[10-Q] California Resources Corporation Quarterly Earnings Report
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Filing Sentiment
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10-Q
8x8, Inc. (EGHT) Q1 FY26 10-Q highlights (quarter ended 30 Jun 2025):
- Revenue: $181.4 M (+1.8% YoY). Service revenue rose 2.0% to $176.3 M; usage growth offset modest subscription attrition.
- Profitability: GAAP gross margin 66.4% (-150 bp YoY). Operating result swung to a $0.6 M profit from a $1.4 M loss. Net loss narrowed to $4.3 M (-0.03 EPS) vs. $10.3 M (-0.08 EPS).
- Cost discipline: R&D down 11.7%; G&A flat; sales & marketing held to +1.6%. Interest expense fell 60% after refinancing the 2022 term loan with a lower-cost 2024 facility.
- Cash & liquidity: Cash and cash equivalents $81.3 M (-$6.7 M Q-to-Q). OCF positive at $11.9 M; $15 M of term-loan principal prepaid and $1.8 M of stock repurchased.
- Balance sheet: Total assets $684.3 M; stockholders鈥� equity improved to $128.2 M (from $122.2 M at 31 Mar 25). Net debt (cash minus term loan & convertibles) roughly $384 M.
- Geography: U.S. revenue fell 8% YoY to $113.1 M; U.K. +5%; Other International +44% on CPaaS strength.
- Outlook & risks: Management cites macro uncertainty, customer churn, and leverage (term loan + $202 M converts) as key headwinds; 83% of $755 M RPO expected to convert to revenue within 24 months.
The quarter shows early traction in cost control and debt refinancing, but topline growth remains modest and margin compression in service delivery warrants monitoring.
8x8, Inc. (EGHT) risultati del primo trimestre esercizio 26 (trimestre terminato il 30 giugno 2025):
- Ricavi: 181,4 milioni di dollari (+1,8% su base annua). I ricavi da servizi sono aumentati del 2,0% a 176,3 milioni di dollari; la crescita dell'utilizzo ha compensato una modesta perdita di abbonati.
- 搁别诲诲颈迟颈惫颈迟脿: margine lordo GAAP al 66,4% (-150 punti base su base annua). Il risultato operativo 猫 passato a un utile di 0,6 milioni di dollari da una perdita di 1,4 milioni. La perdita netta si 猫 ridotta a 4,3 milioni di dollari (-0,03 EPS) rispetto a 10,3 milioni (-0,08 EPS).
- Disciplina dei costi: R&S in calo dell'11,7%; G&A stabili; vendite e marketing contenuti a +1,6%. Gli oneri finanziari sono diminuiti del 60% dopo il rifinanziamento del prestito a termine 2022 con una struttura a costo inferiore del 2024.
- Liquidit脿 e cassa: liquidit脿 e mezzi equivalenti a 81,3 milioni di dollari (-6,7 milioni rispetto al trimestre precedente). Flusso di cassa operativo positivo a 11,9 milioni; 15 milioni di dollari di capitale del prestito a termine rimborsati anticipatamente e 1,8 milioni di azioni riacquistate.
- Stato patrimoniale: attivit脿 totali 684,3 milioni di dollari; patrimonio netto migliorato a 128,2 milioni (da 122,2 milioni al 31 marzo 2025). Debito netto (cassa meno prestito a termine e convertibili) circa 384 milioni.
- Geografia: ricavi USA in calo dell'8% su base annua a 113,1 milioni; Regno Unito +5%; altre aree internazionali +44% grazie alla forza del CPaaS.
- Prospettive e rischi: la direzione segnala incertezze macroeconomiche, abbandono clienti e leva finanziaria (prestito a termine + 202 milioni di convertibili) come principali ostacoli; l'83% dei 755 milioni di dollari di RPO dovrebbe convertirsi in ricavi entro 24 mesi.
Il trimestre mostra i primi segnali positivi nel controllo dei costi e nel rifinanziamento del debito, ma la crescita dei ricavi rimane modesta e la compressione dei margini nella fornitura di servizi richiede attenzione.
8x8, Inc. (EGHT) destacados del primer trimestre del a帽o fiscal 26 (trimestre finalizado el 30 de junio de 2025):
- Ingresos: 181,4 millones de d贸lares (+1,8% interanual). Los ingresos por servicios aumentaron un 2,0% a 176,3 millones; el crecimiento del uso compens贸 una ligera p茅rdida de suscripciones.
- Rentabilidad: margen bruto GAAP del 66,4% (-150 puntos b谩sicos interanual). El resultado operativo pas贸 a un beneficio de 0,6 millones de d贸lares desde una p茅rdida de 1,4 millones. La p茅rdida neta se redujo a 4,3 millones (-0,03 EPS) frente a 10,3 millones (-0,08 EPS).
- Disciplina de costos: I+D baj贸 un 11,7%; G&A se mantuvo estable; ventas y marketing limitados a +1,6%. Los gastos por intereses cayeron un 60% tras refinanciar el pr茅stamo a plazo de 2022 con una l铆nea m谩s barata en 2024.
- Liquidez y caja: efectivo y equivalentes en 81,3 millones (-6,7 millones trimestre a trimestre). Flujo de caja operativo positivo en 11,9 millones; 15 millones de principal de pr茅stamo a plazo prepagados y 1,8 millones en recompra de acciones.
- Balance: activos totales 684,3 millones; patrimonio neto mejor贸 a 128,2 millones (desde 122,2 millones al 31 de marzo de 2025). Deuda neta (efectivo menos pr茅stamo a plazo y convertibles) aproximadamente 384 millones.
- 骋别辞驳谤补蹿铆补: ingresos en EE.UU. cayeron un 8% interanual a 113,1 millones; Reino Unido +5%; otras regiones internacionales +44% gracias al impulso de CPaaS.
- Perspectivas y riesgos: la direcci贸n menciona incertidumbre macro, p茅rdida de clientes y apalancamiento (pr茅stamo a plazo + 202 millones en convertibles) como principales desaf铆os; se espera que el 83% de los 755 millones de RPO se conviertan en ingresos en 24 meses.
El trimestre muestra avances iniciales en control de costos y refinanciamiento de deuda, pero el crecimiento de ingresos sigue siendo moderado y la compresi贸n de m谩rgenes en la prestaci贸n de servicios requiere vigilancia.
8x8, Inc. (EGHT) 2026 須岅硠鞐半弰 1攵勱赴 10-Q 欤检殧 雮挫毄 (2025雲� 6鞗� 30鞚� 膦呺 攵勱赴):
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- 靾橃澋靹�: GAAP 齑濎澊鞚惦 66.4% (鞝勲厔 雽�牍� -150bp). 鞓侅梾鞚挫澋鞚� 140毵� 雼煬 靻愳嫟鞐愳劀 60毵� 雼煬 鞚挫澋鞙茧 鞝勴櫂. 靾滌啇鞁れ潃 430毵� 雼煬 (-0.03 EPS)搿� 於曥唽, 鞚挫爠 攵勱赴 1,030毵� 雼煬 (-0.08 EPS) 雽�牍� 臧滌劆.
- 牍勳毄 甏�毽�: 鞐瓣惮臧滊皽牍� 11.7% 臧愳唽; 甏�毽箘電� 鞙犾; 韺愲Г 氚� 毵堨紑韺呺箘電� 1.6% 歃濌皜鞐� 攴胳龚. 2022雲� 旮绊暅攵� 雽�於滌潉 2024雲� 鞝�牍勳毄 雽�於滊 鞛湹鞛愴晿氅� 鞚挫瀽牍勳毄 60% 臧愳唽.
- 順勱笀 氚� 鞙犽彊靹�: 順勱笀 氚� 順勱笀靹� 鞛愳偘 8,130毵� 雼煬 (攵勱赴 雽�牍� -670毵� 雼煬). 鞓侅梾頇滊彊 順勱笀頋愲鞚� 1,190毵� 雼煬 頋戩瀽; 旮绊暅攵� 雽�於� 鞗愱笀 1,500毵� 雼煬 靹犾旮� 氚� 欤检嫕 180毵� 雼煬 毵れ瀰.
- 雽赌彀寑臁绊憸: 齑濎瀽靷� 6鞏� 8,430毵� 雼煬; 鞛愲掣齑濌硠電� 1鞏� 2,820毵� 雼煬搿� 2025雲� 3鞗� 31鞚检潣 1鞏� 2,220毵� 雼煬鞐愳劀 臧滌劆. 靾滊秬毂�(順勱笀鞐愳劀 旮绊暅攵� 雽�於� 氚� 鞝勴櫂靷眲 彀皭) 鞎� 3鞏� 8,400毵� 雼煬.
- 歆赌鞐硠: 氙戈淡 毵れ稖鞚� 鞝勲厔 雽�牍� 8% 臧愳唽頃� 1鞏� 1,310毵� 雼煬; 鞓侁淡 +5%; 旮绊儉 甑牅 歆�鞐潃 CPaaS 臧曥劯搿� 44% 歃濌皜.
- 鞝勲 氚� 鞙勴棙: 瓴届榿歆勳潃 瓯办嫓瓴届牅 攵堩檿鞁れ劚, 瓿犼皾 鞚错儓, 霠堧矂毽(旮绊暅攵� 雽�於� + 2鞏� 200毵� 雼煬 鞝勴櫂靷眲)毳� 欤检殧 毽姢韥 歆�鞝�; 7鞏� 5,500毵� 雼煬 RPO鞚� 83%臧� 24臧滌洈 雮� 毵れ稖搿� 鞝勴櫂霅� 瓴冹溂搿� 鞓堨儊.
鞚措矆 攵勱赴電� 牍勳毄 韱奠牅鞕� 攵�毂� 鞛湹鞛愳棎靹� 齑堦赴 靹标臣毳� 氤挫榾鞙茧倶, 毵れ稖 靹膘灔毳犾潃 鞐爠頌� 鞕勲頃橂┌ 靹滊箘鞀� 鞝滉车 毵堨 鞎曤皶鞚� 歆�靻嶌爜鞙茧 欤检嫓頃� 頃勳殧臧� 鞛堧嫟.
8x8, Inc. (EGHT) faits saillants du 1er trimestre de l鈥檈xercice 26 (trimestre clos le 30 juin 2025) :
- Chiffre d鈥檃ffaires : 181,4 M$ (+1,8 % en glissement annuel). Les revenus des services ont augment茅 de 2,0 % pour atteindre 176,3 M$ ; la croissance de l鈥檜tilisation a compens茅 une l茅g猫re perte d鈥檃bonnements.
- 搁别苍迟补产颈濒颈迟茅 : marge brute selon les normes GAAP de 66,4 % (-150 points de base en glissement annuel). Le r茅sultat d鈥檈xploitation est pass茅 d鈥檜ne perte de 1,4 M$ 脿 un b茅n茅fice de 0,6 M$. La perte nette s鈥檈st r茅duite 脿 4,3 M$ (-0,03 BPA) contre 10,3 M$ (-0,08 BPA).
- Ma卯trise des co没ts : R&D en baisse de 11,7 % ; frais g茅n茅raux stables ; ventes et marketing limit茅s 脿 +1,6 %. Les charges d鈥檌nt茅r锚ts ont chut茅 de 60 % suite au refinancement du pr锚t 脿 terme de 2022 par une facilit茅 moins co没teuse en 2024.
- Tr茅sorerie et liquidit茅s : tr茅sorerie et 茅quivalents de tr茅sorerie 脿 81,3 M$ (-6,7 M$ d鈥檜n trimestre 脿 l鈥檃utre). Flux de tr茅sorerie op茅rationnel positif 脿 11,9 M$ ; 15 M$ de principal de pr锚t 脿 terme rembours茅s par anticipation et 1,8 M$ d鈥檃ctions rachet茅es.
- Bilan : total des actifs de 684,3 M$ ; capitaux propres en am茅lioration 脿 128,2 M$ (contre 122,2 M$ au 31 mars 2025). Dette nette (tr茅sorerie moins pr锚t 脿 terme et convertibles) d鈥檈nviron 384 M$.
- 骋茅辞驳谤补辫丑颈别 : les revenus aux 脡tats-Unis ont chut茅 de 8 % en glissement annuel 脿 113,1 M$ ; Royaume-Uni +5 % ; autres march茅s internationaux +44 % gr芒ce 脿 la vigueur du CPaaS.
- Perspectives et risques : la direction cite l鈥檌ncertitude macro茅conomique, le churn client et l鈥檈ndettement (pr锚t 脿 terme + 202 M$ de convertibles) comme principaux freins ; 83 % des 755 M$ de RPO devraient se convertir en revenus dans les 24 mois.
Le trimestre montre des premiers signes positifs dans le contr么le des co没ts et le refinancement de la dette, mais la croissance du chiffre d鈥檃ffaires reste mod茅r茅e et la compression des marges dans la prestation de services n茅cessite une surveillance continue.
8x8, Inc. (EGHT) Q1 Gesch盲ftsjahr 26 10-Q Highlights (Quartal zum 30. Juni 2025):
- Umsatz: 181,4 Mio. USD (+1,8% im Jahresvergleich). Serviceumsatz stieg um 2,0% auf 176,3 Mio. USD; Nutzungswachstum kompensierte moderaten Abonnentenverlust.
- 笔谤辞蹿颈迟补产颈濒颈迟盲迟: GAAP-Bruttomarge 66,4% (-150 Basispunkte im Jahresvergleich). Operatives Ergebnis drehte von einem Verlust von 1,4 Mio. USD zu einem Gewinn von 0,6 Mio. USD. Nettoverlust verringerte sich auf 4,3 Mio. USD (-0,03 EPS) gegen眉ber 10,3 Mio. (-0,08 EPS).
- Kostendisziplin: F&E um 11,7% gesenkt; Verwaltungskosten stabil; Vertriebs- und Marketingkosten nur um 1,6% gestiegen. Zinsaufwand sank um 60% nach Refinanzierung des 2022er Terminkredits mit einer kosteng眉nstigeren 2024er Finanzierung.
- Barmittel & Liquidit盲t: Zahlungsmittel und Zahlungsmittel盲quivalente 81,3 Mio. USD (-6,7 Mio. Quartalsvergleich). Operativer Cashflow positiv mit 11,9 Mio.; 15 Mio. USD Tilgung des Terminkredits vorzeitig geleistet und 1,8 Mio. USD Aktienr眉ckk盲ufe.
- Bilanz: Gesamtverm枚gen 684,3 Mio. USD; Eigenkapital verbesserte sich auf 128,2 Mio. USD (von 122,2 Mio. USD zum 31. M盲rz 2025). Nettoverschuldung (Barmittel minus Terminkredit & Wandelanleihen) etwa 384 Mio. USD.
- Geografie: US-Umsatz fiel um 8% im Jahresvergleich auf 113,1 Mio.; UK +5%; andere internationale M盲rkte +44% dank starker CPaaS-Performance.
- Ausblick & Risiken: Management nennt makro枚konomische Unsicherheiten, Kundenabwanderung und Verschuldung (Terminkredit + 202 Mio. Wandelanleihen) als wesentliche Herausforderungen; 83% der 755 Mio. USD RPO sollen innerhalb von 24 Monaten in Umsatz umgewandelt werden.
Das Quartal zeigt erste Fortschritte bei Kostenkontrolle und Schuldenrefinanzierung, aber das Umsatzwachstum bleibt moderat und die Margenkompression bei der Servicebereitstellung sollte weiter beobachtet werden.
Positive
- Operating income turned positive for the first time in recent periods ($0.6 M vs. 鈥�$1.4 M YoY).
- Net loss narrowed 58% to 鈥�$4.3 M; EPS improved to 鈥�$0.03.
- Interest expense down 60% after lower-cost 2024 term loan refinancing.
- Positive operating cash flow of $11.9 M, supporting liquidity.
- Stockholders鈥� equity increased to $128 M despite net loss, aided by FX gains.
Negative
- Revenue growth modest at 1.8% YoY, lagging industry averages.
- Gross margin compressed 150 bp to 66.4% due to higher service delivery costs.
- Cash balance fell $7.1 M sequentially after debt repayment and buybacks.
- U.S. revenue declined 8%, indicating competitive or churn pressure in core market.
- Leverage remains elevated with $336 M debt vs. $81 M cash.
Insights
TL;DR: EGHT turned marginally profitable on operations and cut interest costs, but growth remains muted and cash fell.
Operationally, the company executed well on cost controls; opex shrank 2% YoY, flipping to a $0.6 M operating profit. Interest savings from the 2024 SOFR-based term loan drove a 60% YoY drop in interest expense, materially narrowing net loss. However, service revenue growth of 2% trails UCaaS/CCaaS peers (mid-single digits), and U.S. revenue contraction shows competitive pressure. Gross margin dipped to 66.4% as network and cloud-hosting costs outpaced revenue. Cash burn after financing activities (-$17.3 M) cut the cash cushion to $81 M; with $336 M of debt, leverage remains elevated (鈮�3.3脳 annualised EBITDA). Overall impact: mildly positive for sentiment given profitability inflection, yet valuation upside hinges on reigniting growth.
TL;DR: Refinancing lowers interest burden; leverage profile stable but still high, liquidity adequate.
Debt stands at $335 M (term loan $136 M, 4% converts $199 M). The new 2024 term loan carries SOFR+3% versus SOFR+6.5% previously, reducing annual cash interest by roughly $17 M. Scheduled amortisation is modest ($6.6 M current), and management prepaid $15 M this quarter and another $10 M in July, signalling deleveraging intent. Interest-coverage covenant appears comfortable with TTM EBITDAR 鈮� covenant threshold. Cash of $82 M plus positive OCF provides near-term flexibility, though share buybacks consumed $1.8 M. Key watch items: continued cash generation, gross margin pressure, and execution on revenue growth; any miss could strain capacity to refinance the 2028 converts.
8x8, Inc. (EGHT) risultati del primo trimestre esercizio 26 (trimestre terminato il 30 giugno 2025):
- Ricavi: 181,4 milioni di dollari (+1,8% su base annua). I ricavi da servizi sono aumentati del 2,0% a 176,3 milioni di dollari; la crescita dell'utilizzo ha compensato una modesta perdita di abbonati.
- 搁别诲诲颈迟颈惫颈迟脿: margine lordo GAAP al 66,4% (-150 punti base su base annua). Il risultato operativo 猫 passato a un utile di 0,6 milioni di dollari da una perdita di 1,4 milioni. La perdita netta si 猫 ridotta a 4,3 milioni di dollari (-0,03 EPS) rispetto a 10,3 milioni (-0,08 EPS).
- Disciplina dei costi: R&S in calo dell'11,7%; G&A stabili; vendite e marketing contenuti a +1,6%. Gli oneri finanziari sono diminuiti del 60% dopo il rifinanziamento del prestito a termine 2022 con una struttura a costo inferiore del 2024.
- Liquidit脿 e cassa: liquidit脿 e mezzi equivalenti a 81,3 milioni di dollari (-6,7 milioni rispetto al trimestre precedente). Flusso di cassa operativo positivo a 11,9 milioni; 15 milioni di dollari di capitale del prestito a termine rimborsati anticipatamente e 1,8 milioni di azioni riacquistate.
- Stato patrimoniale: attivit脿 totali 684,3 milioni di dollari; patrimonio netto migliorato a 128,2 milioni (da 122,2 milioni al 31 marzo 2025). Debito netto (cassa meno prestito a termine e convertibili) circa 384 milioni.
- Geografia: ricavi USA in calo dell'8% su base annua a 113,1 milioni; Regno Unito +5%; altre aree internazionali +44% grazie alla forza del CPaaS.
