CRC

A month has gone by since the last earnings report for California Resources Corporation (CRC). Shares have added about 2.7% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is California Resources due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for California Resources Corporation before we dive into how investors and analysts have reacted as of late. California Resources reported second-quarter 2026 adjusted earnings of 99 cents per share, down 10% from $1.10 a year ago and 24.4% below the Zacks Consensus Estimate of $1.31, mainly due to temporary takeaway constraints, weaker oil differentials and higher transportation and operating costs.The Long Beach, CA-based oil and gas exploration and production company’s oil, natural gas and natural gas liquids revenues of $1.06 billion rose 50.4% from $702 million and beat the Zacks Consensus Estimate of $979 million by 7.8%.CRC’s board of directors declared a quarterly cash dividend of 40.5 cents per share of common stock, payable on Sept. 18, 2026, to its shareholders of record as of Sept. 4. During this quarter, CRC returned $36 million to its shareholders through dividends. California Resources' average net production was 149 thousand barrels of oil equivalent per day (MBoe/d), up from 137 MBoe/d in the year-ago quarter. Net oil production averaged 120 thousand barrels per day, while NGL production was 10 thousand barrels per day. Natural gas output averaged 115 million cubic feet per day. Oil represented 81% of total production.The realized oil price before derivative settlements was $91.55 per barrel, while NGL and natural gas realizations were $49.62 per barrel and $1.84 per Mcf, respectively. CRC built about 137 thousand barrels of oil inventory because of temporary takeaway constraints. The inventory build, weaker differentials and higher operating and transportation costs reduced adjusted EBITDAX and operating cash flow before working-capital changes by about $25 million. Total operating expenses were $786 million, up 10.5% from $711 million a year earlier. Operating costs were $347 million, up 17.6% from $295 million a year earlier General and administrative expenses increased 22.8% to $97 million. Adjusted G&A expenses, however, declined to $89 million from $99 million in the first quarter, reflecting Berry-related efficiencies.The company implemented more than 100% of its 2026 Berry synergy target six months ahead of schedule, representing $103 million of annualized savings. California drilling efficiency improved about 25% and nearly 80% of wells drilled year to date outperformed the type curve, with average initial production more than 10% above expectations. CRC lowered its long-term drilling, completions and workover maintenance-capital estimate by about 5% to $450-$475 million with six rigs. Net cash provided by operating activities was $263 million, up 59.4% from $165 million in the prior-year quarter. Free cash flow totaled $114 million, while capital investments were $149 million, including $101 million for drilling, completions and workovers.CRC ended June with $1.32 billion of liquidity, consisting of $43 million of available cash and $1.28 billion of borrowing capacity, with a debt-to-capitalization of 27.4%. During the quarter, it issued $550 million of 7.25% senior notes due 2035 and redeemed its remaining 8.25% senior notes due 2029. CRC agreed to acquire Crimson Midstream Holdings, LLC for $63 million in cash. The transaction adds roughly 2,000 miles of California crude-oil pipelines and storage assets, expanding the company's access to higher-value markets and third-party throughput.The company also acquired the Line 100 system earlier in 2026. That network includes a 118-mile crude pipeline with 60 thousand barrels per day of capacity and more than 1 million barrels of storage. Management expects the Crimson deal to strengthen market access and commercial flexibility. Carbon TerraVault I began carbon dioxide (CO2) injection and generated first revenues during the quarter. Management said the project is capturing and injecting about 270 metric tons of CO2 per day and is targeting an annualized rate of roughly 100,000 tons.CRC also partnered with Beacon Data Centers on the proposed Golden Valley Technology Hub at Elk Hills. The planned campus would have 275 megawatts of capacity and use power from CRC's existing Elk Hills plant. The company has submitted a conditional-use permit and expects the environmental review process to advance later in 2026. In the past month, investors have witnessed a upward trend in fresh estimates. The consensus estimate has shifted 17.26% due to these changes. At this time, California Resources has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a score of B on the value side, putting it in the second quintile for value investors. Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, California Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. California Resources is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, Cheniere Energy (LNG), a stock from the same industry, has gained 4%. The company reported its results for the quarter ended June 2026 more than a month ago. Cheniere Energy reported revenues of $5.73 billion in the last reported quarter, representing a year-over-year change of +23.5%. EPS of $3.02 for the same period compares with $7.30 a year ago. For the current quarter, Cheniere Energy is expected to post earnings of $3.86 per share, indicating a change of -18.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +4.8% over the last 30 days. Cheniere Energy has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report California Resources Corporation (CRC) : Free Stock Analysis Report Cheniere Energy, Inc. (LNG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Let’s dig into the relative performance of California Resources (NYSE:CRC) and its peers as we unravel the now-completed Q2 mixed or offshore upstream e&p earnings season. This category includes smaller or niche E&P companies operating in specialized basins, geographies, or resource types outside major classifications. These firms may target unconventional resources, frontier regions, or specific commodity niches. Tailwinds include potential for outsized returns from successful exploration, acquisition opportunities during industry downturns, and specialized expertise commanding premium valuations. Headwinds include higher operational and geological risks, limited scale reducing negotiating power and cost efficiencies, and constrained capital market access during challenging commodity environments. Regulatory risks and ESG concerns may disproportionately affect smaller operators with fewer resources for compliance. The 21 mixed or offshore upstream e&p stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 8%. Thankfully, share prices of the companies have been resilient as they are up 8.6% on average since the latest earnings results. Operating some of California's most productive oil fields including Elk Hills and Belridge, California Resources (NYSE:CRC) explores for and produces crude oil, natural gas, and natural gas liquids from fields across California. California Resources reported revenues of $1.09 billion, up 33.1% year on year. This print exceeded analysts’ expectations by 15%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EPS estimates. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $52.45. Is now the time to buy California Resources? Access our full analysis of the earnings results here, it’s free. Operating without drilling rigs or field crews of its own, Granite Ridge Resources (NYSE:GRNT) owns interests in oil and natural gas wells across six major US shale basins. Granite Ridge Resources reported revenues of $149.3 million, up 36.7% year on year, outperforming analysts’ expectations by 5.7%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates. The market seems happy with the results as the stock is up 8.8% since reporting. It currently trades at $5.07. Is now the time to buy Granite Ridge Resources? Access our full analysis of the earnings results here, it’s free. Beginning with a single wagon hauling coal in Illinois back when Grover Cleveland was president, Peabody Energy (NYSE:BTU) mines coal used by electricity generators and steel manufacturers. Peabody Energy reported revenues of $1.00 billion, up 12.7% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates. Interestingly, the stock is up 24.8% since the results and currently trades at $29.00. Read our full analysis of Peabody Energy’s results here. With drilling operations focused on the Utica Shale in eastern Ohio and the SCOOP play in central Oklahoma, Gulfport Energy (NYSE:GPOR) drills for and produces natural gas from underground shale formations. Gulfport Energy reported revenues of $323.2 million, down 27.8% year on year. This result beat analysts’ expectations by 6.7%. Taking a step back, it was a satisfactory quarter as it also produced EPS in line with analysts’ estimates but a slight miss of analysts’ EBITDA estimates. Gulfport Energy had the slowest revenue growth among its peers. The stock is up 7.8% since reporting and currently trades at $176.60. Read our full, actionable report on Gulfport Energy here, it’s free. Operating in water depths reaching 12,000 feet below the surface, Seadrill (NYSE:SDRL) owns and operates drillships and semi-submersible rigs that drill oil and gas wells in deepwater offshore locations. Seadrill reported revenues of $449 million, up 19.1% year on year. This print surpassed analysts’ expectations by 13.9%. Overall, it was an incredible quarter as it also recorded a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates. The stock is up 10.1% since reporting and currently trades at $47.61. Read our full, actionable report on Seadrill here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

