Executive Summary

CRC delivered a clean beat on Q1 2025: adjusted EPS $1.07 vs S&P Global consensus $0.77*, revenue $912M vs $861.6M*, and adjusted EBITDAX $328M vs EBITDA consensus $283M*, driven by cost discipline and realized Aera synergies .
Reaffirmed full-year 2025 production (132–138 MBoe/d), capital ($285–$335M), and adjusted EBITDAX ($1.1–$1.2B) guidance; raised 2025 electricity margin outlook to $175–$190M from $120–$145M, and lowered consolidated G&A and operating cost guidance, improving quality of earnings .
Returned a record $258M in Q1 (buybacks $100M, dividends $35M, debt repurchases $123M); liquidity of ~$1.18B at quarter-end with $199M cash and $983M undrawn RCF .
Management highlighted 70% oil hedged for 2025 and a corporate breakeven around $34 Brent, plus visible CCS and power catalysts (first CO₂ injection by YE25; progressing PPA with hyperscalers), providing downside protection and upside optionality .

What Went Well and What Went Wrong

What Went Well
- Cost wins and synergy capture: CRC realized $173M of Aera-related synergies YTD (on track for $185M by YE25; remainder early 2026); Q1 OpEx+G&A were ~5% better than guidance, enabling beats across metrics .
- Cash returns and balance sheet: Record $258M returned (buybacks, dividend, debt redemption); $1.18B liquidity; RCF borrowing base reaffirmed at $1.5B in April .
- Strategy/hedges: CEO emphasized an integrated portfolio (low-decline O&G, scalable CCS, power); “70% of oil production hedged for 2025,” underpinning cash generation across cycles .
What Went Wrong
- Electricity margin stepped down sequentially ($12M vs $30M in Q4), reflecting lower merchant price capture/seasonality; management is offsetting via capacity revenues and operating configuration .
- Effective tax rate increased to 29% from 20% in Q4; income tax provision $47M in Q1 vs $8M in Q4, modestly tempering net income leverage .
- Q2 production guide implies a BOE step-down (133–137 MBoe/d vs 141 in Q1) as CRC re-allocates gas to internal power/Belridge to optimize cash flow—supportive for margins but optical negative for volume screens .

Financial Results

Key P&L, cash flow, and volume trend (oldest → newest):

Metric	Q1 2024	Q4 2024	Q1 2025
Total operating revenues ($M)	$454	$877	$912
Net income ($M)	$(10)	$33	$115
Diluted EPS ($)	$(0.14)	$0.36	$1.26
Adjusted diluted EPS ($)	$0.75	$0.91	$1.07
Operating income ($M)	$(4)	$68	$186
Adjusted EBITDAX ($M)	$149	$316	$328
Net cash from operating activities ($M)	$87	$206	$186
Free cash flow ($M)	$33	$118	$131
Net production (MBoe/d)	76	141	141
Operating costs ($M)	$176	$323	$316
Adjusted G&A ($M)	$51	$85	$66

Consensus vs actual (Q1 2025):

Metric	Q1 2025 Consensus	Q1 2025 Actual	Surprise
Primary EPS ($)	0.772*	1.07	Beat
Revenue ($M)	861.6*	912	Beat
EBITDA ($M)	283.5*	322.0*	Beat

Values retrieved from S&P Global.*

Segment performance (Adjusted EBITDAX, oldest → newest):

Segment Adjusted EBITDAX ($M)	Q1 2024	Q4 2024	Q1 2025
Oil & Natural Gas	$208	$425	$422
Carbon Management (CMB)	$(13)	$(25)	$(21)

KPIs (oldest → newest):

KPI	Q1 2024	Q4 2024	Q1 2025
Realized oil price w/ settlements ($/Bbl)	$77.17	$73.00	$72.01
Realized gas price w/ settlements ($/Mcf)	$3.90	$3.65	$4.12
Net oil production (MBbl/d)	48	112	111
Net total production (MBoe/d)	76	141	141
Operating costs per BOE ($)	$25.80	$25.35	$25.60
Adjusted G&A per BOE ($)	$7.35	$6.55	$5.22

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Production (MBoe/d)	2025E	132–138	132–138	Maintained
Adjusted EBITDAX ($M)	2025E	1,100–1,200	1,100–1,200	Maintained
Capital ($M)	2025E	285–335	285–335	Maintained
Operating Costs ($M, consolidated)	2025E	1,325–1,425	1,230–1,300	Lowered
G&A ($M, consolidated)	2025E	325–345	310–335	Lowered
Adjusted G&A ($M, consolidated)	2025E	300–320	289–309	Lowered
Electricity Margin ($M)	2025E	120–145	175–190	Raised
Margin from Purchased Commodities ($M)	2025E	80–95	80–95	Maintained
Taxes other than income ($M)	2025E	275–300	265–285	Lowered
Interest & Debt Expense ($M)	2025E	100–113	100–113	Maintained
Net Production (MBoe/d)	2Q25E	—	133–137	New
Adjusted EBITDAX ($M)	2Q25E	—	275–290	New
Capital ($M)	2Q25E	—	81–92	New
Dividend per share ($)	Quarterly	$0.3875 (3/2/25)	$0.3875 (5/5/25)	Maintained

