California Resources Corporation (OTCPK:CRCQW) Q2 2023 Earnings Conference Call August 1, 2023 1:00 PM ET

Company Participants

Joanna Park - Vice President, Investor Relations and Treasurer

Francisco Leon - President and Chief Executive Officer

Manuela Molina - Executive Vice President and Chief Financial Officer

Chris Gould - Executive Vice President and Chief Sustainability Officer, and Managing Director, CTV Holdings

Conference Call Participants

Scott Hanold - RBC Capital Markets

Kalei Akamine - Bank of America

Nate Pendleton - Stifel

Nitin Kumar - Mizuho

Leo Mariani - ROTH MKM

Noel Parks - Tuohy Brothers Investment Research

Operator

Good day and welcome to the California Resources Corporation Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Joanna Park, Vice President of Investor Relations and Treasurer. Please go ahead.

Joanna Park

Welcome to the California Resources Corporation Second Quarter 2023 Conference Call. Participating on today’s call are Francisco Leon, President and Chief Executive Officer; Nelly Molina, Executive Vice President and Chief Financial Officer, as well as CRC’s entire executive team. I would like to highlight that, we have provided slides in the Investor Relations section of our website crc.com. These slides provide additional information on our operations and our second quarter results.

We have also provided information reconciling non-GAAP financial measures discussed to the most directly comparable GAAP financial measures on our website as well as in our earnings press release. Today, we are making some forward-looking statements based on current expectations. Actual results could differ due to factors described in our earnings release and in our periodic SEC filings. As a reminder, we have allotted additional time for Q&A at the end of our prepared remarks. And we ask that participants limit their questions to a primary and one follow-up.

With that, I will now turn the call over to Francisco.

Francisco Leon

Thank you, Joanna. At CRC, our strengths are clear; cash flow, carbon and California. First, our cash flows strength comes from our high-quality, low-decline assets. These assets provide a large production base with predictable cash flows from our long-lived reserves. Further, we produce some of the lowest carbon intensity oil and natural gas in the U.S., which we sell into markets that have access to premium pricing and advantaged realizations as compared to the rest of the U.S.

Our second strength is our carbon storage platform, Carbon TerraVault, which benefits from an early mover advantage for CCS. CRC’s large mineral and surface acreage position was the quality of our geological reservoirs, our extensive serve surface knowledge and joint venture with Brookfield continue to provide us with a competitive advantage. Carbon TerraVault leads the nation in permit applications submitted to the EPA. Additionally, our CCS storage potential continues to attract significant interest from current and future emitters. To date, we have executed five carbon dioxide management agreements or CDMAs for a combined injection rate of 815,000 metric tons per year, which represents reservations of 16% of our port space and good progress towards our target of 5 million tons per year of injection by year-end 2027.