California Resources delivered a quarter that drew a positive market response, as operational execution and strategic infrastructure moves took center stage. Management pointed to efficiency gains in drilling, accelerated integration of recent acquisitions, and the expansion of its midstream footprint as key drivers. CEO Francisco J. Leon highlighted the completion of the Line 100 pipeline acquisition and the announcement of the Crimson midstream transaction as steps that “bolster our long-term strategy to generate shareholder value from our California assets.” The company also cited progress in carbon management projects and behind-the-meter power initiatives, reinforcing its multi-pronged approach to value creation. Is now the time to buy CRC? Find out in our full research report (it’s free). Revenue: $1.30 billion vs analyst estimates of $950.6 million (58% year-on-year growth, 36.4% beat) Adjusted EPS: $0.99 vs analyst expectations of $1.37 (28% miss) Operating Margin: 39.4%, up from 32.5% in the same quarter last year Oil production per day: up 10.1% year on year Market Capitalization: $4.73 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Betty Jiang (Barclays) asked about the strategic fit of the Crimson acquisition and its impact on integration. CEO Francisco J. Leon explained it adds difficult-to-replicate infrastructure, enhances market access, and creates more stable revenue streams within their California platform. Nitin Kumar (Mizuho) questioned plans for the Uinta asset and capital allocation. Leon noted Uinta’s higher costs and lower margins make it non-core, while CFO Clio Crespy emphasized rigorous capital allocation focused on returns and strategic fit. William Barber (UBS) inquired about the development path for the Golden Valley Technology Hub. Leon described the partnership with Beacon Data Centers, the focus on parallel permitting and commercial engagement, and the project’s unique position to deliver reliable power. Arun Jayaram (JPMorgan) asked about the absence of share repurchases and future capital allocation balance. Crespy reiterated the opportunistic approach to buybacks, emphasizing the company’s strong balance sheet and flexibility for strategic investments. Octavian Jordan (RBC) sought insight into the commercial impact of the CCS project and state programs. Leon highlighted increased customer engagement and the potential for regulatory programs to drive growth in carbon capture and power. In the coming quarters, the StockStory team will monitor (1) the successful closing and integration of the Crimson midstream acquisition, (2) sustained operational efficiency and cost reductions across drilling and production activities, and (3) regulatory and commercial progress in carbon management and power projects, particularly the Golden Valley Technology Hub and Elk Hills CCS. Updates on capital allocation priorities and further synergy realization will also be crucial for tracking the company’s execution. California Resources currently trades at $53.40, up from $52.08 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Monday, Aug. 10, 2026 at 1:00 p.m. ET Vice President of Investor Relations - Daniel Juck President and Chief Executive Officer - Francisco J. Leon Clio Crespy Operator: Good day, and welcome to the California Resources Corporation Second Quarter 26 Conference Call. All participants will be in a listen-only mode. Followed by 0. After today's presentation, there will be an opportunity to ask questions. To withdraw your questions, please press * then 2. Please note this event is being recorded. I would now like to turn the conference over to Daniel Juck, Vice President of Investor Relations. Please go ahead. Daniel Juck: Good morning, and welcome to California Resources Corporation's Second Quarter 26 Conference Call. We hope you have had a chance to review our earnings materials, which include our non GAAP reconciliations. Today's call includes forward looking statements and actual results may differ due to factors described in our earnings release and SEC filings. Following prepared remarks, our leadership team will take questions. As a reminder, please limit your questions to 1 primary and 1 follow-up. I will now turn over the call to Francisco J. Leon. Francisco J. Leon: Good morning, everyone. We delivered a solid quarter in our oil and gas business. Driven by strong operational execution continued synergy capture and sustainable drilling efficiency gains that strengthened our outlook. We also made good progress on our emerging carbon management and behind the meter power platforms. And announced 2 important midstream transactions that build on our long term strategy to generate shareholder value from our California assets. Let me begin with some comments on our strategic plans. Clio will then walk through our quarterly results and outlook. While focused on near term execution, our team is also looking to the future. The state's regulatory environment once seen as an impediment to our industry, is now supporting local onshore production to the benefit of all Californians. Events in The Middle East have caused ripple effects throughout energy markets. Here at home, California's reliance on imported crude and refined products has created temporary transportation and price challenges across the state. Highlighting the need for energy security, and reliable stable sources of local supply. that is precisely the need CRC is built for. For the last several years, CRC has been intentionally building a stronger and more integrated California energy Our Aera and Berry mergers created scale, new avenues to profitably grow our business. As the largest producer in the state, the expansion of our midstream infrastructure and marketing capabilities was a logical step to bolster our long term strategy. Greater control of critical infrastructure will provide options to enhance the commercial capabilities of our business and stability of our operations. This benefits CRC, as well as other producers. Working to move more local product to local markets and ultimately supports California's energy security and affordability. Last quarter, we took the first of 2 steps to strengthen our midstream position, purchasing the Line 100 pipeline from Phillips 66 for a nominal amount. The deal added about 120 miles of crude pipelines connecting key Central Valley production hubs along with over 1 million barrels of storage capacity and gathering, transportation, and truck loading infrastructure. That brings us to the Crimson acquisition we announced today. Crimson's midstream platform covers roughly 2,000-mile network of California crude oil pipelines that run through the heart of our producing fields. The transaction advances our long term strategy and connects our production directly to California's highest value markets. As the state's largest producer, our integrated platform will provide greater flexibility to move both CRC and third party volumes. Improve price realizations generate more diversified cash flows and drive new efficiencies. The all cash deal is financially accretive and is priced significantly below prevailing midstream sector valuation multiples. Because certain Crimson assets operate as a common carrier, the transaction requires CPUC approval. We recently received tentative approval with no conditions attached and we expect a final decision later this month. Recent market conditions have illustrated the strategic value that Crimson adds to our platform. Takeaway capacity over the last quarter was constrained due to what we expect to be temporary marketing disputes with a pipeline operator and certain off takers. Limiting our ability and that of other local producers to transport barrels to previously contracted markets and pressuring oil price differentials from replacement sales. We have taken proactive strategic steps to broaden our transportation and marketing options and improve the reliability of our market access through new agreements and partnerships. We fully expect these actions together with the resolution of the ongoing disputes, to strengthen differentials and bring realizations in line with historical levels. Now, let me focus on the expansion of our growth businesses. On carbon management, we recently commenced CO2 injection and achieved first revenue at California's first Carbon Capture and Sequestration project at Elk Hills. This places us on an esteemed list of commercial scale sequestration operators globally. We have demonstrated our ability to permit, construct and operate an EPA Class VI project, The startup showcases our operating, technical and regulatory competencies, all of which can be applied and scaled across the state. We are tracking the CPUC's Reliable and Clean Power Procurement Program or RCPPP as a potential market for natural gas with CCS. Updates from the state are expected this fall. This could be meaningful for CRC as we are well positioned to support California's growing demand for reliable, lower carbon power. California has the potential to decarbonize approximately 17 gigawatts of power of power. For our Carbon TerraVault platform, this includes a near term opportunity of approximately 2.4 gigawatts in the Central Valley. Using our Elk Hills power plant and adjacent infrastructure, we recently partnered with Beacon Data Centers, an energy focused North American data center co developer to advance the Golden Valley Technology Hub. The proposed 275-megawatt campus would span 100-acres adjacent to Elk Hills and combine our proven permitting and operating experience in California, with Beacon's data center expertise. With our co developer partner funding early stage development, the project will leverage industrial acreage existing infrastructure and firm power from our Elk Hills plant to help meet rapidly growing demand for power and AI. The proposed behind the meter design is expected to minimize power and water usage. We have submitted the conditional use permit and expect the environmental review process to advance later this year. Our ongoing discussions with a handful of global hyperscale data center operators have accelerated. Reinforced our confidence in the commercial viability of the Golden Valley Technology Hub. We look forward to reporting on our progress in the coming quarters. With that, I will turn it over to Clio Crespy. Clio Crespy: Thank you, Francisco J. Leon. Let me cover our second quarter results and our outlook. Net production averaged 149 thousand barrels of oil equivalent per day, with oil representing 81% of total volumes. Oil realizations were approximately 95% of Brent before hedges within our second quarter guidance range. Operating costs were in line with guidance at $347 million As expected, G&A declined nearly 9% reflecting Berry-related efficiencies. Second quarter adjusted EBITDAX was $338 million while operating cash flow and free cash flow before working capital were $300 million and $151 million respectively. We have implemented more than 100% of our 2026 Berry-related synergy target 6 months ahead of schedule representing approximately $103 million of annualized savings. Across our integration and broader cost reduction initiatives, we now expect up to $470 million of cumulative synergies and structural cost reductions through 2028. This reflects the quality of the combined portfolio and our ability to translate integration into durable margin improvement. Execution continued to improve during the quarter. In California, time to market improved approximately 25% allowing us to complete more wells sidetracks and workovers than planned. In the Uinta, we drilled 4 wells ahead of schedule, We reduced cycle times and our D&C costs were below plan. The team continues to target first production in the fourth quarter as planned. These efficiency gains allowed us to pull activity forward into the second quarter resulting in total capital of $149 million for the period. As a result, we have streamlined our development program reducing planned 2026 D&C and workover capital by $10 million We are redeploying those savings into targeted facilities investments which is why our total capital guidance range remained unchanged. More importantly, we believe the underlying drilling and capital efficiency gains are sustainable. We now expect to operate an average of approximately 5 rigs in California during the second half of 26 compared with 6 in our prior plan while maintaining nearly flat gross entry to exit production. Faster time to market is only half of the story. We have also materially improved well productivity. Approximately 80% of the wells drilled year to date have outperformed their type curve with average initial production more than 10% above expectations. As you know, production from our conventional wells peak within 6 to 12 months after coming online and recent activity will benefit for 2027 volume. Together, accelerated cycle times and stronger well productivity are a powerful combination. And have meaningfully improved our long term maintenance capital outlook. We now estimate that California production can be maintained with 6 rigs on a normalized annual basis. 