Note: Prior 2025 “Operating Costs and CMB expenses” presentation was consolidated; Q1 guidance presents consolidated operating costs with separate CMB line items. Ranges are comparable at the consolidated level .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024; Q4 2024)	Current Period (Q1 2025)	Trend
Aera synergies/costs	On-track ~$235M by Q3’25; $135M actioned; OpEx lower	$173M realized; on track $185M YE’25, remainder early ’26; beats driven by cost discipline	Improving/accelerating
Hedging & breakeven	Hedges underpin cash flows	~70% oil hedged 2025; corporate breakeven ~$34 Brent	Strengthened clarity
CCS (CTV)	Conditional use permits approved	First CO₂ injection by YE25; construction starting summer; multiple permits progressing; pipeline legislative momentum	Advancing to execution
Power/PPA & AI	Power partner MOU (Hull Street)	Actively negotiating multi-yr PPA; strong hyperscaler/co-locator interest; behind-the-meter model at Elk Hills	Momentum building
Production/capital cadence	1-rig program; strong cost control	Q2 BOE step-down (optimize cash via gas reallocation); 2 rigs H2’25	Managing for cash over volumes
CA regulatory/permitting	Progress on CTV approvals	Kern EIR revision expected later in year; constructive engagement; sufficient 2025 permits	More constructive

Management Commentary

“Our integrated strategy—anchored by low-decline conventional assets, a scalable carbon management platform, and power solutions—positions us to generate sustainable free cash flow across cycles.” — CEO Francisco Leon .
“This quarter, our results exceeded the Street's expectations… all of which came in above consensus. This performance was primarily driven by our continued cost discipline.” — CFO Clio Crespy .
“Our corporate breakeven is around $34 Brent… we have taken steps to be ready for volatility… to deliver sustainable capital return.” — CEO Francisco Leon .
“We are advancing the state's first CCS project at Elk Hills… on track for first CO₂ injection by year-end 2025.” — CEO Francisco Leon .
“We’re pursuing multiple opportunities with AI data center companies… our offering is differentiated and resonating.” — CEO/CFO on PPA discussions .

Q&A Highlights

Synergies and cost drivers: Execution on supply chain, infrastructure consolidation, and synergy pull-forward are reducing OpEx and supporting reaffirmed guidance despite lower Brent .
Breakeven and hedging: Corporate breakeven ~$34 Brent; strategy built to sustain returns through cycles with robust hedge book and low-decline assets .
Refinery landscape: No concern on California refinery closures; CRC barrels have preferential placement and realize near-Brent pricing given crude quality .
Q2 production guide dynamics: Lower BOE due to flexible 2x1→1x1 power plant configuration and gas reallocation to Belridge; choice maximizes cash flows over volumes .
CCS/pipelines: First-of-kind injection targeted YE25; multiple EPA Class VI permits in queue; California legislature progressing CO₂ pipeline framework—key catalyst for scaling .
Capital returns: Opportunistic buybacks doubled pace in Q1 due to perceived dislocation; 20% of shares issued in Aera merger repurchased at ~9% discount vs issuance .

Estimates Context

Q1 2025 results beat S&P Global consensus on all key lines: adjusted EPS $1.07 vs $0.77*, revenue $912M vs $861.6M*, and S&P EBITDA actual $322.0M vs $283.5M* .
With 2025 electricity margin raised (to $175–$190M) and consolidated G&A/operating costs lowered, sell-side models may need higher non-E&P contribution and lower cost run-rates; 2025 Adjusted EBITDAX range held at $1.1–$1.2B .
Values retrieved from S&P Global.*

Key Takeaways for Investors

Quality beat: Broad-based upside vs consensus and sequential improvement in adjusted EBITDAX, driven by cost execution and synergy realization .
Guidance sturdiness: FY25 EBITDAX and production maintained while non-E&P profit pools (electricity margin) are higher and consolidated costs lower, enhancing earnings quality and visibility .
Volume optics vs cash reality: Q2 BOE step-down is a conscious cash optimization (power/gas allocation); near-term prints may screen weaker on volumes but stronger on cash flow/margins .
Defensive setup: ~70% oil hedged for 2025 and ~$34 Brent breakeven anchor downside protection in a volatile macro .
Capital returns + de-leveraging: Record $258M returned in Q1 with additional debt redemption and $1.18B liquidity support continued buybacks/dividends .
Structural catalysts: First CCS injection by YE25 and potential long-term PPA with hyperscalers can re-rate the power/CCS option value and diversify earnings .
Watchlist items: Electricity margin realization vs guidance, Kern EIR progress and CO₂ pipeline framework, timing/terms of PPA, synergy conversion to NGL/gas monetization projects .

Notes:

“Consensus” and “actual” fields marked with an asterisk (*) are Values retrieved from S&P Global.

California Resources Corp (CRC)·Q1 2025 Earnings Summary