California Resources Corp [CRC] Filings

10-Q 1 crc-20240630.htm 10-Q crc-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number 001-36478

California Resources Corporation

(Exact name of registrant as specified in its charter)


Delaware						46-5670947
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1 World Trade Center, Suite 1500

Long Beach, California 90831

(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
Common Stock	CRC	New York Stock Exchange

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:

Large Accelerated Filer

☑

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, 2024 was 67,876,933.

California Resources Corporation and Subsidiaries

Table of Contents


	Page
Part I
Item 1	Financial Statements (unaudited)	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	27
	General	27
	Aera Merger	27
	Recent Debt Transactions	27
	Business Environment and Industry Outlook	27
	Regulatory Updates	28
	Results of Oil and Gas Operations	30
	Statements of Operations Analysis	34
	Liquidity and Capital Resources	41
	Divestitures, Acquisitions and Assets Held for Sale	45
	Lawsuits, Claims, Commitments and Contingencies	45
	Critical Accounting Estimates and Significant Accounting and Disclosure Changes	45
	Forward-Looking Statements	46
Item 3	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4	Controls and Procedures	48

Part II
Item 1	Legal Proceedings	49
Item 1A	Risk Factors	49
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 5	Other Disclosures	50
Item 6	Exhibits	51

GLOSSARY AND SELECTED ABBREVIATIONS

The following are abbreviations and definitions of certain terms used within this Form 10-Q:

•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.

•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.

•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 - Contractual arrangements similar to 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.

•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.

PART I FINANCIAL INFORMATION

Item 1Financial Statements (unaudited)

CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

As of June 30, 2024 and December 31, 2023

(in millions, except share data)


	June 30,		December 31,
	2024		2023
CURRENT ASSETS
Cash and cash equivalents	$	1,031	$	496
Trade receivables	175		216
Inventories	56		72
Assets held for sale	13		13
Receivable from affiliate	61		19
Other current assets, net	103		113
Total current assets	1,439		929
PROPERTY, PLANT AND EQUIPMENT	3,548		3,437
Accumulated depreciation, depletion and amortization	(775)		(667)
Total property, plant and equipment, net	2,773		2,770
INVESTMENT IN UNCONSOLIDATED SUBSIDIARY	17		19
DEFERRED INCOME TAXES	139		132
OTHER NONCURRENT ASSETS	122		148
TOTAL ASSETS	$	4,490	$	3,998


CURRENT LIABILITIES



Accounts payable	248		245
Liabilities associated with assets held for sale	5		5

Accrued liabilities	340		366

Total current liabilities	593		616
NONCURRENT LIABILITIES
Long-term debt, net	1,161		540

Asset retirement obligations	436		422
Other long-term liabilities	248		201



STOCKHOLDERS' EQUITY
Preferred stock (20,000,000 shares authorized at $0.01 par value) no shares outstanding at June 30, 2024 and December 31, 2023	—		—
Common stock (200,000,000 shares authorized at $0.01 par value) (84,510,451 and 83,557,800 shares issued; 67,876,933 and 68,693,885 shares outstanding at June 30, 2024 and December 31, 2023)	1		1
Treasury stock (16,633,518 shares held at cost at June 30, 2024 and 14,863,915 shares held at cost at December 31, 2023)	(697)		(604)
Additional paid-in capital	1,302		1,329
Retained earnings	1,374		1,419
Accumulated other comprehensive income	72		74


Total stockholders' equity	2,052		2,219
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	4,490	$	3,998

The accompanying notes are an integral part of these condensed consolidated financial statements.

CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

For the three and six months ended June 30, 2024 and 2023

(dollars in millions, except share and per share data; shares in millions)


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
REVENUES
Oil, natural gas and NGL sales	$	412	$	447	$	841	$	1,162
Net gain (loss) from commodity derivatives	5		31		(66)		73
Revenue from marketing of purchased commodities	51		72		125		259
Electricity sales	36		34		51		102
Interest and other revenue	10		7		17		19
Total operating revenues	514		591		968		1,615

OPERATING EXPENSES
Operating costs	156		186		332		440
General and administrative expenses	63		71		120		136
Depreciation, depletion and amortization	53		56		106		114
Asset impairment	13		—		13		3
Taxes other than on income	39		42		77		84
Exploration expense	—		1		1		2
Costs related to marketing of purchased commodities	43		27		97		151
Electricity generation expenses	14		13		22		62
Transportation costs	17		16		37		33
Accretion expense	13		11		25		23
Carbon management business expenses	15		8		23		13
Other operating expenses, net	51		13		88		21
Total operating expenses	477		444		941		1,082
Gain on asset divestitures	1		—		7		7

OPERATING INCOME	38		147		34		540

NON-OPERATING (EXPENSES) INCOME

Interest and debt expense	(17)		(14)		(30)		(28)