- Prospettive e rischi: la direzione segnala incertezze macroeconomiche, abbandono clienti e leva finanziaria (prestito a termine + 202 milioni di convertibili) come principali ostacoli; l'83% dei 755 milioni di dollari di RPO dovrebbe convertirsi in ricavi entro 24 mesi.
Il trimestre mostra i primi segnali positivi nel controllo dei costi e nel rifinanziamento del debito, ma la crescita dei ricavi rimane modesta e la compressione dei margini nella fornitura di servizi richiede attenzione.
8x8, Inc. (EGHT) destacados del primer trimestre del a帽o fiscal 26 (trimestre finalizado el 30 de junio de 2025):
- Ingresos: 181,4 millones de d贸lares (+1,8% interanual). Los ingresos por servicios aumentaron un 2,0% a 176,3 millones; el crecimiento del uso compens贸 una ligera p茅rdida de suscripciones.
- Rentabilidad: margen bruto GAAP del 66,4% (-150 puntos b谩sicos interanual). El resultado operativo pas贸 a un beneficio de 0,6 millones de d贸lares desde una p茅rdida de 1,4 millones. La p茅rdida neta se redujo a 4,3 millones (-0,03 EPS) frente a 10,3 millones (-0,08 EPS).
- Disciplina de costos: I+D baj贸 un 11,7%; G&A se mantuvo estable; ventas y marketing limitados a +1,6%. Los gastos por intereses cayeron un 60% tras refinanciar el pr茅stamo a plazo de 2022 con una l铆nea m谩s barata en 2024.
- Liquidez y caja: efectivo y equivalentes en 81,3 millones (-6,7 millones trimestre a trimestre). Flujo de caja operativo positivo en 11,9 millones; 15 millones de principal de pr茅stamo a plazo prepagados y 1,8 millones en recompra de acciones.
- Balance: activos totales 684,3 millones; patrimonio neto mejor贸 a 128,2 millones (desde 122,2 millones al 31 de marzo de 2025). Deuda neta (efectivo menos pr茅stamo a plazo y convertibles) aproximadamente 384 millones.
- 骋别辞驳谤补蹿铆补: ingresos en EE.UU. cayeron un 8% interanual a 113,1 millones; Reino Unido +5%; otras regiones internacionales +44% gracias al impulso de CPaaS.
- Perspectivas y riesgos: la direcci贸n menciona incertidumbre macro, p茅rdida de clientes y apalancamiento (pr茅stamo a plazo + 202 millones en convertibles) como principales desaf铆os; se espera que el 83% de los 755 millones de RPO se conviertan en ingresos en 24 meses.
El trimestre muestra avances iniciales en control de costos y refinanciamiento de deuda, pero el crecimiento de ingresos sigue siendo moderado y la compresi贸n de m谩rgenes en la prestaci贸n de servicios requiere vigilancia.
8x8, Inc. (EGHT) 2026 須岅硠鞐半弰 1攵勱赴 10-Q 欤检殧 雮挫毄 (2025雲� 6鞗� 30鞚� 膦呺 攵勱赴):
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- 靾橃澋靹�: GAAP 齑濎澊鞚惦 66.4% (鞝勲厔 雽�牍� -150bp). 鞓侅梾鞚挫澋鞚� 140毵� 雼煬 靻愳嫟鞐愳劀 60毵� 雼煬 鞚挫澋鞙茧 鞝勴櫂. 靾滌啇鞁れ潃 430毵� 雼煬 (-0.03 EPS)搿� 於曥唽, 鞚挫爠 攵勱赴 1,030毵� 雼煬 (-0.08 EPS) 雽�牍� 臧滌劆.
- 牍勳毄 甏�毽�: 鞐瓣惮臧滊皽牍� 11.7% 臧愳唽; 甏�毽箘電� 鞙犾; 韺愲Г 氚� 毵堨紑韺呺箘電� 1.6% 歃濌皜鞐� 攴胳龚. 2022雲� 旮绊暅攵� 雽�於滌潉 2024雲� 鞝�牍勳毄 雽�於滊 鞛湹鞛愴晿氅� 鞚挫瀽牍勳毄 60% 臧愳唽.
- 順勱笀 氚� 鞙犽彊靹�: 順勱笀 氚� 順勱笀靹� 鞛愳偘 8,130毵� 雼煬 (攵勱赴 雽�牍� -670毵� 雼煬). 鞓侅梾頇滊彊 順勱笀頋愲鞚� 1,190毵� 雼煬 頋戩瀽; 旮绊暅攵� 雽�於� 鞗愱笀 1,500毵� 雼煬 靹犾旮� 氚� 欤检嫕 180毵� 雼煬 毵れ瀰.
- 雽赌彀寑臁绊憸: 齑濎瀽靷� 6鞏� 8,430毵� 雼煬; 鞛愲掣齑濌硠電� 1鞏� 2,820毵� 雼煬搿� 2025雲� 3鞗� 31鞚检潣 1鞏� 2,220毵� 雼煬鞐愳劀 臧滌劆. 靾滊秬毂�(順勱笀鞐愳劀 旮绊暅攵� 雽�於� 氚� 鞝勴櫂靷眲 彀皭) 鞎� 3鞏� 8,400毵� 雼煬.
- 歆赌鞐硠: 氙戈淡 毵れ稖鞚� 鞝勲厔 雽�牍� 8% 臧愳唽頃� 1鞏� 1,310毵� 雼煬; 鞓侁淡 +5%; 旮绊儉 甑牅 歆�鞐潃 CPaaS 臧曥劯搿� 44% 歃濌皜.
- 鞝勲 氚� 鞙勴棙: 瓴届榿歆勳潃 瓯办嫓瓴届牅 攵堩檿鞁れ劚, 瓿犼皾 鞚错儓, 霠堧矂毽(旮绊暅攵� 雽�於� + 2鞏� 200毵� 雼煬 鞝勴櫂靷眲)毳� 欤检殧 毽姢韥 歆�鞝�; 7鞏� 5,500毵� 雼煬 RPO鞚� 83%臧� 24臧滌洈 雮� 毵れ稖搿� 鞝勴櫂霅� 瓴冹溂搿� 鞓堨儊.
鞚措矆 攵勱赴電� 牍勳毄 韱奠牅鞕� 攵�毂� 鞛湹鞛愳棎靹� 齑堦赴 靹标臣毳� 氤挫榾鞙茧倶, 毵れ稖 靹膘灔毳犾潃 鞐爠頌� 鞕勲頃橂┌ 靹滊箘鞀� 鞝滉车 毵堨 鞎曤皶鞚� 歆�靻嶌爜鞙茧 欤检嫓頃� 頃勳殧臧� 鞛堧嫟.
8x8, Inc. (EGHT) faits saillants du 1er trimestre de l鈥檈xercice 26 (trimestre clos le 30 juin 2025) :
- Chiffre d鈥檃ffaires : 181,4 M$ (+1,8 % en glissement annuel). Les revenus des services ont augment茅 de 2,0 % pour atteindre 176,3 M$ ; la croissance de l鈥檜tilisation a compens茅 une l茅g猫re perte d鈥檃bonnements.
- 搁别苍迟补产颈濒颈迟茅 : marge brute selon les normes GAAP de 66,4 % (-150 points de base en glissement annuel). Le r茅sultat d鈥檈xploitation est pass茅 d鈥檜ne perte de 1,4 M$ 脿 un b茅n茅fice de 0,6 M$. La perte nette s鈥檈st r茅duite 脿 4,3 M$ (-0,03 BPA) contre 10,3 M$ (-0,08 BPA).
- Ma卯trise des co没ts : R&D en baisse de 11,7 % ; frais g茅n茅raux stables ; ventes et marketing limit茅s 脿 +1,6 %. Les charges d鈥檌nt茅r锚ts ont chut茅 de 60 % suite au refinancement du pr锚t 脿 terme de 2022 par une facilit茅 moins co没teuse en 2024.
- Tr茅sorerie et liquidit茅s : tr茅sorerie et 茅quivalents de tr茅sorerie 脿 81,3 M$ (-6,7 M$ d鈥檜n trimestre 脿 l鈥檃utre). Flux de tr茅sorerie op茅rationnel positif 脿 11,9 M$ ; 15 M$ de principal de pr锚t 脿 terme rembours茅s par anticipation et 1,8 M$ d鈥檃ctions rachet茅es.
- Bilan : total des actifs de 684,3 M$ ; capitaux propres en am茅lioration 脿 128,2 M$ (contre 122,2 M$ au 31 mars 2025). Dette nette (tr茅sorerie moins pr锚t 脿 terme et convertibles) d鈥檈nviron 384 M$.
- 骋茅辞驳谤补辫丑颈别 : les revenus aux 脡tats-Unis ont chut茅 de 8 % en glissement annuel 脿 113,1 M$ ; Royaume-Uni +5 % ; autres march茅s internationaux +44 % gr芒ce 脿 la vigueur du CPaaS.
- Perspectives et risques : la direction cite l鈥檌ncertitude macro茅conomique, le churn client et l鈥檈ndettement (pr锚t 脿 terme + 202 M$ de convertibles) comme principaux freins ; 83 % des 755 M$ de RPO devraient se convertir en revenus dans les 24 mois.
Le trimestre montre des premiers signes positifs dans le contr么le des co没ts et le refinancement de la dette, mais la croissance du chiffre d鈥檃ffaires reste mod茅r茅e et la compression des marges dans la prestation de services n茅cessite une surveillance continue.
8x8, Inc. (EGHT) Q1 Gesch盲ftsjahr 26 10-Q Highlights (Quartal zum 30. Juni 2025):
- Umsatz: 181,4 Mio. USD (+1,8% im Jahresvergleich). Serviceumsatz stieg um 2,0% auf 176,3 Mio. USD; Nutzungswachstum kompensierte moderaten Abonnentenverlust.
- 笔谤辞蹿颈迟补产颈濒颈迟盲迟: GAAP-Bruttomarge 66,4% (-150 Basispunkte im Jahresvergleich). Operatives Ergebnis drehte von einem Verlust von 1,4 Mio. USD zu einem Gewinn von 0,6 Mio. USD. Nettoverlust verringerte sich auf 4,3 Mio. USD (-0,03 EPS) gegen眉ber 10,3 Mio. (-0,08 EPS).
- Kostendisziplin: F&E um 11,7% gesenkt; Verwaltungskosten stabil; Vertriebs- und Marketingkosten nur um 1,6% gestiegen. Zinsaufwand sank um 60% nach Refinanzierung des 2022er Terminkredits mit einer kosteng眉nstigeren 2024er Finanzierung.
- Barmittel & Liquidit盲t: Zahlungsmittel und Zahlungsmittel盲quivalente 81,3 Mio. USD (-6,7 Mio. Quartalsvergleich). Operativer Cashflow positiv mit 11,9 Mio.; 15 Mio. USD Tilgung des Terminkredits vorzeitig geleistet und 1,8 Mio. USD Aktienr眉ckk盲ufe.
- Bilanz: Gesamtverm枚gen 684,3 Mio. USD; Eigenkapital verbesserte sich auf 128,2 Mio. USD (von 122,2 Mio. USD zum 31. M盲rz 2025). Nettoverschuldung (Barmittel minus Terminkredit & Wandelanleihen) etwa 384 Mio. USD.
- Geografie: US-Umsatz fiel um 8% im Jahresvergleich auf 113,1 Mio.; UK +5%; andere internationale M盲rkte +44% dank starker CPaaS-Performance.
- Ausblick & Risiken: Management nennt makro枚konomische Unsicherheiten, Kundenabwanderung und Verschuldung (Terminkredit + 202 Mio. Wandelanleihen) als wesentliche Herausforderungen; 83% der 755 Mio. USD RPO sollen innerhalb von 24 Monaten in Umsatz umgewandelt werden.
Das Quartal zeigt erste Fortschritte bei Kostenkontrolle und Schuldenrefinanzierung, aber das Umsatzwachstum bleibt moderat und die Margenkompression bei der Servicebereitstellung sollte weiter beobachtet werden.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2025
OR
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission file number 001-36478
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) (Zip Code)
(888 ) 848-4754
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act:
| ☑ | Accelerated Filer | ☐ | Non-Accelerated Filer | ☐ | |||||||||||||
| Smaller Reporting Company | Emerging Growth Company | ||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☑ Yes ☐ No
Indicate the number of shares outstanding for each of the issuer's classes of common stock, as of the latest practicable date.
The number of shares of common stock outstanding as of June 30, 2025 was 83,679,985 .
California Resources Corporation and Subsidiaries
Table of Contents
| Page | ||||||||
| Part I | ||||||||
| Item 1 | Financial Statements | 4 | ||||||
Condensed Consolidated Balance Sheets | 4 | |||||||
Condensed Consolidated Statements of Operations | 5 | |||||||
Condensed Consolidated Statements of Comprehensive Income (Loss) | 6 | |||||||
Condensed Consolidated Statements of Stockholders' Equity | 7 | |||||||
Condensed Consolidated Statements of Cash Flows | 9 | |||||||
Notes to the Condensed Consolidated Financial Statements | 10 | |||||||
| Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 35 | ||||||
General | 35 | |||||||
Business Environment and Industry Outlook | 35 | |||||||
Regulatory Updates | 36 | |||||||
Statements of Operations Analysis | 37 | |||||||
Results of Our Oil and Natural Gas Operations | 44 | |||||||
Results of Our Carbon Management Segment | 48 | |||||||
Liquidity and Capital Resources | 48 | |||||||
Divestitures and Assets Held for Sale | 51 | |||||||
Lawsuits, Claims, Commitments and Contingencies | 51 | |||||||
Critical Accounting Estimates and Significant Accounting and Disclosure Changes | 52 | |||||||
Forward-Looking Statements | 53 | |||||||
| Item 3 | Quantitative and Qualitative Disclosures About Market Risk | 54 | ||||||
| Item 4 | Controls and Procedures | 55 | ||||||
| Part II | ||||||||
| Item 1 | Legal Proceedings | 56 | ||||||
| Item 1A | Risk Factors | 56 | ||||||
| Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 56 | ||||||
| Item 5 | Other Disclosures | 56 | ||||||
| Item 6 | Exhibits | 58 | ||||||
1
GLOSSARY AND SELECTED ABBREVIATIONS
The following are abbreviations and definitions of certain terms used within this Form 10-Q:
•AB - Assembly Bill.
•ABR - Alternate base rate.
•Aera - Aera Energy LLC.
•Aera Merger - The transactions contemplated by the Merger Agreement.
•ASC - Accounting Standards Codification.
•ARO - Asset retirement obligation.
•Bbl - Barrel.
•Bbl/d - Barrels per day.
•Bcf - Billion cubic feet.
•Bcfe - Billion cubic feet of natural gas equivalent using the ratio of one barrel of oil, condensate, or NGLs converted to six thousand cubic feet of natural gas.
•Boe - We convert natural gas volumes to crude oil equivalents using a ratio of six thousand cubic feet (Mcf) to one barrel of crude oil equivalent based on energy content. This is a widely used conversion method in the oil and natural gas industry.
•Boe/d - Barrel of oil equivalent per day.
•Brookfield - BGTF Sierra Aggregator LLC.
•Btu - British thermal unit.
•CalGEM - California Geologic Energy Management Division.
•CAISO - California Independent System Operator.
•Carbon TerraVault JV - A joint venture between our wholly-owned subsidiary Carbon TerraVault I, LLC with Brookfield for the further development of a carbon management business in California.
•CCS - Carbon capture and storage.
•CDMA - Carbon Dioxide Management Agreement.
•CEQA - California Environmental Quality Act.
•CO2 - Carbon dioxide.
•DAC - Direct air capture.
•DD&A - Depletion, depreciation, and amortization.
•EOR - Enhanced oil recovery.
•EPA - United States Environmental Protection Agency.
•ESG - Environmental, social and governance.
•E&P - Exploration and production.
•GAAP - United States Generally Accepted Accounting Principles.
•G&A - General and administrative expenses.
•GHG - Greenhouse gases.
•JV - Joint venture.
•LCFS - Low Carbon Fuel Standard.
•MBbl - One thousand barrels of crude oil, condensate or NGLs.
•MBbl/d - One thousand barrels per day.
•MBoe/d - One thousand barrels of oil equivalent per day.
•MBw/d - One thousand barrels of water per day.
•Mcf - One thousand cubic feet of natural gas equivalent, with liquids converted to an equivalent volume of natural gas using the ratio of one barrel of oil to six thousand cubic feet of natural gas.
•Merger Agreement - Definitive agreement and plan of merger related to the transactions to obtain all of the ownership interests in Aera.
•MHp - One thousand horsepower.
•MMBbl - One million barrels of crude oil, condensate or NGLs.
•MMBoe - One million barrels of oil equivalent.
•MMBtu - One million British thermal units.
•MMcf/d - One million cubic feet of natural gas per day.
•MMT - Million metric tons.
•MMTPA - Million metric tons per annum.
•MW - Megawatts of power.
•NGLs - Natural gas liquids. Hydrocarbons found in natural gas that may be extracted as purity products such as ethane, propane, isobutane and normal butane, and natural gasoline.
•NYMEX - The New York Mercantile Exchange.
2
•OCTG - Oil country tubular goods.
•Oil spill prevention rate - Calculated as total Boe less net barrels lost divided by total Boe.
•OPEC - Organization of the Petroleum Exporting Countries.
•OPEC+ - OPEC together with Russia and certain other producing countries.
•PHMSA - Pipeline and Hazardous Materials Safety Administration.
•Proved developed reserves - Reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.
•Proved reserves - The estimated quantities of natural gas, NGLs, and oil that geological and engineering data demonstrate with reasonable certainty to be commercially recoverable in future years from known reservoirs under existing economic conditions, operating methods and government regulations.
•Proved undeveloped reserves - Proved reserves that are expected to be recovered from new wells on undrilled acreage that are reasonably certain of production when drilled or from existing wells where a relatively major expenditure is required for recompletion.
•PSCs - Production-sharing contracts.
•PV-10 - Non-GAAP financial measure and represents the year-end present value of estimated future cash flows from proved oil and natural gas reserves, less future development and operating costs, discounted at 10% per annum and using SEC Prices. PV-10 facilitates the comparisons to other companies as it is not dependent on the tax-paying status of the entity.
•Responsible Net Zero – Refers to our net zero emissions goal adopted by our Board of Directors in May 2025. Refer to Part I, Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations, Responsible Net Zero Goal for more information.
•SB - Senate Bill.
•Scope 1 emissions - Our direct emissions.
•Scope 2 emissions - Indirect emissions from energy that we use (e.g., electricity, heat, steam, cooling) that is produced by others.
•Scope 3 emissions - Indirect emissions from upstream and downstream processing and use of our products.
•SDWA - Safe Drinking Water Act.
•SEC - United States Securities and Exchange Commission.
•SEC Prices - The unweighted arithmetic average of the first day-of-the-month price for each month within the year used to determine estimated volumes and cash flows for our proved reserves.
•SOFR - Secured overnight financing rate as administered by the Federal Reserve Bank of New York.
•Standardized measure - The year-end present value of after-tax estimated future cash flows from proved oil and natural gas reserves, less future development and operating costs, discounted at 10% per annum and using SEC Prices. Standardized measure is prescribed by the SEC as an industry standard asset value measure to compare reserves with consistent pricing, costs and discount assumptions.
•TRIR - Total Recordable Incident Rate calculated as recordable incidents per 200,000 hours for all workers (employees and contractors).
