Breaking Down California Resources Corporation (CRC) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments? Have you considered the financial stability and future prospects of California Resources Corporation (CRC)? With the company's focus on energy transition and environmental responsibility, understanding its financial health is crucial for making informed investment decisions. In 2024, CRC generated $610 million in net cash flow from operating activities and $355 million in free cash flow, with total operating revenues reaching $3,198 million. But how does this translate into long-term value for investors, and what are the key factors driving CRC's financial performance? Let's delve into the details to uncover the insights you need.

California Resources Corporation (CRC) Revenue Analysis

California Resources Corporation (CRC) operates as an independent oil and natural gas company, focusing on the exploration, production, and development of oil and natural gas reserves primarily in California. Understanding the sources and trends in CRC's revenue is crucial for investors.

Here's a breakdown of CRC's revenue streams:

• Primary Revenue Sources: CRC's main revenue drivers are crude oil, natural gas, and natural gas liquids (NGLs). The sales volume and prices of these commodities significantly impact the company's financial performance.
• Regional Contribution: The majority of CRC’s operations and revenue generation are concentrated within California.

Analyzing year-over-year revenue growth provides insights into CRC's performance and market dynamics. Examining historical trends helps to understand the company's ability to adapt to changing market conditions.

For example, a table illustrating revenue changes over recent years might look like this:

Note: The information in this table is based on historical reports. For the most up-to-date figures, please refer to CRC's latest financial filings.

Investors should also consider how different business segments contribute to CRC's overall revenue. Shifts in these contributions can signal strategic changes or varying performance across segments.

Keep in mind that significant changes in revenue streams can arise from various factors, including:

• Fluctuations in commodity prices
• Changes in production volumes
• Acquisitions or divestitures
• Regulatory impacts

By analyzing these components, investors can gain a more comprehensive understanding of California Resources Corporation’s financial health and make better-informed decisions. To delve deeper into CRC's financial health, consider reading: Breaking Down California Resources Corporation (CRC) Financial Health: Key Insights for Investors

California Resources Corporation (CRC) Profitability Metrics

Analyzing the profitability of Mission Statement, Vision, & Core Values of California Resources Corporation (CRC). is crucial for investors. Several key metrics provide insights into the company's financial health. Here's an overview of CRC's profitability based on the 2024 fiscal year data:

Gross Profit:

Gross Profit for the quarter that ended in Dec. 2024 was $1,343 million.

California Resources's annualized Gross Profit for the quarter that ended in Dec. 2024 was $5,372 million.

Gross Profit Margin:

Gross Margin % for the quarter that ended in Dec. 2024 is 145.35%.

California Resources had a gross margin of 145.35% for the quarter that ended in Dec. 2024, indicating a durable competitive advantage.

Operating Profit:

• For the full year 2024, California Resources Corporation (CRC) posted a net income of $376 million and an adjusted net income of $317 million.
• For the fourth quarter of 2024, CRC reported a net income of $33 million and an adjusted net income of $84 million.

Operating Profit Margin:

• Operating Margin as of February 2025 (TTM): 28.38%.
• At the end of 2023, the company had an Operating Margin of 26.59%.
• California Resources's Operating Margin % for the fiscal year that ended in Dec. 2024 is 13.17%.
• California Resources's Operating Margin % for the quarter that ended in Dec. 2024 is 15.37%.

Net Profit Margin:

• California Resources's Net Margin for the fiscal year that ended in Dec. 2024 is 12.83%.
• California Resources's Net Margin for the quarter that ended in Dec. 2024 is 3.57%.

Revenue:

• Total operating revenues for the year were $3,198 million.
• CRC's total operating revenues for the quarter were $877 million.
• Revenue in 2024 (TTM): $2.93 Billion USD.

EBITDAX:

• Adjusted EBITDAX for the year was $1,006 million.
• Adjusted EBITDAX for the quarter was $316 million.

Operational Efficiency:

California Resources Corporation (CRC) focuses on several strategies to maintain and improve operational efficiency:

• Cost Management: CRC is committed to optimizing operational efficiency and cost management, which allows it to maximize production and profitability.
• Merger Synergies: Following the merger with Aera Energy, CRC achieved more than 70% of its targeted $235 million in merger-related synergies. The company is on track to deliver approximately $235 million in estimated synergies by the third quarter of 2025.
• Capital Efficiency: CRC is focused on improving capital efficiency and reducing costs. The company has actioned $135 million in Aera merger-related synergies during the second half of 2024 and remains on-track to deliver approximately $235 million in estimated synergies by the third quarter of 2025.

Gross Margin Trends:

• Gross Profit is the numerator in the calculation of Gross Margin.
• California Resources had a gross margin of 145.35% for the quarter that ended in Dec. 2024 => Durable competitive advantage.

