CRC - Earnings call transcript Q3 2024 | California Resources Corporation

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Operator

Good day, and welcome to the California Resources Corporation Third Quarter 2024 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

Good morning, and welcome to California Resources Corporation's Third Quarter Conference Call.

remarks, take our your prepared be team brief to available questions. our members leadership of will Following By now, I to review hope you have earnings and had release supplemental slides. our a chance

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

and SEC Today, be making described current may results Actual to we some factors on periodic will differ our in in release earnings expectations. filings. forward-looking statements our due based

reminder, get a questions one on As limit please to this primary, your as follow-up allows and today. more one us to review

will call I over the turn to now Francisco.

Francisco Leon

all strong Joanna. day, with on CRC Thanks, has been progress accounts, year everyone. for a very By excellent Good fronts. this several

financially following Aera stronger with and combination Energy. our are We bigger

integrated talented California's low decline CRC to successfully with portfolio conventional have intensity capital into Aera fields. of form a workforce and high-quality, producer largest We low

long-duration through offset flexible of for development Our allows assets in declines natural and statewide workovers our reservoirs. and portfolio inventory opportunities sidetracks allocation capital to

of already on We XX% in regards and returns as the strategy, assets ability acquire to to synergies synergies. are capture annual have than $XXX rapidly grow business have we ahead Aera, cash we flows. and our to implemented demonstrating In more an executed million schedule of enhance

consolidating of Our rapidly core industry. a a track growing in record cash flow is per competency share

industries while partners an solutions decarbonize new energy and provider, attracting innovative are hard-to-abate green California We the capital helping and state. to essential

and shareholders. very offer a existing we compelling prospective investment for proposition And

stages business multiple carbon value is conventional underpinned and our projects of is our momentum equity the gaining PDP with development. of Our by in various assets

excess us to CRC has natural meet combination with gas the accelerating power a electricity monetize generation of California. well has capacity production bright very in rapidly this In future. to demand our positioned power addition,

are I to Before questions, specific discuss. taking want things your X there

give third First, quarter our Nelly us will results. a of summary

provide key the business are a efficient, and CRC on solutions. projects provide our reliable is our an to and I Carbon sustainability update will energy leader, positioned we're near-term Second, assets Management and advancing. uniquely

Lastly, XXXX. on thoughts I will share some early

normal Although full guidance priorities. wanted will February, we out highlight top come to our course next in

Nelly? get of Let's quarter results. recap a our third started with

Manuela Molina

Thank you, Francisco.

expectations, Our lower operational compared performance driven remained improved our production efficiencies last exceeded due workover effectively strong and quarter. results to cost program, manages by production, resilient when to the declines. operating which Reservoir

adjusted million Third after of day. barrels quarter per XX% of day in equivalent oil at generated Oil XXX,XXX averaged oil hedges. cash per Brent and averaged flow. free $XXX XXX,XXX EBITDAX sold and million in We production $XXX barrels

costs prices just Results with to more that merger-related X% peer-leading returns. below benefited despite from cash than our and came and weaker and quarter rewarded commodity our rebuilt cash In we shareholder in million payments, approximately owners balance $XXX X guidance.

remains $X.XX $X.XXX programs. leverage level liquidity Our we while ] and repurchase reducing robust share in are billion [ billion committed to to continuing our target (sic) dividend at and our XXXX, debt

after on high-grading We projects. and million. quarterly $XX continue deployment lower-than-expected to is lower-than-expected This mainly results capital to our strong capital maintain delivered discipline decrease capital related of workover

dividends comprised of to approximately million $XX We and we have shareholders to with XXXX. in repurchases. meaningful was more $XXX a to This since million $XX returning share or returned of quarter, returned million the track cash $XX cash than shareholders record third quarter's In of shareholders half free flow. million the in

Francisco, quarterly I you. of back results, our happy questions financial Francisco remarks. the If will answer you on have be at to them to our end and

Francisco Leon

Nelly. Thanks,

Management Now our growing let's talk about business. Carbon

decarbonize common progress quickly new the We goal affordable We as reliable exciting share industrial rapidly from continue information, dual including our all and X some California. in solve interest Carbon energy. experience provided stakeholders major to of business challenge updates. TerraVault delivering and release, emissions make In we in our various California's a significant Carbon reducing Management while to we safely helping

our conditional CTV Elk County for unanimously First, use X Kern permits approved at Hills.

for For Shortly the our of CTV EPA XXR plant. after EPA X tracker, carbon Class our Elk permits final first at to to permit, storage receipt and gas VI capture month. reservoir ground expect to next we the FID receive we our EPA expect on processing project break Hills

annum MOU recently Next, which up we allow solutions brownfield metric for will California tons for sequestration. a X.X carbon power signed a per to company, million of develop COX to leading

