California Resources Corporation (CRC): Business Model Canvas [Dec-2025 Updated]

You're looking to cut through the noise and see exactly how California Resources Corporation (CRC) makes its money right now, heading into late 2025, and you need a precise breakdown. Honestly, their business model isn't just about pumping oil and gas in California anymore; it's a fascinating pivot where their established E&P cash flow, which supports an Adjusted EBITDAX guidance midpoint of $1.235 billion for 2025, is funding a major bet on decarbonization through Carbon TerraVault (CCS). We see them integrating the Aera merger, targeting $185 million in synergies this year, while simultaneously building out the infrastructure to sell permanent CO2 sequestration services to industrial emitters. It's a dual-engine strategy, plain and simple. Below, we map out the nine essential blocks-from their key partnerships with entities like Capital Power for CCS to their core customer base of California refineries-so you can see the full picture of this energy transition play.

California Resources Corporation (CRC) - Canvas Business Model: Key Partnerships

You're looking at the partnerships that are actively shaping California Resources Corporation's strategy as of late 2025. These aren't just names on a slide; they represent concrete financial commitments and operational milestones.

Pending merger with Berry Corporation to expand California asset base.

The definitive agreement to combine with Berry Corporation, announced on September 14, 2025, values Berry at approximately $717 million, inclusive of assumed net debt of $408 million as of June 30, 2025. The HSR waiting period expired on November 10, 2025. The transaction is expected to be immediately accretive, delivering more than 10% accretion to second half 2025 operating cash flow and free cash flow before synergies. Upon closing, existing California Resources Corporation shareholders are expected to own approximately 94% of the combined company. The pro forma last 12 months leverage ratio is expected to be about 0.8x.

Capital Power MOU for carbon capture and sequestration (CCS) at La Paloma.

California Resources Corporation's carbon management business, Carbon TerraVault (CTV), signed a Memorandum of Understanding (MOU) with Capital Power on November 4, 2025. This is to explore CCS solutions for Capital Power's La Paloma generation facility, which is a 1.1 gigawatts natural gas combined cycle facility. CTV intends to evaluate serving as the exclusive transportation and sequestration services provider for up to 3 million metric tons per annum (MMTPA) of captured carbon dioxide.

Environmental Protection Agency (EPA) for CO2 injection well permits.

Carbon TerraVault received final Class VI well permits from the EPA in early January 2025 for the CTV I storage site at the Elk Hills Field. The permits authorize the construction of four deep injection wells. The 26R reservoir has an expected injection rate of 1.46 million metric tons of CO2 storage per annum. The total estimated capacity of the 26R reservoir is up to 38 million metric tons. Before injection can start, CTV must plug 200 abandoned wells in the area. The project lifespan for injection is set at 26 years, planning to inject about 1.5 million metric tons of CO2 annually.

Equipment and service providers for drilling/workover programs.

Capital expenditures related to drilling, completions, and workovers show the ongoing activity level with these service providers. For the third quarter of 2025, this capital spend totaled $43 million. In the first quarter of 2025, the drilling, completions, and workover capital was $34 million. California Resources Corporation expected to run a two-rig program in the second half of 2025.

Financial institutions for the $1.5 billion Revolving Credit Facility.

The Revolving Credit Facility has a stated borrowing base of $1,500 million. Following a semi-annual redetermination on October 29, 2025, the aggregate elected commitments were increased by $300 million to $1.45 billion. As of June 30, 2025, the available borrowing capacity under the facility was $983 million, which reflected a total borrowing capacity of $1,150 million less $167 million in outstanding letters of credit.

Here's the quick math on the facility as of the end of Q3 2025:

• Borrowing Base Reaffirmed: $1,500 million
• Elected Commitments Increase: By $300 million
• Total Elected Commitments: $1.45 billion
• Available Borrowing Capacity (as of Sept 30, 2025): $974 million
• Letters of Credit Outstanding (as of Sept 30, 2025): $176 million

The company also redeemed all remaining 2026 Senior Notes for $122 million at par on October 10, 2025.

California Resources Corporation (CRC) - Canvas Business Model: Key Activities

You're looking at the core operational engine of California Resources Corporation (CRC) as of late 2025, which is a blend of conventional production and new energy transition plays. The primary activity remains the oil and natural gas exploration and production (E&P) right there in California.

For the nine months leading up to the third quarter of 2025, CRC delivered substantial production volumes. For instance, the average net production in the second quarter of 2025 was 137 thousand barrels of oil equivalent per day (MBoe/d), with oil making up 80% of that mix. The company is guiding for the fourth quarter of 2025 (4Q25E) to be in the range of 131 - 135 MBoe/d. To support this, the realized oil price with derivative settlements in the second quarter of 2025 hit $66.73 per Bbl.