Additional Key Points:

• CRC returned $303 million to shareholders in 2024 through share repurchases and dividends, representing approximately 85% of its free cash flow.
• The company exited 2024 with $354 million in available cash and $983 million in available borrowing capacity.

Gross-Profit-to-Asset:

• California Resources's annualized Gross Profit for the quarter that ended in Dec. 2024 was $5,372 Mil.
• California Resources's average Total Assets over the quarter that ended in Dec. 2024 was $7,132 Mil.
• Therefore, California Resources's annualized Gross-Profit-to-Asset % for the quarter that ended in Dec. 2024 was 75.33%.

Liquidity:

• California Resources's current ratio for the quarter that ended in Dec. 2024 was 1.04.
• California Resources has a current ratio of 1.04. It generally indicates good short-term financial strength.

Reserves:

• As of December 31, 2024, CRC's total proved reserves were 545 million Boe (MMBoe), of which approximately 81% was oil and 506 MMBoe was proved developed.

Production:

• For the full year 2024, CRC delivered an average net production of 110 thousand barrels of oil equivalent per day (MBoe/d), with 73% of it being oil.

Capital Investments:

• The company provided a 2025 outlook, expecting $1.1 billion in adjusted EBITDAX at $73 per barrel Brent, with $285-$335 million in capital investment and annual net production of approximately 135,000 BOE per day, 80% of which is oil.

Here is a table summarizing key financial data for California Resources Corporation in 2024:

These metrics collectively highlight CRC's strong financial performance in 2024, driven by strategic initiatives and operational efficiencies.

California Resources Corporation (CRC) Debt vs. Equity Structure

Understanding how California Resources Corporation (CRC) manages its debt and equity is crucial for investors. This involves looking at their debt levels, debt-to-equity ratio, and any recent financing activities to gauge their financial strategy and stability.

As of the fiscal year 2024, California Resources Corporation (CRC) demonstrates a strategic approach to managing its debt. While specific figures for 2024 aren't available, examining recent trends and data provides insights into their financial health. For instance, recent data indicates a focus on reducing long-term debt to strengthen its balance sheet, reflecting a commitment to financial prudence.

Here's an overview of what to consider regarding CRC's debt and equity:

• Overview of Debt Levels: CRC's financial reports detail both short-term and long-term debt. Analyzing these figures helps understand the company's immediate and future obligations.
• Debt-to-Equity Ratio: This ratio is a key indicator of financial leverage. It shows the proportion of debt and equity used to finance the company's assets. Comparing CRC's ratio to industry averages provides context on whether the company is more or less leveraged than its peers.
• Recent Financing Activities: Keep an eye on any new debt issuances, credit rating changes, or refinancing activities. These events can significantly impact CRC's financial flexibility and cost of capital.
• Balancing Debt and Equity: A healthy balance between debt and equity is vital. Too much debt can increase financial risk, while too little debt might indicate missed opportunities for growth.

While pinpointing the exact 2024 figures is not possible, analyzing past performance and available data helps in assessing CRC’s approach to balancing debt and equity. For example, CRC has been actively managing its debt through various strategies, as evidenced by its financial activities. Investors should monitor these trends to understand the company's financial risk and growth potential.

For more insights into the investors behind CRC, check out: Exploring California Resources Corporation (CRC) Investor Profile: Who’s Buying and Why?

California Resources Corporation (CRC) Liquidity and Solvency

Liquidity is crucial for understanding California Resources Corporation's (CRC) ability to meet its short-term obligations. Key metrics like current and quick ratios provide insights into the company's immediate financial health. Analyzing working capital trends and cash flow statements further enhances this assessment. Here’s a detailed look:

Current and Quick Ratios: These ratios measure a company's ability to pay off its short-term liabilities with its current assets. A higher ratio generally indicates better liquidity. As of the end of 2024, specific figures for CRC's current and quick ratios would be essential to determine its liquidity position. The standard benchmark for the current ratio is generally above 1.0, indicating that a company has more current assets than current liabilities. The quick ratio, which excludes inventory from current assets, provides a more conservative view of liquidity.

Working Capital Trends: Working capital, calculated as current assets minus current liabilities, indicates the funds available for day-to-day operations. Monitoring trends in working capital helps identify whether CRC is efficiently managing its short-term resources. An increase in working capital typically suggests improved liquidity, while a decrease might signal potential challenges. To provide an accurate analysis, the specific working capital figures for the fiscal year 2024 are needed.

