California Resources Corporation

What they do

CRC produces crude oil and natural gas primarily in California; second quarter 2026 net production averaged 149 thousand barrels of oil equivalent per day, 81% of which was oil. It also operates a carbon management segment built around Carbon TerraVault, which reached first CO2 injection and revenue at CTV I in the second quarter of 2026. The company is expanding into midstream by agreeing to acquire Crimson Midstream Holdings' California pipeline and storage assets for $63 million in cash.

Revenue drivers

• Oil production (California) — The dominant revenue source; Q2 2026 production was 149 MBoe/d, 81% oil, and revenue of $1.06B was reported for the quarter ended 2026-06-30 versus $715.0M a year earlier.
• Natural gas production — Produced alongside oil in California; the remaining 19% of Q2 2026 net production was non-oil, though the filings provided do not break out its revenue contribution.
• Carbon management / Carbon TerraVault — CCS business that began generating revenue in Q2 2026 with first CO2 injection at CTV I; the 10-K lists a separate MD&A section for this segment, but no segment revenue figure is given in the excerpts.
• Midstream and infrastructure — Being added via the pending Crimson acquisition of California pipeline systems and storage assets, intended to support CRC's integrated platform; no standalone revenue contribution is disclosed in the excerpts.

Recent performance

For the second quarter of 2026, CRC reported net income of $514 million, adjusted net income of $88 million and adjusted EBITDAX of $338 million. Net cash provided by operating activities was $263 million, or $300 million before changes in operating assets and liabilities, and free cash flow was $114 million. Total capital invested was $149 million, including $101 million of drilling, completions and workover capital, and the company returned $36 million to shareholders through dividends. Results were reduced by roughly $25 million from temporarily building about 137 thousand barrels of oil inventory due to takeaway constraints, weaker differentials and higher operating and transportation costs. Quarterly revenue has risen from $715.0M in Q3 2025 to $1.06B in Q2 2026.

Strategy

CRC is integrating the Berry merger and said it has implemented more than 100% of the annual synergy target, representing $103 million of annualized savings six months ahead of schedule. It lowered its California long-term maintenance capital outlook by about 5% to a $450 million-$475 million range with six drilling rigs instead of seven. The company optimized its capital structure with a $550 million offering of 7.250% senior notes due 2035 and redemption of all remaining 8.250% senior notes due 2029. It agreed to acquire Crimson Midstream's California pipeline and storage assets for $63 million and announced the Golden Valley Technology Hub data center project with Beacon Data Centers at Elk Hills. Carbon management efforts reached first CO2 injection and revenue at CTV I.

Risks

• Commodity price volatility — Product prices are volatile and a substantial decline over an extended period could materially affect CRC's financial condition, results, cash flow and ability to invest.
• California geographic concentration — Producing properties are located primarily in California, exposing CRC to drought, earthquake, wildfire and other regional risks.
• Refining and pipeline capacity — Reductions in California refining and pipeline capacity could impair CRC's ability to market production and its realized prices; Q2 2026 results were already reduced by roughly $25 million partly from temporary takeaway constraints.
• Carbon management execution — The Carbon TerraVault business may not grow or develop large-scale CCS projects, and depends on financial and tax incentives that may be insufficient, unavailable, delayed, reduced or terminated.

Outlook

Management said recent efficiency gains and continued Berry synergy capture strengthen its long-term outlook and that it can maintain flat California production with fewer rigs and less maintenance capital, creating momentum into 2027 and beyond. The company lowered long-term maintenance capital to a $450 million-$475 million range with six drilling rigs, down from seven. It pointed to the Crimson acquisition, the Golden Valley Technology Hub with Beacon, and first CO2 injection at CTV I as moves that strengthen the integrated energy platform.