•Working interest - The right granted to a lessee of a property to explore for and to produce and own oil, natural gas or other minerals in-place. A working interest owner bears the cost of development and operations of the property.
•WTI - West Texas Intermediate.
3
PART I FINANCIAL INFORMATION
Item 1Financial Statements
CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
As of June 30, 2025 and December 31, 2024
(in millions, except share data)
| June 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
(unaudited) | (audited) | ||||||||||
| CURRENT ASSETS | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Trade receivables | |||||||||||
| Inventories | |||||||||||
| Assets held for sale | |||||||||||
| Receivable from affiliate | |||||||||||
| Other current assets, net | |||||||||||
| Total current assets | |||||||||||
PROPERTY, PLANT AND EQUIPMENT | |||||||||||
Accumulated depreciation, depletion and amortization | ( | ( | |||||||||
| Total property, plant and equipment, net | |||||||||||
| INVESTMENT IN UNCONSOLIDATED SUBSIDIARY | |||||||||||
DEFERRED INCOME TAXES | |||||||||||
| OTHER NONCURRENT ASSETS | |||||||||||
| TOTAL ASSETS | $ | $ | |||||||||
| CURRENT LIABILITIES | |||||||||||
| Current portion of long-term debt | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Accrued liabilities | |||||||||||
| Total current liabilities | |||||||||||
| NONCURRENT LIABILITIES | |||||||||||
| Long-term debt, net | |||||||||||
| Asset retirement obligations | |||||||||||
Deferred tax liabilities | |||||||||||
| Other long-term liabilities | |||||||||||
| STOCKHOLDERS' EQUITY | |||||||||||
Preferred stock ( | |||||||||||
Common stock ( | |||||||||||
Treasury stock ( | ( | ( | |||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive income | |||||||||||
| Total stockholders' equity | |||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (unaudited)
For the three and six months ended June 30, 2025 and 2024
(dollars in millions, except share and per share data; shares in millions)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||
| REVENUES | ||||||||||||||||||||||||||||||||
| Oil, natural gas and natural gas liquids sales | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Net gain (loss) from commodity derivatives | ( | |||||||||||||||||||||||||||||||
| Revenue from marketing of purchased commodities | ||||||||||||||||||||||||||||||||
| Electricity revenue | ||||||||||||||||||||||||||||||||
Other revenue | ||||||||||||||||||||||||||||||||
| Total operating revenues | ||||||||||||||||||||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||||||||||||||||
| Operating costs | ||||||||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||
Asset impairment | ||||||||||||||||||||||||||||||||
| Taxes other than on income | ||||||||||||||||||||||||||||||||
| Costs related to marketing of purchased commodities | ||||||||||||||||||||||||||||||||
| Electricity generation expenses | ||||||||||||||||||||||||||||||||
| Transportation costs | ||||||||||||||||||||||||||||||||
| Accretion expense | ||||||||||||||||||||||||||||||||
Net loss (gain) on natural gas purchase derivatives | ( | |||||||||||||||||||||||||||||||
Measurement period adjustments, net | ||||||||||||||||||||||||||||||||
| Other operating expenses, net | ||||||||||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||||||||||
| Gain on asset divestitures | ||||||||||||||||||||||||||||||||
OPERATING INCOME | ||||||||||||||||||||||||||||||||
| NON-OPERATING (EXPENSES) INCOME | ||||||||||||||||||||||||||||||||
Interest and debt expense, net | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Loss on early extinguishment of debt | ( | |||||||||||||||||||||||||||||||
| Loss from investment in unconsolidated subsidiaries | ( | ( | ( | |||||||||||||||||||||||||||||
Other non-operating (expense) income, net | ( | ( | ||||||||||||||||||||||||||||||
| INCOME (LOSS) BEFORE INCOME TAXES | ( | |||||||||||||||||||||||||||||||
| Income tax (provision) benefit | ( | ( | ( | |||||||||||||||||||||||||||||
| NET INCOME (LOSS) | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
| Net income (loss) per share | ||||||||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
| Weighted-average common shares outstanding | ||||||||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)
For the three and six months ended June 30, 2025 and 2024
(in millions)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
Net income (loss) | $ | $ | $ | $ | ( | |||||||||||||||||||||
Other comprehensive loss(a): | ||||||||||||||||||||||||||
| Actuarial gain associated with pension and postretirement plans | ( | |||||||||||||||||||||||||
| Amortization of prior service cost credit included in net periodic benefit cost, net of tax | ( | ( | ( | |||||||||||||||||||||||
| Comprehensive income (loss) | $ | $ | $ | $ | ( | |||||||||||||||||||||
(a) Tax effects of the actuarial gain associated with pension and postretirement plans and amortization of prior service cost credit were insignificant for the three and six months ended June 30, 2025 and 2024.
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders' Equity (unaudited)
For the three and six months ended June 30, 2025 and 2024
(in millions)
| Three months ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Total Equity | ||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
Cash dividend | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Other | — | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Three months ended June 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Total Equity | ||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
Cash dividend | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Shares cancelled for taxes | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
Other | — | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
| Six months ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Total Equity | ||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Cash dividend | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Shares cancelled for taxes | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Six months ended June 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Total Equity | ||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
Cash dividend | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Shares cancelled for taxes | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (unaudited)
For the three and six months ended June 30, 2025 and 2024
(in millions)
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| CASH FLOW FROM OPERATING ACTIVITIES | |||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | |||||||||||||||||||||||||||||||||||
| Asset impairments | |||||||||||||||||||||||||||||||||||
| Deferred income tax provision (benefit) | ( | ||||||||||||||||||||||||||||||||||
| Net (gain) loss from commodity derivatives | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Net payments on settled commodity derivatives | ( | ( | ( | ||||||||||||||||||||||||||||||||
Net loss on early extinguishment of debt | |||||||||||||||||||||||||||||||||||
| Gain on asset divestitures | ( | ( | |||||||||||||||||||||||||||||||||
| Other non-cash charges to income, net | |||||||||||||||||||||||||||||||||||
| Net changes in operating assets and liabilities | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Net cash provided by operating activities | |||||||||||||||||||||||||||||||||||
| CASH FLOW FROM INVESTING ACTIVITIES | |||||||||||||||||||||||||||||||||||
| Capital investments | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Changes in accrued capital investments | ( | ||||||||||||||||||||||||||||||||||
| Proceeds from asset divestitures | |||||||||||||||||||||||||||||||||||
| Acquisitions | ( | ( | |||||||||||||||||||||||||||||||||
| Other, net | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Net cash used in investing activities | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| CASH FLOW FROM FINANCING ACTIVITIES | |||||||||||||||||||||||||||||||||||
| Proceeds from Revolving Credit Facility | |||||||||||||||||||||||||||||||||||
| Proceeds from 2029 Senior Notes, net | |||||||||||||||||||||||||||||||||||
| Repurchases of common stock | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Common stock dividends | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Dividend equivalents on equity-settled awards | ( | ( | |||||||||||||||||||||||||||||||||
| Issuance of common stock | ( | ||||||||||||||||||||||||||||||||||
| Bridge loan commitments | ( | ||||||||||||||||||||||||||||||||||
| Debt amendment costs | ( | ||||||||||||||||||||||||||||||||||
| Shares cancelled for taxes | ( | ( | ( | ||||||||||||||||||||||||||||||||
Debt redemption | ( | ||||||||||||||||||||||||||||||||||
Net cash (used in) provided by financing activities | ( | ( | |||||||||||||||||||||||||||||||||
Increase (decrease) in cash and cash equivalents | ( | ( | |||||||||||||||||||||||||||||||||
| Cash and cash equivalents—beginning of period | |||||||||||||||||||||||||||||||||||
| Cash and cash equivalents—end of period | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
9
CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
June 30, 2025
NOTE 1 BASIS OF PRESENTATION
We are an independent energy and carbon management company committed to energy transition. We are committed to environmental stewardship while safely providing local, responsibly sourced energy. We are also focused on maximizing the value of our land, mineral ownership, and energy expertise for decarbonization by developing carbon capture and storage (CCS) and other emissions-reducing projects.
On July 1, 2024, pursuant to the Agreement and Plan of Merger, dated as of February 7, 2024 (the Merger Agreement), we obtained all of the ownership interests in Aera Energy LLC (Aera) (Aera Merger). Our consolidated results of operations include the results of Aera beginning July 1, 2024, the closing date of the Aera Merger. The Aera Merger significantly impacted the comparability of our financial results for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024. See Note 2 Aera Merger for transaction details.
Except when the context otherwise requires or where otherwise indicated, all references to ‘‘CRC,’’ the ‘‘Company,’’ ‘‘we,’’ ‘‘us’’ and ‘‘our’’ refer to California Resources Corporation and its subsidiaries as of the date presented.
In the opinion of our management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present our financial position, results of operations, comprehensive income, equity and cash flows for all periods presented. We have eliminated all significant intercompany transactions and accounts. We account for our share of oil and natural gas producing activities in which we have a direct working interest by reporting our proportionate share of assets, liabilities, revenues, costs and cash flows within the relevant lines on our condensed consolidated financial statements. In applying the equity method of accounting, our investments in our unconsolidated subsidiaries are recognized either at cost, as is the case with Carbon TerraVault JV HoldCo, LLC, or at fair value if acquired in a business combination, as is the case for Midway Sunset Cogeneration Company. These investments are then adjusted for our proportionate share of income or loss in addition to contributions and distributions.
We have prepared this report in accordance with generally accepted accounting principles (GAAP) in the United States and the rules and regulations of the U.S. Securities and Exchange Commission applicable to interim financial information which permit the omission of certain disclosures to the extent they have not changed materially since the latest annual financial statements. We believe our disclosures are adequate to make the information presented not misleading.
The preparation of financial statements in conformity with GAAP requires management to select appropriate accounting policies and make informed estimates and judgments regarding certain types of financial statement balances and disclosures. Actual results could differ. Management believes that these estimates and judgments provide a reasonable basis for the fair presentation of our condensed consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2024 (2024 Annual Report).
10
NOTE 2 AERA MERGER
On July 1, 2024, we obtained by way of merger all of the ownership interests in Aera. Aera is a leading operator of mature fields in California, primarily in the San Joaquin and Ventura basins, with high oil-weighted production. The Aera Merger adds significant proved developed reserves to CRC. In connection with the closing of the Aera Merger, we issued shares of common stock to the former Aera owners. We also paid approximately $990 million in connection with the extinguishment of all of Aera's outstanding indebtedness using the proceeds from the issuance of our 8.25 % senior notes due 2029 (2029 Senior Notes) and cash on hand.
As of July 1, 2024, and immediately following closing of the Aera Merger, our existing stockholders prior to the Aera Merger owned 76 % of CRC and the former owners of Aera owned 24 % of CRC. For more information on the 2029 Senior Notes, refer to Note 4 Debt. See Note 10 Stockholders' Equity for details on a repurchase of shares during the second quarter of 2025 from one of the former Aera owners.
We have measured assets and liabilities at acquisition date fair value on a nonrecurring basis.
The following table summarizes the consideration transferred:
| Merger Consideration | ||||||||
| (in millions, except share and per share data) | ||||||||
Shares of common stock (dividend adjusted) | ||||||||
| Common stock per share fair value on July 1, 2024 | $ | |||||||
| Fair value of share consideration | ||||||||
Settlement of Aera debt | ||||||||
Purchase price settlement | ( | |||||||
Total purchase consideration | $ | |||||||
11
The following table represents the final purchase price allocation to the identifiable assets acquired and the liabilities assumed based on their estimated fair values as of the closing date of the Aera Merger:
Preliminary Purchase Price Allocation as of December 31, 2024 | Adjustments | Purchase Price Allocation as of June 30, 2025 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Assets Acquired | |||||||||||||||||
Cash | $ | $ | $ | ||||||||||||||
Accounts receivable | |||||||||||||||||
Inventories | ( | ||||||||||||||||
Other current assets | |||||||||||||||||
Investment in unconsolidated subsidiary | ( | ||||||||||||||||
| Property, plant and equipment | |||||||||||||||||
Pension and other postretirement benefits | |||||||||||||||||
Other noncurrent assets | |||||||||||||||||
| Total Assets Acquired | |||||||||||||||||
| Liabilities Assumed | |||||||||||||||||
| Accounts payable | ( | ( | |||||||||||||||
| Accrued liabilities | ( | ( | ( | ||||||||||||||
Asset retirement obligations | ( | ( | |||||||||||||||
Fair value of derivative contracts | ( | ( | |||||||||||||||
Pension and other postretirement benefits | ( | ( | |||||||||||||||
Deferred tax liability | ( | ( | ( | ||||||||||||||
| Other long-term liabilities | ( | ( | ( | ||||||||||||||
| Total Liabilities Assumed | ( | ( | ( | ||||||||||||||
| Net Assets Acquired | $ | $ | ( | $ | |||||||||||||
Supplemental Pro Forma Information (unaudited)
The following supplemental pro forma financial information presents the condensed consolidated results of operations for the three and six months ended June 30, 2024 as if the Aera Merger had occurred on January 1, 2024.
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
| 2024 | 2024 | ||||||||||||||||
| (in millions) | |||||||||||||||||
Total operating revenue | $ | $ | |||||||||||||||
Net income (loss)(a) | $ | $ | ( | ||||||||||||||
Net income (loss) per share | |||||||||||||||||
Basic | $ | $ | ( | ||||||||||||||
Diluted | $ | $ | ( | ||||||||||||||
(a)The six months ended June 30, 2024 reflects a net loss of $118 million primarily resulting from a significant net loss on commodity derivatives related to hedge positions held by Aera.
12
NOTE 3 INVESTMENTS AND RELATED PARTY TRANSACTIONS
The following tables present changes to our investments in unconsolidated subsidiaries for the periods presented:
Carbon TerraVault JV | |||||
(in millions) | |||||
Investment, December 31, 2024 | $ | ||||
Loss from investment in unconsolidated subsidiary | ( | ||||
| Contributions | |||||
Investment, June 30, 2025 | $ | ||||
Midway Sunset Cogeneration Company | |||||
(in millions) | |||||
Investment, December 31, 2024 | $ | ||||
Adjustment to the preliminary purchase price allocation (see Note 2 Aera Merger) | ( | ||||
Income from investment in unconsolidated subsidiary | |||||
Investment, June 30, 2025 | $ | ||||
Carbon TerraVault JV
In August 2022, we entered into a joint venture with BGTF Sierra Aggregator LLC (Brookfield) for the further development of a carbon management business in California (Carbon TerraVault JV). We hold a 51 % interest in the Carbon TerraVault JV and Brookfield holds a 49 % interest. The Carbon TerraVault JV holds rights to inject CO2 into the 26R reservoir in our Elk Hills field for permanent CO2 storage (26R reservoir).
Because the parties have certain put and call rights (repurchase features) with respect to the 26R reservoir if certain milestones are not met, the initial investment by Brookfield is reflected as a contingent liability included in other long-term liabilities on our condensed consolidated balance sheets. The contingent liability was $107 million at December 31, 2024 and $112 million at June 30, 2025, inclusive of interest. The amount payable to Brookfield under the put and call rights, if exercised, includes additional capital contributions made by Brookfield to develop the 26R storage reservoir, inclusive of interest. This payment would differ from the contingent liability currently recognized because the contingent liability reported in other long-term liabilities on our condensed consolidated balance sheet relates solely to the initial investment and does not include capital contributions made by Brookfield for ongoing development activities to the Carbon TerraVault JV.
13
The table below presents the summarized financial information related to our equity method investment in the Carbon TerraVault JV (and does not include amounts we have incurred related to development of our carbon management business, Carbon TerraVault), along with related party transactions for the periods presented.
| June 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
Receivable from affiliate(a) | $ | $ | |||||||||
Other long-term liabilities(b) | $ | $ | |||||||||
(a)At June 30, 2025, the amount of $31 million includes the remaining $28 million of Brookfield's first and second installments of their initial investment which is available to us and $3 million related to the Master Service Agreement (MSA) and vendor reimbursements. At December 31, 2024, the amount of $46 million includes $43 million remaining of Brookfield's initial contribution available to us and $3 million related to the MSA and vendor reimbursements.
(b)Other long-term liabilities include the contingent liability related to the Carbon TerraVault JV put and call rights.
We recognized a loss of $1 million and $2 million for the three and six months ended June 30, 2025, respectively, and a loss of $4 million and $7 million for the three and six months ended June 30, 2024, respectively, related to our investment in the Carbon TerraVault JV.
We are also performing well abandonment work at our Elk Hills field to prepare our 26R reservoir for injection of CO2. During the three and six months ended June 30, 2025, we performed abandonment work and sought reimbursement in the amounts of $6 million and $8 million, respectively, from the Carbon TerraVault JV. During the three and six months ended June 30, 2024, we performed abandonment work and sought reimbursement in the amounts of $5 million and $9 million, respectively, from the Carbon TerraVault JV. We recorded these reimbursements as a reduction to property, plant and equipment, net on our condensed consolidated balance sheets.
Midway Sunset Cogeneration Company
14
NOTE 4 DEBT
As of June 30, 2025 and December 31, 2024, our long-term debt consisted of the following:
| June 30, | December 31, | ||||||||||||||||||||||
| 2025 | 2024 | Interest Rate | Maturity | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Revolving Credit Facility | $ | $ | SOFR plus ABR plus | March 16, 2029 | |||||||||||||||||||
| 2026 Senior Notes | February 1, 2026 | ||||||||||||||||||||||
| 2029 Senior Notes | June 15, 2029 | ||||||||||||||||||||||
Principal amount | $ | ||||||||||||||||||||||
Unamortized debt discount and issuance costs | ( | ( | |||||||||||||||||||||
Unamortized premium | |||||||||||||||||||||||
Total debt, net | |||||||||||||||||||||||
Less: Current maturities | |||||||||||||||||||||||
Long-term debt, net | $ | $ | |||||||||||||||||||||
(a)At our election, borrowings under the amended Revolving Credit Facility may be alternate base rate (ABR) loans or term SOFR loans, plus an applicable margin. ABR loans bear interest at a rate equal to the highest of (i) the federal funds effective rate plus 0.50 %, (ii) the administrative agent prime rate and (iii) the one-month SOFR rate plus 1 %. Term SOFR loans bear interest at term SOFR, plus an additional 10 basis points per annum credit spread adjustment. The applicable margin is adjusted based on a commitment utilization percentage and will vary from (i) in the case of ABR loans, 1.50 % to 2.50 % and (ii) in the case of term SOFR loans, 2.50 % to 3.50 %.
Revolving Credit Facility
Our Amended and Restated Credit Agreement, dated April 26, 2023 (Revolving Credit Facility), consists of a senior revolving loan facility with an aggregate commitment of $1.15 billion. The amount we are able to borrow under our Revolving Credit Facility is limited to the amount of these commitments. Our Revolving Credit Facility also includes a sub-limit of $300 million for the issuance of letters of credit. As of June 30, 2025, $167 million letters of credit were issued to support ordinary course marketing, insurance, regulatory and other matters. As of June 30, 2025, we had $983 million of availability on our Revolving Credit Facility after taking into account $167 million in letters of credit outstanding. Our borrowing base of $1.5 billion is redetermined semi-annually and was re-affirmed in April 2025.
Fair Value
As shown in the table below, we estimate the fair value of our fixed rate 2029 Senior Notes and 2026 Senior Notes based on known prices from market transactions (using Level 1 inputs on the fair value hierarchy).
| June 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
Fixed rate debt | |||||||||||
2026 Senior Notes | $ | $ | |||||||||
2029 Senior Notes | |||||||||||
Fair Value of Long-Term Debt | $ | $ | |||||||||
Other
As of June 30, 2025, we were in compliance with all financial and other debt covenants under our Revolving Credit Facility, 2026 Senior Notes and 2029 Senior Notes.