Here's a quick look at the scale of the E&P activity and capital deployment for the year:

A critical activity supporting the financial stability of the E&P segment is active risk management via commodity hedging. This is how CRC locks in revenue certainty. For the remainder of 2025, you see that approximately 70% of the net oil production is hedged, carrying an average Brent floor price of around $67 per barrel. Also, they are using hedges for internal fuel consumption, with about 70% hedged at an average natural gas price of approximately $4 per MMBtu.

The development of the Carbon TerraVault (CTV) CCS projects and infrastructure is a major strategic activity. CRC is targeting first carbon dioxide (CO2) injection at the CTV I - 26R storage reservoir, which is part of the Elk Hills Cryogenic Gas Plant CCS project, by year-end 2025. This is supported by the fact that they received authorization to construct from the U.S. Environmental Protection Agency (EPA) for CO2 injection wells for that 26R storage reservoir.

Finally, realizing the value from the Aera merger is a key activity driving cost structure improvements. The company is on track to realize the targeted $185 million of Aera-related merger synergies by the end of 2025, with the remaining portion of the total annualized synergy target expected in early 2026. To be fair, they had already realized $173 million of those synergies by the end of the first quarter of 2025.

These activities are all interconnected, so you can see the focus is on disciplined production, de-risking revenue, and advancing the carbon management platform.

• Implementing the Aera merger synergies, with $185 million expected to be realized in 2025.
• Executing a disciplined drilling program, planning for two rigs in the second half of 2025 (H2 2025).
• Targeting first CO2 injection at the CTV I - 26R reservoir by year-end 2025.

California Resources Corporation (CRC) - Canvas Business Model: Key Resources

You're looking at the core assets that make California Resources Corporation tick as of late 2025. Honestly, it's a mix of legacy production strength and a very deliberate pivot into carbon management, which is where the future value is being built.

The foundation remains the extensive, low-decline conventional oil and gas assets in California. These aren't just wells; they are established, de-risked operations within the state's unique regulatory environment. The operational performance reflects this stability.

This lower decline rate, down from a previous assumption of 10% to 15%, is a key financial lever, strengthening cash flow generation and enhancing the value of the proved reserve base.

Next up is the emerging, but critical, resource: Carbon TerraVault's subsurface pore space for CO2 sequestration. This is about owning the right geology for permanent storage, which is a scarce resource in California. The initial project is already moving toward operation.

• Carbon TerraVault I (CTV I) total storage potential in the 26R reservoir: 38 million metric tons.
• CTV I annual storage capability: Up to 1.6 million metric tons of CO2 annually.
• First CO2 injection planned for early 2026.
• Total potential capacity across several identified vaults (as of September 2024): 325 MMT.

The company's financial footing is solid, providing the necessary cushion for these capital-intensive projects. You see this clearly in the liquidity position.

Strong liquidity of $1,154 million as of Q3 2025 is a major resource. It gives California Resources Corporation the flexibility to execute on its merger plans and capital program without undue stress. Here's the quick math on that liquidity:

The integrated power generation and natural gas infrastructure links the upstream assets to in-state energy demand, which is growing, especially with AI infrastructure development. This infrastructure provides optionality and hedges against commodity price swings for internal fuel use.

• Elk Hills Power Plant capacity: 550-MW, supplied by the adjacent Elk Hills cryogenic gas plant.
• MOU with Capital Power targets CCS for a facility with potential up to 1.1GW of power capacity.

Finally, the intangible but vital resource is the experienced technical staff and regulatory expertise in California. This expertise is evidenced by tangible achievements that de-risk future projects. They secured the nation's first Class VI permits for using depleted oil and gas reservoirs for CO2 sequestration. That's not something you can buy off the shelf; it's built over time navigating the California Environmental Protection Agency and local boards, like the Kern County Board of Supervisors, which gave unanimous approval for CTV I. That regulatory know-how is definitely a competitive moat.

Finance: draft 13-week cash view by Friday.

California Resources Corporation (CRC) - Canvas Business Model: Value Propositions

Local, responsibly sourced energy for California's demand.

• Average net production guidance for full year 2025: 136,000 BOE per day.
• Second Quarter 2025 net production: 137 thousand barrels of oil equivalent per day (MBoe/d).
• Fourth Quarter 2025E Net Production guidance range: 131 - 135 MBoe/d.
• Oil comprised 79% of net total production in Q1 2025.
• Resource Adequacy Power Capacity Payments contracted value for 2025: $150 million.
• Achieved MiQ 'Grade A' Certification for Ventura Basin assets on November 18, 2025.

