California Resources Faces Permit Challenges And Oversupply Risks—Analyst Sees Growth, But Stay Cautious
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 14 2025
0mins
Should l Buy CRC?
Source: Benzinga
Analyst Rating and Performance: J.P. Morgan analyst Alejandra Magana maintains a Neutral rating on California Resources Corporation (CRC) with a price target of $63, noting a strong fourth quarter despite missing EPS and revenue estimates, while highlighting challenges from California regulations and potential oversupply concerns in 2025.
Regulatory Challenges and Opportunities: The company is facing stalled permit inventory due to regulatory revisions and may encounter further local restrictions; however, it is exploring clean power initiatives and has unique opportunities in carbon capture and storage (CCS).
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Analyst Views on CRC
Wall Street analysts forecast CRC stock price to rise
9 Analyst Rating
9 Buy
0 Hold
0 Sell
Strong Buy
Current: 61.460
Low
56.00
Averages
64.33
High
72.00
Current: 61.460
Low
56.00
Averages
64.33
High
72.00
About CRC
California Resources Corporation is an independent energy and carbon management company committed to energy transition. The Company’s segments include Oil and Natural Gas and Carbon Management. Its Carbon Management business, Carbon TerraVault, focuses on building, installing, operating, and maintaining carbon dioxide equipment, transportation assets and storage facilities. The Oil and Natural Gas segment explores for, develops and produces crude oil, oil condensate, natural gas liquids and natural gas. It has operations in oil and gas basins, including San Joaquin Basin, Los Angeles Basin, Sacramento Basin, and other. It has interests in oil and gas fields throughout the San Joaquin basin, including in Elk Hills, Buena Vista, Coles Levee, North Belridge and South Belridge, Kern Front, Lost Hills, Cymric, McKittrick, Midway Sunset and Coalinga. The Los Angeles Basin is a northwest-trending plain about 50 miles long and 20 miles wide. The Company is also focused on Uinta basin.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
California Resources Corporation Q1 2026 Earnings Call Highlights
- Earnings Growth Outlook: California Resources Corporation reported an adjusted EBITDAX of $304 million for Q1 2026, exceeding guidance midpoint by approximately 17%, with a full-year adjusted EBITDAX midpoint target of $1.45 billion, indicating significant profitability enhancement amid market volatility.
- Increased Drilling Activity: The company plans to add three rigs this summer, with two in California and one in Utah, aiming to drill approximately 357 new wells throughout the year, reflecting a proactive strategy to enhance production capacity and market responsiveness.
- Carbon Capture Project Progress: CRC completed the construction of California's first commercial-scale carbon capture and storage project at its Elk Hills gas plant, expecting to receive final EPA approval soon, which will solidify the company's leadership position in environmental sustainability.
- Free Cash Flow Outlook: The company anticipates free cash flow exceeding $800 million in 2026, showcasing ongoing improvements in capital deployment and operational efficiency, thereby enhancing its financial resilience in an uncertain market environment.
See More
CRC Q1 2026 Earnings Call Transcript
See More
California Gas Prices Surge Amidst Energy Dynamics
- High Gas Prices: California's gasoline tax stands at $0.70 per gallon, approximately 280% higher than Hawaii, making it the highest in the nation and directly impacting consumer travel costs and living expenses.
- Increased Import Dependency: Despite having over 1.5 billion barrels of proven oil reserves, California's reliance on imports has intensified due to refinery closures, with a recent tanker bringing over 530,000 barrels of fuel oil from Algeria, highlighting the state's energy supply vulnerabilities.
- Uncertain Market Outlook: Analysts warn that oil prices may remain elevated, with Evercore ISI noting that if prices stay between $93 and $98 in the coming months, it could pose risks to stock market recovery, urging investors to remain vigilant.
- Strong Company Performance: California Resources Corp (CRC), the only pure-play oil company in the state, has a favorable analyst target price averaging $80, implying about a 10% upside, reflecting market confidence in its future growth.