1 fewer than previously projected and approximately 5% lower D&C and workover maintenance capital. Both represent meaningful structural improvements in the capital efficiency of the business. During the quarter, we refinanced our remaining 29 senior notes with new senior notes due 2035. This extended our weighted average debt maturity from 5.5 years to 8 years reduced annual expenses by $5.5 million and achieved the lowest credit spread in CRC's history. Our capital allocation priorities remain unchanged. Invest in high return organic growth and strategic opportunities maintain a strong balance sheet and return meaningful capital to shareholders through a sustainable dividend growth model and opportunistic buybacks. Temporary takeaway constraints during the second quarter related to marketing disputes and subsequent operational needs required us to temporarily build inventory of approximately 1.5 thousand barrels of oil per day during the quarter. Increasing operating costs and negatively impacting our differentials. Absent these temporary impacts, production would have exceeded guidance while adjusted EBITDAX and operating cash flow before working capital would have each been approximately $25 million higher. We are actively addressing this matter while executing on alternative logistics and marketing solutions. By the end of July, we had sold the substantial majority of this inventory. As a result, we expect third quarter oil price realization of approximately 93% of Brent. We think it is a prudent assumption based on current market conditions To be clear, we do not view that as a new long term run rate. We expect realizations to improve as the commercial and logistics actions already underway take effect. Those actions will give us a broader slate of alternatives to move CRC and third party barrels to California's highest value markets while strengthening our cash flow outlook. Turning to guidance. We target full year net production to average 153 thousand barrels of oil equivalent per day. While maintaining our full year capital guidance of $520 million to $560 million Including Uinta, our outlook continues to reflect approximately 1% entry-to-exit production growth. Importantly, we continue to see our full year realizations at about 94% within our original 94% to 98% range. We expect to enter 2027 at the normalized California 6 rig pace contemplated in our long term maintenance framework. Updated 2026 guidance will be provided following the close of the Crimson transaction. Disciplined execution lower costs, including synergy capture, and strategic actions are supporting margins. Ultimately, stronger well performance and sustained operating efficiencies are enhancing free cash flow while lowering the long term maintenance capital required to sustain our unique low decline California production base. I will turn it back to Francisco J. Leon. Francisco J. Leon: Thanks, Clio Crespy. Let me close with a quick summary before opening the line for questions. First, today's midstream transaction strengthens our California platform. Reinforcing market access improving margins, and increasing our ability to move local barrels to the state's highest value markets. Second, we are executing very well. Better wells, lower cost and sustained efficiency gains are reducing long term maintenance capital and rig requirements. While reinforcing free cash flow resilience. Third, we are advancing our carbon and power platforms. The start of CO2 injection and revenue generation in California's first CCS project were great milestones and our new planned project with Beacon Data Centers at the Golden Valley Technology Hub is leveraging growing demand for firm power, and data center capacity. Together, these actions make CRC more integrated more efficient, and better positioned to create durable value in California. Operator, we are ready for questions. Operator: Thank you. We will now begin the question and answer session. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please limit yourself to 1 primary and 1 follow-up. At this time, we will pause momentarily to assemble our roster. The first question today comes from Wei Jiang with Barclays. Please go ahead. Betty Jiang: Hi, good morning. Thank you for taking my question. I want to start off with Crimson. Francisco, you mentioned earlier that the company has been intentionally building an integrated California energy platform over the last few years. That includes the expansion of midstream infrastructure So can you just frame this Crimson acquisition within that broader strategy What role does the asset play in that vision, and how long you guys have been thinking about this opportunity? Francisco J. Leon: Hey, Wei. Good morning. Yeah. We have been thinking about midstream integration for some time. We started thinking about Crimson, in particular, about 3 years ago. But the first order of business was to acquire Aera and Berry. Gave us a lot of scale a lot of remaining oil, and expanded our footprint considerably. And as that footprint was growing, we felt critical infrastructure around those barrels was going to be key to step into. And it was truly a natural step. We already managed a lot of pipe in California. So we understand the systems really well. So now we are getting into common carrier which adds contractor revenue which we really like. And these are assets that are very difficult to replicate. If you think about our playbook, it really has not changed from an acquisitions perspective, we are looking for high quality assets at attractive values. In assets where we have an advantage and what that integration that comes into our hands becomes even more valuable. So we think we have a good track record of doing that and Crimson fits that pattern. In terms of the asset, so 2,000 mile system, connects that to most of our key fields and across multiple basins. Support certainly our production but also improves market access and strengthens the connectivity to some of the highest value markets in the state. Restoring capacity for this pipe was important too from a state perspective. It addresses a real constraint from other producers and ultimately that flows to consumers in the state. This pipeline system is needed. And I think you are seeing that reflected in a supportive regulatory process. As I mentioned on the script, we have a tentative CPUC approval with no conditions and expect to receive final approval later this month. So if you step back Crimson is doing exactly what an acquisition should be doing for us. it is adding more stable contracted cash flow. Makes the broader California platform even stronger. Betty Jiang: Got it. That makes sense. And maybe tying that to the differentials and the transport constraints that we are seeing right now, Can you just help us understand a bit better on just what is driving the current bottleneck, maybe more color on this pipeline legal case that you mentioned earlier? What gives you the confidence that this pressure is going to be alleviated, soon? And just maybe some outlook into 2027, how this differential improves from here? Francisco J. Leon: Sounds good, Wei. I will give you some high level perspective and Clio can talk about some of the impact in the quarter. But we see this impact as being temporary. And to start, maybe I am going to give a little context on what we are seeing in California because a lot has changed over the last year. And in our view, a lot of things are improving significantly. We are running about 7 and there are 7 rigs that are being run in the state today. 5 of those rigs are CRCs. that is the highest level of activity that we have seen in the state since 2023. If you heard of the second quarter earnings from some refineries, they are starting to make significant capital investments back in the state. On top of that, production has been increasing and the pipes in the southern system are running full. If you take it as a whole, you will see that the signs of market significantly improving. Now you couple that with the Middle East conflict and it is leading to some near term conditions that are favoring refiners and on top of that, we are dealing with a pipeline operator that is behaving in a matter that we feel is inconsistent with established tariffs. We do view those as temporary conditions and not structural changes to the California market. Again, we see the market as improving drastically. Our team has done a great job. it is between our marketing organization, the relationships we have with refineries, we have multiple transportation connections, We did a timely acquisition of Line 100 that provided a million barrels of storage and gave us a lot of options. So what you are seeing that reported differential impacts for some producers in the basin are approaching about $20 a barrel. We limited that impact to CRC to about $2 a barrel. And we see we think we have seen the worst of the impact and are working really hard to improve to get back on track to historical levels. The other way to think about it is we are also thinking beyond the noise and the disruption. Going forward, we see a potentially fragile global energy supply chain where reliable barrels produced under stable governments are becoming increasingly more valuable. Which makes owning this California infrastructure even more important. So that is where Crimson came in. So as we move into 2027, we like the greater control of midstream We like the multiple market connections and storage. We have a strong marketing capability that actually allow us to move our barrels to the best markets ultimately capture value. So with that, maybe I will turn it to Clio for context. Clio Crespy: Thanks, Francisco J. Leon. So from a financial perspective, I think the key point here is that we view this as a temporary commercial issue. Rather than a change in the underlying earnings power of our business. And there are really 3 things to highlight here. First, operationally, this was a strong quarter And despite the temporary disruptions during the quarter, we still realized approximately 95% of Brent which was within our second quarter guidance range of 94% to 96% and we had established that at the beginning of the quarter. Before these transportation and marketing issues emerge. And that really speaks to both the strength of the underlying business as well as to the execution of the team, of course, Francisco mentioned this, but they really adapted quickly found alternative solutions, and ultimately, that allowed us to deliver within guide. Second, the total financial