Decarbonization solutions for industrial emitters via Carbon TerraVault.

First $\text{CO}_2$ injection for CTV I is planned for early 2026, with the project breaking ground on October 16, 2025.

Sustainable cash flow per share growth and robust shareholder returns.

• Quarterly cash dividend declared November 4, 2025: $0.405 per share, a 5% increase.
• Total annual dividend expected: $1.62 per share.
• Total capital returned to shareholders in the nine months ended September 30, 2025: $454 million.
• Share repurchases in the nine months ended September 30, 2025: $352 million.
• Total capital returned to shareholders since May 2021: More than $1.5 billion.
• Share Repurchase Program authorized through June 30, 2026.
• First Quarter 2025 Cash Flow Per Share (CFPS): $2.76.
• Free Cash Flow generated in Q3 2025: $188 million.

Financial resilience with a low-cost structure and strong hedge book.

• 2025 Targeted Controllable Cost Structure estimate: $220 million.
• Cost reduction target achieved: Combined operating and G&A costs were approximately 7% lower than the original outlook for the first half of 2025.
• Aera merger synergies expected to be realized in 2025: $185 million.
• Oil production hedged for 2025: More than 70% at $67 per barrel.
• Fuel Gas Hedging for 2025: More than 60% at $3.95 per MMBTU.
• Corporate breakeven Brent oil price assumption: Approximately $34.
• Total Liquidity as of Q2 2025: Over $1 billion.
• Leverage ratio as of Q2 2025: Below 1X.

California Resources Corporation (CRC) - Canvas Business Model: Customer Relationships

You're looking at how California Resources Corporation (CRC) manages its connections with the entities that buy its energy and carbon management services. It's a dual focus: maintaining the core business relationships while aggressively building out the customer base for Carbon TerraVault (CTV).

Direct, long-term contractual relationships with California refineries.

For the traditional energy segment, relationships are anchored in the physical assets and the supply chain within California. While specific long-term contract values with refineries aren't public, the operational scale suggests deep integration. CRC's net production averaged $\mathbf{137}$ thousand barrels of oil equivalent per day ($\text{MBoe/d}$) in Q2 $\mathbf{2025}$ and Q3 $\mathbf{2025}$, with oil comprising $\mathbf{80\%}$ in Q2 and $\mathbf{78\%}$ in Q3 of that mix. This consistent supply volume forms the basis of the relationship with downstream processors.

Dedicated Carbon TerraVault sales team for industrial emitters.

The CTV business is actively forging relationships with industrial emitters for carbon capture and sequestration (CCS) services. This involves securing Memorandums of Understanding (MOUs) that represent future revenue streams. For instance, CTV signed an MOU with National Cement for the 'Lebec Net Zero' initiative, which is supported by up to $\mathbf{\$500}$ million of Department of Energy funding and targets up to $\mathbf{1}$ MMTPA of $\text{CO}_2$ emissions. Furthermore, an MOU was signed with Capital Power to evaluate CCS solutions for its La Paloma generation facility, potentially serving up to $\mathbf{3}$ million metric tons of $\text{CO}_2$ annually. CRC owns $\mathbf{51\%}$ of the Carbon TerraVault Joint Venture (CTV JV) that develops these assets, with Brookfield holding the remaining $\mathbf{49\%}$ interest.

• Targeting first $\text{CO}_2$ injection at the CTV I - 26R reservoir by year-end $\mathbf{2025}$ or early $\mathbf{2026}$.
• Construction of California's first CCS project at Elk Hills is expected to complete around year-end $\mathbf{2025}$.
• The company has received California's first Environmental Protection Agency Class VI well permits for $\text{CO}_2$ storage.

Transparent communication and capital returns to shareholders.

CRC emphasizes transparent communication, particularly through consistent financial reporting and a clear capital return policy. The commitment is evident in the actual dollars returned. You can see the scale of this commitment in the table below:

The Board increased the quarterly dividend by $\mathbf{5\%}$, setting the total annual dividend to $\mathbf{\$1.62}$ per share. Honestly, that consistent action speaks volumes about their view of the underlying cash generation, which hit $\mathbf{\$188}$ million in free cash flow in Q3 $\mathbf{2025}$.

Negotiating Power Purchase Agreements (PPAs) with large consumers.