See More
California Resources Q1 Earnings Miss Expectations Amid Revenue Decline
- Disappointing Earnings: California Resources reported a Q1 non-GAAP EPS of $0.88, missing expectations by $0.02, with revenue plummeting to $119 million, down 87% year-over-year, indicating significant revenue challenges for the company.
- Increased Merger Synergies: The company raised the midpoint of its expected annual synergy target from the Berry merger by 12% to $90-$100 million, reflecting enhanced confidence in resource integration.
- Capital Expenditure Adjustments: Expected investments in drilling, completions, and workover capital in California and Utah will increase by approximately $100 million to accelerate high-return drilling projects, while facilities capital is reduced by $10 million, indicating ongoing field consolidation efforts.
- Production Target Upgrade: The 2026 estimated gross production exit rate is targeted at approximately 175 MBoe/d, representing about 1% production growth, with a projected 42% increase in adjusted EBITDAX to a midpoint of $1.45 billion, driven by rising oil prices and increased drilling activity.
See More
Carbon Management Firm Q1 Performance Update
- First Carbon Capture Project: The upcoming CO2 injection at CRC's Elk Hills plant marks California's inaugural carbon capture and storage project, positioning CTV as one of only two U.S. oil and gas companies with EPA-permitted operations, enhancing its market standing in carbon management.
- EPA Permit Acceleration: The U.S. EPA selected CTV VII as the sole regional project, reflecting its efforts to expedite carbon storage permitting, which is expected to facilitate faster project advancement and market acceptance for the company.
- Federal Support Reinstated: The Department of Energy has reopened negotiations with California State University Bakersfield to support EPA Class VI well characterization work at Elk Hills, further solidifying CTV's technical foundation in carbon storage.
- Financial Guidance Outlook: Projected capital expenditures for Q2 2026 are between $2 million and $5 million, with total annual spending expected to range from $12 million to $20 million, demonstrating the company's confidence and commitment to future investments in carbon management.
See More
Carbon Management Firm Q1 Performance Update
- Carbon Capture Progress: Carbon TerraVault Holdings is preparing for CO₂ injection at California's first carbon capture and storage project at Elk Hills, positioning CRC as one of only two U.S. oil and gas companies with EPA-permitted operations, which is expected to enhance its market position in carbon management.
- Regulatory Support Strengthened: The U.S. EPA has selected CTV VII as the sole regional project under its expedited Class VI permit review program, reflecting efforts to accelerate carbon storage permitting, which will provide crucial support for future project approvals and boost market confidence.
- Financial Performance Improvement: In Q1 2026, the Carbon Management Business reported an adjusted EBITDAX of -$8 million, an improvement from -$15 million in the same period last year, indicating positive progress in cost control and operational efficiency.
- Optimistic Outlook: The company expects to receive at least two additional EPA Class VI draft permits in 2026, further advancing carbon capture project implementation, while engaging in discussions with multiple customers for power supply, aiding CRC's strategic positioning in the renewable energy sector.
See More
California Resources Corporation Q1 2026 Earnings Call Highlights
- Earnings Growth Outlook: California Resources Corporation reported an adjusted EBITDAX of $304 million for Q1 2026, exceeding guidance midpoint by approximately 17%, with a full-year adjusted EBITDAX midpoint target of $1.45 billion, indicating significant profitability enhancement amid market volatility.
- Increased Drilling Activity: The company plans to add three rigs this summer, with two in California and one in Utah, aiming to drill approximately 357 new wells throughout the year, reflecting a proactive strategy to enhance production capacity and market responsiveness.
- Carbon Capture Project Progress: CRC completed the construction of California's first commercial-scale carbon capture and storage project at its Elk Hills gas plant, expecting to receive final EPA approval soon, which will solidify the company's leadership position in environmental sustainability.
- Free Cash Flow Outlook: The company anticipates free cash flow exceeding $800 million in 2026, showcasing ongoing improvements in capital deployment and operational efficiency, thereby enhancing its financial resilience in an uncertain market environment.