CRC, vital XXXX. significance regulators sequestration to While the this high-emitting of importance decarbonize California's that economy. is is goal grow power by partnership have industry carbon uniquely to important MOU. highlighted aligned the acknowledge with is decarbonizing our critical this moment take this explain of to I'll to California's a and as

of MOU net Bill a deliver and in Our CCS combining Street aligned with which provider Senate is state's objectives. the state today it desperately gas in XXXX. own to a carbon needed pipeline today needs Energy, state's that to doing enable will clean be new captured, leading zero allow Hull to the more with and transported part power goals. California's climate is achieve lead necessary our with power fast from to will California CRC, safely carbon is new power, renewable California's decarbonization, the be ours power climate stored. At Natural their part installation and of regulations retail take sourced action regulators This on zero electricity do and we pipes. we're XXX states XXX% to but and sales to COX resources need by

in Our metric annum nearly CTV discussion. and scaling CCS consideration rapidly of per with today tons substantial projects under subsidiary X.X is million other agreements

given a connection for that is explore to California, these California. the rising in centers, infrastructure across receiving generation And gas existing to believe run for in data energy We SMRs creates to existing option the in tech nuclear, advantage reduce required expansive geothermal coupled the to and first-mover desire opportunities power with Data are with AI the the that emissions. unique contracts companies decarbonize and with CRC. power country lastly, continue expanding power attention. Having we with natural rapidly centers for sources CCS multiple best ability new centers

goal with making carbon-free. California's the positioning solutions are centers energy of We CTV provider data as

Together, we jobs California's our report and tech. the already meeting high-paying can investments bridge the state an power on creating decarbonization encouraging between We of helping hope soon and attract reliability with retain of in grid. goals new have ensure CRC's to taxed highly aggressive the and in carbon-free digital technical, role aim more energy to and

thoughts Let on with out some our me preliminary close XXXX. remarks

last in few significant our prices. the tremendous cash flow seen weeks, we to near-term positions. this provide through backdrop, have oil Over steps With have certainty taken we volatility hedge

an oil per $XX hedged underpin support XX% price at assumptions roughly These of production and is our average our floor XXXX, year full the For barrel. positions flow. merger of cash our

strategy XXXX and priorities confident that are are the we clear. We right our have

expect We our the to and improve we our cash near-term balance hedges, line. and strength maintain of both generate total strong our meaningful significant Through synergies bottom and discipline, cash of will reduce to continued investors. sheet capital area-related to delivery return debt

we to will brownfield we XXXX greenfield through which end our In declines and XXXX. agreements new of combination of by with business. proactively will with TerraVault, In low Power start our we natural inject add After hand. one-rig we demonstrate into a into permits In a plan manage the of to wells can planning, new XXXX, moving program, again will on closer We our the of X the with years sustain business, our emitters. in COX E&P we're business, XXXX. with Carbon entering scale leading and target once Carbon CTV Management workovers, strength to sidetracks

that place in approximately contracts adequacy payments XX% will resource have by to year-over-year We in increase million XXXX. these $XXX

generating flow cash additional pursue opportunities. aggressively will we Lastly,

We are position industries in enter provide to unrivaled expansion centers solutions great to state. our industry other new that for AI an data power and looking

now kind Californians. With look unlocking forward and our of for and we We company, our are shareholders questions. of we to benefit the that, the open the fellow a for energy value line of our business can different

Operator

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

Scott Hanold

I in think ways. MOU Energy with to X Hull want signed. I significant start Obviously, you the

situation. date. a agreement think it's obviously, your largest And it's I to brownfield

X California provide You did pipeline line that right things. time in thoughts the highlight, addressed? Can and think now where you being obviously, could on One, is you of regulation would you needed. provide be COX that

of assets relative front-end for likely that? you'd you would California to And two, storage in at at that looking take what just would be do first number piece? agreement context area of kind that around location versus any be the for to the And it

Francisco Leon

market needed need demand want Scott, and be where so significant market yes, going it. regarding COX pipelines, to that's definitely to a scale business emissions. a There's to reduce to take to the we