Cash Flow Statements Overview: The cash flow statement provides a comprehensive view of all cash inflows and outflows, categorized into operating, investing, and financing activities. Analyzing these cash flow trends is vital for assessing CRC's liquidity. Here’s a breakdown:

• Operating Cash Flow: This indicates the cash generated from CRC's core business operations. A positive and increasing trend suggests strong liquidity.
• Investing Cash Flow: This includes cash used for investments in assets like property, plant, and equipment (PP&E). Negative investing cash flow is common as companies invest in their future growth.
• Financing Cash Flow: This involves activities related to debt, equity, and dividends. It shows how CRC raises capital and returns it to investors.

To illustrate, here's a hypothetical overview of CRC's cash flows (in millions of USD) for the fiscal year 2024:

Potential Liquidity Concerns or Strengths: Based on the above analysis, any potential liquidity concerns or strengths for CRC can be identified. For instance, consistently positive operating cash flow indicates a strong liquidity position. However, significant debt obligations or large capital expenditure plans could raise concerns. Monitoring these factors is essential for a comprehensive assessment.

For more in-depth insights, check out: Breaking Down California Resources Corporation (CRC) Financial Health: Key Insights for Investors

California Resources Corporation (CRC) Valuation Analysis

Assessing whether California Resources Corporation (CRC) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment. Here's a breakdown of critical valuation metrics:

Price-to-Earnings (P/E) Ratio: The P/E ratio compares a company's stock price to its earnings per share (EPS). As of the close of trading on April 18, 2024, California Resources Corporation's P/E ratio stands at 3.4x, significantly lower than the industry average of 9.7x. This suggests that CRC's stock price may be undervalued relative to its earnings compared to its peers. However, a low P/E ratio can also indicate that investors have low expectations for future growth or perceive risks associated with the company.

Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity. As of April 18, 2024, CRC's P/B ratio is 0.6x, which is below the industry average of 1.2x. A P/B ratio less than 1 can imply that the stock is undervalued, as the market price is lower than the net asset value of the company. This could mean that the market is undervaluing CRC's assets, or it could reflect concerns about the company's ability to generate returns from those assets.

Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The EV/EBITDA ratio is used to assess a company's total value relative to its earnings before interest, taxes, depreciation, and amortization (EBITDA). As of April 18, 2024, CRC's EV/EBITDA ratio is 2.4x, compared to the industry average of 6.8x. A lower EV/EBITDA ratio may indicate that the company is undervalued, as it suggests that the company's total value is low relative to its earnings potential. This could be an attractive sign for investors, but it's important to consider why the ratio is low; it could reflect higher risk or lower growth expectations.

Stock Price Trends: Analyzing stock price trends provides insights into market sentiment and investor confidence. Over the past year, California Resources Corporation's stock has experienced considerable volatility. From April 2024 to April 2025, the stock price has shown an upward trend, influenced by factors such as oil price fluctuations, production levels, and company-specific announcements. Monitoring these trends helps investors gauge the potential for future price appreciation or correction.

Dividend Yield and Payout Ratios: As of April 2025, California Resources Corporation does not offer a dividend. Therefore, dividend yield and payout ratios are not applicable in assessing its valuation. This is not uncommon for companies in the energy sector, particularly those focused on growth or debt reduction.

Analyst Consensus: Analyst consensus provides a summarized view of professional opinions on a stock's valuation and future performance. Based on recent ratings, the consensus for California Resources Corporation is a mix of 'buy,' 'hold,' and 'sell' recommendations. The price targets set by analysts range from $45 to $60, suggesting a potential upside from the current trading price. However, investors should consider that analyst ratings are not always accurate and can be influenced by various factors.

Here is a table summarizing the key valuation metrics for California Resources Corporation:

In conclusion, the valuation of California Resources Corporation suggests that it may be undervalued based on its P/E, P/B, and EV/EBITDA ratios compared to industry averages. However, investors should conduct thorough due diligence, considering factors such as stock price trends, analyst consensus, and company-specific developments, to make informed investment decisions.

To gain more insight into who is investing in CRC and why, check out this related article: Exploring California Resources Corporation (CRC) Investor Profile: Who’s Buying and Why?

California Resources Corporation (CRC) Risk Factors

California Resources Corporation (CRC) faces a complex landscape of risks that could significantly impact its financial health. These risks stem from both internal operational challenges and external market dynamics. Investors need to be aware of these potential pitfalls to make informed decisions. The risks are associated with industry competition, regulatory changes, and evolving market conditions.

Here's a breakdown of key risk areas:

• Industry Competition: The oil and gas industry is highly competitive. CRC competes with numerous other companies, including major integrated oil companies, independent producers, and alternative energy providers. Increased competition could lead to lower prices and reduced profitability.
• Regulatory Changes: CRC's operations are subject to extensive federal, state, and local laws and regulations, including those relating to environmental protection, health and safety, and taxation. Changes in these regulations could increase operating costs, limit production, or delay projects.
• Market Conditions: The prices of oil, natural gas, and natural gas liquids are subject to volatile fluctuations due to factors such as global supply and demand, economic conditions, and geopolitical events. Lower commodity prices could significantly reduce CRC's revenues and cash flow.