Loss from investment in unconsolidated subsidiary	(4)		(1)		(7)		(3)
Other non-operating (loss) income	(6)		3		(5)		2
INCOME (LOSS) BEFORE INCOME TAXES	11		135		(8)		511
Income tax (provision) benefit	(3)		(38)		6		(113)
NET INCOME (LOSS)	$	8	$	97	$	(2)	$	398






Net income (loss) per share
Basic	$	0.12	$	1.39	$	(0.03)	$	5.65
Diluted	$	0.11	$	1.35	$	(0.03)	$	5.47

Weighted-average common shares outstanding
Basic	68.1		69.7		68.6		70.5
Diluted	70.0		71.9		68.6		72.7

The accompanying notes are an integral part of these condensed consolidated financial statements.

CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

For the three and six months ended June 30, 2024 and 2023

(in millions)


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Net income (loss)	$	8	$	97	$	(2)	$	398
Other comprehensive income (loss):
Amortization of prior service cost credit included in net periodic benefit cost, net of tax(a)	—		—		(2)		—
Comprehensive income (loss)	$	8	$	97	$	(4)	$	398

(a) Tax effects of the amortization of the prior service cost credit was insignificant for the three and six months ended June 30, 2024.

The accompanying notes are an integral part of these condensed consolidated financial statements.

CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders' Equity

For the three and six months ended June 30, 2024 and 2023

(in millions)


	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	$	1	$	(662)	$	1,295	$	1,387	$	72	$	2,093
Net income	—		—		—		8		—		8

Share-based compensation	—		—		7		—		—		7


Repurchases of common stock	—		(35)		—		—		—		(35)

Cash dividend ($0.31 per share)	—		—		—		(21)		—		(21)
Shares cancelled for taxes	—		—		(1)		—		—		(1)
Other	—		—		1		—		—		1

Balance, June 30, 2024	$	1	$	(697)	$	1,302	$	1,374	$	72	$	2,052


	Three months ended June 30, 2023
	Common Stock		Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Equity
Balance, March 31, 2023	$	1	$	(520)	$	1,311	$	1,219	$	81	$	2,092
Net income	—		—		—		97		—		97

Share-based compensation	—		—		7		—		—		7



Repurchases of common stock	—		(64)		—		—		—		(64)

Cash dividend ($0.2825 per share)	—		—		—		(21)		—		(21)
Shares cancelled for taxes	—		—		(1)		—		—		(1)

Balance, June 30, 2023	$	1	$	(584)	$	1,317	$	1,295	$	81	$	2,110

The accompanying notes are an integral part of these condensed consolidated financial statements.


	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	$	1	$	(604)	$	1,329	$	1,419	$	74	$	2,219
Net loss	—		—		—		(2)		—		(2)



Share-based compensation	—		—		14		—		—		14


Repurchases of common stock	—		(93)		—		—		—		(93)

Cash dividend ($0.31 per share)	—		—		—		(43)		—		(43)
Shares cancelled for taxes					(42)		—		—		(42)
Other comprehensive income, net of tax	—		—		—		—		(2)		(2)
Other	—		—		1		—		—		1
Balance, June 30, 2024	$	1	$	(697)	$	1,302	$	1,374	$	72	$	2,052


	Six months ended June 30, 2023
	Common Stock		Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Equity
Balance, December 31, 2022	$	1	$	(461)	$	1,305	$	938	$	81	$	1,864
Net income	—		—		—		398		—		398



Share-based compensation	—		—		14		—		—		14
Repurchases of common stock	—		(123)		—		—		—		(123)


Cash dividend ($0.2825 per share)	—		—		—		(41)		—		(41)
Shares cancelled for taxes					(2)		—		—		(2)



Balance, June 30, 2023	$	1	$	(584)	$	1,317	$	1,295	$	81	$	2,110

The accompanying notes are an integral part of these condensed consolidated financial statements.

CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

For the three and six months ended June 30, 2024 and 2023

(in millions)


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss)	$	8	$	97	$	(2)	$	398
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	53		56		106		114
Deferred income tax provision (benefit)	3		9		(6)		56
Asset impairments	13		—		13		3
Net (gain) loss from commodity derivatives	(4)		(31)		68		(73)
Net payments on settled commodity derivatives	(10)		(63)		(24)		(128)


Gain on asset divestitures	(1)		—		(7)		(7)



Other non-cash charges to income, net	46		30		52		51
Changes in operating assets and liabilities, net	(11)		10		(16)		4
Net cash provided by operating activities	97		108		184		418

CASH FLOW FROM INVESTING ACTIVITIES
Capital investments	(34)		(39)		(88)		(86)
Changes in accrued capital investments	6		(2)		2		(15)
Proceeds from asset divestitures, net	2		—		12		—
Acquisitions	(6)		(1)		(6)		(1)