impact during the quarter, that was $25 million or less than $2 per BOE. And roughly half of that was timing related from the temporary inventory build while the balance was primarily weaker differentials while also transportation costs represent a smaller component. The substantial majority of those inventory barrels those were sold during July So that timing impact, it is largely behind us. And those sales, they are already reflected in our guidance. Third, we are guiding for the third quarter of oil realization to approximately 93% of Brent, Now to be clear, we do not view that as a new long term run rate. As we said in our remarks, we think that is a prudent assumption while the commercial and logistics actions that we have already put in place that those take effect. We expect the third quarter to represent the low point of realizations this year with our implied fourth quarter guidance that reflects the beginning of the recovery. So stepping back, we currently expect full year oil realizations of approximately 94% That remains within the original 94% to 98% framework that we had established back in March. And that was before these temporary disruptions emerged. Operator: The next question comes from Nitin Kumar with Mizuho. Please go ahead. Neetin Kumar: Hi, good afternoon, Francisco J. Leon and Clio Crespy. Thanks for taking my questions. I want to start on the Uinta. You mentioned a lot of the improvements in efficiencies in California. But if I remember correctly, you have 3 wells coming online by the end of this year. Can you maybe give us an update on the drilling in the Uinta and what are your plans for the asset longer term? Francisco J. Leon: Yeah, it sounds good. We are actually drilling 4 wells and we have been very pleased with the drilling performance to date. We are actually currently drilling the fourth well which should be done in the next few days. So we are running ahead of schedule. Then we move in the completion rig in early September and we expect to have online and producing all 4 wells before the end of the year. On the cost side, these wells are roughly about $11.5 million And based on what we are seeing today, we expect to complete the wells ahead and below the AFE. So good progress on the drilling. Now in terms of what is next, we are evaluating our strategy in the Uinta. it is a very large position, 100 thousand acres with good resource potential but it is largely undeveloped. And it requires pretty significant amount of capital to develop scale that we need for a second asset So as we do a side by side and we compare the Uinta assets with California, Uinta has higher capital intensity, higher breakevens. Lower crude quality, waxy crude that is famous for but also has higher transportation and operating cost in the steeper declines. Ultimately, it is a drag of about 1% on our realization. So putting it side by side with our California assets that have very low decline and generate better returns. it is hard to see us allocating a lot of dollars back into the Uinta. So I would say it is a non core assets to where non core asset where we are taking CRC and we continue to evaluate the best way to maximize the value of that going forward. As of today, do not see it competing for long term capital in our portfolio. Neetin Kumar: Got it. Okay. And so maybe just to clarify, does that mean that with the 4 wells you have tested enough to say that maybe this is something that does not belong in the portfolio? And is there a timeline for the asset to be sold? Or are going to wait for the results? Francisco J. Leon: Yeah. I would not say there is anything around the drilling. Ultimately, we need the completion crews to come in based on what we have seen that we like the well performance. it is more around the type of assets, right? it is unconventional high decline assets and 1 that is going to require significant amount of capital. So like I said, we will see how the rest of the program goes. But if you think if you want a long term answer, I do not think it is core to our business. Neetin Kumar: Got it. I am sorry, want to sneak 1 more in, just quickly. You talked a lot about the integrated platform with this purchase of Crimson. Clio, maybe looking at Slide 10, from a capital allocation standpoint, how does the Crimson asset fit in and what was attractive about this specific asset? Clio Crespy: Thanks, Nitin. And that is a great question. I actually think the important distinction here is how we evaluate investments So every dollar competes for capital, whether we are drilling a well, acquiring an asset, refinancing debt or returning capital to shareholders. We apply exactly the same investment framework to every capital allocation decision. And from that perspective, Crimson met every 1 of our investment criteria. We have been building toward an opportunity like this for a while. We were patient. And when strategy really met opportunity at the right valuation, we acted. So strategically, it strengthens an integrated California platform, that we believe has significant long term competitive advantage. And Francisco mentioned that is a key part of a long term strategy. Financially, we are acquiring the asset at approximately 4.4x estimated 2027 EBITDA. And so that represents a very attractive entry point valuation relative to comparable public midstream assets. We also believe it is a highly accretive use of capital particularly when you consider the CRC specific synergies and the commercial opportunities here? And finally, we have already demonstrated our ability to create value by integrating acquired assets within CRC's existing infrastructure. A good example of this is the integration of our 2 largest fields, So connecting Bell Ridge to our Elk Hills processing system That project immediately increased gas and NGL production while improving the economics of the combined asset base. So Crimson gives us another opportunity to apply that same playbook. We do not evaluate Crimson solely on the cash flows, generated by the pipeline itself, We also evaluate it based on what it does for our broader California platform. it is improving market access, increasing commercial flexibility, enhancing realized pricing and ultimately creating more value across the integrated business. If I put it simply, we believe Crimson is worth more inside of CRC than it would as a standalone midstream company. And we have been very deliberate about where we want to build the business. And but also equally disciplined about the price we are willing to pay. So we are very comfortable passing on opportunities until they meet both our strategic and also our financial objectives. And that is really ultimately how we think about capital allocation. It has to be the right asset at the right valuation and at the right time. Operator: The next question comes from William Barber with UBS. Please go ahead. William Barber: Hi, Francisco and team. Thanks for the time. My first question is just around the Golden Valley Tech Hub. If you could just walk us through how the partnership with Beacon Data Centers came about. And then with the conditional use permit submitted and environmental review expected to advance later this year. Can you outline like the critical path forward from here? How should we be thinking about sequencing of hyperscaler commitments, power agreements, permitting, and, obviously, FID? Francisco J. Leon: Thanks. Hey, William. Thanks for the question. So we talked to a lot of developers and ultimately Beacon was the best fit for us. They are doing a lot of very large projects in North America with data centers. So they bring great engagement and current engagement with potential hyperscalers and tenants They are doing construction, they are capitalizing the project. So if you look at what they bring to the table versus-- it is a nice complement to our land position, our power infrastructure in ultimately our ability to permit and execute in California. So we think it is a strong combination. At the end of the day, look at data center development maybe a little bit different from what you are seeing from other E&Ps. We are very comfortable starting with project development and not with the headline. And because that is ultimately what gets projects done in California and that is our advantage. You know, E&P companies are talking about acquiring land and ordering turbines. Or building power plants from scratch. We already have all of that. And so then our focus is on derisking the project. In around what the hyperscalers actually need. So in our direct conversations with hyperscalers, the perspective is that the power procurement cycle is evolving. The EC electrons that were readily available are gone. So as you are thinking about what comes next, they are focusing back on cleaner and reliable electrons. They really care about the certainty and ultimately when you have the business operating, And they are focused on project, real community relations. So we think that project Golden Valley is really well positioned for that. As you said, we filed the conditional use permit. So it is a public permit and what you can see in that permit is on the power side that we have designed a triple redundancy into the power solution. It will be a behind the meter solution. So we are not dependent on waiting years for new grid interconnection. And we also designed around 2 of the major friction points which is water and community support. The project has a very low water use. it is using closed loop cooling. System. And on the community side, we have documented support from over 100 local residents and business owners. So we are doing a lot of the groundwork, a lot of what is needed to deliver the project. So from here, the work stream really is to advance many things in parallel. it is the hyperscale engagement and the commercial agreements. Those certainly are the next value we can unlock. But we will continue progressing permitting, engineering and financing. that is how projects get done in California. You start with the project development you advance multiple pieces together and that is something our team knows how to do. William Barber: Got it. Thanks for that. Maybe switching over to the E&P business. You guys have improved execution enough to run California on 5 rigs through year end and 6 going forward. The 5% lower maintenance capital required in 2027 and beyond while you are 2026 wells drilled are also coming in ahead of expectations. Guess just what were some of the key drivers and initiatives here How durable are they? And ultimately, what does this mean for capital efficiency and your production cadence heading into 2027? Francisco J. Leon: Thanks. Yeah. We have talked a lot about acquisitions and how those assets are going to be better. In our hands. And I think you are seeing a lot of that coming through on the operating results Our team is doing a great job operationally The days to total debt are down roughly 25%. We now have a continuous drilling campaign, which is helpful and dedicated rigs and crews. And we also have good coordination with the CRC operating team and C and J altogether reducing the idle time and getting wells online