15
Note Redemptions
In February 2025, we redeemed $123 million of our 7.125 % senior notes due 2026 (2026 Senior Notes) at 100 % of the principal amount, resulting in an extinguishment loss in the amount of $1 million for the write-off of unamortized debt issuance costs. There were no
NOTE 5 LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES
We are party to various legal and/or regulatory proceedings from time to time arising in the ordinary course of business. We accrue reserves for currently outstanding lawsuits, claims and proceedings when we determine it is probable that a liability has been incurred and the liability can be reasonably estimated. Reserve balances for these items at June 30, 2025 and December 31, 2024 were not material to our condensed consolidated balance sheets as of such dates. We also evaluate the amount of reasonably possible losses that we could incur as a result of these matters. We believe that reasonably possible losses that we could incur in excess of reserves cannot be accurately determined.
In October 2020, Signal Hill Services, Inc. defaulted on its decommissioning obligations associated with two offshore platforms. The Bureau of Safety and Environmental Enforcement (BSEE) determined that former lessees, including our former parent, Occidental Petroleum Corporation (Oxy) with a 37.5 % share, are responsible for accrued decommissioning obligations associated with these offshore platforms. Oxy sold its interest in the platforms approximately 30 years ago and it is our understanding that Oxy has not had any connection to the operations since that time and was challenging BSEE's order. Oxy notified us of the claim under the indemnification provisions of the Separation and Distribution Agreement between us and Oxy. In September 2021, we accepted the indemnification claim from Oxy and are challenging the order from BSEE. In March 2024, we entered into a cost sharing agreement with former lessees to share in ongoing maintenance costs during the pendency of the challenge to the BSEE order. Due to the preliminary stage of the process, no cost estimates to abandon the offshore platforms have been determined. For the three and six months ended June 30, 2025, other operating expenses, net on our condensed consolidated statement of operations includes $2 million for our ongoing share of maintenance costs during the pendency of the challenge to the BSEE order.
NOTE 6 DERIVATIVES
We enter into commodity derivative contracts to help protect our cash flows, margins and capital program from the volatility of commodity prices. We primarily hedge a portion of our forecasted oil production and purchased natural gas used in our steamflood operations. We did not have any derivative instruments designated as accounting hedges as of and for the three and six months ended June 30, 2025 and 2024. Unless otherwise indicated, we use the term "hedge" to describe derivative instruments that are designed to implement our hedging strategy.
16
Summary of Derivative Contracts
We held the following Brent-based contracts as of June 30, 2025:
| Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | 2H 2026 | 2027 | 2028 | |||||||||||||||||||||||||||||||||||
| Sold Calls | |||||||||||||||||||||||||||||||||||||||||
| Barrels per day | |||||||||||||||||||||||||||||||||||||||||
| Weighted-average price per barrel | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Purchased Puts | |||||||||||||||||||||||||||||||||||||||||
| Barrels per day | |||||||||||||||||||||||||||||||||||||||||
| Weighted-average price per barrel | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Swaps | |||||||||||||||||||||||||||||||||||||||||
| Barrels per day | |||||||||||||||||||||||||||||||||||||||||
| Weighted-average price per barrel | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
At June 30, 2025, we also held the following swaps to hedge purchased natural gas used in our operations as shown in the table below.
| Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | 2H 2026 | 2027 | 2028 | |||||||||||||||||||||||||||||||||||
SoCal Border | |||||||||||||||||||||||||||||||||||||||||
MMBtu per day | |||||||||||||||||||||||||||||||||||||||||
Weighted-average price per MMBtu | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
NWPL Rockies | |||||||||||||||||||||||||||||||||||||||||
MMBtu per day | |||||||||||||||||||||||||||||||||||||||||
Weighted-average price per MMBtu | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
In the three and six months ended June 30, 2025 and 2024, we also had a limited number of derivative contracts related to our natural gas marketing activities that were intended to lock in locational price spreads. These derivative contracts were not significant to our results of operations or financial statements taken as a whole.
The outcomes of the derivative positions shown in the tables above are as follows:
•Sold calls – we make settlement payments for prices above the indicated weighted-average price per barrel.
•Purchased puts – we receive settlement payments for prices below the indicated weighted-average price per barrel.
•Swaps – with respect to swaps for crude oil, we make settlement payments for prices above the indicated weighted-average price per barrel and receive settlement payments for prices below the indicated weighted-average price per barrel. With respect to swaps for purchased natural gas, we receive settlement payments for prices above the indicated weighted-average price per MMBtu and we make settlement payments for prices below the weighted-average price per MMBtu.
17
Fair Value of Derivatives
Derivative instruments not designated as hedging instruments are required to be recorded on the balance sheet at fair value. We report gains and losses on our derivative contracts related to our oil production and our marketing activities in operating revenue on our consolidated statements of operations as shown in the table below:
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||||||||
Non-cash commodity derivative gain (loss) | $ | $ | $ | $ | ( | ||||||||||||||||||
Net settlements and amortized premiums | ( | ( | |||||||||||||||||||||
| Net gain (loss) from commodity derivatives | $ | $ | $ | $ | ( | ||||||||||||||||||
We report gains and losses on our commodity derivative contracts related to purchases of natural gas in operating expenses on our condensed consolidated statements of operations as shown in the table below:
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||||||||
Non-cash gain on natural gas purchase derivatives | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Settlements | |||||||||||||||||||||||
Net loss (gain) on natural gas purchase derivatives | $ | $ | $ | ( | $ | ||||||||||||||||||
Our derivative contracts are measured at fair value using industry-standard models with various inputs, including quoted forward prices, and are classified as Level 2 in the required fair value hierarchy for the periods presented. The following tables present the fair values of our outstanding commodity derivatives as of June 30, 2025 and December 31, 2024.
| June 30, 2025 | ||||||||||||||||||||
| Classification | Gross Amounts at Fair Value | Netting | Net Fair Value | |||||||||||||||||
| (in millions) | ||||||||||||||||||||
Other current assets, net | $ | $ | ( | $ | ||||||||||||||||
Other noncurrent assets | ( | |||||||||||||||||||
| Current liabilities | ( | ( | ||||||||||||||||||
| Noncurrent liabilities | ( | ( | ||||||||||||||||||
| $ | $ | $ | ||||||||||||||||||
18
| December 31, 2024 | ||||||||||||||||||||
| Classification | Gross Amounts at Fair Value | Netting | Net Fair Value | |||||||||||||||||
| (in millions) | ||||||||||||||||||||
Other current assets, net | $ | $ | ( | $ | ||||||||||||||||
Other noncurrent assets | ( | |||||||||||||||||||
| Current liabilities | ( | ( | ||||||||||||||||||
| Noncurrent liabilities | ( | ( | ||||||||||||||||||
| $ | ( | $ | $ | ( | ||||||||||||||||
NOTE 7 INCOME TAXES
The following table presents the components of our income tax provision (benefit) and effective tax rate:
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
| Current income tax provision | |||||||||||||||||||||||||||||||||||
Deferred income tax provision (benefit) | ( | ||||||||||||||||||||||||||||||||||
Income tax provision (benefit) | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
Effective tax rate | % | % | % | % | |||||||||||||||||||||||||||||||
Our income tax provision or benefit for interim periods is determined by applying an estimated annual effective tax rate to income (loss) before income taxes with the result adjusted for discrete items, if any, in the relevant period. Our annual effective tax rate of 29 % and 27 % for the three months ended June 30, 2025 and 2024, respectively, differed from the U.S. statutory rate of 21% primarily due to state taxes. Our annual effective tax rate of 29 % for the six months ended June 30, 2025 differed from the U.S. statutory rate of 21% primarily due to state taxes.
Our annual effective tax rate of 75 % differed from the U.S. statutory rate of 21% for the six months ended June 30, 2024 primarily due to the settlement of stock-based compensation awards in the first quarter of 2024 at a share price which exceeded the grant date value used to recognize compensation expense for financial accounting. The difference resulted in a tax benefit and had the effect of increasing our effective tax rate for the six months ended June 30, 2024.
On July 4, 2025, An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14th and commonly referred to as the One Big Beautiful Bill Act was signed into law. This law contains several legislative changes including the reinstatement of full expensing for qualified assets placed in service after January 19, 2025. This law also reinstated the expensing of all domestic research and development costs, including favorable transition rules, and increases the limitation on the amount of annual business interest expense which can be deducted each year.
19
NOTE 8 DIVESTITURES AND ASSETS HELD FOR SALE
Fort Apache in Huntington Beach
In March 2024, we sold our 0.9 -acre Fort Apache real estate property in Huntington Beach, California for $10 million and recognized a $6 million gain.
Carbon Management Assets
NOTE 9 SEGMENT INFORMATION
We conduct our business primarily through two reportable segments: (1) oil and natural gas and (2) carbon management. We identified these segments based on the nature of their activities, the types of products sold and services to be provided. Our oil and natural gas segment explores for, develops, and produces oil and condensate, natural gas liquids and natural gas. Our carbon management segment, that we refer to as Carbon TerraVault, is primarily expected to build, install, operate and maintain CO2 capture equipment, transportation assets and storage facilities. Our oil and natural gas segment and carbon management segment operate exclusively in California.
Revenues related to sales of produced natural gas to our Elk Hills power plant are included in oil, natural gas and natural gas liquids sales in the table below. Direct labor-related costs are allocated to our reportable segments based on job function. General and administrative expenses are allocated to a segment if they directly support a segment's activities. We do not allocate income taxes to our segments. We use proportionate consolidation to account for our share of oil and natural gas producing activities.
The following tables provide segment profit or loss and reconciliations of segment profit or loss to total operating revenues and consolidated income before income taxes for the three and six months ended June 30, 2025 and 2024.
| Three months ended June 30, 2025 | |||||||||||||||||||||||||||||||||||
| Oil and Natural Gas | Carbon Management | Total Reportable Segments | Elimination | Total | |||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Oil, natural gas and natural gas liquids sales | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Other revenue | — | ||||||||||||||||||||||||||||||||||
| Segment operating revenues | $ | $ | $ | ||||||||||||||||||||||||||||||||
Other revenues and income(a) | |||||||||||||||||||||||||||||||||||
| Total operating revenues | $ | ||||||||||||||||||||||||||||||||||
(a)Other revenues and income includes net gain from commodity derivatives, revenue from marketing of purchased commodities, electricity revenue, interest income and unallocated other revenue.
20
| Three months ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| Oil and Natural Gas | Carbon Management | Total Reportable Segments | Reconciliation (Income)/Expense | Total | ||||||||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||||||||
| Segment operating revenues | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||
Operating costs: | ||||||||||||||||||||||||||||||||||||||
| Energy operating costs | ( | |||||||||||||||||||||||||||||||||||||
| Gas processing costs | ||||||||||||||||||||||||||||||||||||||
| Non-energy operating costs | ||||||||||||||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
| Taxes other than on income | ||||||||||||||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||||||||||
| Loss from investment in unconsolidated subsidiaries | ( | |||||||||||||||||||||||||||||||||||||
Other segment expenses(a) | ||||||||||||||||||||||||||||||||||||||
| Segment profit or (loss) | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||
Other profit or loss(b) | ( | ( | ||||||||||||||||||||||||||||||||||||
Unallocated amounts(c) | ( | ( | ||||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | |||||||||||||||||||||||||||||||||||||
(a)Other segment expenses for our oil and natural gas segment includes transportation costs, accretion expense, and other operating expenses, net. Other segment expenses for our carbon management segment primarily includes operating lease costs.
(b)Other profit or loss includes the margin we earn from marketing activities and the margin we earn on sales of electricity from our Elk Hills power plant to customers.
(c)Unallocated amounts include net gain from commodity derivatives, net loss on natural gas purchase derivatives, transportation costs, other operating expenses, net, interest income and unallocated other revenue.
| Three months ended June 30, 2024 | |||||||||||||||||||||||||||||||||||
| Oil and Natural Gas | Carbon Management | Total Reportable Segments | Elimination | Total | |||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Oil, natural gas and NGL sales to external customers | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Other revenue | — | ||||||||||||||||||||||||||||||||||
| Segment operating revenues | $ | $ | $ | ||||||||||||||||||||||||||||||||
Other revenues and income(a) | |||||||||||||||||||||||||||||||||||
| Total operating revenues | $ | ||||||||||||||||||||||||||||||||||
(a)Other revenue and income includes net gain from commodity derivatives, revenue from marketing of purchased commodities, electricity revenue, interest income and unallocated other revenue.
21
| Three months ended June 30, 2024 | ||||||||||||||||||||||||||||||||||||||
| Oil and Natural Gas | Carbon Management | Total Reportable Segments | Reconciliation (Income)/Expense | Total | ||||||||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||||||||
| Segment operating revenues | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||
| Operating costs: | ||||||||||||||||||||||||||||||||||||||
| Energy operating costs | ( | |||||||||||||||||||||||||||||||||||||
| Gas processing costs | ||||||||||||||||||||||||||||||||||||||
| Non-energy operating costs | ||||||||||||||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
| Taxes other than on income | ||||||||||||||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||||||||||
| Loss from investment in unconsolidated subsidiary | ||||||||||||||||||||||||||||||||||||||
Other segment expenses(a) | ||||||||||||||||||||||||||||||||||||||
| Segment profit or (loss) | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||
Other profit or loss(b) | ( | ( | ||||||||||||||||||||||||||||||||||||
Unallocated amounts(c) | ||||||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | |||||||||||||||||||||||||||||||||||||
(a)Amounts for our oil and natural gas segment include transportation costs, accretion expense, asset impairment, and other operating expenses, net. Amounts for our carbon management segment primarily include operating lease costs.
(b)Other profit or loss includes margin from purchased commodities and the margin we earn on sales of electricity from our Elk Hills power plant to customers.
(c)Unallocated amounts include net gain from commodity derivatives, transportation costs, interest and debt expense, other operating expenses, net, other non-operating loss, interest income, unallocated other revenue, and gain on asset divestitures.
| Six months ended June 30, 2025 | |||||||||||||||||||||||||||||||||||
| Oil and Natural Gas | Carbon Management | Total Reportable Segments | Elimination | Total | |||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Oil, natural gas and natural gas liquids sales | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Other revenue | — | ||||||||||||||||||||||||||||||||||
| Segment operating revenues | $ | $ | $ | ||||||||||||||||||||||||||||||||
Other revenues and income(a) | |||||||||||||||||||||||||||||||||||
| Total operating revenues | $ | ||||||||||||||||||||||||||||||||||
(a)Other revenues and income includes net gain from commodity derivatives, revenue from marketing of purchased commodities, electricity revenue, interest income and unallocated other revenue.
22
| Six months ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| Oil and Natural Gas | Carbon Management | Total Reportable Segments | Reconciliation (Income)/Expense | Total | ||||||||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||||||||
| Segment operating revenues | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||
| Operating costs: | ||||||||||||||||||||||||||||||||||||||
| Energy operating costs | ( | |||||||||||||||||||||||||||||||||||||
| Gas processing costs | ||||||||||||||||||||||||||||||||||||||
| Non-energy operating costs | ||||||||||||||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
| Taxes other than on income | ||||||||||||||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||||||||||
| Loss from investment in unconsolidated subsidiaries | ( | |||||||||||||||||||||||||||||||||||||
Other segment expenses(a) | ||||||||||||||||||||||||||||||||||||||
| Segment profit or (loss) | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||
Other profit or loss(b) | ( | ( | ||||||||||||||||||||||||||||||||||||
Unallocated amounts(c) | ( | ( | ||||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | |||||||||||||||||||||||||||||||||||||
(a)Other segment expenses for our oil and natural gas segment includes transportation costs, accretion expense, and other operating expenses, net. Other segment expenses for our carbon management segment primarily includes operating lease costs.
(b)Other profit or loss includes the margin we earn from marketing activities and the margin we earn on sales of electricity from our Elk Hills power plant to customers.
(c)Unallocated amounts include net gain from commodity derivatives, net gain on natural gas purchase derivatives, transportation costs, other operating expenses, net, other non-operating losses, loss on early extinguishment of debt, interest income and unallocated other revenue.
| Six months ended June 30, 2024 | |||||||||||||||||||||||||||||||||||
| Oil and Natural Gas | Carbon Management | Total Reportable Segments | Elimination | Total | |||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Oil, natural gas and NGL sales to external customers | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Other revenue | — | ||||||||||||||||||||||||||||||||||
| Segment operating revenues | $ | $ | $ | ||||||||||||||||||||||||||||||||
Other revenues and income(a) | |||||||||||||||||||||||||||||||||||
| Total operating revenues | $ | ||||||||||||||||||||||||||||||||||
(a)Other revenue and income includes net loss from commodity derivatives, revenue from marketing of purchased commodities, electricity revenue, interest income and unallocated other revenue.
23
| Six months ended June 30, 2024 | ||||||||||||||||||||||||||||||||||||||
| Oil and Natural Gas | Carbon Management | Total Reportable Segments | Reconciliation (Income)/Expense | Total | ||||||||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||||||||
| Segment operating revenues | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||
| Operating costs: | ||||||||||||||||||||||||||||||||||||||
| Energy operating costs | ( | |||||||||||||||||||||||||||||||||||||
| Gas processing costs | ||||||||||||||||||||||||||||||||||||||
| Non-energy operating costs | ||||||||||||||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
| Taxes other than on income | ||||||||||||||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||||||||||
| Loss from investment in unconsolidated subsidiary | ||||||||||||||||||||||||||||||||||||||
Other segment expenses(a) | ||||||||||||||||||||||||||||||||||||||
| Segment profit or (loss) | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||
Other profit or loss(b) | ( | ( | ||||||||||||||||||||||||||||||||||||
Unallocated amounts(c) | ||||||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | ( | ||||||||||||||||||||||||||||||||||||
(a)Amounts for our oil and natural gas segment include transportation costs, accretion expense, asset impairment and other operating expenses, net. Amounts for our carbon management segment primarily include operating lease costs.
(b)Other profit or loss includes margin from purchased commodities and the margin we earn on sales of electricity from our Elk Hills power plant to customers.
(c)Unallocated amounts include net loss from commodity derivatives, transportation costs, interest and debt expense, other operating expenses, net, other non-operating loss, interest income, unallocated other revenue, and gain on asset divestitures.
The following table provides capital investment by segment and a reconciliation to our consolidated capital investment for the three and six months ended June 30, 2025 and 2024. We do not provide total assets by segment because this is not used by our Chief Operating Decision Maker. See Note 3 Investments and Related Party Transactions for information on our investment in the Carbon TerraVault JV, which is part of our carbon management segment.
Oil and Natural Gas | Carbon Management | Corporate and Other | Total | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Three months ended June 30, 2025 | $ | $ | $ | $ | |||||||||||||||||||
| Three months ended June 30, 2024 | $ | $ | ( | $ | ( | $ | |||||||||||||||||
Oil and Natural Gas | Carbon Management | Corporate and Other | Total | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Six months ended June 30, 2025 | $ | $ | $ | $ | |||||||||||||||||||
| Six months ended June 30, 2024 | $ | $ | $ | $ | |||||||||||||||||||
24
NOTE 10 STOCKHOLDERS' EQUITY
Share Repurchase Program
Our Board of Directors authorized a Share Repurchase Program to acquire up to $1.35 billion of our common stock through December 31, 2025. The total value of shares that may yet be purchased under the Share Repurchase Program totaled $205 million as of June 30, 2025. Refer to Note 16 Subsequent Events for more information on a recent extension to our Share Repurchase Program. The repurchases may be effected from time-to-time through open market purchases, privately negotiated transactions, Rule 10b5-1 plans, accelerated stock repurchases, derivative contracts or otherwise in compliance with Rule 10b-18, subject to market conditions. The Share Repurchase Program does not obligate us to repurchase any dollar amount or number of shares, and our Board of Directors may modify, suspend or discontinue authorization of the program at any time.