I appetite. market with there's MOU proves Hull that think our Street

And in going this is centers needed data to to attract be California. also

need or this potential transaction highlights this get think I to there. the So market transaction

opportunities this the pipe. to we scale to will able be be to step table next one many the will connectivity because certainly the of the be business on So bring

have potential rulemake we As ways we start state. to believe before, to pipelines. can they're One legislation drafting SBXXX regulate are to be around X government, their able going pipeline looking also about But bill to at is the pipelines talked throughout federal we the and think I a about California soon. the of

need the to the brownfields, to definitely the start, X this scale think greenfield But the And is with are emitters we we a So right? about new to evidence with critical business going of evidence take needed combination like the brownfields. support, fields be going the existing as greenfield, this of forward. portfolio of market a of market and just we

is We're So we Kern the that thing is to -- emitter been first very to permitting able building. EPA. which brownfield we've be portfolio selective development, permit to able ever of this be in now were our this as CUP advance nice awaiting get stage the the at to the we County next getting to continue process

Street details. building we work queue. of at inventory and to We're on through, to more this but brownfield emitters still an lot with that that point a specific There's today. we're So got excited being Hull that project building MOU come. not here things We're announce to

Scott Hanold

And they last a think do all don't context. the prior or uncertainty has as that the you put you prior is appreciate pretty that the the been month IRA the out obviously, changes, bill from in that too in was And about IRA those night, say, Were obviously, my really with do if that signed? we'll there the change so. last have about reliant the some really agreements I or political very bill on perspective, dynamic, financial came much? agreements Or change you think follow-up, there? landscape how

Francisco Leon

IRA Yes. bipartisan. We aspects at election that the headed the through as looking working we're the of into

existing your a So they're if have with or right them interest nationally. and and blue To done it's There's you red look the infrastructure irrespective at to of lot states. capability in the sequestration, compromise We carbon really emissions is states right? think if store use the solution, and CCS. both retrofit capture that being of this

So EOR. into Certainly, election red states the thinking COX we use it's bipartisan. went for

So we don't see that changing all. at

and projects, that. So is think viable, more we as the But very is our We right? we multiple these ways the IRA about thing component. good to very, there's right bring ultimately projects IRA one investment think forward. make So about technology feel California to

that We lower centers, then That's and you to sees cleaner, data also really be -- right? be is also customer here value clean market right? bringing to any come have carbon really also clean premium both the clean credit intensity starting a it take LCFS that and to develop in starting are CCS. table And voluntary centers, data where going we're having have electrons having could on seeing benefit the power what fuels to the the But It but program and -- or to to will start the baseload value locally. products, is doesn't hold.

entirety changing to and -- win, We CCS, Carbon specifically this to don't the nationally. the these an opportunity, market what's election. the take Management that But with business for ways projects the and see off the in needed multiple if all ultimately So think at see really we ways on California, forward, at the we kit of look be us, the is see overreliance multiple the other. we to bring whole to incentives, versus don't you one going make

Operator

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

Kaleinoheaokealaula Akamine

first, definition forming guess, really see option I around value good in the it's your to some portfolio.

on constructive some your the As clean meter. there's you to demand to positioned power, opportunity the those If for guys behind watts take baseload we we've pretty provide you and think that been it. well business Power are of know,

don't I think me And this that brings I permit. guess the comes receiving MOU. that surface the to coincidence it's after

milestone VI give the and You've that whether of for Class Can news that's Class penciled got and permit? of the up behind VI the expect sense in been December. even building us anticipation you after we in that more work a getting flow should

Francisco Leon

question. Yes. for the Kalei, Thanks,

for years. talking been Class So our yes, we've X VI about permit

get there ever, right? great achieved it's milestone this to we So first finally and where

to effort the We we're come value testament tracking ultimately by towards So an recap, we use, the to about but where the now for mean, into the being magnitude decarbonize. years able that that We ultimately as significant permit dismiss you But this a state decarbonize. we work, thinking to several It County a projects needs CRC see And milestone, the next not the clearly, and law can't Kern get business, see, understanding, positioning and is amount first, went month. been state in to of to the EPA company there wants we've really done. say, next important see I permit team just of as conditional to forward. should and fits. in a create on these impact bring chain that is value for at

of taxes, other emitters. infrastructure We to place paid pay extend a life find carbon greenhouse and real by lot that's of great the gas have in a tax already We a for need see and that today. emitters

can So capital to but that -- looked through to the you then at first this you we And deploy people that wait want as a if when landscape, let's kind, have go value weight with the see the saw across and Brookfield we a take opportunity of chain. deliver. CRC alongside

progress ahead we're anybody good of there that making state. the I really think we're is in else that point proof the

-- see will apply And MOU you I believe and to that can The with the today. our same centers. data

we're I question solution to more we're them. to to right than for the not. these real -- Obviously, in other think is provide cycle yes, or So combined to real right? CCS, and of the then see natural market right months. expect You I I first-of-a-kind okay, I would need, is But speak need. a expect that people a say, think coming more, can't solutions, for a come conversations gas would market like with do absolutely. you The to it's when I ready say drive And this other there, legitimate to

finite a get is have which pore will we The As resource, over space. full time. reservoirs

ultimately and the able to the So come time long-term clear partners I get from think the a partners, has right to COX. benefit in of bring being that storage capture right do