Other, net	(1)		(2)		(2)		(3)
Net cash used in investing activities	(33)		(44)		(82)		(105)

CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Revolving Credit Facility	30		—		30		—

Proceeds from 2029 Senior Notes, net	590		—		590		—

Repurchases of common stock	(35)		(64)		(93)		(123)
Common stock dividends	(22)		(20)		(43)		(40)
Payments on equity-settled awards	—		—		(4)		—




Issuance of common stock	2		—		3		1
Bridge loan commitments	—		—		(5)		—
Debt amendment costs	—		(8)		(3)		(8)
Shares cancelled for taxes	(1)		(1)		(42)		(2)

Net cash provided by (used in) financing activities	564		(93)		433		(172)
Increase (decrease) in cash and cash equivalents	628		(29)		535		141
Cash and cash equivalents—beginning of period	403		477		496		307
Cash and cash equivalents—end of period	$	1,031	$	448	$	1,031	$	448

The accompanying notes are an integral part of these condensed consolidated financial statements.

CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

June 30, 2024

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.

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. On July 1, 2024, we closed on transactions contemplated by the definitive agreement and plan of merger (Merger Agreement) to obtain all of the ownership interests in Aera Energy, LLC (Aera) with an effective date of January 1, 2024 (Aera Merger). As such, the accompanying unaudited financial statements do not contain the results of Aera for the periods indicated.

In the opinion of our management, the accompanying unaudited 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 investment in an unconsolidated subsidiary (Carbon TerraVault JV HoldCo, LLC) was initially recognized at cost and then is 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, 2023 (2023 Annual Report).

The carrying amounts of cash, cash equivalents and on-balance sheet financial instruments, other than debt, approximate fair value. Refer to Note 3 Debt for the fair value of our debt.

Certain prior period balances related to natural gas liquid (NGL) marketing activities have been reclassified to conform to our 2024 presentation. For the six months ended June 30, 2023, we reclassified $3 million related to NGL storage activities from other revenue to revenue from marketing of purchased commodities on our condensed consolidated statement of operations.

NOTE 2 INVESTMENT IN UNCONSOLIDATED SUBSIDIARY AND RELATED PARTY TRANSACTIONS

In August 2022, our wholly-owned subsidiary Carbon TerraVault I, LLC 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. We determined that the Carbon TerraVault JV is a variable interest entity (VIE); however, we share decision-making power with Brookfield on all matters that most significantly impact the economic performance of the joint venture. Therefore, we account for our investment in the Carbon TerraVault JV under the equity method of accounting. Transactions between us and the Carbon TerraVault JV are related party transactions.

Brookfield has committed an initial $500 million to invest in CCS projects that are jointly approved through the Carbon TerraVault JV. As part of the formation of the Carbon TerraVault JV, we contributed rights to inject CO2 into the 26R reservoir in our Elk Hills field for permanent CO2 storage (26R reservoir) and Brookfield committed to make an initial investment of $137 million, payable in three installments with the last two installments subject to the achievement of certain milestones. We achieved the milestone for the second installment in March 2024. The third installment will be sized based on permitted storage capacity.

Brookfield contributed the first $46 million installment of their initial investment to the Carbon TerraVault JV in 2022 and the second $46 million installment in April 2024. The remaining balance of the initial installment plus the second installment may, at our sole discretion, be distributed to us or used to satisfy future capital contributions, among other items. Because the parties have certain put and call rights (repurchase features) with respect to the 26R reservoir if certain milestones are not met, the first and second installment of 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 $102 million and $52 million at June 30, 2024 and December 31, 2023, respectively, inclusive of interest.

The tables below present the summarized financial information related to our equity method investment in the Carbon TerraVault JV (and do 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,
	2024		2023
	(in millions)
Investment in unconsolidated subsidiary(a)	$	17	$	19
Receivable from affiliate(b)	$	61	$	19
Other long-term liabilities - Contingent liability (related to Carbon TerraVault JV put and call rights)	$	102	$	52

(a)Reflects our investment less losses allocated to us of $7 million and $9 million for the six months ended June 30, 2024 and the year ended December 31, 2023, respectively.

(b)The amount of Brookfield's contributions available to us and amounts due to us under the MSA (described further below) are reported as receivable from affiliate. At June 30, 2024, the amount of $61 million includes the remaining $58 million of Brookfield's first and second installments of their initial investment which is available to us and $3 million related to the MSA and vendor reimbursements. At December 31, 2023, the amount of $19 million includes $17 million remaining of Brookfield's initial contribution available to us and $2 million related to the MSA and vendor reimbursements.