Operational risks for California Resources Corporation (CRC) encompass a range of challenges that could affect the company's ability to maintain production levels and manage costs effectively. These risks include:

• Drilling and Production Risks: Oil and gas exploration and production involve inherent risks, such as well failures, blowouts, and equipment malfunctions. These events can result in production disruptions, environmental damage, and significant financial losses.
• Infrastructure Constraints: CRC relies on pipelines, storage facilities, and other infrastructure to transport and process its products. Disruptions to this infrastructure, whether due to accidents, weather events, or other factors, could interrupt operations and reduce revenues.
• Cost Overruns: Oil and gas projects are often complex and capital-intensive. Unexpected cost increases due to factors such as inflation, labor shortages, or supply chain disruptions could negatively impact project economics and reduce profitability.

Financial and strategic risks can significantly impact California Resources Corporation (CRC). These risks include:

• Liquidity Risk: Maintaining sufficient liquidity is crucial for CRC to meet its financial obligations and fund its operations. Factors such as lower commodity prices, increased operating costs, or unexpected capital expenditures could strain liquidity and limit financial flexibility.
• Debt Burden: CRC has a significant amount of debt, which could increase its vulnerability to adverse economic conditions and limit its ability to invest in growth opportunities.
• Strategic Execution: The success of CRC's business strategy depends on its ability to execute its plans effectively. Factors such as poor project management, inadequate risk assessment, or failure to adapt to changing market conditions could hinder strategic execution and reduce shareholder value.

Mitigation strategies are crucial for addressing the various risks California Resources Corporation (CRC) faces. While specific details of mitigation plans may not always be publicly available, companies typically employ several common strategies. Diversification is one such strategy, where CRC could diversify its asset portfolio to reduce its reliance on specific geographic areas or types of production.

Another strategy is hedging, where CRC can use hedging instruments to protect itself against fluctuations in commodity prices. Furthermore, the company can invest in safety and environmental programs to minimize the risk of accidents and environmental damage, which can lead to regulatory penalties and reputational harm. Finally, CRC may implement cost control measures to improve efficiency and reduce operating expenses, enhancing its financial resilience.

For more insights into the investor profile of California Resources Corporation, check out this link: Exploring California Resources Corporation (CRC) Investor Profile: Who’s Buying and Why?

California Resources Corporation (CRC) Growth Opportunities

California Resources Corporation (CRC) is focusing on several key areas to drive future growth. These include strategic initiatives, partnerships, and leveraging its competitive advantages.

• Merger Synergies: CRC completed its all-stock combination with Aera Energy in July 2024. The company is focused on achieving $235 million in merger-related synergies. By early March 2025, CRC had already achieved over 70% of this target. The remaining cost savings are planned to be captured in 2025 through operational efficiencies and infrastructure consolidation.
• Production and Operations: The pro forma combined net daily production of CRC and Aera averaged 146 thousand barrels of oil equivalent per day (Mboe/d), with 79% being oil, during April and May 2024. CRC's average net production for the full year 2024 was 110 Mboe/d (73% oil). In the fourth quarter of 2024, average net production was 141 thousand barrels of oil equivalent per day (MBoe/d) (79% oil), exiting the year with 163 MBoe/d of gross production.
• Carbon Management: CRC is expanding its carbon management platform to help California meet its climate goals. The company received California's first Environmental Protection Agency (EPA) Class VI well permits for underground carbon dioxide (CO2) injection and storage into the 26R reservoir.
• Financial Performance: In 2024, CRC generated $1 billion in adjusted EBITDAX and $355 million in free cash flow. For 2025, CRC expects $1.1 billion in adjusted EBITDAX at $73 per barrel Brent.

CRC is also focused on returning cash to shareholders. In 2024, the company repurchased 3.6 million shares of its common stock for $190 million at an average price of $52.12 per share and returned $113 million to shareholders in dividends. As of December 31, 2024, CRC had approximately $557 million of capacity remaining under its share repurchase authorization.

The company has also made strides in reducing interest expenses. A reduction of $60 million in annual interest expense was achieved in the second quarter of 2024, with third-quarter results reflecting approximately $8 million of run-rate savings.

Here’s a summary of CRC’s financial highlights for 2024:

CRC is actively pursuing opportunities in power and carbon management, including potential agreements for AI data centers leveraging its Elk Hills facility. Updates on these developments are expected later in the year.

Learn more about CRC's mission, vision, and core values: Mission Statement, Vision, & Core Values of California Resources Corporation (CRC).