faster. So that is 1 of the elements. But then if you look at the portfolio about 2-thirds of the wells we are drilling are in fields previously operated by Era. So we are seeing the benefit of applying the combined organizations operating practices across the portfolio. On top of that, nearly 80% of the wells we drilled to date are outperforming the type curve. So about 10% above expectations. So every rig dollar is buying more production than we underwrote on the deal. So those efficiencies translated into maintenance capital. We expect to be at 5 rigs in California through the end of the year. And we plan to add a sixth rig for the beginning of 2027. Now the 5 rigs are delivering the same well count. But roughly with $10 million savings for 2026. So that sets up well for 2027 on a normalized basis. The go-forward maintenance, drilling and completion and workover capital. Is dropping about 5%. So the range is $450 million to $475 million there is always additional upside the team keeps looking for further ways and to integrate and optimize. But we will not put that into the outlook until we demonstrate it and we are able to sustain it. Operator: The next question comes from Arun Jayaram with JPMorgan. Please go ahead. Arun Jayaram: Yes, good day. I had a question on capital allocation. Your framework has been built on kind of a balance. And then this quarter, you obviously funded the Crimson acquisition with cash. But did not do share repurchases this quarter. How should investors think about this trade off? And what is your appetite for share buybacks going forward just given the valuation of the stock at some of the unique growth opportunities that you highlighted today? Clio Crespy: Hi, Arun. Yes. So I actually would not frame it as a trade off Our framework is indeed intentionally balanced rather than sequential. And we allocate capital to the opportunity we believe creates the greatest long term per share value for our shareholders. So this quarter, we concluded that Crimson represented 1 of those opportunities. But that said, I would not interpret the absence of share repurchases this quarter. As any change in our philosophy or in our view of the intrinsic value of CRC quite the opposite. We continue to see compelling value in our shares at current prices And as you would expect, while we are actively executing strategic transactions, there are naturally periods when our ability to repurchase shares opportunistically, that is more limited. But those are timing considerations, not capital allocation considerations. So opportunistic buybacks, they remain an important part of capital allocation framework. And nothing about this quarter changes our view of the attractiveness of our shares. Importantly, we have the balance sheet to support that flexibility. We are operating at approximately 1x leverage We have no meaningful debt maturities for the next 7 years. And our revolving credit facility remains undrawn. So that gives us the flexibility to invest in those strategic opportunities like Crimson. But also maintain the capacity to be opportunistic across all of our capital allocation priorities. Arun Jayaram: Great. And my follow-up is just on synergy capture. You are ahead of plan on the Berry synergies already over 100% of your targeted synergies for the year. How should we think about broader savings beyond 2026? Maybe through 2028. So maybe you could help us think about what is left to go in terms of G and A operating costs and capital efficiency? And what do you think we can underwrite in the model even next year? Clio Crespy: Yes. So it is actually helpful to distinguish between the integration synergies and the structural operating improvements because we are increasingly talking about the latter. So the Berry integration itself that substantially complete delivering more than 100% of our target 6 months ahead of schedule really demonstrates that. And those implemented Berry synergies, they now represent more than $100 million of annualized savings. So that is approximately 14% of the deal value, which I think speaks to both the quality of the acquisition, but also our ability to execute So more broadly now, we are entering the next chapter. We have already delivered about $400 million of the roughly $470 million target of cumulative synergies, but also structural cost reductions. We continue to see into 2028. So we are already about 85% or so of the way there. And what is changed is really the nature of the remaining opportunity. The first phase was largely about integration, about eliminating duplicative costs And the next phase, it is increasingly about optimizing the combined footprint, operating these assets more efficiently together than independently. And some examples really focus on infrastructure consolidation So connecting additional Berry fields to our cogeneration facilities to reduce our purchase power costs bringing stranded gas into our central processing facility to increase NGL recovery, also optimizing oil blending and transportation and we also continue to improve capital efficiency across the portfolio. So we already demonstrated some of that playbook through the ERA integration, and now we are applying the same approach across the Berry assets. And many of those opportunities simply were not available before those assets were connected. If you think, Arun, about 27 and 28, I would increasingly view the remaining synergies as structural improvements to the economics of our platform. Rather than your traditional merger synergies. So those improvements really focus on lowering operating costs on reducing our maintenance capital, And ultimately, that is improving our long term cash flow generating ability for the business. Operator: The next question comes from Octavian Jordan with RBC. Please go ahead. Octavian Jordan: Yes. Good afternoon. Thanks for your time today. So for the first for our first question, so with CTV 1 now injecting CO2, generating revenue, how does the how does this milestone change the commercial outlook for the broader CTV platform? And how could programs like the Reliable, the RCPPP help accelerate future CCS and power opportunities in California? Francisco J. Leon: Octavian, thanks for the question. So, yeah, we are proud that our first of a kind project in the state is now operational. So we were capturing and injecting about 270 tons of CO2 per day converted to MCFs, about 5 million cubic feet per day. And everything is performing as expected. We are on target to have an annualized number of about 100 thousand tons per year of capture and storage. So having this project live and operational really changes the conversations. So now potential customers, partners not just evaluating or permitting know how and ability to move things down the line with EPA. But it also has a project that works and people can see and a lot of the mystery away as to what CCS is. So the way I would say this would mention the change in the conversation is really an increase in engagement. that is with technology providers with emitters. And you were starting to see some of these potential partners come to the table willing to fund portions of the pre FID development. So that is helpful, helps us be more capital-efficient way to advance the project, having many different potential customers trying to look for solutions to decarbonize their plants, which is needed given that we are in a cap and invest market and is very punitive to have any form of emissions. The very encouraging progress has been on the RCPPP. it is a great behind-the-meter power market to decarbonize it is a framework that recognizes natural gas generation paired with CCS as clean and firm power. So the procurement for the state and ultimately what can be servicing the grid will be a way to add both reliability and low emissions. So that is a potentially really important step that expands the opportunity for us And we see a near term opportunity of 2.4 gigawatts of power in the Central Valley that can be decarbonized. And that is just in the kind of the focal area that where we have our first permit, but we were working on permits throughout the state. So we see both the RCPPP as a big market signal in the operations of CTV 1 as really key to advance our carbon management strategy. Octavian Jordan: Got it. Thank you. And just for our follow-up, you have highlighted the big debt refinancing this quarter. How should we think about the capital structure going forward and also why refinance now? Clio Crespy: Thanks, Octavian and you are right. We did not have to refinance. We chose to. Our philosophy is really to capital markets from a position of strength rather than waiting until refinancing becomes a necessity. So the question for us was not whether we needed to refinance, The question was whether we could make an already very strong balance sheet even stronger. We believe the answer was yes. So the fact that we achieved the tightest credit spread in CRC's history that reinforced that we were executing from a position of strength. More importantly, we eliminated our only meaningful medium term maturity and created a clean, long dated maturity profile. So none of us know what financing markets will look like several years from now. And we choose to remove that uncertainty and rather than carry it forward. So the result is a stronger balance sheet today than before the transaction and really greater financial flexibility. At this point, I would say our objective is to preserve the strength we have built That allows us to spend less time managing the balance sheet and more time allocating capital to create long term shareholder value. Operator: The next question comes from Nate Pendleton with Texas Capital. Please go ahead. Nate Pendleton: Hey, good morning and congrats on the acquisition. Is there any update you can provide on Huntington Beach how you are thinking about structuring that opportunity? I guess more specifically, what roles could partners play there How would a structure work And how do you expect to capture value from that asset? Francisco J. Leon: Hey, Nate. Thanks for the question. So we are making really good progress Huntington Beach and we remain on track to get a response from the city. On in terms of re entitlement sometime before year end. So then the process goes to the California Coastal Commission and we expect that to run through 2028. So that is the key, to unlocking value for Huntington Beach We started the project in 2023. What we said is we are going to continue operating and producing the oil. it is about 3 thousand barrels a day gross on that field and then systematically start the abandonment process. So we have done that at the end of the day, it is this re entitlement that is the unlock of the value. So it is premature to talk about developer or capital structure We really want to wait until we get the re entitlement before we talk about that. Because otherwise we are giving value away to the developer and the 1 that I just with the CRC shareholders. More to come, but we are making progress. Nate Pendleton: Understood. And then as my follow-up, perhaps for Clio, I wanted to go back to a prior question. You have talked