Kaleinoheaokealaula Akamine

my really quick appreciate follow-up. I This that, is Francisco.

market last week, EGM? a regulators on pushback it at going the So about the FERC leave Susquehanna the And bit little plant behind different than talk California meter. I'll Can why is there. you

Francisco Leon

can't out Kalei, about the not the to COX. is going to I and We where around continue states companies California to lower is carrots to that mandates a both happening solution sticks in viable goal -- them. what's This emissions. in to -- these make I and to We forward, there's is not But need speak that unique. find to to might they store ultimately other our details won't as Yes. there's speak know laid already, what's dynamic decarbonize.

in So solar a wind. there's when we there's place think about in natural renewable away and significant appetite gas power. an from And what's penetration move to California, of

reliability Well, electricity. as do of We've that, a seen also to lack what a increase we system. seen the we've on in consumers cost is

that need to we mutually to we can for what emissions place more exclusive. speaking these are think both, and think do that's this be okay, forward solutions right? as We we great as acts as the do lower provide infrastructure should speakers So and state. going not They today reliability. it's be deliver baseload, as can to, to not in We

power be of that's but some also meter the servicing communities, these take businesses the behind to California. to is can benefit attract key new great for used a not the that it have And ultimately

So the dynamics here. different are

in capacity to going we to excess the to clean, we're generation. behind bring have We make going meter. and it We're gas -- natural like it

Operator

Barclays. Jiang Betty from comes question next The with

Wei Jiang

the seeing Carbon up see project the starting capture and to carbon to But those business. as start activities year, gas great definitely capital And expect like processing to you're year? It's momentum own in how that of put we the business your for the level the be into allocation -- the that thinking Management just being what pick should you're is imminent JV the about percentage you what's next Management CRC the to next level? FID us help us versus CapEx, Carbon spent remind the capital being at funded at subsidiary

Francisco Leon

question. for Yes, the Betty, thanks

our strip own project on condition very COX project. receipt EPA have get project, from our FID the to last It's Expect of that XXR after we is the facility, to the remaining forward permit. shortly the of going capture of first the move to pre-combustion We're gas an COX. carbon out on So precedent project to stream. existing basically

we I As of relatively than the a $XX It's, that before, existing less project stated is million. would say, plant. simple modification

We also by, very, have away. close I injector think it's like feet the X,XXX very

exists be So pipe, the facility very and it can modified. already short

then So disclose we'll low project, once reach the details FID. capital we

project would so is projects to other to may say But now, will for depend we I market capital. the of bring communicated table. And line to sight and that in on this of XXXX, XXR we terms just what we the it have

of a of business of The termination and is combination permits the people run rate cost.

run The and at we big as storage come and working partnership XX% finance interest the ultimately on if emitters. Brookfield, effectively, of great forward. in ability joint rate disclosed self-funding projects per particular brownfield our could capital OpEx pore transport venture in down that's financials, a in become a that's to these costs the the to So business, small to have recall, business the business, have And move CRC we capital ball later the where as will sell we a projects move and portion us we with advance That of space amount the G&A space, ton. port you $XX capture, we the forward. where helps a

be So I XXXX year say a of market should further points, would evolution. further proof

further different us. And for limited the to of see more Expect to we're XXXX, more investments. fronts. in continue ready I to be year. that about launching in larger of with be would come most expect 'XX projects in to should on this capital industries we'll emitters capital, and partner part, the should then talk the XXR advancing those we But

Wei Jiang

really That's cash and buyback helpful. follow-up specifically. My is on return

quarter, quarter flow It's impact first of of the back a seeing and we capability -- $XXX third capable full of The doing. the only million. quarter, $XX we business. the flow than The free this free you the Aera you is million see thought less bought and then cash bit generation cash adjusted are

we forward hedges. look So by protected the as business to 'XX,

So up or wouldn't? buyback should expecting to pace be pick any that we reason that it

Francisco Leon

our in So I raise, tremendous Betty, is see guess the point value stock. first we to

If to to in the catalysts that the you we MOU don't about captured the with arrive have all and the starting think that all lines our see opportunities, business first have, stock. the see today. we value catalyst business the We great

that look that's years, over as the program a past. indication track we'll since continues, the -- of buying shares, repurchase to long XX% back record the continue at last of about you as used So So flow the X We our shares share back if free right? back cash have And our we've buy we XXXX. bought aggressively.