See More
CRC Q1 2026 Earnings Call Transcript
See More
California Gas Prices Surge Amidst Energy Dynamics
- High Gas Prices: California's gasoline tax stands at $0.70 per gallon, approximately 280% higher than Hawaii, making it the highest in the nation and directly impacting consumer travel costs and living expenses.
- Increased Import Dependency: Despite having over 1.5 billion barrels of proven oil reserves, California's reliance on imports has intensified due to refinery closures, with a recent tanker bringing over 530,000 barrels of fuel oil from Algeria, highlighting the state's energy supply vulnerabilities.
- Uncertain Market Outlook: Analysts warn that oil prices may remain elevated, with Evercore ISI noting that if prices stay between $93 and $98 in the coming months, it could pose risks to stock market recovery, urging investors to remain vigilant.
- Strong Company Performance: California Resources Corp (CRC), the only pure-play oil company in the state, has a favorable analyst target price averaging $80, implying about a 10% upside, reflecting market confidence in its future growth.
See More
California Resources Q1 Earnings Miss Expectations Amid Revenue Decline
- Disappointing Earnings: California Resources reported a Q1 non-GAAP EPS of $0.88, missing expectations by $0.02, with revenue plummeting to $119 million, down 87% year-over-year, indicating significant revenue challenges for the company.
- Increased Merger Synergies: The company raised the midpoint of its expected annual synergy target from the Berry merger by 12% to $90-$100 million, reflecting enhanced confidence in resource integration.
- Capital Expenditure Adjustments: Expected investments in drilling, completions, and workover capital in California and Utah will increase by approximately $100 million to accelerate high-return drilling projects, while facilities capital is reduced by $10 million, indicating ongoing field consolidation efforts.
- Production Target Upgrade: The 2026 estimated gross production exit rate is targeted at approximately 175 MBoe/d, representing about 1% production growth, with a projected 42% increase in adjusted EBITDAX to a midpoint of $1.45 billion, driven by rising oil prices and increased drilling activity.
See More
Carbon Management Firm Q1 Performance Update
- First Carbon Capture Project: The upcoming CO2 injection at CRC's Elk Hills plant marks California's inaugural carbon capture and storage project, positioning CTV as one of only two U.S. oil and gas companies with EPA-permitted operations, enhancing its market standing in carbon management.
- EPA Permit Acceleration: The U.S. EPA selected CTV VII as the sole regional project, reflecting its efforts to expedite carbon storage permitting, which is expected to facilitate faster project advancement and market acceptance for the company.
- Federal Support Reinstated: The Department of Energy has reopened negotiations with California State University Bakersfield to support EPA Class VI well characterization work at Elk Hills, further solidifying CTV's technical foundation in carbon storage.
- Financial Guidance Outlook: Projected capital expenditures for Q2 2026 are between $2 million and $5 million, with total annual spending expected to range from $12 million to $20 million, demonstrating the company's confidence and commitment to future investments in carbon management.
See More
Carbon Management Firm Q1 Performance Update
- Carbon Capture Progress: Carbon TerraVault Holdings is preparing for CO₂ injection at California's first carbon capture and storage project at Elk Hills, positioning CRC as one of only two U.S. oil and gas companies with EPA-permitted operations, which is expected to enhance its market position in carbon management.
- Regulatory Support Strengthened: The U.S. EPA has selected CTV VII as the sole regional project under its expedited Class VI permit review program, reflecting efforts to accelerate carbon storage permitting, which will provide crucial support for future project approvals and boost market confidence.
- Financial Performance Improvement: In Q1 2026, the Carbon Management Business reported an adjusted EBITDAX of -$8 million, an improvement from -$15 million in the same period last year, indicating positive progress in cost control and operational efficiency.
- Optimistic Outlook: The company expects to receive at least two additional EPA Class VI draft permits in 2026, further advancing carbon capture project implementation, while engaging in discussions with multiple customers for power supply, aiding CRC's strategic positioning in the renewable energy sector.
See More