a lot about capital efficiency and capital allocation as it relates to Crimson. But as you evaluate where to deploy capital across your growing portfolio internally, what metrics are you using to inform your decisions and what metrics should investors really focus on externally? Clio Crespy: that is a great question, Nate. Because I do think some of our investors sometimes focus on different metrics than we do internally. And so 1 of the metrics people naturally compare across E and P companies is operating cost per barrel. And while that is certainly an important metric, it is not how we think about capital allocation. We spend much more time focused on the full cycle cost of replacing production and on the returns generated on every dollar of capital deployed. And ultimately, that is really what drives long term value creation. I also think it is important to step back and look at what is happening across the broader industry. High quality upstream inventory is really becoming increasingly scarce. We are seeing that reflected both in recent M&A valuations as well as in A&D transactions whether companies choose to acquire inventory or develop it organically the cost of replacing production continues to increase. And that is where we think CRC is differentiated. Today, our California drilling program is delivering new production at $22 thousand to $27 thousand per flowing barrel and that is actually below what we pay to acquire production through the Aera and Berry transactions. Those were already highly attractive at $28 thousand to $30 thousand per flowing barrel. And it is materially below where many recent public transactions have completed. So of course replacement costs, it is only 1 part of the equation. Ultimately, what matters is the return generated on that capital. And that is where the economics here become really compelling. We continue to see those program level returns of approximately 4.5x ROIC, very high IRRs in the 60% and 70% range. So those metrics capture the full cycle economics They include our operating costs, they continue to comfortably exceed our investment thresholds. I would say that is also why today's announcement on capital allocation is about spending less than what we are able to do is structurally improving really the economics of the business. Every year going forward, a larger portion of our cash flows become discretionary rather than maintenance capital. And it gives us greater flexibility to allocate capital where it creates the greatest value. So the 1 framework I would encourage investors to use is to focus on our full cycle economics of replacing production on the returns that are generated on that capital. Ultimately on the free cash flow produced after sustaining the business. And I think that is where CRC has become materially stronger over the last several years. Operator: We have time for 1 more question from Emma Schwartz with Jefferies. Please go ahead. Emma Schwartz: Hi, Francisco J. Leon and Clio Crespy. Thanks for taking my question. So I wanted to start by stepping back, how do you think about CRC's long term growth vision across E&P, midstream, power and CCS. Can you talk a little bit about what your vision is for this company going forward? And then what is your position in California that specifically makes this integrated strategy really difficult for others to replicate? Francisco J. Leon: Hi, Emma. it is a great question to wrap up. So the simplest way to think about it is we are building an integrated California energy platform with very high quality assets that are nearly impossible to replicate. We are finding ways to generate and grow cash flow on a contracted basis that ultimately grows the cash flow per share of the business. That is all wrapped around an improving outlook. For California. So the diversification that you see is not just diversifying for the sake of it. We are extending what we see as a market advantage. So let me break it down. California is the biggest economy in The U. S, a massive energy market, and it has significant barriers to entry. We already own a lot of the critical infrastructure and assets and we did so again with the purchase of Crimson we announced today. And we know how to operate here. So I would not think about our business as 4 independent companies in E&P, Midstream Power and CCS. They really reinforce each other. So every barrel that we produce, every pipe we control, every megawatt we generate and every ton we sequester, all is to strengthen the underlying asset position and build competitive advantage. The other part of our strategy is that we are going to grow cash flow but we are going to we are not going to be we are not we are not going to need to fund all the all the growth ourselves. We are taking a capital light approach So in areas like data centers and CCS, we bring a lot of the scarce assets and then we use third party capital to grow around that base. So you look at our entire portfolio and you look at every asset that we own, as I said, very difficult to replicate. We spend time building a close to 2-million-acre mineral position, have over 200 thousand surface acreage. We have a leading position on pore space multi decade inventory for both oil and gas and now a significant midstream footprint power assets, first-class CCS project. So it is that collection of assets, and the combination that is our strength and the advantage. So we see this as a growth asset that are a great growth platform beyond oil and gas, with midstream, data centers and CCS, these businesses typically command a higher multiple. So we see a potential expansion in the rerate of the multiple CRC. And that is what ultimately brings value to the shareholders. Now in the meantime, because we are building a lot of these platforms we will continue to grow the dividend. And being opportunistic on buybacks. We believe there is a meaningful gap between where our stock is trading today and the value of the business we are building. So that makes share repurchases a very attractive use of capital in the near term. Operator: Thank you so much. This concludes our question and answer session. I would like to turn the conference back over to Francisco J. Leon for any closing remarks. Francisco J. Leon: Thanks, everybody, for joining us. We look forward to connecting at some of the upcoming investor conferences. Have a great day. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in California Resources, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and California Resources wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $421,511!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,381,960!* Now, it’s worth noting Stock Advisor’s total average return is 981% — a market-crushing outperformance compared to 216% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 17, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. CRC Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

California Resources Corporation CRC reported second-quarter 2026 adjusted earnings of 99 cents per share, down 10.0% from $1.10 a year ago and the figure also missed the Zacks Consensus Estimate of $1.31 by 24.43%, mainly due to temporary takeaway constraints, weaker oil differentials and higher transportation and operating costs. Long Beach, CA-based oil and gas exploration and production company’s oil, natural gas and natural gas liquids revenues of $1.06 billion rose 50.4% from $702 million and beat the Zacks Consensus Estimate of $979 million by 7.87%. California Resources Corporation price-consensus-eps-surprise-chart | California Resources Corporation Quote CRC’s board of directors declared a quarterly cash dividend of 40.5 cents per share of common stock, payable on Sept. 18, 2026, to its shareholders of record as of Sept. 4. During this quarter, CRC returned $36 million to its shareholders through dividends. California Resources' average net production was 149 thousand barrels of oil equivalent per day (MBoe/d), up from 137 MBoe/d in the year-ago quarter. Net oil production averaged 120 thousand barrels per day, while NGL production was 10 thousand barrels per day. Natural gas output averaged 115 million cubic feet per day. Oil represented 81% of total production. The realized oil price before derivative settlements was $91.55 per barrel, while NGL and natural gas realizations were $49.62 per barrel and $1.84 per Mcf, respectively. CRC built about 137 thousand barrels of oil inventory because of temporary takeaway constraints. The inventory build, weaker differentials and higher operating and transportation costs reduced adjusted EBITDAX and operating cash flow before working-capital changes by about $25 million. Total operating expenses were $786 million, up 10.5% from $711 million a year earlier.Operating costs were $347 million, up 17.6% from $295 million a year earlier. General and administrative expenses increased 22.8% to $97 million. Adjusted G&A expenses, however, declined to $89 million from $99 million in the first quarter, reflecting Berry-related efficiencies. The company implemented more than 100% of its 2026 Berry synergy target six months ahead of schedule, representing $103 million of annualized savings. California drilling efficiency improved about 25% and nearly 80% of wells drilled year to date outperformed the type curve, with average initial production more than 10% above expectations. CRC lowered its long-term drilling, completions and workover maintenance-capital estimate by about 5% to $450-$475 million with six rigs. Net cash provided by operating activities was $263 million, up 59.4% from $165 million in the prior-year quarter. Free cash flow totaled $114 million, while capital investments were $149 million, including $101 million for drilling, completions and workovers. CRC ended June with $1.32 billion of liquidity, consisting of $43 million of available cash and $1.28 billion of borrowing capacity, with a debt-to-capitalization of 27.4%. During the quarter, it issued $550 million of 7.25% senior notes due 2035 and redeemed its remaining 8.25% senior notes due 2029. CRC agreed to acquire Crimson Midstream Holdings for $63 million in cash. The transaction adds roughly 2,000 miles of California crude-oil pipelines and storage assets, expanding the company's access to higher-value markets and third-party throughput. The company also acquired the Line 100 system earlier in 2026. That network includes a 118-mile crude pipeline with 60 thousand barrels per day of capacity and more than 1 million barrels of storage. Management expects the Crimson deal to strengthen market access and commercial flexibility. Carbon TerraVault I began carbon dioxide (CO2) injection and generated first revenues during the quarter. Management said the project is capturing and injecting about 270 metric tons of CO2 per day and is targeting an annualized rate of roughly 100,000 tons. CRC also partnered with Beacon Data Centers on the proposed Golden Valley Technology Hub at Elk Hills. The planned campus would have 275 megawatts of capacity and use power from CRC's existing Elk Hills plant. The company has submitted a conditional-use permit and expects the environmental review process