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
	(in millions)				(in millions)
Loss from investment in unconsolidated subsidiary	$	4	$	1	$	7	$	3
General and administrative expenses(a)	$	3	$	2	$	5	$	3

(a)General and administrative expenses on our condensed consolidated statements of operations have been reduced by this amount which we have invoiced to the Carbon TerraVault JV under the MSA for back-office operational and commercial services.

We are also performing well abandonment work at our Elk Hills field as part of the permitting process for injection of CO2 at the 26R reservoir. 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. During the three and six months ended June 30, 2023, we performed abandonment work and sought reimbursement in the amounts of $1 million and $2 million, respectively, from the Carbon TerraVault JV.

The Carbon TerraVault JV has an option to participate in certain projects that involve the capture, transportation and storage of CO2 in California. This option expires upon the earlier of (1) August 2027, (2) when a final investment decision has been approved by the Carbon TerraVault JV for storage projects representing in excess of 5 million metric tons per annum (MMTPA) in the aggregate, or (3) when Brookfield has made contributions to the joint venture in excess of $500 million (unless Brookfield elects to increase its commitment).

We entered into a Management Services Agreement (MSA) with the Carbon TerraVault JV whereby we provide administrative, operational and commercial services under a cost-plus arrangement. Services may be supplemented by using third parties and payments to us under the MSA are limited to the amount in an approved budget. The MSA may be terminated by mutual agreement of the parties, among other events.

NOTE 3 DEBT

As of June 30, 2024 and December 31, 2023, our long-term debt consisted of the following:



	June 30,		December 31,
	2024		2023		Interest Rate	Maturity
	(in millions)

Revolving Credit Facility	$	30	$	—	SOFR plus 2.50%-3.50% ABR plus 1.50%-2.50%(a)	July 31, 2027(b)

2026 Senior Notes	545		545		7.125%	February 1, 2026
2029 Senior Notes	600		—		8.250%	June 15, 2029
Principal amount	$	1,175	$	545
Unamortized debt discount and debt issuance costs	(14)		(5)
Long-term debt, net	$	1,161	$	540

(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%.

(b)The Revolving Credit Facility is subject to a springing maturity to August 4, 2025 if any of our 2026 Senior Notes are outstanding on that date.

On April 26, 2023, we entered into an Amended and Restated Credit Agreement (Revolving Credit Facility) with Citibank, N.A., as administrative agent, and certain other lenders, which amended and restated in its entirety the prior credit agreement dated October 27, 2020. As of June 30, 2024, our Revolving Credit Facility consisted of a senior revolving loan facility with an aggregate commitment of $630 million. Our Revolving Credit Facility also included a sub-limit of $250 million for the issuance of letters of credit. As of June 30, 2024, $130 million letters of credit were issued to support ordinary course marketing, insurance, regulatory and other matters. As of June 30, 2024, we had $470 million of availability on our Revolving Credit Facility after taking into account a draw of $30 million and $130 million in letters of credit outstanding. The borrowing base is redetermined semi-annually and the next determination will be on or about October 1, 2024.

In February 2024, in connection with the Aera Merger, we entered into a second amendment to our Revolving Credit Facility to, among other things, permit the incurrence of indebtedness under a bridge loan facility. We did not utilize a bridge loan facility in connection with the Aera Merger and wrote-off $6 million of bridge loan and commitment fees during the three months ended June 30, 2024 included in other non-operating (loss) income on our condensed consolidated statement of operations.

In March 2024, we entered into a third amendment to our Revolving Credit Facility. This amendment facilitated certain matters with respect to the Aera Merger, including the postponement of the regular spring borrowing base redetermination until the fall of 2024 and certain other amendments.

On July 1, 2024, we entered into a fourth amendment to our Revolving Credit Facility. This amendment increased the aggregate revolving commitments available under the Revolving Credit Facility from $630 million to $1.1 billion. The amount we are able to borrow under our Revolving Credit Facility is limited to the amount of these commitments. This amendment also increased the borrowing base from $1.2 billion to $1.5 billion, among other matters.

For a discussion of the Aera Merger, see Note 13 Subsequent Events.

2029 Senior Notes

On June 5, 2024, we completed an offering of $600 million in aggregate principal amount of 8.25% senior notes due 2029 (2029 Senior Notes). The terms of the 2029 Senior Notes are governed by the Indenture, dated as of June 5, 2024, by and among us, the guarantors and Wilmington Trust, National Association, as trustee (2029 Senior Notes Indenture). The net proceeds of $590 million, after $10 million of debt discount and issuance costs, were used along with available cash to repay all of Aera's outstanding debt at closing of the Aera Merger. See Note 13 Subsequent Events for more information on the closing of the Aera Merger.

Security – Our 2029 Senior Notes are general unsecured obligations which are guaranteed on a senior unsecured basis by all of our existing subsidiaries that guarantee our obligations under the Revolving Credit Facility and our existing 2026 Senior Notes.