Beyond the CCS MOUs, CRC is also positioning its energy assets to secure long-term power agreements. The Carbon TerraVault team is engaged in discussions with multiple large-scale industrial customers for a Power Purchase Agreement (PPA) that is expected later in $\mathbf{2025}$. This suggests they are looking to lock in revenue stability for power generated alongside their decarbonization solutions, mirroring the trend where PPAs secure fixed prices for $\mathbf{10-20}$ years.

Finance: draft $\mathbf{13}$-week cash view by Friday.

California Resources Corporation (CRC) - Canvas Business Model: Channels

Direct pipeline and transportation to California refineries and marketers

California Resources Corporation (CRC) delivered production volumes through its existing infrastructure channels.

• Q3 2025 Net Production: 137 thousand barrels of oil equivalent per day (MBoe/d).
• Q3 2025 Oil Mix: 78% of production.
• Q1 2025 Net Production: 141 thousand barrels of oil equivalent per day (MBoe/d).
• Q1 2025 Oil Mix: 79% of production.

Carbon TerraVault (CTV) as the dedicated carbon management business

Carbon TerraVault Holdings, LLC (CTV), a subsidiary of California Resources Corporation (CRC), utilizes a joint venture structure for its Carbon Capture and Storage (CCS) development.

Power grid connections for electricity sales via PPAs

CRC is exploring power sales channels leveraging its decarbonized energy solutions.

• Discussions ongoing for a power purchase agreement (PPA) expected in 2025.
• CRC-IB advised on the financing for a 200 MW / 800 MWh Energy Storage Project.
• Global Corporate PPA Market Size (2024) USD 3.16 billion Market valuation.

Investor Relations outreach and financial reporting for capital markets

Financial performance metrics channel directly into capital markets communications.

Investor Relations contacts include Joanna Park, Vice President, Investor Relations and Treasurer, and Daniel Juck, Senior Director, Investor Relations.

California Resources Corporation (CRC) - Canvas Business Model: Customer Segments

You're looking at the key groups California Resources Corporation (CRC) serves, which is a mix of traditional energy buyers and new decarbonization partners. Here's the breakdown based on late 2025 figures.

California Refineries and Marketers (primary purchasers of E&P products)

This segment buys the crude oil, natural gas, and natural gas liquids that CRC produces. CRC markets these products to California refineries and other purchasers with access to local facilities. The production base supporting this segment was reported at an average of 136 thousand barrels of oil equivalent per day (kboe/d) for the full year 2025 guidance, with Q3 2025 production specifically at 137 thousand barrels of oil equivalent per day (MBoe/d), of which 78% was oil. To put the local market need in perspective, California imported over 300 million barrels of oil and natural gas from foreign countries in 2022 alone.

Large Industrial Emitters seeking permanent CO2 sequestration

This is the customer base for CRC's Carbon TerraVault (CTV) business. A key example is the Memorandum of Understanding (MOU) signed with Capital Power to evaluate carbon capture and sequestration (CCS) for their La Paloma 1.1 GW natural gas combined-cycle facility. Under that MOU, CTV intends to assess serving as the exclusive provider for up to 3 million metric tons per annum (MMTPA) of CO2. The first internal project, CTV I at Elk Hills, is planned to capture and store up to 100 thousand metric tons (KMTPA) of CO2 per annum from CRC's own gas plant. The 26R reservoir for CTV I has a total estimated capacity of up to 38 million metric tons. For this sequestration service, CRC expects to qualify for $85 per metric ton in 45Q tax credits.

Power Consumers, including new segments like AI data centers

CRC is actively pursuing power-related customers, with management noting multiple new power Power Purchase Agreements (PPAs) under negotiation, specifically mentioning AI data centers. The company's resource adequacy payments, which relate to standby power capacity for the grid, contributed a contracted value of $150 million for 2025.

Equity and Debt Investors seeking returns and financial stability

Investors are focused on CRC's financial health and shareholder return policy. As of early December 2025, the company's market capitalization stood at $4.00 billion, with an institutional ownership level reported at 101.81%. The company has a low leverage profile, with a debt-to-equity ratio of 0.26. CRC returned $454 million to shareholders in the first nine months of 2025 through dividends and buybacks. The quarterly dividend was recently increased to $0.405 per share, which translates to a total annual dividend of $1.62 per share. As of September 30, 2025, $205 million remained authorized for share repurchases through June 30, 2026. Liquidity at the end of Q3 2025 was $1,154 million.