to advance later in 2026. For the third quarter, CRC expects net production of 151-154 MBoe/d, capital investments of $150-$170 million and adjusted EBITDAX of $285-$325 million. Oil is expected to represent 80% of output. For 2026, the company maintained capital-investment guidance of $520-$560 million and expects net production of 150-155 MBoe/d. Adjusted EBITDAX is projected at $1.2-$1.3 billion. CRC cut expected drilling, completions and workover capital by $10 million to $370-$390 million while continuing to target about 1% entry-to-exit gross production growth. CRC currently holds a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. While we have discussed CRC’s second-quarter results in detail, let us take a look at three other key reports in the energy space. Houston, TX-based oil and gas equipment and services provider Halliburton HAL posted second-quarter 2026 adjusted net income per share of 55 cents, marginally beating the Zacks Consensus Estimate of 54 cents. The outperformance was backed by year-over-year revenue growth. However, the bottom line was flat compared with the prior-year level. As of June 30, 2026, Halliburton had approximately $2 billion in cash and cash equivalents and $7.1 billion in long-term debt, representing a debt-to-capitalization of 39%. Fort Worth, TX-based oil and gas exploration and production company Range Resources Corporation RRC reported second-quarter 2026 adjusted earnings of 79 cents per share, up 19.7% from 66 cents a year ago. Range Resources’ bottom line topped the Zacks Consensus Estimate of 56 cents by 41.1%. Strong quarterly results are driven by higher production and improved price realization. Range Resources’ net debt was $880.8 million at June 30, 2026, down 28% from $1.22 billion at year-end 2025. It repurchased $78 million of shares and paid $24 million in dividends during the quarter. Houston, TX-based oil and gas storage and transportation company Kinder Morgan, Inc. KMI reported second-quarter 2026 adjusted earnings of 37 cents per share, beating the Zacks Consensus Estimate of 31 cents by 19.35%. Earnings increased 32.1% from 28 cents per share in the year-ago quarter. Strong quarterly results benefited from broad-based segment growth, led by higher natural gas transportation and gathering volumes. Natural gas transport volumes rose 7%, while gathering volumes increased 26%. As of June 30, 2026, Kinder Morgan reported $89 million in cash and cash equivalents. Kinder Morgan’s net debt stood at $32.03 billion at quarter-end. The net debt-to-adjusted EBITDA ratio improved to 3.6X from 3.8X at the end of 2025. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report California Resources Corporation (CRC) : Free Stock Analysis Report Halliburton Company (HAL) : Free Stock Analysis Report Range Resources Corporation (RRC) : Free Stock Analysis Report Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Net Production: Averaged 149,000 barrels of oil equivalent per day in Q2 2026, with oil representing 81% of total volume. Oil Realizations: Approximately 95% of Brent before hedges, within Q2 guidance range. Operating Costs: $347 million, in line with guidance. G&A Expenses: Declined nearly 9% year-over-year, reflecting Berry-related efficiencies. Adjusted EBITDAX: $338 million for Q2 2026. Operating Cash Flow: $300 million before working capital. Free Cash Flow: $151 million before working capital. Capital Expenditures: $149 million in Q2 2026; full-year guidance maintained at $520 million to $560 million. Synergies: Achieved more than 100% of 2026 Berry synergy target, representing approximately $103 million in annualized savings; cumulative synergies and structural cost reductions now expected up to $470 million through 2028. Well Productivity: Approximately 80% of wells drilled year-to-date outperformed type curve, with average initial production more than 10% above expectations. Maintenance Capital: California production can now be maintained with six rigs on a normalized annual basis, one fewer than previously projected, with approximately 5% lower D&C and workover maintenance capital. Debt Refinancing: Refinanced remaining 2029 senior notes with new notes due 2035, extending weighted average debt maturity from 5.5 to 8 years and reducing annual expenses by $5.5 million. Full-Year Production Guidance: Targeting approximately 153,000 barrels of oil equivalent per day, reflecting approximately 1% gross entry-to-exit production growth. Full-Year Realizations: Expected at approximately 94% of Brent, within original 94% to 98% range. Warning! GuruFocus has detected 5 Warning Signs with CRC. Is CRC fairly valued? Test your thesis with our free DCF calculator. Release Date: August 10, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Delivered a solid quarter with strong operational execution, including a 25% improvement in time-to-market and 80% of wells outperforming type curves. Achieved over 100% of the 2026 Berry synergy target six months ahead of schedule, with $103 million in annualized savings. Announced the accretive Crimson midstream acquisition at 4.4x 2027 EBITDA, enhancing market access and price realizations. Commenced CO2 injection and first revenue at California's first CCS project, positioning CRC as a commercial-scale sequestration operator. Reduced long-term maintenance capital by 5% and rig requirements to six, improving free cash flow resilience. Experienced temporary takeaway constraints due to marketing disputes, leading to a $25 million EBITDA impact and weaker oil differentials. Third-quarter oil realizations are guided lower at 93% of Brent, reflecting ongoing logistics challenges. The Uinta asset is deemed non-core with higher capital intensity and breakevens, potentially limiting portfolio growth. No share repurchases were made in the quarter due to strategic transaction focus, despite attractive stock valuation. Full-year production growth remains modest at approximately 1% entry-to-exit, with capital guidance unchanged. Q: Can you frame the Crimson acquisition within the broader strategy of building an integrated California energy platform? What role does the asset play, and how long have you been considering this opportunity?A: Francisco Leon (President, CEO, Director): We've been thinking about midstream integration for some time, starting to consider Crimson about three years ago. After the Era and Berry mergers gave us significant scale, owning critical infrastructure around those barrels became a natural step. Crimson's 2,000-mile pipeline system connects to most of our key fields, improves market access, and strengthens connectivity to the state's highest-value markets. The assets are very difficult to replicate, and the transaction adds more stable contracted cash flow, making the broader California platform even stronger. We have received tentative CPUC approval with no conditions and expect final approval later this month. Q: Can you help us understand what's driving the current transportation bottleneck and differential pressure? What gives you confidence this will be alleviated, and how should we think about 2027 differentials?A: Francisco Leon (President, CEO, Director) and Clio Crespy (EVP, CFO): We view this impact as temporary. California's market is actually improving significantly, with seven rigs running in the state (five are CRC's), refineries making capital investments, and production increasing. However, a pipeline operator behaving inconsistently with established tariffs, coupled with Middle East conflict, created near-term conditions favoring refiners. While some producers in the basin saw differential impacts approaching $20 per barrel, we limited CRC's impact to about $2 per barrel. Clio added that the total financial impact was approximately $25 million or less than $2 per BOE, with roughly half being timing-related from temporary inventory builds. We expect Q3 realizations of approximately 93% of Brent to be the low point, with full-year realizations of approximately 94%, remaining within our original guidance range. Q: Can you provide an update on the Uinta drilling program and your longer-term plans for that asset?A: Francisco Leon (President, CEO, Director): We're drilling four wells, currently on the fourth which should be done in the next few days, running ahead of schedule. We expect all four wells to be online and producing before year-end, with costs around $11.5 million per well, below AFE. However, when comparing the Uinta to California assets, the Uinta has higher capital intensity, higher breakevens, lower crude quality, higher transportation and operating costs, and steeper declines. It's a drag of about 1% on realizations. I would characterize it as a noncore asset where we will continue to evaluate the best way to maximize value, but I don't see it competing for long-term capital in our portfolio. Q: From a capital allocation standpoint, how does the Crimson asset fit in, and what was attractive about this specific asset?A: Clio Crespy (EVP, CFO): Every dollar competes for capital under the same investment framework, and Crimson met every one of our investment criteria. We're acquiring the asset at approximately 4.4 times estimated 2027 EBITDA, a very attractive entry point relative to comparable public midstream assets. We've already demonstrated our ability to create value by integrating acquired assets, such as connecting Bell Ridge to our Elk Hills processing system. We don't evaluate Crimson solely on the pipeline's cash flows but also on what it does for our broader California platformimproving market access, increasing commercial flexibility, and enhancing realized pricing. We believe Crimson is worth more inside of CRC than as a stand-alone midstream company. Q: Can you walk us through how the partnership with Beacon data centers came about and the critical path forward for the Golden Valley Tech Hub?A: Francisco Leon (President, CEO, Director): We talked to many developers, and Beacon was the best fit. They bring strong engagement with potential hyperscalers, construction expertise, and project capitalization. We're comfortable starting with project development rather than headlines because that's what gets projects done in California. We've filed the conditional use permit, which includes a triple-redundant power solution with behind-the-meter design, low water use through closed-loop cooling, and documented support from over 100 local residents. The next steps involve advancing hyperscale engagement, commercial agreements, permitting, engineering, and financing in parallel. Hyperscalers are increasingly focused on clean, reliable electrons and project certainty, which positions Golden Valley well. Q: What were the key drivers behind the improved capital efficiency allowing you to run California on five rigs through year-end? How durable are these improvements, and what does this mean for 2027?A: Francisco Leon (President, CEO, Director): Days to total depth are down roughly 25% due to continuous drilling campaigns, dedicated rigs and crews, and better coordination reducing idle time. About two-thirds of the wells we're drilling are in fields previously operated by Era, so we're seeing the benefit of