Redemption – We may redeem the 2029 Senior Notes at any time on or after June 15, 2026 at the redemption prices of (i) 104.125% during the twelve-month period beginning on June 15, 2026, (ii) 102.063% during the twelve-month period beginning on June 15, 2027 and (iii) 100% after June 15, 2028 and before the maturity date. Prior to June 15, 2026, we may redeem up to 35% of the aggregate principal amount of the 2029 Senior Notes with an amount of cash not greater than the net cash proceeds from certain equity offerings at the redemption price of 108.250%. In addition, before June 15, 2026, we may redeem some or all of the 2029 Senior Notes at a redemption price equal to 100% of the aggregate principal amount of the 2029 Senior Notes redeemed, plus the applicable premium as specified in the 2029 Senior Notes Indenture and accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, our 2029 Senior Notes were subject to a special mandatory redemption in certain circumstances if the Aera Merger did not close. As of June 30, 2024, it was not probable that this redemption feature would be triggered and it is no longer effective.

Other Covenants – Our 2029 Senior Notes include covenants that, among other things, restrict our ability to incur additional indebtedness, issue preferred stock, grant liens, make asset sales and investments, repay existing indebtedness, make subsidiary distributions, and enter into transactions that would result in fundamental changes.

Events of Default and Change of Control – Our 2029 Senior Notes provide for certain triggering events, including upon a change of control, as defined in the indenture, that would require us to repurchase all or any part of the 2029 Senior Notes at a price equal to 101% of the aggregate principal amount plus accrued and unpaid interest.

Fair Value

We estimate that the fair value of our variable rate debt approximates its carrying value because the interest rate approximates current market rates. As shown in the table below, we estimate fair value of our fixed rate Senior Notes based on known prices from market transactions (using Level 1 inputs on the fair value hierarchy).


	June 30,		December 31,
	2024		2023
	(in millions)
Variable rate debt	$	30	$	—
Fixed rate debt
2026 Senior Notes	547		554
2029 Senior Notes	612		—
Fair Value of Long-Term Debt	$	1,189	$	554

Other

As of June 30, 2024, we were in compliance with all financial and other debt covenants under our Revolving Credit Facility, 2026 Senior Notes and 2029 Senior Notes. For more information on our 2026 Senior Notes, see Part II, Item 8 – Financial Statements and Supplementary Data, Note 4 Debt in our 2023 Annual Report.

NOTE 4 LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES

We are involved, in the normal course of business, in lawsuits, environmental and other claims, and other contingencies that seek, among other things, compensation for alleged personal injury, breach of contract, property damage or other losses, punitive damages, civil penalties or injunctive or declaratory relief.

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, 2024 and December 31, 2023 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. We estimate our ongoing share of maintenance costs for the platforms could be approximately $5 million per year. Due to the preliminary stage of the process, no cost estimates to abandon the offshore platforms have been determined.

NOTE 5 DERIVATIVES

We continue to maintain a commodity hedging program primarily focused on crude oil to help protect our cash flows, margins and capital program from the volatility of commodity prices. We also enter into natural gas swaps for the purpose of hedging our fuel consumption at one of our steamfloods as well as swaps for natural gas purchases and sales related to our marketing activities. We did not have any derivative instruments designated as accounting hedges as of and for the three and six months ended June 30, 2024 and 2023. Unless otherwise indicated, we use the term "hedge" to describe derivative instruments that are designed to implement our hedging strategy.

Summary of Derivative Contracts

We held the following Brent-based contracts as of June 30, 2024:


	Q3 2024		Q4 2024		Q1 2025		Q2 2025		2H 2025
Sold Calls
Barrels per day	30,000		29,000		30,000		30,000		29,500
Weighted-average price per barrel	$	90.07	$	90.07	$	87.08	$	87.08	$	87.11

Purchased Puts
Barrels per day	30,000		29,000		30,000		30,000		29,500
Weighted-average price per barrel	$	65.17	$	65.17	$	61.67	$	61.67	$	61.69

Swaps
Barrels per day	8,875		8,875		5,250		3,500		3,250
Weighted-average price per barrel	$	80.10	$	79.94	$	76.27	$	72.50	$	72.50

The outcomes of the derivative positions 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 – 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.

At June 30, 2024, we also held the following swaps to hedge purchased natural gas used in our operations as shown in the table below.


	Q3 2024		Q4 2024
Swaps:
MMBtu per day	10,000		10,000
Weighted-average price per MMBtu	$	5.65	$	5.65

We also have a limited number of derivative contracts related to our natural gas marketing activities that are intended to lock in locational price spreads. These derivative contracts are not significant to our results of operations or financial statements taken as a whole.