right? flow the the transaction to transaction, capacity it we As you flow we over took down Aera closed more in and our then business, quarter rebuilt more the capacity, brings levels -- scale to the again -- stability, to cash out, the Aera we business. as million, cash we point cash bigger of the it X, to Just showcases and $XXX showcase X the

$XXX So authorization the it under still million day. remaining share every on buyback. have the evaluate we about And we Board

stock. lot value in look way. We a a And see capital at -- of deploy a I like ways to smart in we said, lot we the have

we evidenced we basis many how track been a opportunities look to take record might done -- we we've of what think where continue. and can going the our but I a on be heading prescriptive haven't as as to go-forward buy, shares if So at we we're

about So thing -- hedge the bring generation the cash we nice also business down can our is and book debt. we

of looking outstanding. Those million bonds $XXX at at about callable have also starting are We're XXXX year. par We next that.

commitment ultimately liquidity deploy very a and with the investors you way capital We'll manage that's in that that in So different strong sheet have our a CRC. rewards forms. balance and

I'll on where that's leave So the it policy. return shareholder

Operator

next comes The TD Deckelbaum with from question David Cowen.

David Deckelbaum

XXXX, the about I was this an was curious on deployment quarter. business just upstream outperformance capital as just obviously, you think there in

look some this was that assets next you about expenditures gave you that around quarter of As guidance as But do opportunities look workovers more optimization some through of as production capital see significantly -- for you lower the optimization, high bookends think where a onetime think kind kind you thing? you year Or could of high-grading year. next grading? you Aera to as of and portfolio future integrate you you of and about kind

Francisco Leon

the we integrate. really of sense through as No, of now see a continue and steering the on workovers We of hands the and first bread a of the capacity butter set we of opportunity Yes, have California is good have Yes. the and business. all, wheel, sidetracks. lot opportunities the to

decline. that any projects the good third onetime sort offset great quarter are that say returns activity. I the really and help not of those evidence would of And make is

of of E&P XXXX continuation very of in terms terms are today I projects set, to is type to of think We on business to go-forward continue guide XXXX of to not on the terms perspective terms really the of going rates. in it's a see those in similar but obviously in focus in an the capital activity specifics, basis. of a business we trajectory decline from deployment,

in inventory workovers continue keep well. and and lot a management, we a surveillance, to and do as can So we've that -- of of expect we lot business blocking permit the as by steady getting the sidetracks rebuilding tackling it's a that base been

And to see next this as just team a the year. So it strongly year did. production to of same them. -- great coming we testament the of similar the as was That's the we've assets the it runs trajectory and quality the in had quality into see that

David Deckelbaum

And I your on your that congrats, surface on obviously have on acreage. as just solar was views it you you something had color on am curious I carbon appreciate there. storage highlighted MOU the market an the It obviously, to update side. the the quarter. last relates if

think in I megawatts XX, of you guys around projects had development. XX

As you opportunity increasing of existing there's state, solutions generation with a in a of kind all consider for the capture power and obviously, carbon huge emitters. from the clean energy source

How are demand solar on versus seeing between surface are things use you progressing would the weigh side? of capture? around opportunity carbon how you -- solar And kind for acreage inbounds the and of

Francisco Leon

it is complementary. Yes, very all

holder state enabled in As acreage significant owner, surface land. the solar largest through a are our projects mineral pretty lot and of a the

the more bring have to solutions California. We ability into solar

the are going conversation of those to and well, don't there. stop the I So clean want But be progressing part we offer. really to it's energy portfolio of that

battery to that solutions create but think also the steam have what's from about you enhanced a the energy. that to into called great more considering, the flooding traditional And bring have heat heat California. reservoirs from or in clean we solutions reservoirs, is and using natural we we're If battery geothermal opportunity

us really something energy a And has basically and battery as that that to that's as earth using well. is ability the excited the bring

and grid so We at ourselves into as green. looking provide land, make these backup see the to have have the to fronts, technologies of make have of further -- in we're interconnectivity because incubators the generation go we power many centers we for reservoirs, a whether more projects solid idea or cases, solutions. these from the it's So great data to the we lot

solar. it's it's it's that like and -- building we Like solution many geothermal, enhanced the embracing not business geothermal, we're as again, trajectory mentioned to storage. -- portfolio traditional heading. And it's decarbonize. that the it's this And we a said, California's it's just really times, So full I it's battery how is platform,

also lower deliver. projects We are going our and want to emissions

Operator

with Silverstein question Josh The comes from next UBS.