• Total Shareholder Returns Since May 2021: more than $1.5 billion
• Q3 2025 Adjusted EBITDAX: $338 million
• Q3 2025 Free Cash Flow: $188 million
• 2025 Full-Year Adjusted EBITDAX Guidance Midpoint: $1.15 billion (between $1.1 billion and $1.2 billion)
• Short Percent (as of Nov 4, 2025): 3.1%

California Resources Corporation (CRC) - Canvas Business Model: Cost Structure

You're looking at the core expenditures that keep California Resources Corporation running and funding its transition strategy. The cost structure is heavily influenced by ongoing operations, necessary capital investment in existing assets, and strategic spending on new ventures like carbon capture.

The company's operational costs show discipline, especially following the Aera merger integration. For the first quarter of 2025, combined Operating and G&A expenses totaled $388 million. To break that down further for Q1 2025, General and administrative expenses were $72 million, which excludes $6 million for stock-based compensation. This performance was noted as being about 5% below guidance.

Capital spending is split between maintaining current production and investing in the future. The full-year 2025 guidance for Drilling, Completion, and Workover (D&C) capital investment was set between $165 million and $180 million. However, by the second quarter, the company lowered the 2025 D&C capital program by $5 million. For the third quarter alone, D&C capital spend was $43 million. The total capital investment expectation for 2025 was previously cited in a range of $285 million to $335 million.

Debt management is a key cost consideration, directly impacting interest expense. California Resources Corporation executed a significant debt reduction in early 2025. In February 2025, CRC redeemed $123 million of its 7.125% Senior Notes due 2026 at 100.000% of the principal amount. The company planned to redeem the remaining $122 million balance in the second half of 2025, and later announced the redemption of all outstanding 2026 Notes for October 10, 2025. This move underscores a focus on maintaining a strong balance sheet.

The investment in the Carbon TerraVault project is a necessary, forward-looking spend. This is CRC's carbon capture and storage (CCS) initiative. The company achieved a major milestone by receiving authorization to construct from the U.S. Environmental Protection Agency (EPA) for CO2 injection wells for the 26R storage reservoir during the second quarter of 2025. Groundbreaking for the first CCS project at the Elk Hills Cryogenic Gas Plant occurred, with initial CO2 injection targeted by year-end 2025.

Costs tied to operating in California are also a factor, though specific figures for regulatory compliance and permitting are not explicitly detailed as a separate line item in the provided data. However, regulatory challenges in the oil and gas permitting process are noted as a risk.

Here's a snapshot of the key financial figures impacting the cost structure:

The company is actively managing its interest costs by eliminating the 7.125% notes. Also, realizing the Aera merger synergies is a direct reduction to the cost base, with $185 million expected in 2025 and the remaining $50 million in 2026, totaling the $235 million annualized target.

California Resources Corporation (CRC) - Canvas Business Model: Revenue Streams

You're looking at the core ways California Resources Corporation brings in cash as of late 2025. It's a mix of traditional energy sales and emerging low-carbon revenue, which is key to their strategy.

The primary revenue driver remains the Sales of Crude Oil, Natural Gas, and Natural Gas Liquids (NGLs). This is the bread and butter, though the company is clearly pushing the transition aspect.

For the full fiscal year 2025, California Resources Corporation (CRC) reaffirmed its guidance midpoint for Adjusted EBITDAX guidance midpoint of $1.235 billion. This figure reflects strong operational execution and cost discipline, even with commodity price fluctuations.

Here's a snapshot of the core production and recent revenue performance that feeds into those streams:

The company is actively building out its energy transition revenue, specifically through its carbon management arm, Carbon TerraVault (CTV). This represents Future revenue from Carbon Capture and Storage (CCS) service fees.

The revenue potential here is tied to sequestration volumes and regulatory credits. For instance, the Elk Hills CCS project is projected to generate:

• EBITDA of $50 - $60 per metric ton in sequestration fees paid by CRC itself.
• Qualification for $85 per metric ton in 45Q tax credits.

To give you a sense of the valuation analysts are placing on this segment, Wells Fargo conservatively estimates the CCUS business to be worth about $5 per share, based on less than 8 million tons per annum of injection starting from 2030. Furthermore, the recent Memorandum of Understanding with Capital Power involves evaluating services for up to 3 million metric tons of captured CO2 annually.

Finally, CRC includes Sales of power generation under Power Purchase Agreements (PPAs) as a distinct revenue component, often tied to their low-carbon strategy. While specific PPA revenue figures aren't broken out, analysts have assigned a conservative value to this part of the business:

• Wells Fargo values CRC's power business at approximately $7.70 per share in a conservative case.

This dual-stream approach-selling hydrocarbons while building out CCS and power solutions-is how California Resources Corporation structures its top line.