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 which hedge commodity price risk 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,
	2024		2023		2024		2023
	(in millions)				(in millions)
Non-cash commodity derivative gain (loss)	$	11	$	94	$	(48)	$	201


Settlements and premiums	(6)		(63)		(18)		(128)

Net gain (loss) from commodity derivatives	$	5	$	31	$	(66)	$	73

We report gains and losses on our derivative contracts for purchased natural gas used to generate steam for our steamflood operations as a component of operating expense on our consolidated statement of operations. For the three and six months ended June 30, 2024, we recognized a net loss of $1 million (which includes a non-cash gain of $3 million and $4 million of settlement payments) and a net loss of $2 million (which includes a non-cash gain of $4 million and $6 million of settlement payments) in other operating expenses, net on our consolidated statement of operations. We did not have derivative contracts related to purchased natural gas for our marketing activities during the three and six months ended June 30, 2023.

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, 2024 and December 31, 2023:


June 30, 2024
Classification	Gross Amounts at Fair Value		Netting		Net Fair Value
	(in millions)
Other current assets, net	$	13	$	(13)	$	—
Other noncurrent assets	15		(15)		—

Current liabilities	(41)		13		(28)
Noncurrent liabilities	(25)		15		(10)
	$	(38)	$	—	$	(38)


December 31, 2023
Classification	Gross Amounts at Fair Value		Netting		Net Fair Value
	(in millions)
Other current assets, net	$	39	$	(18)	$	21
Other noncurrent assets	38		(32)		6

Current liabilities	(26)		18		(8)
Noncurrent liabilities	(34)		32		(2)
	$	17	$	—	$	17

NOTE 6 INCOME TAXES

The following table presents the components of our total income tax provision:


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
	(in millions)				(in millions)
Income (loss) before income taxes	$	11	$	135	$	(8)	$	511

Current income tax provision	—		29		—		57
Deferred income tax provision (benefit)	3		9		(6)		56
Total income tax provision (benefit)	$	3	$	38	$	(6)	$	113

Our annual effective tax rate of 27% differed from the U.S. federal statutory tax rate of 21% for the three months ended June 30, 2024 primarily due to state taxes. Our annual effective tax rate of 75% differed from the U.S. federal 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. This difference resulted in a tax benefit and had the effect of increasing our effective tax rate for the six months ended June 30, 2024.

Our annual effective tax rate of 28% differed from the U.S. federal statutory tax rate of 21% for the three and six months ended June 30, 2023 primarily due to state taxes. During the six months ended June 30, 2023 we recognized a tax benefit for the release of a valuation allowance, which was recognized in 2022. See Part II, Item 8 – Financial Statements and Supplementary Data, Note 7 Income Taxes in our 2023 Annual Report for additional information.

Management expects to realize the recorded deferred tax assets primarily through future income and reversal of taxable temporary differences. Realization of our existing deferred tax assets is not assured and depends on a number of factors including our ability to generate sufficient taxable income in future periods.

NOTE 7 DIVESTITURES, ACQUISITIONS AND ASSETS HELD FOR SALE

Divestitures

Fort Apache in Huntington Beach

In March 2024, we sold our 0.9-acre Fort Apache real estate property in Huntington Beach, California for purchase price of $10 million and recognized a $6 million gain.

Other

During the three and six months ended June 30, 2024, we sold non-core assets recognizing a $1 million gain.

During the six months ended June 30, 2023, we sold a non-producing asset in exchange for the assumption of liabilities, recognizing a $7 million gain related to the liability reduction.

Acquisitions

In the three and six months ended June 30, 2024, we acquired land for our carbon management business for approximately $6 million. In the three and six months ended June 30, 2023, we acquired land for our carbon management business for approximately $1 million.

Assets Held for Sale

Ventura Basin Transactions

During 2021 and 2022, we entered into transactions to sell our Ventura basin assets. The transaction contemplates multiple closings that are subject to customary closing conditions. The transfer of the remaining assets in the Ventura basin was approved in June 2024 by the State Lands Commission. We expect to close on the sale of these assets in the second half of 2024. These remaining assets, consisting of property, plant and equipment and associated asset retirement obligations, are classified as held for sale on our condensed consolidated balance sheets at June 30, 2024 and December 31, 2023. See Part II, Item 8 – Financial Statements and Supplementary Data, Note 8 Divestitures and Acquisitions in our 2023 Annual Report for additional information on the Ventura basin transactions.

Other

In 2022, we acquired properties for carbon management activities for approximately $17 million, with the intent to divest a portion of these assets. We recorded these assets at fair value recognizing an impairment of $3 million in the first quarter of 2023. The fair value, using Level 3 inputs in the fair value hierarchy, declined during the first quarter of 2023 due to market conditions (including inflation and rising interest rates). The assets being divested are classified as held for sale as of June 30, 2024 on our condensed consolidated balance sheet.