Pursuant to our Share Repurchase Program, we repurchased 5,516,050 shares of common stock during the three months ended June 30, 2025, including 4,950,000 shares from IKAV Impact S.a.r.l. (IKAV) at a price of $46.00 per share in a privately negotiated transaction. For the three months ended June 30, 2025, the aggregate purchase price consideration, inclusive of excise tax, for our shares was $253 million, including $228 million for the repurchase of the shares held by IKAV. We funded our share repurchases with available cash.
Simultaneously with the consummation of the stock repurchase from IKAV, the lock-up restrictions applicable to sales of common stock by IKAV and its affiliates IKAV Energy, Inc. and Simlog Inc. pursuant to a Registration Rights Agreement, dated July 1, 2024, with the sellers party thereto ceased to be effective. This transaction did not impact any other terms of the Aera Merger.
The following is a summary of our share repurchases, for the periods presented:
| Total Number of Shares Purchased | Total Value of Shares Purchased | Average Price Paid per Share | |||||||||||||||
| (number of shares) | (in millions) | ($ per share) | |||||||||||||||
| Three months ended June 30, 2024 | $ | $ | |||||||||||||||
| Three months ended June 30, 2025 | $ | $ | |||||||||||||||
| Six months ended June 30, 2024 | $ | $ | |||||||||||||||
| Six months ended June 30, 2025 | $ | $ | |||||||||||||||
25
Dividends
Our Board of Directors declared the following cash dividends for each of the periods presented.
| Total Dividend | Rate Per Share | ||||||||||
| (in millions) | ($ per share) | ||||||||||
| 2025 | |||||||||||
Three months ended March 31, 2025 | $ | $ | |||||||||
Three months ended June 30, 2025 | $ | ||||||||||
Six months ended June 30, 2025 | $ | ||||||||||
| 2024 | |||||||||||
Three months ended March 31, 2024 | $ | $ | |||||||||
Three months ended June 30, 2024 | $ | ||||||||||
Six months ended June 30, 2024 | $ | ||||||||||
NOTE 11 EARNINGS PER SHARE
Basic and diluted earnings per share (EPS) were calculated using the treasury stock method for the three and six months ended June 30, 2025 and 2024. Our restricted stock unit (RSU) and performance stock unit (PSU) awards are not considered participating securities since the dividend rights on unvested shares are forfeitable.
For basic EPS, the weighted-average number of common shares outstanding excludes shares underlying our equity-settled awards and warrants. For diluted EPS, the basic shares outstanding are adjusted by adding potential common shares, if dilutive.
26
The following table presents the calculation of basic and diluted EPS, for the three and six months ended June 30, 2025 and 2024:
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| (in millions, except per-share amounts) | |||||||||||||||||||||||||||||||||||
| Numerator for Basic and Diluted EPS | |||||||||||||||||||||||||||||||||||
Net income (loss) | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
| Denominator for Basic EPS | |||||||||||||||||||||||||||||||||||
| Weighted-average shares | |||||||||||||||||||||||||||||||||||
Potential common shares, if dilutive: | |||||||||||||||||||||||||||||||||||
| Warrants | |||||||||||||||||||||||||||||||||||
Restricted stock units | |||||||||||||||||||||||||||||||||||
Performance stock units | |||||||||||||||||||||||||||||||||||
| Denominator for Diluted EPS | |||||||||||||||||||||||||||||||||||
| Weighted-average shares | |||||||||||||||||||||||||||||||||||
| EPS | |||||||||||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
NOTE 12 PENSION AND POSTRETIREMENT BENEFIT PLANS
The following table sets forth the components of the net periodic benefit costs for our defined benefit pension and postretirement benefit plans for the three and six months ended June 30, 2025 and 2024:
| Three months ended June 30, | Three months ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Pension Benefit | Postretirement Benefit | Pension Benefit | Postretirement Benefit | ||||||||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||||||||
| Service cost - benefits earned during the period | $ | $ | $ | $ | |||||||||||||||||||
| Interest cost on projected benefit obligation | |||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ||||||||||||||||||||
| Settlement loss | |||||||||||||||||||||||
Amortization of net actuarial loss | ( | ||||||||||||||||||||||
| Amortization of prior service cost credit | ( | ( | |||||||||||||||||||||
| Net periodic benefit costs | $ | ( | $ | $ | $ | ||||||||||||||||||
27
| Six months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Pension Benefit | Postretirement Benefit | Pension Benefit | Postretirement Benefit | ||||||||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||||||||
| Service cost - benefits earned during the period | $ | $ | $ | $ | |||||||||||||||||||
| Interest cost on projected benefit obligation | |||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ||||||||||||||||||||
| Settlement loss | |||||||||||||||||||||||
Amortization of net actuarial loss | ( | ( | |||||||||||||||||||||
| Amortization of prior service cost credit | ( | ( | |||||||||||||||||||||
| Net periodic benefit costs | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Contributions to our pension benefit plans were insignificant during the three and six months ended June 30, 2025. During the three and six months ended June 30, 2024, we contributed $2
NOTE 13 SUPPLEMENTAL ACCOUNT BALANCES
Restricted cash — Cash and cash equivalents includes restricted cash of $16 million and $18 million at June 30, 2025 and December 31, 2024, respectively. Restricted cash primarily includes funds held in an escrow account established to secure oil field well and infrastructure abandonment and habitat restoration at an oil and gas field previously owned by Aera.
Revenues — We derive most of our revenue from sales of oil, natural gas and natural gas liquids, with the remaining revenue primarily generated from sales of electricity and revenue from resource adequacy contracts in addition to revenue from marketing activities related to storage and managing excess pipeline capacity. The following table provides disaggregated revenue for sales of produced oil, natural gas and natural gas liquids to customers:
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||||||||||||||||||||
| Oil | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Natural gas | |||||||||||||||||||||||||||||||||||
Natural gas liquids | |||||||||||||||||||||||||||||||||||
Oil, natural gas and natural gas liquids sales | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
28
From time-to-time, we enter into transactions for third-party production, which we report as revenue from marketing of purchased commodities on our condensed consolidated statements of operations. Revenues from marketing of purchased commodities primarily results from the storage or transportation of natural gas to take advantage of differences in pricing or location, or marketing oil sales that have resulted from third-party purchases. The following table provides disaggregated revenue for sales to customers related to our marketing activities:
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||||||||||||||||||||
| Oil | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Natural gas | |||||||||||||||||||||||||||||||||||
| Natural gas liquids | |||||||||||||||||||||||||||||||||||
Revenue from marketing of purchased commodities | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Inventories — Materials and supplies, which primarily consist of well equipment and tubular goods used in our oil and natural gas operations and critical spares related to our cogeneration power plants, are valued at weighted-average cost and are reviewed periodically for obsolescence. Finished goods include produced oil and natural gas liquids in storage, which are valued at the lower of cost or net realizable value. Inventories, by category, are as follows:
| June 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Materials and supplies | $ | $ | |||||||||
| Finished goods | |||||||||||
| Inventories | $ | $ | |||||||||
Other current assets, net — Other current assets, net include the following:
| June 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
Net amounts due from joint interest partners(a) | $ | $ | |||||||||
| Fair value of commodity derivative contracts | |||||||||||
| Prepaid expenses | |||||||||||
| Greenhouse gas allowances | |||||||||||
| Income tax receivable | |||||||||||
| Other | |||||||||||
| Other current assets, net | $ | $ | |||||||||
(a)The amounts due from joint interest partners include insignificant amounts of allowances for credit losses for each period presented.
29
Other noncurrent assets — Other noncurrent assets include the following:
| June 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Operating lease right-of-use assets | $ | $ | |||||||||
| Deferred financing costs - Revolving Credit Facility | |||||||||||
| Emission reduction credits | |||||||||||
| Fair value of commodity derivative contracts | |||||||||||
Funded pension | |||||||||||
Postretirement plan | |||||||||||
Other | |||||||||||
| Other noncurrent assets | $ | $ | |||||||||
Accrued liabilities — Accrued liabilities include the following:
| June 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Compensation-related liabilities | $ | $ | |||||||||
| Taxes other than on income | |||||||||||
Asset retirement obligations - current portion | |||||||||||
| Operating lease liability | |||||||||||
| Fair value of derivative contracts | |||||||||||
| Premiums due on commodity derivative contracts | |||||||||||
Withholding tax on IKAV stock repurchase (Note 10 Stockholders' Equity) | |||||||||||
Advanced payments | |||||||||||
Payable to the former owners of Aera | |||||||||||
| Other | |||||||||||
| Accrued liabilities | $ | $ | |||||||||
Other long-term liabilities — Other long-term liabilities include the following:
| June 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Compensation-related liabilities | $ | $ | |||||||||
| Postretirement and pension benefit plans | |||||||||||
| Operating lease liability | |||||||||||
Fair value of commodity derivative contracts | |||||||||||
Contingent liability (Note 3 Investments and Related Party Transactions) | |||||||||||
| Other | |||||||||||
| Other long-term liabilities | $ | $ | |||||||||
30
NOTE 14 SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosures to our condensed consolidated statements of cash flows are presented below:
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||||||||||||||||||||
Supplemental cash flow information | |||||||||||||||||||||||||||||||||||
Interest paid, net of amounts capitalized | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||
| Income taxes paid | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Interest income | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Supplemental disclosure of non-cash investing and financing activities | |||||||||||||||||||||||||||||||||||
Contributions to the Carbon TerraVault JV | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Issuance of shares for stock-based compensation awards | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Dividends accrued for stock-based compensation awards | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Excise tax on share repurchases | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Withholding tax on the Stock Repurchase | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
NOTE 15 CONDENSED CONSOLIDATING FINANCIAL INFORMATION
We have designated certain of our subsidiaries as Unrestricted Subsidiaries under the indenture governing our 2026 Senior Notes (2026 Senior Notes Indenture) and the indenture governing our 2029 Senior Notes (2029 Senior Notes Indenture). Unrestricted Subsidiaries (as defined in the 2026 Senior Notes Indenture and 2029 Senior Notes Indenture) are subject to fewer restrictions under the indentures. We are required under the 2026 Senior Notes Indenture and 2029 Senior Notes Indenture to present the financial condition and results of operations of CRC and its Restricted Subsidiaries (as defined in the 2026 Senior Notes Indenture and 2029 Senior Notes Indenture) separate from the financial condition and results of operations of its Unrestricted Subsidiaries. The following condensed consolidating balance sheets as of June 30, 2025 and December 31, 2024 and the condensed consolidating statements of operations for the three and six months ended June 30, 2025 and 2024, as applicable, reflect the condensed consolidating financial information of CRC (Parent), our combined Unrestricted Subsidiaries, our combined Restricted Subsidiaries and the elimination entries necessary to arrive at the information for the Company on a consolidated basis. The financial information may not necessarily be indicative of the financial condition and results of operations had the Unrestricted Subsidiaries operated as independent entities.
31
Condensed Consolidating Balance Sheets
As of June 30, 2025 and December 31, 2024
As of June 30, 2025 | |||||||||||||||||||||||||||||
| Parent | Combined Unrestricted Subsidiaries | Combined Restricted Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
Total current assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Total property, plant and equipment, net | |||||||||||||||||||||||||||||
| Investments in consolidated subsidiaries | ( | ( | |||||||||||||||||||||||||||
| Deferred tax asset | |||||||||||||||||||||||||||||
Investment in unconsolidated subsidiaries | |||||||||||||||||||||||||||||
| Other assets | |||||||||||||||||||||||||||||
| TOTAL ASSETS | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
| Total current liabilities | |||||||||||||||||||||||||||||
| Long-term debt | |||||||||||||||||||||||||||||
| Asset retirement obligations | |||||||||||||||||||||||||||||
| Other long-term liabilities | |||||||||||||||||||||||||||||
Deferred tax liability | |||||||||||||||||||||||||||||
| Amounts due to (from) affiliates | ( | ||||||||||||||||||||||||||||
| Total equity | ( | ( | |||||||||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
32
As of December 31, 2024 | |||||||||||||||||||||||||||||
| Parent | Combined Unrestricted Subsidiaries | Combined Restricted Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
Total current assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Total property, plant and equipment, net | |||||||||||||||||||||||||||||
| Investments in consolidated subsidiaries | ( | ( | |||||||||||||||||||||||||||
| Deferred tax asset | |||||||||||||||||||||||||||||
| Investment in unconsolidated subsidiary | |||||||||||||||||||||||||||||
| Other assets | |||||||||||||||||||||||||||||
| TOTAL ASSETS | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
| Total current liabilities | |||||||||||||||||||||||||||||
| Long-term debt | |||||||||||||||||||||||||||||
| Asset retirement obligations | |||||||||||||||||||||||||||||
| Other long-term liabilities | |||||||||||||||||||||||||||||
| Amounts due to (from) affiliates | ( | ||||||||||||||||||||||||||||
Deferred tax liability | |||||||||||||||||||||||||||||
| Total equity | ( | ( | |||||||||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Condensed Consolidating Statement of Operations
For the three and six months ended June 30, 2025 and 2024
| Three months ended June 30, 2025 | |||||||||||||||||||||||||||||
| Parent | Combined Unrestricted Subsidiaries | Combined Restricted Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
Total operating revenues | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Total costs and other | ( | ||||||||||||||||||||||||||||
Non-operating (loss) income | ( | ( | ( | ||||||||||||||||||||||||||
(LOSS) INCOME BEFORE INCOME TAXES | ( | ( | |||||||||||||||||||||||||||
Income tax provision | ( | ( | |||||||||||||||||||||||||||
NET (LOSS) INCOME | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||
33
| Three months ended June 30, 2024 | |||||||||||||||||||||||||||||
| Parent | Combined Unrestricted Subsidiaries | Combined Restricted Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
Total operating revenues | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Total costs and other | ( | ||||||||||||||||||||||||||||
| Gain on asset divestitures | |||||||||||||||||||||||||||||
| Non-operating (loss) income | ( | ( | ( | ||||||||||||||||||||||||||
| (LOSS) INCOME BEFORE INCOME TAXES | ( | ( | |||||||||||||||||||||||||||
Income tax provision | ( | ( | |||||||||||||||||||||||||||
| NET (LOSS) INCOME | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||
| Six months ended June 30, 2025 | |||||||||||||||||||||||||||||
| Parent | Combined Unrestricted Subsidiaries | Combined Restricted Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
Total operating revenues | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Total costs and other | ( | ||||||||||||||||||||||||||||
Non-operating (loss) income | ( | ( | ( | ||||||||||||||||||||||||||
(LOSS) INCOME BEFORE INCOME TAXES | ( | ( | |||||||||||||||||||||||||||
Income tax provision | ( | ( | |||||||||||||||||||||||||||
NET (LOSS) INCOME | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||
| Six months ended June 30, 2024 | |||||||||||||||||||||||||||||
| Parent | Combined Unrestricted Subsidiaries | Combined Restricted Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
Total operating revenues | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Total costs and other | ( | ||||||||||||||||||||||||||||
| Gain on asset divestitures | |||||||||||||||||||||||||||||
| Non-operating (loss) income | ( | ( | ( | ||||||||||||||||||||||||||
| (LOSS) INCOME BEFORE INCOME TAXES | ( | ( | ( | ||||||||||||||||||||||||||
Income tax benefit | |||||||||||||||||||||||||||||
| NET (LOSS) INCOME | $ | ( | $ | ( | $ | $ | $ | ( | |||||||||||||||||||||
NOTE 16 SUBSEQUENT EVENTS
Dividend
On August 5, 2025, our Board of Directors declared a quarterly cash dividend of $0.3875 per share of common stock. The dividend is payable to shareholders of record at the close of business on August 27, 2025 and is expected to be paid on September 12, 2025.
Share Repurchase Program
On July 30, 2025 the Board of Directors authorized an extension of our Share Repurchase Program through June 30, 2026. Refer to Note 10 Stockholders' Equity for more information on our Share Repurchase Program.
34
Item 2Management’s Discussion and Analysis of Financial Condition and Results of Operations
General
We are an independent energy and carbon management company committed to energy transition. We are committed to environmental stewardship while safely providing local, responsibly sourced energy. We are also focused on maximizing the value of our land, mineral ownership, and energy expertise for decarbonization by developing carbon capture and storage (CCS) and other emissions-reducing projects.
Except when the context otherwise requires or where otherwise indicated, all references to ‘‘CRC,’’ the ‘‘Company,’’ ‘‘we,’’ ‘‘us’’ and ‘‘our’’ refer to California Resources Corporation and its consolidated subsidiaries as of the date presented.
Business Environment and Industry Outlook
Commodity Prices
Our operating results, and those of the oil and natural gas industry, are heavily influenced by commodity prices. Oil and natural gas prices and differentials may fluctuate significantly as a result of numerous market-related variables. These and other factors make it challenging to predict realized prices reliably. We may respond to economic conditions by adjusting the amount and allocation of our capital program while continuing to identify efficiencies and cost savings. Volatility in oil and natural gas prices may affect the quantities of oil and natural gas reserves we can economically produce over the longer term. Refer to Results of Our Oil and Natural Gas Operations, Production, Prices and AG真人官方izations below for information on our realized prices.
During 2025, Brent prices were negatively affected by a succession of announcements by OPEC+ of its intention to return offline production to market at a much quicker pace than previously anticipated and concern over the state of global trade following a series of tariff announcements. Prices slightly increased in June 2025 as tensions between Iran and Israel became overtly military in nature and a concern developed that petroleum flowing through the Persian Gulf — and through the Strait of Hormuz, in particular — could ultimately be impacted.
Collectively, these factors introduced significant oil price volatility with Brent crude oil prices fluctuating between a low of approximately $60 per barrel in early May and a high of approximately $80 per barrel in mid-June.
The following table presents the average daily benchmark prices for oil and natural gas during the periods presented:
| Three months ended | Six months ended | ||||||||||||||||||||||||||||||||||
| June 30, 2025 | March 31, 2025 | June 30, 2025 | June 30, 2024 | ||||||||||||||||||||||||||||||||
| Brent oil ($/Bbl) | $ | 66.76 | $ | 74.92 | $ | 70.84 | $ | 83.42 | |||||||||||||||||||||||||||
| WTI oil ($/Bbl) | $ | 63.74 | $ | 71.42 | $ | 67.58 | $ | 78.77 | |||||||||||||||||||||||||||
NYMEX Henry Hub ($/MMBtu) | $ | 3.44 | $ | 3.65 | $ | 3.55 | $ | 2.07 | |||||||||||||||||||||||||||
Supply Chain and Inflation
We continued to experience relatively flat pricing from our suppliers in the first half of 2025 as compared to the prior year. Tariff policy changes by the U.S. government for both country of origin and material type remains uncertain. The United States recently expanded tariff rates on imported goods including a 50% tariff on the steel and aluminum value of imported products. These expanded tariff rates, if sustained, could increase our cost of oilfield goods and expand delivery lead times over the longer term. We have taken measures to limit the effects of price increases caused by the recent expansion of U.S. tariffs by entering into fixed price contracts with terms of one to three years for a significant majority of our materials and services based on our current expected development plans. We also pre-purchased inventory prior to the execution of the tariffs and continue to purchase from vendors who source domestic content to limit the impact of foreign tariffs on our business. Overall, we continue to expect minimal impact of tariffs in our supply chain in 2025. Assuming the current tariff regime remains in place or is expanded, our inventory, capital and operating costs could increase over the long-term.