Joshua Silverstein

questions couple you a upstream for of I So guys. have

a shutting more realizations. First, know perhaps down just maybe linked guys you down. see shutting I on potentially news oil and recent Brent. given California are what I'm to guys curious others down the the of road refinery you happening

Do you to Brent or -- you that the this see any at to or higher have the I few WTI the years? all improved guys changing over of guess, discount the realization the the -- next discount from relative

Francisco Leon

appreciate question. consumes that The reality I a the and of -- California think through audience I to jet is the is just the remind Yes. fuel. lot oil No, gasoline

think California entire consumption of of X/XX jet is the of about I and X/X we're fuel. the gasoline

So still very much is there. the demand

if X/X state, the X.X XXX,XXX barrels of then get capacity of compared a than we at about refining look you the million the California day, So through to more to have production coming that from that's And barrels produced refining. close CRC.

fuel that's and the built today. Nelson to this jet refineries through this, were what other refineries These at Complexity, look products the ability for California crude. create And you have, need you these if

a we source. So as our crude blending use

for country you there's states lighter lot So of crude as preference other a bring sulfur high or imports, blend countries, our from to a it. foreign crude crude or strong

our crude California. heavy that in continue So on even high why you trades WTI above very that's realizations see to

but to Jay else add. it -- he I'll to to Bys maybe So turn has see anything if

Jay Bys

this, I would refiners No, make. Francisco take right most not that's really essence million basically to changed. These to native it but capital nice run production. think captured which and reticent the refineries find think X.X demand crude, I It's you could [Technical It Difficulty] now, a of investment, XXX,XXX change, built ratio. versus

see being, particular. to going for time the in our products to demand for think continue I we're So strong

Joshua Silverstein

Got it.

execute remaining one $XXX million synergies. to Next implement of is, I'm curious on and what need guys the the to do you Aera

like and financing is good the on the bulk the a $XXX It job million really operational You've done G&A side. looks related. more of

what to to that? needs you guys execute happen for on So

Francisco Leon

we announced we decades. team. question. Aera the run for the to I is unique been each other, tremendous a Yes. This assets. merger. it of as And No, appreciate next by talked That job independently the about right have absolutely They're fit

rightsizing about confidence organization on about when about a synergies an and on of focused thinking operational So the synergies. were talked lot the those, we We organization. the just had wasn't we it really and

can our disclosure and G&A deck, see between the OpEx. You in slide we have

see more synergies, where on supply focus optimization from. it come focus to natural on will over we But Omar I'll ultimately, Hayat And to examples color next $XXX the chain, some and million on pass progression a infrastructure flood of optimization. and provide steam

Omar Hayat

Thank Yes. you.

is synergies the way about So think to a time it on about line. think really

we we supply which projects we fast combined them, have far thing is contracts, next value, looking execute our to line in done reevaluating company around Aera moving the chain scale. is executed can here have the we contracts what direction. really to economical our move doubled deliver infrastructure what connecting is assets So favorable so at leveraging products more the and and we're that now to most consolidation. And the those in optimization is and assets that have the the workforce the The proximity

mean while at cost, what a and of So can that low higher own with a power, are cost. we I assets still there therefore, PG&E feed power power our if generated are that on at at that you our provide leases look by is most operations power and

Similarly, provided in in those assets. bring X gas, major look So producers by cost consumers are net and opportunities look we from a at at the if own to Hills fields. power you lower we energy are assets which at net Elk Belridge, our

based we'll the on gas the X we and prices fields, recently direction moving consumption. at right look So those and have in connected

We plant. lot all of plant Elk in also our and assets gas Hills our are at connected capacity that not cryogenic to have a

array And liquids a So CGP that earlier now there opportunity see in made future. comments is an of realization large right the our produce we send in optimize and to Jay gas to to natural API operations look works were blends in and by quite marketing Francisco, our with of team and oil bringing gas at continuously to extract refineries we to gravity terms prices. the

capacities. same finally, then water way. There the And is are the disposal

disposal some have in We excess areas. capacities

are in We pinched others.

water cost consolidate movement. around to we'll So optimize

around consolidation. So just those are examples some the of infrastructure

Operator

question with The Scott Citigroup. next comes Gruber from

Scott Gruber

a lot of covered We've ground.

those come underpinning indirect capture types the and MOU gas curious capital on that of capture I'm curious, how Are big when driver the comes big or plants? given here in conversations? the today in just plants? one of tech is kind just it tech is really market into having on Or forces that's the me, interest the for it directly space? for incentives So gas I'm announced. you place to direct to broader is interested underwriting