NOTE 8 STOCKHOLDERS' EQUITY

Share Repurchase Program

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. 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. The following is a summary of our share repurchases, which are held as treasury stock, 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, 2023	1,618,746	$	64	$	39.12
Three months ended June 30, 2024	703,839	$	35	$	49.71

Six months ended June 30, 2023	3,042,510	$	123	$	40.12
Six months ended June 30, 2024	1,769,603	$	93	$	51.85

Inception of Program (May 2021) through June 30, 2024	16,633,518	$	697	$	41.74

Note: The total value of shares purchased includes approximately $1 million in both the six months ended June 30, 2024 and 2023 related to excise taxes on share repurchases, which was effective beginning on January 1, 2023. Commissions paid on share repurchases were not significant in all periods presented.

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)
2024
Three months ended March 31, 2024	$	21	$	0.31
Three months ended June 30, 2024	22		$	0.31

Six months ended June 30, 2024	$	43
2023
Three months ended March 31, 2023	$	20	$	0.2825
Three months ended June 30, 2023	20		$	0.2825

Six months ended June 30, 2023	$	40

In addition to dividends on our common stock shown in the table above, we paid $4 million on equity-settled stock-based compensation awards in the six months ended June 30, 2024. Future cash dividends, and the establishment of record and payment dates, are subject to final determination by our Board of Directors each quarter after reviewing our financial performance and position. See Note 13 Subsequent Events for information on future cash dividends.

Warrants

In October 2020, we reserved an aggregate 4,384,182 shares of our common stock for warrants, which are exercisable at $36 per share through October 2024.

As of June 30, 2024, we had outstanding warrants exercisable into 4,119,144 shares of our common stock (subject to adjustments pursuant to the terms of the warrants). During the three and six months ended June 30, 2024, we issued 34,474 and 53,325 shares of our common stock in exchange for warrants. During the three and six months ended June 30, 2023, we issued an insignificant number of shares of our common stock in exchange for warrants.

See Part II, Item 8 – Financial Statements and Supplementary Data, Note 10 Stockholders' Equity in our 2023 Annual Report for additional information on the terms of our warrants.

NOTE 9 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, 2024 and 2023. 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.

The following table presents the calculation of basic and diluted EPS, for the three and six months ended June 30, 2024 and 2023:


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
	(in millions, except per-share amounts)
Numerator for Basic and Diluted EPS
Net income (loss)	$	8	$	97	$	(2)	$	398





Denominator for Basic EPS
Weighted-average shares	68.1		69.7		68.6		70.5

Potential common shares, if dilutive:
Warrants	1.2		0.5		—		0.5
Restricted stock units	0.4		0.9		—		0.9
Performance stock units	0.3		0.8		—		0.8

Denominator for Diluted EPS
Weighted-average shares	70.0		71.9		68.6		72.7

EPS
Basic	$	0.12	$	1.39	$	(0.03)	$	5.65
Diluted	$	0.11	$	1.35	$	(0.03)	$	5.47

The following table presents potentially dilutive weighted-average common shares which were excluded from the denominator for diluted EPS in periods of losses:


	Three months ended June 30,		Six months ended June 30,
	2024	2023	2024	2023
	(in millions)
Shares issuable upon exercise of warrants	—	—	4.2	—
Shares issuable upon settlement of RSUs	—	—	0.8	—
Shares issuable upon settlement of PSUs	—	—	1.0	—
Total antidilutive shares	—	—	6.0	—

NOTE 10 SUPPLEMENTAL ACCOUNT BALANCES

Restricted cash — Cash and cash equivalents at June 30, 2024 included an insignificant amount that was restricted under oil and natural gas liens in favor of one of our suppliers. We had no restricted cash at December 31, 2023.

Revenues — We derive most of our revenue from sales of oil, natural gas and NGLs, with the remaining revenue primarily generated from sales of electricity and marketing activities related to storage and managing excess pipeline capacity.

The following table provides disaggregated revenue for sales of produced oil, natural gas and NGLs to customers:



	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
	(in millions)				(in millions)
Oil	$	353	$	362	$	701	$	752
Natural gas	14		43		46		306
NGLs	45		42		94		104
Oil, natural gas and NGL sales	$	412	$	447	$	841	$	1,162

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 in the quality of products other than natural gas. 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,
	2024		2023		2024		2023
	(in millions)
Oil	$	28	$	—	$	48	$	—
Natural gas	23		72		71		256
NGLs	—		—		6		3
Revenue from marketing of purchased commodities	$	51	$	72	$	125	$	259

Inventories — Materials and supplies, which primarily consist of well equipment and tubular goods used in our oil and natural gas operations, are valued at weighted-average cost and are reviewed periodically for obsolescence. Finished goods include produced oil and NGLs in storage, which are valued at the lower of cost or net realizable value. Inventories, by category, are as follows:



	June 30,		December 31,
	2024		2023
	(in millions)
Materials and supplies	$	54	$	68
Finished goods	2		4
Inventories	$	56	$	72

In the three and six months ended June 30, 2024, we recorded an impairment of excess and obsolete materials and supplies of $13 million. The impairment related to the write-down of obsolete materials and supplies to fair value using Level 3 inputs in the fair value hierarchy.