35
Marketing Arrangements
In October 2024, Phillips 66 announced that it plans to close its Wilmington refinery in Los Angeles in late 2025. Additionally, in April 2025, Valero notified the California Energy Commission of its intent to idle, restructure, or cease refining operations at its Benicia refinery in the San Francisco Bay Area by the end of April 2026. Historically, we have sold a portion of our crude oil to these refineries. Assuming both refineries were to cease operations, there will be six remaining major petroleum refineries in California, each of which have a refining capacity greater than 75,000 barrels per day. We expect this would leave California with approximately 1.3 million barrels per day of remaining major refining capacity, which is more than four times the amount of crude oil produced in California in 2024. As a result of this and given the considerable flexibility we have in marketing our production, we do not expect the cessation of operations at these refineries, should they occur, will affect our ability to market our crude oil production. While these announcements have had no impact on our price realizations thus far, fewer refineries in California have the potential to impact our future price realizations.
Regulatory Updates
Well Permitting
During the three months ended June 30, 2025, we received well permits for 86 workovers and 84 sidetracks. The rate at which CalGEM issued permits for workovers and sidetracks during this period continued to increase relative to the three months ended March 31, 2025.
During the first half of 2025, we have received total well permits for 139 workovers, 105 sidetracks and 4 deepenings. We have not received any permits for new wells in 2025.
We currently hold sufficient permits to maintain our existing two drilling rig capital program throughout 2025. We also have the requisite number of permits in hand to run one active drilling rig throughout 2026.
For further information regarding well permitting, see Part I, Items 1 & 2 – Business and Properties, Regulation of the Industries in Which We Operate, Regulation of Exploration and Production Activities, Well Permitting in our 2024 Annual Report.
Kern County EIR Litigation
On June 26, 2025, the Kern County Board of Supervisors certified a revised Environmental Impact Report (EIR) and approved an ordinance that authorizes the development of oil and natural gas wells in the county consistent with the revised EIR. Kern County is seeking the Trial Court’s determination that the revised EIR complies with the judgment and order of the Trial Court and decision of the Court of Appeal. After that, the Trial Court could lift the stay, subject to further potential appeals. The timing of when or if the Trial Court will take such action is uncertain. If the stay is lifted and no further stay is issued by the Court of Appeal, new well permitting could resume. However, there is no certainty we will obtain permits on that timeline or at all, or that the Trial Court and Court of Appeal will collectively lift the stay before a final, non-appealable ruling upholding the adequacy of the revised EIR is issued. These developments could further adversely affect our business, results of operations and financial condition.
Waste Emissions Charge
In May 2025, following a joint resolution of disapproval under the Congressional Review Act, the EPA issued a final rule to remove the Waste Emission Charge (WEC) regulations, originally adopted under the Inflation Reduction Act, from the Code of Federal Regulations. As a result, the fees associated with methane emissions from certain oil and gas facilities that would have been due to the EPA in September 2025 will not be collected. Although the underlying statute still requires a methane charge, An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14th and commonly referred to as the One Big Beautiful Bill Act, postponed implementation from 2024 to 2034.
36
Water Injection
Our operations in the Wilmington Oil Field utilize injection wells to reinject produced water pursuant to waterflooding plans. CalGEM has issued a directive to reduce the injection well pressure in a gradual manner in accordance with a five-year injection reduction work plan. The first phase of reduction commenced July 1, 2024 and a second reduction began in January 2025. The next phase of reduction is currently on hold while we evaluate the impact of the previously implemented reductions together with CalGEM. The work plan may be adjusted and it is difficult to predict with accuracy the impact to production and reserves. However, we continue to estimate a negative impact on production of approximately 1 MBoe/d at the end of the current 5-year work plan. We also estimate that the net present value of our proved developed reserves would be negatively impacted by less than 1%. These estimates could change materially pending the results of future technical audits.
Statements of Operations Analysis
Our consolidated results of operations include the results of Aera beginning July 1, 2024, the closing date of the Aera Merger. For more information on the Aera Merger, see Part I, Item 1 – Financial Statements, Note 2 Aera Merger. The Aera Merger and related transactions have significantly impacted the comparability of our financial results for the six months ended 2024.
Consolidated Results of Operations
Three months ended June 30, 2025 compared to March 31, 2025
The following table presents our consolidated operating revenues for the periods indicated:
| Three months ended | ||||||||||||||||||||||||||
| June 30, 2025 | March 31, 2025 | |||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||
Oil, natural gas and natural gas liquids sales | $ | 702 | $ | 814 | ||||||||||||||||||||||
Net gain from commodity derivatives | 157 | 6 | ||||||||||||||||||||||||
Revenue from marketing of purchased commodities | 56 | 64 | ||||||||||||||||||||||||
Electricity revenue | 58 | 22 | ||||||||||||||||||||||||
Other revenue | 5 | 6 | ||||||||||||||||||||||||
| Total operating revenues | $ | 978 | $ | 912 | ||||||||||||||||||||||
Oil, natural gas and natural gas liquids sales — Oil, natural gas and natural gas liquids sales, excluding the effects of cash settlements on our commodity derivative contracts, were $702 million for the three months ended June 30, 2025, which is a decrease of $112 million compared to $814 million for the three months ended March 31, 2025.
The following table shows changes in oil, natural gas and natural gas liquids sales for the three months ended June 30, 2025 compared to the three months ended March 31, 2025:
| Oil | NGLs | Natural Gas | Total Operations | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
Three months ended March 31, 2025 | $ | 736 | $ | 50 | $ | 28 | $ | 814 | |||||||||||||||
Changes in realized prices | (85) | (11) | (14) | (110) | |||||||||||||||||||
Changes in production and other | (7) | — | (1) | (8) | |||||||||||||||||||
Changes in intersegment revenues | — | — | 6 | 6 | |||||||||||||||||||
| Three months ended June 30, 2025 | $ | 644 | $ | 39 | $ | 19 | $ | 702 | |||||||||||||||
Note: See Production for volumes by commodity type and Prices and AG真人官方izations for index and realized prices for comparative periods.
37
Net gain from commodity derivatives — We report gains and losses on our derivative contracts related to sales of our oil and marketing activities in operating revenues. Net gain from commodity derivatives was $157 million for the three months ended June 30, 2025 compared to a net gain of $6 million for the three months ended March 31, 2025. The change primarily resulted from the non-cash changes in the fair value of our outstanding commodity derivatives from the positions held at the end of each measurement period. Gains and losses from our commodity derivative contracts are shown in the table below:
Three months ended | |||||||||||
| June 30, 2025 | March 31, 2025 | ||||||||||
| (in millions) | |||||||||||
Non-cash commodity derivative gain | $ | 140 | $ | 22 | |||||||
Net proceeds (settlements) and amortized premiums | 17 | (16) | |||||||||
Net gain from commodity derivatives | $ | 157 | $ | 6 | |||||||
Electricity revenue — Electricity revenue increased by $36 million to $58 million for the three months ended June 30, 2025 compared to $22 million for the three months ended March 31, 2025. This increase was primarily a result of higher resource adequacy sales driven by increased seasonal pricing for the three months ended June 30, 2025 compared to the three months ended March 31, 2025, as well as downtime for maintenance that primarily impacted the three months ended March 31, 2025.
38
The following table presents our consolidated operating and non-operating expenses and income for the three months ended June 30, 2025 and March 31, 2025.
| Three months ended | ||||||||||||||||||||||||||
| June 30, 2025 | March 31, 2025 | |||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||
| Energy operating costs | $ | 78 | $ | 103 | ||||||||||||||||||||||
| Gas processing costs | 5 | 4 | ||||||||||||||||||||||||
| Non-energy operating costs | 212 | 209 | ||||||||||||||||||||||||
| General and administrative expenses | 79 | 72 | ||||||||||||||||||||||||
| Depreciation, depletion and amortization | 128 | 131 | ||||||||||||||||||||||||
| Taxes other than on income | 47 | 70 | ||||||||||||||||||||||||
Costs related to marketing of purchased commodities | 41 | 50 | ||||||||||||||||||||||||
| Electricity generation expenses | 5 | 10 | ||||||||||||||||||||||||
Transportation costs | 20 | 20 | ||||||||||||||||||||||||
| Accretion expense | 28 | 29 | ||||||||||||||||||||||||
Net loss (gain) on natural gas purchase derivatives | 3 | (6) | ||||||||||||||||||||||||
Measurement period adjustments, net | — | 1 | ||||||||||||||||||||||||
| Other operating expenses, net | 65 | 33 | ||||||||||||||||||||||||
| Total operating expenses | 711 | 726 | ||||||||||||||||||||||||
Operating income | 267 | 186 | ||||||||||||||||||||||||
| Non-operating (expenses) income | ||||||||||||||||||||||||||
Interest and debt expense, net | (25) | (27) | ||||||||||||||||||||||||
Loss on early extinguishment of debt | — | (1) | ||||||||||||||||||||||||
Loss from investment in unconsolidated subsidiaries | — | (1) | ||||||||||||||||||||||||
Other non-operating income, net | — | 5 | ||||||||||||||||||||||||
Income before income taxes | 242 | 162 | ||||||||||||||||||||||||
Income tax provision | (70) | (47) | ||||||||||||||||||||||||
Net income | $ | 172 | $ | 115 | ||||||||||||||||||||||
Energy operating costs consist of purchased natural gas used to generate electricity for our operations and steam for our steamfloods, purchased electricity and internal costs to generate electricity used in our operations. These internal costs include an allocation of the direct costs to produce electricity at our Elk Hills power plant based on electricity consumption by our Elk Hills and nearby fields. There is no internal allocation of the costs to produce steam from the power plant used in oil and natural gas operations. Gas processing costs include costs associated with compression, maintenance and other activities needed to run our gas processing facilities at Elk Hills. Non-energy operating costs equal total operating costs less energy operating costs and gas processing costs
Energy operating costs — Energy operating costs for the three months ended June 30, 2025 were $78 million, which was a decrease of $25 million from $103 million for the three months ended March 31, 2025. This decrease was primarily due to lower prices and lower volumes of natural gas used in our steamflood operations. For more information on natural gas market prices, see Prices and AG真人官方izations below.
General and administrative expenses — General and administrative (G&A) expenses were $79 million for the three months ended June 30, 2025 compared to $72 million for the three months ended March 31, 2025, which was an increase of $7 million. The increase was primarily a result of higher legal expenses and compensation-related expenses during the three months ended June 30, 2025.
39
Taxes other than on income — Taxes other than on income for the three months ended June 30, 2025 were $47 million, which was a decrease of $23 million from $70 million for the three months ended March 31, 2025. The decrease was primarily due to an adjustment to the production tax rate. We also had lower greenhouse gas expense based on market prices.
Costs related to marketing of purchased commodities — Costs related to marketing of purchased commodities for the three months ended June 30, 2025 were $41 million, which is a decrease of $9 million from $50 million for the three months ended March 31, 2025. This decrease was primarily due to lower natural gas prices, partially offset by increased volumes of purchased natural gas.
Other operating expenses, net — Other operating expenses, net increased $32 million to $65 million for the three months ended June 30, 2025 compared to $33 million for the three months ended March 31, 2025. For the three months ended June 30, 2025 and March 31, 2025, other operating expenses, net includes the following:
| Three months ended | |||||||||||
| June 30, 2025 | March 31, 2025 | ||||||||||
| (in millions) | |||||||||||
Carbon management business expense | $ | 14 | $ | 18 | |||||||
Aera transaction and integration costs | 3 | 3 | |||||||||
Severance | 6 | 2 | |||||||||
Front-end engineering design studies | — | 3 | |||||||||
Litigation and settlement related expenses(a) | 25 | — | |||||||||
All other | 17 | 7 | |||||||||
Total operating expenses, net | $ | 65 | $ | 33 | |||||||
(a)See Part I, Item 1 – Financial Statements, Note 5 Lawsuits, Claims, Commitments and Contingencies for more information on a $25 million payment we made to CalGEM during the three months ended June 30, 2025.
Income taxes – The income tax provision for the three months ended June 30, 2025 was $70 million (representing an effective tax rate of 29%), compared to a provision of $47 million (representing an effective tax rate of 29%) for the three months ended March 31, 2025. See Part I, Item 1 – Financial Statements, Note 7 Income Taxes.
Six months ended June 30, 2025 compared to June 30, 2024
The following table presents our consolidated operating revenues for the periods indicated:
Six months ended | ||||||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | |||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||
Oil, natural gas and natural gas liquids sales | $ | 1,516 | $ | 841 | ||||||||||||||||||||||
Net gain (loss) from commodity derivatives | 163 | (66) | ||||||||||||||||||||||||
Revenue from marketing of purchased commodities | 120 | 125 | ||||||||||||||||||||||||
Electricity revenue | 80 | 51 | ||||||||||||||||||||||||
Other revenue | 11 | 17 | ||||||||||||||||||||||||
| Total operating revenues | $ | 1,890 | $ | 968 | ||||||||||||||||||||||
40
Oil, natural gas and natural gas liquids sales — Oil, natural gas and natural gas liquids sales, excluding the effects of cash settlements on our commodity derivative contracts, were $1,516 million for the six months ended June 30, 2025, which is an increase of $675 million compared to $841 million for the six months ended June 30, 2024.
The following table shows changes in oil, natural gas and natural gas liquids sales for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
| Oil | NGLs | Natural Gas | Total Operations | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Six months ended June 30, 2024 | $ | 701 | $ | 94 | $ | 46 | $ | 841 | |||||||||||||||
Changes in realized prices | (106) | — | 13 | (93) | |||||||||||||||||||
Changes in production and other (a) | 785 | (5) | 2 | 782 | |||||||||||||||||||
Changes in intersegment revenues | — | — | (14) | (14) | |||||||||||||||||||
| Six months ended June 30, 2025 | $ | 1,380 | $ | 89 | $ | 47 | $ | 1,516 | |||||||||||||||
Note: See Production for volumes by commodity type and Prices and AG真人官方izations for index and realized prices for comparative periods.
(a)The increase in production primarily relates to the addition of the Aera fields on July 1, 2024. See Part I, Item 1 – Financial Statements, Note 2 Aera Merger for additional information.
Net gain (loss) from commodity derivatives – We report gains and losses on our derivative contracts related to sales of our produced oil and marketing activities in operating revenue. Net gain from commodity derivatives was $163 million for the six months ended June 30, 2025 compared to a net loss of $66 million for the six months ended June 30, 2024. The change primarily resulted from payments to settle commodity derivative contracts and the non-cash changes in the fair value of our outstanding commodity derivatives from the positions held at the end of each measurement period. Gains and losses from our commodity derivative contracts are shown in the table below:
Six months ended | |||||||||||
| June 30, 2025 | June 30, 2024 | ||||||||||
| (in millions) | |||||||||||
Non-cash commodity derivative gain (loss) | $ | 162 | $ | (48) | |||||||
Net settlements and amortized premiums | 1 | (18) | |||||||||
| Net gain (loss) from commodity derivatives | $ | 163 | $ | (66) | |||||||
Electricity revenue — Electricity revenue increased by $29 million to $80 million for the six months ended June 30, 2025 compared to $51 million for the six months ended June 30, 2024. This increase was primarily a result of higher pricing from resource adequacy contracts.
41
The following table presents our consolidated operating and non-operating expenses and income for the six months ended June 30, 2025 and June 30, 2024.
Six months ended | ||||||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | |||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||
| Energy operating costs | $ | 181 | $ | 94 | ||||||||||||||||||||||
| Gas processing costs | 9 | 7 | ||||||||||||||||||||||||
| Non-energy operating costs | 421 | 231 | ||||||||||||||||||||||||
| General and administrative expenses | 151 | 120 | ||||||||||||||||||||||||
| Depreciation, depletion and amortization | 259 | 106 | ||||||||||||||||||||||||
| Asset impairment | — | 13 | ||||||||||||||||||||||||
| Taxes other than on income | 117 | 77 | ||||||||||||||||||||||||
Costs related to marketing of purchased commodities | 91 | 97 | ||||||||||||||||||||||||
| Electricity generation expenses | 15 | 22 | ||||||||||||||||||||||||
Transportation costs | 40 | 37 | ||||||||||||||||||||||||
| Accretion expense | 57 | 25 | ||||||||||||||||||||||||
Net (gain) loss on natural gas purchase derivatives | (3) | 2 | ||||||||||||||||||||||||
Measurement period adjustments, net | 1 | — | ||||||||||||||||||||||||
| Other operating expenses, net | 98 | 110 | ||||||||||||||||||||||||
| Total operating expenses | 1,437 | 941 | ||||||||||||||||||||||||
| Gain on asset divestitures | — | 7 | ||||||||||||||||||||||||
Operating income | 453 | 34 | ||||||||||||||||||||||||
| Non-operating (expenses) income | ||||||||||||||||||||||||||
Interest and debt expense, net | (52) | (30) | ||||||||||||||||||||||||
Loss on early extinguishment of debt | (1) | — | ||||||||||||||||||||||||
Loss from investment in unconsolidated subsidiaries | (1) | (7) | ||||||||||||||||||||||||
Other non-operating income, net | 5 | (5) | ||||||||||||||||||||||||
Income before income taxes | 404 | (8) | ||||||||||||||||||||||||
Income tax (provision) benefit | (117) | 6 | ||||||||||||||||||||||||
Net income (loss) | $ | 287 | $ | (2) | ||||||||||||||||||||||
Energy operating costs — Energy operating costs for the six months ended June 30, 2025 were $181 million, which was an increase of $87 million from $94 million for the six months ended June 30, 2024. This increase was predominantly due to additional energy costs and natural gas used in our steamflood operations related to the addition of the Aera fields on July 1, 2024. Excluding $94 million related to the operation of the Aera fields, our energy operating costs would have been $87 million for the six months ended June 30, 2025. The decrease was primarily a result of lower energy and natural gas costs in the six months ended June 30, 2025 compared to the same prior year period.
Non-energy operating costs — Non-energy operating costs for the six months ended June 30, 2025 were $421 million, which was an increase of $190 million from $231 million for the six months ended June 30, 2024. The increase includes $191 million predominantly related to the addition of the Aera fields on July 1, 2024. Excluding the costs related to the Aera fields, our non-energy operating costs would have been $230 million for the six months ended June 30, 2025, which would be in line with the same prior year period.
General and administrative expenses — General and administrative (G&A) expenses were $151 million for the six months ended June 30, 2025 compared to $120 million for the six months ended June 30, 2024, which was an increase of $31 million. The increase was primarily due to additional compensation-related expense and other corporate expense resulting from the Aera Merger.
42
Depreciation, depletion and amortization — Depreciation, depletion and amortization (DD&A) for the six months ended June 30, 2025 was $259 million compared to $106 million during the six months ended June 30, 2024. The increase of $153 million was primarily the result of the addition of the Aera assets included in the six months ended June 30, 2025. See Part I, Item 1 – Financial Statements, Note 2 Aera Merger for information on the Aera assets.
Asset impairments — During the six months ended June 30, 2024, we recognized a $13 million impairment for excess and obsolete materials and supplies related to our oilfield operations. We did not recognize an asset impairment during the six months ended June 30, 2025.