Francisco Leon

we I is think no one have have, stage we're when to about have, to find think which tech at gas lower out. solves is then looking as you emissions, take combined infrastructure great project the has AI. everything CCS to natural a power cycle ability we develop it very big that that do the The people really -- on few they for really for a and

doesn't right? across are Because it every direction they they you on But why power see as to not get U.S. in looking market are announcements hungry their share. So power we exist, -- the compete seeing the how for hands

what where fiber know permits, ultimately having Elk think a shop in I the to can with table that CCS, bring having of Hills high. for an think power, We terms does we're proposition. really one-stop that's of water, proof attractive these networks, underwriting yet. at that's land, today where of there be to of we going pore interest? And what's we the an So don't showcase where it's stand space capacity? points it's Is

that what a be to So it's becomes going we a think capitalizing about now market really is first-mover leader. initiative

for right? to that's gives profile partner, an our be also right and investors, us ultimately structure and sure update. be to we the that So selective happy we to working have the announce what we'll And return have when the towards, make we're right capital time right

Scott Gruber

view, nucs certainly a small work need step I interest in through what that kind stock we we the to kind restart, you Is in in do we And through? of solution. meaningful after great. your think of great progress takes can cadence, capture of guess plants on that terms gas a That's of higher? the

Francisco Leon

Yes, absolutely.

I really mean I natural We started. getting we see are just think that the state. in that a should of opportunity. progression be the we lot see

that that And talk a this to so today brownfield I look bringing we I we of projects about this be them. proved can forward this. that But more think behind there's can. And can forward something that we CRC of lot market conversation yes, executes, appetite

Operator

Leo comes question from next Mariani with ROTH. The P.

Leo Mariani

coming CalGEM It And just permit months and certainly any has of workover I there? know if there's CalGEM permits the there drilling actual I if situation. kind of wanted whatnot. you now. for guys any curious was any could there? of or others curious to there just sidetrack follow out But update permits that drilling up many, Are seems that to you or on I of rethinking was many there's just about? update kind that like talk kind been

Francisco Leon

the Leo, Yes, thanks question. for

permits avenues we impact about. the There's Kern get back multiple So on County environmental report that yes, track. to talked

particular, we're progress We good CUPs what's also And conditional made permit, permit. a or are other called conditional in by seeing operators. through use pursuing the use

X we're not about And seques, to have path new the we're basically the they state. fields. county-wide, taken permits the basically it's the field permit, operators same we've use Over And level last that process doing that undertaking. to taking. XX conditional quarters, in specific seen so other And that's but

have the And Now make XX% Combined, X our CUP the proved undeveloped our have Belridge. Vista, we and submissions some fields around Elk they Hills, California. been Front in Kern reserves. of about up most of of fields, biggest Buena

the can and back different of ordinance, of see resolution working paths us revised make with the County still year. we next satisfy CalGEM adoption their requirements through to on potential also on the So in watching seques. permits. the working half to Kern that We are We're see and second get we progress it

of seeing good seeing and operators. sidetrack. smaller really So work other other lots on on progress also some happening. We're workovers progress -- We're with good operators,

as in coming usual. are those per So

when. to our is approval pinpoint So on constructive permit in that the we we're predict growing confidence timing, It's It's discussions coming. but do to [ difficult hard depending see resolution ].

Leo Mariani

Okay. Appreciate in pipeline place need get that. regulations some And the earlier, state the on side. COX in mentioned then certainly to you the

that over discussed Do you there? know in wanted the something legislature get progress that I that a been Just summer. to getting sense sense, might have the was there's been any real

year Or other next of this in have back are legislature there And you this was early expectations session? just priorities? slipped, when by get up is kind can again things issue maybe maybe the taken do

Francisco Leon

opportunity COX California There's one, address support a of that who comes pipelines. to and need see lift government right? of So moving satisfy of lot a direction. be trying that I matter in X legislature to X Again, session at is first, on state. we that would country lot opportunity. the we capital it. conveying really, this forward We significant just And federal see also expect that it. it's California But has expectation. to an the the see Yes, interest ultimately of and the rest up a attracting been my the to capture the And to move yes, That's in think would moratorium an we we next what it we by move forward. have be I would the doing and We've over advantage of the legislators. the into picked earlier as

at existing a subsurface. permits connected, I that natural can you COX on the And as points a flowing -- -- proof natural step. the be step pipelines next look transport to a start is but it's ways there's to there's all This right? if bring of in delivering need, retrofitted market to think

as and again So session those conversations the I continue constructive continue have year. to do begins to the expect conversations, next

Operator

Michael The from Stephens. next Scialla question with comes

Michael Scialla

that to willing have was Or be plant is cogen capacity needed have Midway a that the do there used I could excess you like at customer? to large find by power any at of And the big some you Hills capacity plans tech wondering If there is to Elk do there plant? underwrite that a all is you power have decarbonization if there that decarbonize you field? plants, Sunset.

