to But burned. give to behind Francisco we've continue Even capacity points to us very we be otherwise full couple the goes got take as the revenue benefit would that to with a back we've not of out. the a attractive plant, the plant we're the got different when unit related value

off-ramp, see going situated. Aera our this broader to The California. So a addition But circumstance run plays to from well only how the if benefit. out off-spec interesting of pretty that's to the be will, you gas it's perspective, in we're through steamers,

Leo Mariani

the process And to I Appreciate permit thorough wanted drilling on the just Okay. follow gas up there. oil here. and answer then

of Obviously, like CalGEM for of there's hiatus County. you've a sounds maybe got Basin somewhat operations, outside kind of it Basin LA been Kern Sac So the operations.

mentioned You of agencies reviewing kind the there. procedures out

anybody they're year. permits context, some process some have they modified for permitting maybe issued have they're slightly those a perhaps going reviewing year really protocols much as of to Just way and And presumably, of updated not in this protocols? the to later kind drilling this

in we to that CalGEM expect you've things. how I about with of Just do these play kind out? assume been contact

more So be maybe wells. assets and drill Kern, little some of kind just have great just color a you to because, of obviously, bit outside it'd

Francisco Leon

think going permitting haven't being CalGEM extensive That's some throughout and new So, other I looking progress to there's right. in under in that's review fields, the their -- in made I procedures Like and exactly fairly how California. a There's seen seeing wells and format. it, is they our this about the approved new year through we we're sidetracks Leo. there's state. you improve fields got -- said, think of permitted

to and them that. full County. Can't to and is drilling speak still permitting with of when capacity to for very program they're CalGEM frequently outside to be ready. get think back full looking We I Kern through them going working as engage

get when So new back track do on hard anticipation ready. we see And already be to on CalGEM progress the -- will wells workovers. date progress and sidetracks we'll pinpoint the specific But soon. meaningful is that

put of progress it, a I steps their talking see agencies made, being in a the lot timeline we getting to, hopefully, about us the but can't and So to final process. are

Operator

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

Noel Parks

had just a I couple.

talk Anything interest focused to about sort wondered, with Are terms that be reserve pore earlier mostly mentioned parties is that to And space. you what and I in or terms? from they that, You discussed? the commitments talking that that brownfield on just emitters interesting. about of can greenfield pricing certain like volume being are there would are looking are

Francisco Leon

Yes.

So the work. at valuable Department a interesting but winning good few grants you of to and only emitters see going California and site from be COX have to COX if they dynamics play. that's We -- put a capture the storage Energy have to very to

pipelines. really COX for So around -- circle brownfield emitters with we're discussions looking the the

COX We or work pipelines We legislature are legislative the rulings the around to some on framework state. issue later how going the being session the in either still for progress the to are in waiting year. budget anticipate during made

So the and positive to could that's going is projects something funding or we that that not DOE emitters. talked the the say JV site these emitters -- And these those big them the some the the the greenfield per to well emitters, they collect slowing the $XX $XX no catalyst. version that have to a nutshell about brownfield from clean. a connectivity all how a a But need sources. markets a there, storage market to in unfolding. We've their energy pore then the we have. fees are optimize make emitters ton these to what's allocate of fence, is down very be trying risk to that's these going ammonia, capital without of behind of brownfield space. CCS are storage -- hydrogen projects projects of there's some Whether of clean lot where storage it's would as it's emitters.And for about putting I pipelines, these at really be and Ultimately,

discussed. being is offtake the So

permit; greenfield the projects going get get sold so, it's the And do as command. to what elements COX of premium less the they're product terms kind the certainty as to other how to more ground in get certainty and we to we on going there's to once of the how

on So It's classics lot interesting it's moving happening. A that a dynamic. of final ultimately And of very exciting lot unfolding. discussions really discussions. these will permit unlock

Noel Parks

in that it at of in Great. a long-term that And just the And XXs. sort a that that of so strip you of the to price. play if had be low-to-mid delta range. announced more crude, going include rally out the into if time projects, was the back I ask with looking sort stronger early about valuation, in mid-XXs year, we this stood kind the you to so then, any took couple upside aren't might wondered strip to essentially looking that to WTI, come envision acquisition. years could I in didn't wanted any last of it your at potential like Aera And where you it for, oil paying you translated to

Francisco Leon

and decision seen on merger are lot Yes. confidence Brent the given that conditions pricing. stronger have ways, stronger we the a the Aera the synergies around at there beginning with year supported of the in getting are we Definitely, that the have of

and ability good a their as but to private because a of historically the hedging volumes They have -- term. be an They the had gives have than swaps, company, further this at update but of quantify As reminder, to some to providing we do away near some will the it barrels we on get takes into some some view different is close. in in we'll provide entered pricing it pricing, did. Difficult which upside. once locking upside us a to Aera plan, more that open more stage

Operator

to like over any I to question-and-answer for concludes session. turn would Mr. remarks. conference This the Leon closing our back

Francisco Leon

today. us joining for Thanks

be you conversations. Really to look during more and engaging presenting forward the several at much. will Bye-bye. seeing We conferences Thank in so investor summer. you

Operator

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

may disconnect. now You

California Resources (CRC) 8 May 242024 Q1 Earnings call transcript