Taxes other than on income — Taxes other than on income for the six months ended June 30, 2025 were $117 million, which is an increase of $40 million from $77 million for the six months ended June 30, 2024. This increase was a result of higher greenhouse gas expense, production taxes and ad valorem taxes related to the Aera assets following the completion of the Aera Merger.
Accretion expense — Accretion expense for the six months ended June 30, 2025 was $57 million compared to $25 million for the six months ended June 30, 2024. The increase was primarily due to the addition of the Aera asset retirement liability assumed as of July 1, 2024 in connection with the Aera Merger.
Other operating expenses, net — Other operating expenses, net decreased $12 million to $98 million for the six months ended June 30, 2025 compared to $110 million for the six months ended June 30, 2024. For the six months ended June 30, 2025 and June 30, 2024, other operating expenses, net includes the following:
Six months ended | |||||||||||
| June 30, 2025 | June 30, 2024 | ||||||||||
| (in millions) | |||||||||||
Carbon management business expense | $ | 32 | $ | 23 | |||||||
Aera transaction and integration costs | 8 | 26 | |||||||||
Energy costs due to downtime at Elk Hills power plant | — | 36 | |||||||||
Severance | 8 | 1 | |||||||||
Litigation and settlement related expenses(a) | 25 | 7 | |||||||||
All other | 25 | 17 | |||||||||
Total operating expenses, net | $ | 98 | $ | 110 | |||||||
(a)See Part I, Item 1 – Financial Statements, Note 5 Lawsuits, Claims, Commitments and Contingencies for more information on a $25 million payment we made to CalGEM during the six months ended June 30, 2025.
Interest and debt expense, net — Interest and debt expense, net was $52 million for the six months ended June 30, 2025 compared to $30 million for the six months ended June 30, 2024. The increase was predominantly due to higher interest expense resulting from the issuance of our 2029 Senior Notes. In June 2024, we issued $600 million in aggregate principal amount of 2029 Senior Notes and in August 2024, we completed a follow-on offering of $300 million in aggregate principal amount of 2029 Senior Notes.
Income taxes – The income tax provision for the six months ended June 30, 2025 was $117 million (representing an effective tax rate of 29%), compared to a benefit of $6 million (representing an effective tax rate of 75%) for the six months ended June 30, 2024. See Part I, Item 1 – Financial Statements, Note 7 Income Taxes for additional information on our income taxes.
For financial information related to our subsidiaries designated as Unrestricted Subsidiaries under the 2026 Senior Notes Indenture and 2029 Senior Notes Indenture, see Part I, Item 1 – Financial Statements, Note 15 Condensed Consolidated Financial Information.
43
Results of Our Oil and Natural Gas Operations
The following table includes financial results and key operating data for our oil and natural gas segment for the three months ended June 30, 2025 and March 31, 2025 and the six months ended June 30, 2025 and 2024.
| Three months ended | Six months ended | ||||||||||||||||||||||
| June 30, 2025 | March 31, 2025 | June 30, 2025 | June 30, 2024 | ||||||||||||||||||||
(in millions, except as otherwise stated) | |||||||||||||||||||||||
Production and segment financial data | |||||||||||||||||||||||
Net production sold (MBoe/d) | 137 | 141 | 139 | 76 | |||||||||||||||||||
Segment total operating revenues | $ | 714 | $ | 830 | $ | 1,544 | $ | 854 | |||||||||||||||
Segment profit | $ | 194 | $ | 266 | $ | 460 | $ | 249 | |||||||||||||||
Items affecting comparability: | |||||||||||||||||||||||
Gain on asset divestitures(a) | $ | — | $ | — | $ | — | $ | 7 | |||||||||||||||
Key operating expenses per Boe | |||||||||||||||||||||||
Operating costs | $ | 24.19 | $ | 25.60 | $ | 24.90 | $ | 24.48 | |||||||||||||||
Operating costs, after hedges on purchased natural gas | $ | 24.75 | $ | 26.55 | $ | 25.65 | $ | 24.91 | |||||||||||||||
Segment general and administrative expenses(b) | $ | 0.72 | $ | 0.95 | $ | 0.84 | $ | 1.30 | |||||||||||||||
Segment depreciation, depletion and amortization(c) | $ | 9.69 | $ | 9.96 | $ | 9.82 | $ | 6.95 | |||||||||||||||
Segment taxes other than on income | $ | 3.28 | $ | 4.66 | $ | 3.98 | $ | 4.71 | |||||||||||||||
(a)Gain on asset divestitures for the six months ended June 30, 2024 related to the sale of oil and gas assets located in Ventura.
(b)Excludes unallocated general and administrative expenses.
(c)Excludes depreciation, depletion and amortization related to our corporate assets and our Elk Hills power plant.
44
Production, Prices, and AG真人官方izations
Net Production Sold
The following table sets forth our average net production of oil, NGLs and natural gas sold per day in each of the California oil and natural gas basins in which we operate for the periods presented. The amounts in the production table below include volumes produced from operated and non-operated fields for each of the periods presented.
| Three months ended | Six months ended | ||||||||||||||||||||||||||||||||||
| June 30, 2025 | March 31, 2025 | June 30, 2025 | June 30, 2024 | ||||||||||||||||||||||||||||||||
| Oil (MBbl/d) | |||||||||||||||||||||||||||||||||||
| San Joaquin Basin | 83 | 84 | 84 | 30 | |||||||||||||||||||||||||||||||
| Los Angeles Basin | 17 | 18 | 17 | 17 | |||||||||||||||||||||||||||||||
Other Basins | 9 | 9 | 9 | — | |||||||||||||||||||||||||||||||
| Total | 109 | 111 | 110 | 47 | |||||||||||||||||||||||||||||||
| NGLs (MBbl/d) | |||||||||||||||||||||||||||||||||||
| San Joaquin Basin | 10 | 10 | 10 | 11 | |||||||||||||||||||||||||||||||
| Total | 10 | 10 | 10 | 11 | |||||||||||||||||||||||||||||||
| Natural gas (MMcf/d) | |||||||||||||||||||||||||||||||||||
| San Joaquin Basin | 96 | 101 | 99 | 94 | |||||||||||||||||||||||||||||||
| Los Angeles Basin | 1 | 1 | 1 | 1 | |||||||||||||||||||||||||||||||
Sacramento Basin | 12 | 12 | 12 | 14 | |||||||||||||||||||||||||||||||
Other Basins | 2 | 3 | 2 | — | |||||||||||||||||||||||||||||||
| Total | 111 | 117 | 114 | 109 | |||||||||||||||||||||||||||||||
Total Net Production Sold (MBoe/d) | 137 | 141 | 139 | 76 | |||||||||||||||||||||||||||||||
Total average net production sold decreased to 137 MBoe/d for the three months ended June 30, 2025 compared to 141 MBoe/d for the three months ended March 31, 2025. The decrease was primarily a result of natural production decline partially offset by development results. In addition, our production-sharing contracts (PSCs), which are described below, negatively impacted our net oil production by 1 MBoe/d in the three months ended June 30, 2025 compared to the three months ended March 31, 2025.
Total average net production sold increased to 139 MBoe/d for the six months ended June 30, 2025 compared to 76 MBoe/d for the six months ended June 30, 2024. The increase was primarily a result of the Aera Merger. Our PSCs, which are described below, positively impacted our net oil production by 1 MBoe/d in the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
Production-Sharing Contracts
Our share of production and reserves from operations in the Wilmington field in the Los Angeles basin is subject to contractual arrangements similar to production-sharing contracts that are in effect through the economic life of the assets. The reporting of our PSCs creates a difference between reported operating costs, which are for the full field, and reported volumes, which are only our net share, inflating the per barrel operating costs.
For further information on our production-sharing contracts, see Part I, Item 1 & 2 Business and Properties, Oil and Natural Gas Operations, Production, Price and Cost History in our 2024 Annual Report.
45
Prices and AG真人官方izations
The following tables set forth the average realized prices and price realizations on the commodities we sell as a percentage of average Brent, WTI and NYMEX Henry Hub indexes for our oil and natural gas operations for the periods presented:
| Three months ended | |||||||||||||||||||||||||||||||||||
| June 30, 2025 | March 31, 2025 | ||||||||||||||||||||||||||||||||||
| Price | AG真人官方ization | Price | AG真人官方ization | ||||||||||||||||||||||||||||||||
| Oil ($ per Bbl) | |||||||||||||||||||||||||||||||||||
| Brent | $ | 66.76 | $ | 74.92 | |||||||||||||||||||||||||||||||
| AG真人官方ized price without derivative settlements | $ | 65.07 | 97% | $ | 73.57 | 98% | |||||||||||||||||||||||||||||
| Derivative settlements | 1.66 | (1.56) | |||||||||||||||||||||||||||||||||
| AG真人官方ized price with derivative settlements | $ | 66.73 | 100% | $ | 72.01 | 96% | |||||||||||||||||||||||||||||
| WTI | $ | 63.74 | $ | 71.42 | |||||||||||||||||||||||||||||||
| AG真人官方ized price without derivative settlements | $ | 65.07 | 102% | $ | 73.57 | 103% | |||||||||||||||||||||||||||||
| AG真人官方ized price with derivative settlements | $ | 66.73 | 105% | $ | 72.01 | 101% | |||||||||||||||||||||||||||||
Natural Gas Liquids ($ per Bbl) | |||||||||||||||||||||||||||||||||||
| AG真人官方ized price (% of Brent) | $ | 42.41 | 64% | $ | 54.64 | 73% | |||||||||||||||||||||||||||||
| AG真人官方ized price (% of WTI) | $ | 42.41 | 67% | $ | 54.64 | 77% | |||||||||||||||||||||||||||||
| Natural gas | |||||||||||||||||||||||||||||||||||
NYMEX Henry Hub ($/MMBtu) | $ | 3.44 | $ | 3.65 | |||||||||||||||||||||||||||||||
| AG真人官方ized price ($/Mcf) | $ | 2.79 | 81% | $ | 4.12 | 113% | |||||||||||||||||||||||||||||
46
Six months ended | |||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | ||||||||||||||||||||||
| Price | AG真人官方ization | Price | AG真人官方ization | ||||||||||||||||||||
| Oil ($ per Bbl) | |||||||||||||||||||||||
| Brent | $ | 70.84 | 83.42 | ||||||||||||||||||||
| AG真人官方ized price without derivative settlements | $ | 69.34 | 98% | $ | 81.63 | 98% | |||||||||||||||||
| Derivative settlements | 0.05 | (2.43) | |||||||||||||||||||||
| AG真人官方ized price with derivative settlements | $ | 69.39 | 98% | $ | 79.20 | 95% | |||||||||||||||||
| WTI | $ | 67.58 | $ | 78.77 | |||||||||||||||||||
| AG真人官方ized price without derivative settlements | $ | 69.34 | 103% | $ | 81.63 | 104% | |||||||||||||||||
| AG真人官方ized price with derivative settlements | $ | 69.39 | 103% | $ | 79.20 | 101% | |||||||||||||||||
Natural Gas Liquids ($ per Bbl) | |||||||||||||||||||||||
| AG真人官方ized price (% of Brent) | $ | 48.60 | 69% | $ | 48.76 | 58% | |||||||||||||||||
| AG真人官方ized price (% of WTI) | $ | 48.60 | 72% | $ | 48.76 | 62% | |||||||||||||||||
| Natural gas | |||||||||||||||||||||||
NYMEX Henry Hub ($/MMBtu) | $ | 3.55 | $ | 2.07 | |||||||||||||||||||
| AG真人官方ized price ($/Mcf) | $ | 3.46 | 97% | $ | 2.81 | 136% | |||||||||||||||||
Oil — Brent prices were lower for the three months ended June 30, 2025 compared to the three months ended March 31, 2025 as well as for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. See Business Environment and Industry Outlook above for more information on factors influencing Brent commodity prices for the periods presented.
NGLs — Prices for natural gas liquids during the three months ended June 30, 2025 decreased compared to the three months ended March 31, 2025, reflecting traditional seasonality. Prices for natural gas liquids during the six months ended June 30, 2025 were consistent with the same prior year period.
Natural Gas — Natural gas prices decreased for the three months ended June 30, 2025 compared to the three months ended March 31, 2025 driven by seasonal demand changes and the effects of significant storage volumes. Natural gas prices increased for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 driven by colder, late winter temperatures in early 2025.
47
Results of Our Carbon Management Segment
Our carbon management segment, which we refer to as Carbon TerraVault, primarily pursues the development of CCS projects. We expect that our Carbon TerraVault CCS projects will inject CO2 captured from industrial, power, agriculture and other emissions sources into subsurface reservoirs and permanently store CO2 deep underground. We also expect to invest in projects that rely on CCS technology in connection with reducing our own emissions. In addition, we may participate in the development of projects that are the source of these CO2 emissions. Our carbon management segment is in its early stages of development. We expect construction of our first carbon capture project at our cryogenic gas processing facility to be completed at or around year end at which time we will be ready to inject subject to receipt of final regulatory approvals early in 2026.
The following tables include results for our carbon management segment for the three months ended June 30, 2025 and March 31, 2025 and the six months ended June 30, 2025 and June 30 2024.
Three months ended | Six months ended | |||||||||||||||||||||||||||||||||||||||||||
| June 30, 2025 | March 31, 2025 | June 30, 2025 | June 30, 2024 | |||||||||||||||||||||||||||||||||||||||||
| (in millions) | (in millions) | |||||||||||||||||||||||||||||||||||||||||||
Segment loss | $ | (20) | $ | (25) | $ | (45) | $ | (38) | ||||||||||||||||||||||||||||||||||||
Three months ended | Six months ended | ||||||||||||||||||||||||||||
| June 30, 2025 | March 31, 2025 | June 30, 2025 | June 30, 2024 | ||||||||||||||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||||||||||||||
Carbon management expenses | $ | 14 | $ | 18 | $ | 32 | $ | 23 | |||||||||||||||||||||
Segment general and administrative expenses | $ | 3 | $ | 3 | $ | 6 | $ | 5 | |||||||||||||||||||||
Loss from investment in the Carbon TerraVault JV | $ | 1 | $ | 1 | $ | 2 | $ | 7 | |||||||||||||||||||||
Carbon management expenses decreased for the three months ended June 30, 2025 compared to the three months ended March 31, 2025 as a result of lower lease costs related to easements.
Carbon management expenses increased for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 as a result of increased expenditure related to the evaluation of CCS projects and increased lease cost for the six months ended June 30, 2025.
Liquidity and Capital Resources
Liquidity
Our primary sources of liquidity and capital resources are cash flows from operations, available cash and cash equivalents and available borrowing capacity under our Revolving Credit Facility. We consider our low leverage and ability to control costs to be a core strength and strategic advantage, which we are focused on maintaining. Our primary uses of operating cash flow for the three and six months ended June 30, 2025 were for repurchases of our common stock, payment of dividends, and capital investments.
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The following table summarizes our liquidity:
| June 30, 2025 | |||||
| (in millions) | |||||
Available cash and cash equivalents(a) | $ | 56 | |||
| Revolving Credit Facility: | |||||
Borrowing capacity | 1,150 | ||||
| Outstanding letters of credit | (167) | ||||
| Availability | $ | 983 | |||
| Liquidity | $ | 1,039 | |||
(a)Excludes restricted cash of $16 million.
At current commodity prices and based upon our planned 2025 capital program described below, we expect to generate operating cash flow to return cash to shareholders through dividends and repurchases of our common stock. In line with this strategy, our Board of Directors has extended the term of our Share Repurchase Program from December 31, 2025 to June 30, 2026. We regularly review our financial position and evaluate whether to (i) adjust our drilling program, (ii) return available cash to shareholders through dividends or share repurchases to the extent permitted under our Revolving Credit Facility and the indentures for our 7.125% senior notes due 2026 (2026 Senior Notes) and our 8.25% senior notes due 2029 (2029 Senior Notes), (iii) reduce outstanding indebtedness, (iv) advance carbon management activities, or (v) maintain cash and cash equivalents on our balance sheet. We continue to monitor the current macroeconomic environment and will adjust our planned uses of cash as necessary. We believe we have sufficient sources of liquidity to meet our obligations for the next twelve months.
We have taken steps to reduce headcount as part of the integration process following the Aera Merger. We initiated these workforce reductions to align the size and composition of our workforce with expected future operating and capital plans. Employee severance and related costs are included in other operating expenses, net on our condensed consolidated statement of operations.
On July 4, 2025, An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14th and commonly referred to as the One Big Beautiful Bill Act was signed into law. This law contains several legislative changes including the reinstatement of full expensing for qualified assets placed in service after January 19, 2025. This law also reinstated the expensing all domestic research and development costs, including favorable transition rules, and increases the limitation on the amount of annual business interest expense which can be deducted each year. We expect these legislative changes will reduce our U.S. federal cash tax obligation by approximately $35 million in 2025 and the amount of U.S. federal taxes we would have otherwise owed in future years.
Revolving Credit Facility
See Part II, Item 8 – Financial Statements and Supplementary Data, Note 5 Debt in our 2024 Annual Report for information on the Revolving Credit Facility and related amendments.
2026 Senior Notes Redemption
See Part I, Item 1 – Financial Statements, Note 4 Debt for information on a partial redemption of our 2026 Senior Notes.
Share Repurchase Program
See Part I, Item 1 – Financial Statements, Note 10 Stockholders' Equity and Part II, Item 2 – Other Information, Unregistered Sales of Equity Securities and Use of Proceeds for more information on our Share Repurchase Program including a repurchase of shares during the second quarter of 2025 from IKAV.
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Dividends
See Part I, Item 1 – Financial Statements, Note 10 Stockholders' Equity for more information on our dividends. See Part I, Item 1 – Financial Statements, Note 16 Subsequent Events for information on a dividend declared in August 2025.
2025 Capital Program
Our capital program is dynamic in response to commodity price volatility and permit availability while focusing on oil production and maximizing our free cash flow. Our capital investment for the six months ended June 30, 2025 was $111 million. We expect our full year 2025 capital program to range between $280 million and $330 million. Of this amount, $245 million to $275 million is related to our oil and natural gas segment, $20 million to $30 million is for our carbon management segment and $15 million to $25 million is for corporate and other activities. The above amounts related to carbon management projects do not include amounts funded by Brookfield through the Carbon TerraVault JV, such as drilling injection and monitoring wells at our 26R reservoir.
With respect to oil and natural gas development, we added a second drilling rig in June 2025 and currently expect to run our two rig program through the remainder of the year using existing permits in hand. Refer to Regulatory Updates above for more information on permitting. Refer to Part I, Item 1 – Financial Statements, Note 9 Segment Information for information on capital investment by segment.
Derivatives
Significant changes in oil and natural gas prices may have a material impact on our liquidity. Declining oil prices negatively affect our operating cash flow, and the inverse applies during periods of rising oil prices. Our hedging strategy seeks to mitigate our exposure to commodity price volatility and ensure our financial strength and liquidity by protecting our cash flows. We will continue to evaluate our hedging strategy based on prevailing market prices and conditions.
Unless otherwise indicated, we use the term “hedge” to describe derivative instruments that are designed to achieve our hedging requirements and program goals, even though they are not accounted for as cash-flow or fair-value hedges. We did not have any commodity derivatives designated as accounting hedges as of and during the six months ended June 30, 2025. See Part I, Item 1 – Financial Statements, Note 6 Derivatives for further information on our derivatives and a summary of our open derivative contracts as of June 30, 2025 and Part II, Item 8 – Financial Statements and Supplementary Data, Note 5 Debt in our 2024 Annual Report for information on the hedging requirements included in our Revolving Credit Facility.
