California Resources Corp Reports Q3 2024 Earnings: EPS at $3.78, Revenue Hits $1,353 Million

Key Financial Achievements and Strategic Developments in Carbon Management

Author's Avatar
Nov 05, 2024
Summary
  • Net Income: Achieved $345 million, translating to $3.78 per diluted share.
  • Adjusted EBITDAX: Reported at $402 million, showcasing strong operational performance.
  • Free Cash Flow: Generated $141 million, reflecting robust cash generation capabilities.
  • Revenue: Total operating revenues reached $1,353 million, a significant increase from the previous quarter.
  • Shareholder Returns: Returned 54% of quarterly free cash flow, including $42 million in share repurchases and $34 million in dividends.
  • Liquidity: Ended the quarter with $213 million in cash and cash equivalents and $1,138 million in total liquidity.
Article's Main Image

On November 5, 2024, California Resources Corp (CRC, Financial) released its 8-K filing detailing the financial and operational results for the third quarter of 2024. As an independent oil and natural gas exploration and production company, CRC operates exclusively in California, focusing on providing affordable and reliable energy while advancing carbon management initiatives.

1853923493624836096.png

Financial Performance and Challenges

California Resources Corp (CRC, Financial) reported a net income of $345 million for the third quarter of 2024, translating to $3.78 per diluted share. This represents a substantial increase compared to the previous quarter's net income of $8 million. The company also achieved an adjusted net income of $137 million, or $1.50 per diluted share. These results underscore CRC's ability to generate significant earnings despite the volatile oil and gas market.

However, CRC faces challenges related to the integration of Aera Energy LLC, which impacted cash flow from operations by $57 million due to transaction and integration costs. Additionally, employee severance and related costs amounted to $27 million for the quarter, with further expenses expected in the coming quarters.

Key Financial Achievements

CRC's financial achievements include generating $402 million in adjusted EBITDAX and $141 million in free cash flow. The company returned 54% of its quarterly free cash flow to shareholders, amounting to $76 million, through share repurchases and dividends. These achievements highlight CRC's commitment to shareholder returns and its ability to maintain a strong financial position.

Operational Highlights and Strategic Initiatives

The company reported an average net production sold of 145 thousand barrels of oil equivalent per day (MBoe/d), with net oil production sold at 113 thousand barrels per day (MBo/d). CRC's operational efficiency is further demonstrated by its drilling and workover capital investments of $38 million, which were lower than anticipated due to strategic capital allocation.

CRC is advancing its carbon management platform, receiving California's first conditional use permits for the Carbon TerraVault I CCS project in Kern County. The company also signed a memorandum of understanding with Hull Street Energy LLC to develop carbon capture and storage solutions, reinforcing its commitment to decarbonization.

Financial Statements Overview

Metric Q3 2024 Q2 2024
Total Operating Revenues $1,353 million $514 million
Operating Costs $311 million $156 million
Net Cash Provided by Operating Activities $220 million $97 million
Free Cash Flow $141 million $63 million

Analysis and Outlook

California Resources Corp (CRC, Financial) has demonstrated robust financial performance in the third quarter of 2024, driven by strategic capital management and operational efficiencies. The company's focus on carbon management and shareholder returns positions it well for future growth. However, the integration of Aera Energy LLC and associated costs remain a challenge that CRC must navigate carefully.

Looking ahead, CRC's strategic initiatives in carbon capture and storage, along with its disciplined financial management, are expected to support continued value creation for shareholders. The company's ability to adapt to market conditions and leverage its assets for decarbonization will be crucial in maintaining its competitive edge in the energy sector.

Explore the complete 8-K earnings release (here) from California Resources Corp for further details.