Other current assets, net — Other current assets, net include the following:


	June 30,		December 31,
	2024		2023
	(in millions)
Net amounts due from joint interest partners(a)	$	48	$	43

Fair value of commodity derivative contracts	—		21
Prepaid expenses	16		19
Greenhouse gas allowances	12		12

Income tax receivable	8		—
Other	19		18
Other current assets, net	$	103	$	113

(a)Included in the June 30, 2024 and December 31, 2023 net amounts due from joint interest partners are allowances of $3 million.

Other noncurrent assets — Other noncurrent assets include the following:



	June 30,		December 31,
	2024		2023
	(in millions)
Operating lease right-of-use assets	$	83	$	73
Deferred financing costs - Revolving Credit Facility	12		11
Emission reduction credits	11		11
Prepaid power plant maintenance	2		34
Fair value of commodity derivative contracts	—		6
Deposits and other	14		13
Other noncurrent assets	$	122	$	148

Accrued liabilities — Accrued liabilities include the following:


	June 30,		December 31,
	2024		2023
	(in millions)
Employee-related costs	$	69	$	82
Taxes other than on income	36		35
Asset retirement obligations	77		99
Interest	21		18
Operating lease liability	19		15
Fair value of derivative contracts	28		8
Premiums due on commodity derivative contracts	13		21
Liability for settlement payments on commodity derivative contracts	2		8
Amounts due under production-sharing contracts	16		5
Signal Hill maintenance	2		12
Income taxes payable	—		18

Other	57		45
Accrued liabilities	$	340	$	366

Other long-term liabilities — Other long-term liabilities includes the following:



	June 30,		December 31,
	2024		2023
	(in millions)
Compensation-related liabilities	$	35	$	38
Postretirement benefit plan	33		36
Operating lease liability	55		55
Fair value of commodity derivative contracts	10		2
Premiums due on commodity derivative contracts	7		10
Contingent liability (related to Carbon TerraVault JV put and call rights)	102		52
Other	6		8
Other long-term liabilities	$	248	$	201

General and administrative expenses — The table below shows G&A expenses for our exploration and production business (including unallocated corporate overhead and other) separately from our carbon management business. The amounts shown for our carbon management business are net of amounts invoiced by us under the MSA with the Carbon TerraVault JV. See Note 2 Investment in Unconsolidated Subsidiary and Related Party Transactions for more information on the Carbon TerraVault JV.


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
	(in millions)				(in millions)
Exploration and production, corporate and other	$	60	$	68	$	115	$	130
Carbon management business	3		3		5		6
Total general and administrative expenses	$	63	$	71	$	120	$	136

NOTE 11 SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental disclosures to our condensed consolidated statements of cash flows, excluding leases and ARO, are presented below:

California Resources Corp [CRC] Filings
California Resources Corp [CRCQW] Filings
10-Q	[2024-08-07]
10-Q	[2024-05-08]
10-K	[2024-02-28]
10-Q	[2023-11-02]
10-Q	[2023-08-01]
10-Q	[2023-05-02]
10-K	[2023-02-24]
10-Q	[2022-11-07]
10-Q	[2022-08-04]
10-Q	[2022-05-05]
10-K	[2022-02-25]
10-Q	[2021-11-12]
10-Q	[2021-08-06]
10-Q	[2021-05-13]
10-K	[2021-03-11]
S-1	[2020-12-04]
10-Q	[2020-11-05]
10-Q	[2020-08-06]
10-Q	[2020-06-25]
10-K	[2020-02-26]
10-Q	[2019-11-04]
10-Q	[2019-08-01]
10-Q	[2019-05-02]
10-K	[2019-02-27]
10-Q	[2018-11-01]
10-Q	[2018-08-02]
10-Q	[2018-05-09]
10-K	[2018-02-27]
10-Q	[2017-11-08]
10-Q	[2017-08-03]
10-Q	[2017-05-04]
10-K	[2017-02-24]
10-Q	[2016-11-03]
10-Q	[2016-08-04]
10-Q	[2016-05-05]
10-K	[2016-02-29]
10-Q	[2015-11-06]
10-Q	[2015-08-07]
10-Q	[2015-05-07]
10-K	[2015-02-27]
10-Q	[2014-10-31]

California Resources Corp [CRC] Filings

California Resources Corp [CRCQW] Filings