Cash Flow Analysis
Cash flows from operating activities — For the six months ended June 30, 2025, our operating cash flow increased by $167 million to $351 million from $184 million in the same period in 2024. This increase in operating cash flow was primarily driven by the Aera Merger on July 1, 2024.
With the addition of Aera's assets, oil production during the six months ended June 30, 2025 as compared to the same period in 2024 increased 63 MBbl/d from 47 MBbl/d to 110 MBbl/d. Higher revenue from this increase in production was partially offset by lower average realized oil prices (after derivative settlements). Average realized prices for oil decreased by $9.81 per barrel to $69.39 in the six months ended June 30, 2025 from $79.20 in the same prior year period. Further, as a result of the Aera Merger, we experienced higher operating costs, production taxes and greenhouse gas taxes during the six months ended June 30, 2025 as compared to the same prior year period in addition to one-time transaction and integration costs were incurred in 2025.
During the six months ended June 30, 2024, scheduled plant downtime at the Elk Hills power plant negatively impacted our production and we purchased electricity at higher prices.
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Cash flows used in investing activities — The following table provides a comparative summary of net cash used in investing activities:
| Six months ended June 30, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Capital investments | $ | (111) | $ | (88) | |||||||||||||||||||
| Changes in accrued capital investments | (15) | 2 | |||||||||||||||||||||
Proceeds from asset divestitures | 1 | 12 | |||||||||||||||||||||
| Acquisitions | — | (6) | |||||||||||||||||||||
| Other, net | (5) | (2) | |||||||||||||||||||||
| Net cash used in investing activities | $ | (130) | $ | (82) | |||||||||||||||||||
Cash flows used in financing activities — The following table provides a comparative summary of net cash used in financing activities:
| Six months ended June 30, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
Proceeds from Revolving Credit Facility | $ | — | $ | 30 | |||||||||||||||||||
Proceeds from 2029 Senior Notes, net | — | 590 | |||||||||||||||||||||
Repurchases of common stock(a) | (318) | (93) | |||||||||||||||||||||
| Common stock dividends | (70) | (43) | |||||||||||||||||||||
Dividend equivalents on equity-settled awards | (1) | (4) | |||||||||||||||||||||
| Issuance of common stock | 2 | 3 | |||||||||||||||||||||
Bridge loan commitment costs | — | (5) | |||||||||||||||||||||
Debt redemption | (123) | — | |||||||||||||||||||||
Debt amendment costs | — | (3) | |||||||||||||||||||||
| Shares cancelled for taxes | (11) | (42) | |||||||||||||||||||||
Net cash provided by (used in) financing activities | $ | (521) | $ | 433 | |||||||||||||||||||
(a)Note: The total value of shares purchased includes excise taxes, which are generally paid in the year following the share repurchase. Commissions paid on share repurchases were not significant in all periods presented.
For the six months ended June 30, 2025, our cash flow used in financing activities was $521 million compared to cash flow provided by financing activities of $433 million in the same period in 2024. This decrease in cash flow from financing activities was primarily driven by the $590 million of proceeds from 2029 Senior Notes issued in the six months ended June 30, 2024. Additionally, the decrease is caused by the $123 million cash outflow used to redeem a portion of the 2026 Senior Notes in February 2025 and the $318 million cash outflow used to repurchase stock in the six months ended June 30, 2025.
Divestitures and Assets Held for Sale
See Part I, Item 1 – Financial Statements, Note 8 Divestitures and Assets Held for Sale for information on our divestitures and acquisitions during the three months ended June 30, 2025 and 2024.
Lawsuits, Claims, Commitments and Contingencies
See Part I, Item 1 – Financial Statements, Note 5 Lawsuits, Claims, Commitments and Contingencies for further information.
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Critical Accounting Estimates and Significant Accounting and Disclosure Changes
There have been no changes to our critical accounting estimates, which are summarized in Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations, Critical Accounting Estimates of our 2024 Annual Report.
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Forward-Looking Statements
This document contains statements that we believe to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical facts are forward-looking statements, and include statements regarding our future financial position, business strategy, projected revenues, earnings, costs, capital expenditures and plans and objectives of management for the future. Words such as "expect," “could,” “may,” "anticipate," "intend," "plan," “ability,” "believe," "seek," "see," "will," "would," “estimate,” “forecast,” "target," “guidance,” “outlook,” “opportunity” or “strategy” or similar expressions are generally intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements.
Although we believe the expectations and forecasts reflected in our forward-looking statements are reasonable, they are inherently subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. No assurance can be given that such forward-looking statements will be correct or achieved or that the assumptions are accurate or will not change over time. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include:
•fluctuations in commodity prices, including supply and demand considerations for our products and services, and the impact of such fluctuations on revenues and operating expenses;
•decisions as to production levels and/or pricing by OPEC+ or U.S. producers in future periods;
•government policy, war and political conditions and events, including the military conflicts in Israel, Lebanon, Ukraine and the Middle East;
•the ability to successfully execute integration efforts in connection with the Aera Merger, and achieve projected synergies and ensure that such synergies are sustainable;
•regulatory actions and changes that affect the oil and gas industry generally and us in particular, including (1) the availability or timing of, or conditions imposed on, EPA and other governmental permits and approvals necessary for drilling or development activities or our carbon management segment; (2) the management of energy, water, land, greenhouse gases (GHGs) or other emissions, (3) the protection of health, safety and the environment, or (4) the transportation, marketing and sale of our products;
•the efforts of activists to delay prevent oil and gas activities or the development of our carbon management segment through a variety of tactics, including litigation;
•the impact of inflation, tariffs and changes in domestic or global trade policies on future expenses and changes generally in the prices of goods and services;
•changes in business strategy and our capital plan;
•lower-than-expected production or higher-than-expected production decline rates;
•changes to our estimates of reserves and related future cash flows, including changes arising from our inability to develop such reserves in a timely manner, and any inability to replace such reserves;
•the recoverability of resources and unexpected geologic conditions;
•general economic conditions and trends, including conditions in the worldwide financial, trade and credit markets;
•production-sharing contracts' effects on production and operating costs;
•the lack of available equipment, service or labor price inflation;
•limitations on transportation or storage capacity and the need to shut-in wells;
•any failure of risk management;
•results from operations and competition in the industries in which we operate;
•our ability to realize the anticipated benefits from prior or future efforts to reduce costs;
•environmental risks and liability under federal, regional, state, provincial, tribal, local and international environmental laws and regulations (including remedial actions);
•the creditworthiness and performance of our counterparties, including financial institutions, operating partners, CCS project participants and other parties;
•reorganization or restructuring of our operations;
•our ability to claim and utilize tax credits or other incentives in connection with our CCS projects;
•our ability to realize the benefits contemplated by our energy transition strategies and initiatives, including CCS projects and other renewable energy efforts;
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•our ability to successfully identify, develop and finance carbon capture and storage projects, power projects and other renewable energy efforts, including those in connection with the Carbon TerraVault JV, and our ability to convert our CDMAs to definitive agreements and enter into other offtake agreements;
•our ability to maximize the value of our carbon management segment and operate it on a stand alone basis;
•our ability to successfully develop infrastructure projects and enter into third party contracts on contemplated terms;
•uncertainty around the accounting of emissions and our ability to successfully gather and verify emissions data and other environmental impacts;
•changes to our dividend policy and share repurchase program, and our ability to declare future dividends or repurchase shares under our debt agreements;
•limitations on our financial flexibility due to existing and future debt;
•insufficient cash flow to fund our capital plan and other planned investments and return capital to shareholders;
•changes in interest rates;
•our access to and the terms of credit in commercial banking and capital markets, including our ability to refinance our debt or obtain separate financing for our carbon management segment;
•changes in state, federal or international tax rates, including our ability to utilize our net operating loss carryforwards to reduce our income tax obligations;
•effects of hedging transactions;
•the effect of our stock price on costs associated with incentive compensation;
•inability to enter into desirable transactions, including joint ventures, divestitures of oil and natural gas properties and real estate, and acquisitions, and our ability to achieve any expected synergies;
•disruptions due to earthquakes, forest fires, floods, extreme weather events or other natural occurrences, accidents, mechanical failures, power outages, transportation or storage constraints, labor difficulties, cybersecurity breaches or attacks or other catastrophic events;
•pandemics, epidemics, outbreaks, or other public health events, such as the COVID-19 pandemic; and
•other factors discussed in Part I, Item 1A – Risk Factors of our 2024 Annual Report.
We caution you not to place undue reliance on forward-looking statements contained in this document, which speak only as of the filing date, and we undertake no obligation to update this information. This document may also contain information from third party sources. This data may involve a number of assumptions and limitations, and we have not independently verified them and do not warrant the accuracy or completeness of such third-party information.
Item 3Quantitative and Qualitative Disclosures About Market Risk
For the three and six months ended June 30, 2025, there were no material changes to market risks from the information provided under Item 305 of Regulation S-K included under the caption Part II, Item 7A – Quantitative and Qualitative Disclosures About Market Risk in the 2024 Annual Report.
Commodity Price Risk
Our financial results are sensitive to fluctuations in oil, NGL and natural gas prices. These commodity price changes also impact the volume changes under our PSCs. We maintain a commodity hedging program focused on hedging crude oil sales and natural gas purchases to help protect our cash flows, margins and capital program from the volatility of commodity prices. As of June 30, 2025, we had a net asset of $131 million for our commodity derivative positions which are carried at fair value. For more information on our derivative positions as of June 30, 2025, refer to Part I, Item 1 – Financial Statements, Note 6 Derivatives.
As of June 30, 2025, we have hedges on approximately 70% of our expected oil production for the remainder of 2025 at a weighted average floor price of $66.83. As of June 30, 2025, our hedges for purchased natural gas approximate 67% of our expected fuel use in oil and natural gas operations for the remainder of 2025 at a fixed price of $3.56.
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Counterparty Credit Risk
Our credit risk relates primarily to trade receivables and derivative financial instruments. Credit exposure for each customer is monitored for outstanding balances and current activity. Counterparty credit limits have been established based upon the financial health of our counterparties, and these limits are actively monitored. In the event counterparty credit risk is heightened, we may request collateral and accelerate payment dates. Concentration of credit risk is regularly reviewed to ensure that counterparty credit risk is adequately diversified.
As of June 30, 2025, the majority of our credit exposure was with investment-grade counterparties. We believe exposure to counterparty credit-related losses related to our business at June 30, 2025 was not material and losses associated with counterparty credit risk have been insignificant for all periods presented.
Interest-Rate Risk
Changes in interest rates may affect the amount of interest we pay on our long-term debt. We had no variable-rate debt outstanding as of June 30, 2025. Our 2026 Senior Notes bear interest at a fixed rate of 7.125% per annum. Our 2029 Senior Notes bear interest at a fixed rate of 8.250% per annum.
Item 4Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer supervised and participated in management's evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2025.
There were no other changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the three months ended June 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
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PART II OTHER INFORMATION
Item 1Legal Proceedings
For additional information regarding legal proceedings, see Item 1 – Financial Statements, Note 5 Lawsuits, Claims, Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements included in Part I of this Form 10-Q, Part I, Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations, Lawsuits, Claims, Commitments and Contingencies in this Form 10-Q, and Part I, Item 3, Legal Proceedings in our 2024 Annual Report.
Item 1A Risk Factors
We are subject to various risks and uncertainties in the course of our business. A discussion of such risks and uncertainties may be found under the heading Risk Factors in our 2024 Annual Report. There were no material changes to those risk factors during the three months ended June 30, 2025.
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
Share Repurchases
Our Board of Directors has authorized a Share Repurchase Program to acquire up to $1.35 billion of our common stock through December 31, 2025. In July 2025, our Board of Directors authorized an extension of our Share Repurchase Program through June 30, 2026. The repurchases may be affected from time-to-time through open market purchases, privately negotiated transactions, Rule 10b5-1 plans, accelerated stock repurchases, derivative contracts or otherwise in compliance with Rule 10b-18, subject to market and contractual limitations in our debt agreements. The Share Repurchase Program does not obligate us to repurchase any dollar amount or number of shares and our Board of Directors may modify, suspend or discontinue authorization of the program at any time. Shares repurchased are either retired or held as treasury stock.
Our share repurchase activity for the three months ended June 30, 2025 was as follows:
| Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs(a) | |||||||||||||||||||
April 1, 2025 - April 30, 2025 | — | $ | — | — | $ | — | |||||||||||||||||
May 1, 2025 - May 31, 2025 | 328,588 | $ | 42.59 | 328,588 | — | ||||||||||||||||||
June 1, 2025 - June 30, 2025 | 5,187,462 | $ | 45.93 | 5,187,462 | — | ||||||||||||||||||
| Total | 5,516,050 | $ | 45.73 | 5,516,050 | $ | — | |||||||||||||||||
(a)The total value of shares that may yet be purchased under the Share Repurchase Program totaled $205 million as of June 30, 2025.
Refer to Part I, Item 1 – Financial Statements, Note 10 Stockholders' Equity for more information on a repurchase of shares during the second quarter of 2025 from one of the former Aera owners.
Item 5 Other Disclosures
Rule 10b5-1 Trading Arrangements
During the three months ended June 30, 2025, no directors or officers adopted terminated
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Employment Agreements
The Company has entered into an Amended and Restated Employment Agreement (the “Employment Agreements”) with each of Messrs. Bys and Preston, effective as of August 4, 2025. The revised employment agreements will replace and supersede the prior employment agreements entered into by Messrs. Bys and Preston in 2021 (the “2021 Employment Agreements”). In addition to memorializing the applicable 2025 compensation arrangements previously approved by the Board for Messrs. Bys and Preston (described below), the revisions to the Employment Agreements reflect the alignment of the employment agreements and terms of the Company’s severance obligations with respect to Messrs. Bys and Preston with the Company’s other named executive officers.
Pursuant to his Employment Agreement, Mr. Bys will receive an annual base salary of not less than $562,000. He will also be eligible to receive: (i) an annual cash bonus with a target value equal to 100% of his annual base salary; (ii) participation in those benefit plans and programs of the Company available to similarly situated executives; and (iii) annual long-term incentive awards (expected to be comprised 60% of performance stock units and 40% of restricted stock units) under the Company’s 2021 Long Term Incentive Plan (as amended, the “LTIP”) with a target grant value of 400% of base salary as in effect on the applicable grant date.
Pursuant to his Employment Agreement, Mr. Preston will receive an annual base salary of not less than $675,000. He will also be eligible to receive: (i) an annual cash bonus with a target value equal to 100% of his annual base salary; (ii) participation in those benefit plans and programs of the Company available to similarly situated executives; and (iii) annual long-term incentive awards (expected to be comprised 60% of performance stock units and 40% of restricted stock units) under the LTIP with a target grant value of 400% of base salary as in effect on the applicable grant date.
The revised Employment Agreements provide that upon either Messrs. Bys or Preston’s termination of employment by the Company without “Cause,” or by either individual for “Good Reason” (each quoted term as defined in the Employment Agreement), they will receive payment of any earned but unpaid annual bonus for the calendar year preceding the calendar year in which the applicable termination date occurs and, so long as they execute a release of claims in favor of the Company and its affiliates and abides by the restrictive covenants within the Employment Agreement, they shall receive severance payments, generally payable in monthly installments following the applicable termination date consisting of: (i) cash payments equal to a multiple of one and one-half (1.5) times, increased to two (2) times if such termination of employment occurs within the one (1)-year period following a qualifying Change in Control (such term as defined in our Long Term Incentive Plan) of annual base salary plus target annual bonus awards for the year in which the termination occurs; (ii) a pro-rata annual bonus for the calendar year in which the termination date occurs, based on actual performance levels earned for the applicable calendar year and payable at the time such bonuses are paid to similarly situated executives of the Company; and (iii) reimbursement for the difference between the amount they pay to effect continued coverage (including coverage for her spouse and eligible dependents) under the Company’s group health plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the contribution amount that similarly situated executives of the Company pay for the same or similar coverage under such group health plans, during the portion, if any, of the 18-month period following the Termination Date (or 24-month period in the event of a termination during the one (1)-year period following a qualifying Change in Control) that they elect to continue coverage.
In all other material respects, the revised Employment Agreements are otherwise substantially similar to the 2021 Employment Agreements.
The foregoing description of the Employment Agreements is qualified in its entirety by reference to the full and complete text of the Employment Agreements, each of which is filed herewith as Exhibit 10.1 and 10.2, respectively and incorporated herein by reference.
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Item 6 Exhibits
| 3.1 | Amended and Restated Certificate of Incorporation of California Resources Corporation (filed as Exhibit 3.1 to Registrant’s Registration Statement on Form 8-A filed October 27, 2020 and incorporated herein by reference). | ||||
| 3.2 | Certificate of Amendment of Amended and Restated Certificate of Incorporation of California Resources Corporation (filed as Exhibit 3.1 to Registrant's Current Report on Form 8-K filed on May 6, 2022 and incorporated herein by reference). | ||||
| 3.3 | Certificate of Amendment of Amended and Restated Certificate of Incorporation of California Resources Corporation (filed as Exhibit 3.1 to Registrant's Current Report on Form 8-K filed on May 1, 2023 and incorporated herein by reference). | ||||
| 3.4 | Amended and Restated Bylaws of California Resources Corporation (filed as Exhibit 3.2 to the Registrant’s Registration Statement on Form 8-A filed October 27, 2020 and incorporated herein by reference). | ||||
10.1*,** | Amended and Restated Employment Agreement by and between Jay A. Bys and California Resources Corporation, dated August 4, 2025. | ||||
10.2*,** | Amended and Restated Employment Agreement by and between Michael L. Preston and California Resources Corporation, dated August 4, 2025. | ||||
| 31.1* | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
| 31.2* | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
| 32.1* | Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||
| 101.INS* | Inline XBRL Instance Document. | ||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | ||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||
| 104 | Cover Page Interactive Data File (formatted in inline XBRL and contained in Exhibits 101). | ||||
* - Filed or furnished herewith
** - Certain portions of this exhibit (indicated by "[]") have been omitted pursuant to Item 601(b)(10) of Regulation S-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CALIFORNIA RESOURCES CORPORATION | ||||||||
| DATE: | August 6, 2025 | /s/ Noelle M. Repetti | |||||||||
| Noelle M. Repetti | |||||||||||
| Senior Vice President and Controller | |||||||||||
| (Principal Accounting Officer) | |||||||||||
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Source:
FAQ
How much revenue did 8x8 (EGHT) report for Q1 FY26?
$181.4 million in total revenue, up 1.8% year over year.
Did 8x8 achieve profitability this quarter?
GAAP operating income was $0.6 million; however, the company still recorded a net loss of $4.3 million (鈥�$0.03 per share).
What drove the sharp drop in interest expense for EGHT?
Management refinanced the higher-cost 2022 term loan with a SOFR+3% 2024 facility, cutting quarterly interest expense by roughly 60%.
How much cash and debt does 8x8 have?
As of 30 Jun 2025, cash & cash equivalents were $81.3 M; total debt (term loan + converts) stood at $335 M.
What percentage of remaining performance obligations (RPO) is expected to convert within two years?
The company expects approximately 83% of its $755 million RPO to be recognized as revenue over the next 24 months.
How did geographic revenue mix shift for EGHT?
U.S. revenue fell to $113.1 M (-8% YoY), while Other International jumped 44% to $37.5 M driven by CPaaS growth.
California Res Corp
NYSE:CRC
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Jul 28, 2025
[144] California Resources Corporation SEC Filing
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4.26B
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92.95%
3.78%
Oil & Gas E&P
Crude Petroleum & Natural Gas
United States
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