Francisco Leon

Yes.

we to power goes half accrues the looking multiple plants. what megawatts state greatest delivers through the at less XXX And our capacity grid. over oilfield. power you the and adequacy looking we're the The the shareholders. So always of of -- look the of for to we throughout if We're have it generation best resource use generation what's participates that CRC, than rest in -- to the ultimately to ultimately value optimize

any Elk want is which I Hills. CalCapture, I So mean to about talked don't other about be prescriptive plant. we

on We're there. CCS we're do in will long cost power. benefit everything evaluating portfolio. We the else But

owning the think solution power to assets gas do or is We like this in We generation. great a CCS natural state. compromise

else. much contracts, and forward, is So that's of that's our capacity what front that's going how us, PPAs, whether with tech So into the opportunity right? pursuing can it's this can. the long-term opportunity big That's aggressively we're that's someone firm turn of -- there's we as as or plan in we

Michael Scialla

portion to there Elk be Or with that customer of there, the free to that I how customer? grid then that And excess the the it. to a -- have tied that, any to have Got would goes you go the an have to what Hills, did grid? Is guess, if much opportunity you now. is

Francisco Leon

Yes.

So of power our the by plant way the megawatts. E&P About generates to think operations. is X/X that so consumed about about it, XXX

a really X/X means home. That have doesn't

year. the hotter is in the basically the So power state have are throughout capacity of it Then the we grid the is participate that throughout standby resource adequacy, pay the for when contracts you on particularly put grid the prices taxed capacity. months spot different ultimately which standby whatever excess that groups typically with at in we for separately that year,

go the about being standby adequacy participating we've made or million been years. program to that we've 'XX, in talked on And What So that for in for the having we that seen up. is power $XXX standby value power resource California. contract we've

the a and that's will goes it's ultimately move That contracted of million -- that in capacity it's a really have $XXX doesn't really to home, it of But more grid. to why we -- XXXX. value

behind think as to ability wants, bring to which the more California the all the as we meter. make that's it possible. have of renewable consistent what with And We grid is

power Can way usable own value can is we optimized. tech. right? partners? think baseload a have for ultimately And that's could that be that It CCS -- ultimately that we power that the in their in others with businesses, it's bring So plan use we

behind the It is power able chip that base be industries. could be it grid. could other customer manufacturing, to that can manufacturing, take of sort be the to it that find be could key And

that. So that of that to with. we our as the ultimately certainly But try participating feel to that and power. about those we're excess the decision now, have a Right dynamics are we work value resource we adequacy, in optimize we good is make

Operator

comes The next Noel from question Tuohy Parks Brothers. with

Noel Parks

had to I a Just few ask. wanted things

maybe of you're talk projects generation you like -- with the versus could between centers. seeing about wondering, Just of and projects on relative for discussions new momentum brownfield versus data your sort timing emitters

is an discussion? it is know, don't the set the complexity Or -- basics are sharing to are in sort around, try that that of you motion? main in terms wondering, agreement as risk things more it just the I I'm are of

Francisco Leon

Yes.

we've -- starting great talked catalyst and the see it's to to about arrive. catalyst-rich it's being CRC So

between versus And as the key so emitter of side. the there brownfield connectivity, greenfield, we yes, combination physical the connectivity the be brownfield, the will and said before, the storage

of -- Elk pipelines have that's Hills. around build from to gas. is greenfield COX it about these renewable a on hydrogen. different have to going to But think going They're why to the maybe So going clean important. then perspective. top conversation natural have projects We're We're we're going

fuels, of there's emission we to to footprint, opportunities you diesel. need build we're could of different their the some and elements input and work, to synergistic ultimately portfolio. of deploy projects. lot still aspects to we lower right? market need going the have these for to emitters So to a about it's projects do how come also fuel And thinking that We're the look an Once clean provide renewable

of We particularly also capture need the connectivity. And But positioned than more able we're we the solutions to excited advanced us market be see being others state to in share. that about California. and provider well

to excited end. that we're run towards So

that work market details strong. to is it out, of lot I the very be clear think opportunity but should A

Operator

session. conference back would of the that remarks. over I the see to to for question-and-answer any This we're top I turn the like our Leon Francisco hour. concludes past closing

Francisco Leon

today. joining for us you so Thank much

investor the and November look seeing both Thanks. in conferences presenting will We at everybody on December several and forward to road. early be

Operator

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

You may now disconnect.

California Resources (CRC) 6 Nov 242024 Q3 Earnings call transcript