applying combined operating practices. Nearly 80% of wells drilled year-to-date are outperforming the type curve by about 10% above expectations. These efficiencies translated into maintenance capital savings of about $10 million for 2026. On a normalized basis, go-forward maintenance drilling, completion, and workover capital is dropping about 5% to a range of $450 million to $475 million, with additional upside potential not yet included in outlook until demonstrated as sustainable. Q: How should investors think about the trade-off between funding the Crimson acquisition with cash versus share repurchases? What is your appetite for buybacks going forward?A: Clio Crespy (EVP, CFO): I wouldn't frame it as a trade-off. Our framework is intentionally balanced, and we allocate capital to opportunities that create the greatest long-term per-share value. The absence of share repurchases this quarter doesn't reflect a change in our view of CRC's intrinsic valuewe continue to see compelling value in our shares. While executing strategic transactions, there are naturally periods when opportunistic repurchases are more limited, but those are timing considerations, not capital allocation considerations. We have the balance sheet to support flexibility, operating at approximately one times leverage with no meaningful debt maturities for seven years and an undrawn revolver. Q: You're ahead of plan on Berry synergies. How should we think about broader savings beyond 2026 through 2028?A: Clio Crespy (EVP, CFO): It's helpful to distinguish between integration synergies and structural operating improvements. The Berry integration is substantially complete, delivering more than 100% of target six months ahead of schedule, representing over $100 million in annualized savingsapproximately 14% of deal value. We've delivered about $400 million For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in California Resources Corporation? Here are five stocks we like better. Strong execution boosted CRC’s second-quarter performance: Production averaged 149,000 BOE/d, while the company delivered $338 million in adjusted EBITDAX and $151 million in free cash flow before working capital. Berry merger synergies reached approximately $103 million in annualized savings, exceeding the 2026 target six months early. Efficiency gains are lowering future operating requirements: Improved drilling performance allowed CRC to reduce its second-half California rig plan to five rigs and lower normalized maintenance capital needs, while maintaining full-year production and capital-spending guidance. CRC is expanding its infrastructure and growth platforms: The planned acquisition of Crimson’s roughly 2,000-mile pipeline network is expected to improve market access and pricing flexibility, while the Elk Hills carbon-capture project began injections and revenue. CRC also advanced plans for a 275-megawatt data center campus powered by its Elk Hills operations. Blueprint for a Banking Fortress: Circle Redraws the Map California Resources (NYSE:CRC) reported second-quarter results marked by operational efficiency gains, early delivery of Berry-related synergies, and progress in expanding its midstream, carbon management and power businesses. President and CEO Francisco Leon said the company’s oil and gas business benefited from strong execution, including drilling efficiency improvements and cost reductions. The company also announced its planned acquisition of Crimson’s California crude oil pipeline platform, a transaction intended to expand its transportation and marketing capabilities. → MarketBeat Week in Review – 08/03 - 08/07 Circle’s IBM Patent Deal Could Redraw the Stablecoin Infrastructure Race CRC averaged net production of 149,000 barrels of oil equivalent per day during the second quarter, with oil representing 81% of total volumes. Oil realizations were about 95% of Brent crude before hedges, within the company’s guidance range, while operating costs totaled $347 million. Adjusted EBITDAX was $338 million, operating cash flow before working capital was $300 million, and free cash flow before working capital was $151 million, according to Executive Vice President and Chief Financial Officer Clio Crespy. → Quantum Earnings Week: Winners and Losers Are Finally Emerging MarketBeat Week in Review – 07/06 - 07/10 General and administrative expenses declined nearly 9% from the prior period as a result of efficiencies tied to the Berry merger. CRC said it has implemented more than 100% of its 2026 Berry synergy target six months ahead of schedule, producing about $103 million in annualized savings. The company now expects cumulative synergies and structural cost reductions of up to $470 million through 2028. Crespy said CRC has already delivered about $400 million of that total and described the remaining opportunities as structural improvements involving infrastructure, processing, transportation, power costs and capital efficiency. → Take-Two’s Q1 Results Leave GTA 6 Bulls Stuck in the Fog of War CRC maintained its full-year net production target of approximately 153,000 BOE/d and its capital guidance range of $520 million to $560 million. Including its Uinta Basin operations, the company continues to expect about 1% entry-to-exit production growth for the year. CRC said drilling and completion performance improved across its California operations. Time to market improved about 25%, allowing the company to complete more wells, sidetracks and workovers than planned. About 80% of wells drilled year to date have exceeded their type curves, with average initial production more than 10% above expectations. The gains allowed CRC to move activity into the second quarter, resulting in $149 million of total capital spending. The company reduced its planned 2026 drilling, completion and workover capital by $10 million, though it redirected those savings toward targeted facilities investments and kept total capital guidance unchanged. CRC now expects to operate an average of about five rigs in California during the second half of 2026, compared with six rigs in its earlier plan, while maintaining nearly flat gross entry-to-exit production. It expects to add a sixth rig at the start of 2027. Leon said the company now believes California production can be maintained using six rigs on a normalized annual basis, one fewer than previously projected. CRC also expects drilling, completion and workover maintenance capital to be about 5% lower, with a normalized range of $450 million to $475 million. In the Uinta Basin, CRC drilled four wells ahead of schedule and below planned drilling and completion costs. Crespy said the company expects all four wells to be online before the end of the year. However, she characterized Uinta as a non-core asset over the long term because it requires substantial capital, has higher capital intensity and operating costs, lower crude quality, steeper production declines and lower realizations than the company’s California assets. CRC announced an all-cash acquisition of Crimson’s roughly 2,000-mile California crude oil pipeline network. Leon said the pipeline system connects key CRC producing fields across multiple basins and will give the company more flexibility to transport its own and third-party volumes to higher-value California markets. The transaction requires approval from the California Public Utilities Commission because some Crimson assets operate as common carriers. CRC said it received tentative approval without conditions and expects a final decision later in August. CRC previously acquired Phillips 66’s Line 100 pipeline for a nominal amount. That transaction added approximately 120 miles of crude pipelines, more than 1 million barrels of storage capacity, and related gathering, transportation and truck-loading infrastructure in the Central Valley. Crespy said the Crimson purchase was valued at approximately 4.4 times estimated 2027 EBITDA. She said CRC expects the acquisition to be accretive and sees value beyond pipeline cash flows through improved market access, commercial flexibility, realized pricing and integration opportunities. The company faced temporary takeaway constraints during the quarter tied to marketing disputes and operational requirements. CRC built inventory of approximately 1,500 barrels of oil per day, which increased costs and pressured differentials. Crespy said the combined impact reduced second-quarter Adjusted EBITDAX and operating cash flow before working capital by roughly $25 million, or less than $2 per BOE, with about half related to inventory timing. CRC sold the substantial majority of the inventory by the end of July. It expects third-quarter oil realizations of about 93% of Brent but said it does not view that figure as a long-term run rate. The company maintained its full-year oil realization expectation of about 94%, within its original 94% to 98% range. CRC said it began carbon dioxide injection and generated first revenue at its Elk Hills carbon capture and sequestration project, which it described as California’s first commercial-scale CCS project. Leon said the project is capturing and injecting about 270 tons of CO2 per day and is targeting annualized capture and storage of about 100,000 tons. The company is monitoring California’s Reliable and Clean Power Procurement Program as a potential market for natural gas generation paired with carbon capture. CRC sees a near-term opportunity to decarbonize approximately 2.4 gigawatts of power in the Central Valley through its carbon management platform. Separately, CRC partnered with Beacon Data Centers to develop the proposed Golden Valley Technology Hub near Elk Hills. The planned 275-megawatt, 100-acre data center campus would use behind-the-meter power from CRC’s Elk Hills plant. Beacon will fund early-stage development, while CRC contributes industrial acreage, infrastructure, permitting experience and power assets. CRC has submitted a conditional use permit and expects the environmental review process to advance later this year. Leon said the company is continuing discussions with global hyperscale data center operators while progressing commercial agreements, permitting, engineering and financing workstreams. California Resources Corporation (NYSE: CRC) is an independent exploration and production company focused exclusively on developing oil and natural gas assets in California. Headquartered in Newport Beach, the company engages in hydraulic fracturing, well completions, reservoir management and enhanced recovery operations to produce crude oil, natural gas and natural gas liquids. CRC's operations are concentrated in three core regions: the Los Angeles Basin, the Ventura Basin and the San Joaquin Basin. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "California Resources Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

California Resources Corporation (CRC) came out with quarterly earnings of $0.99 per share, missing the Zacks Consensus Estimate of $1.31 per share. This compares to earnings of $1.1 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -24.43%. A quarter ago, it was expected that this company would post earnings of $0.83 per share when it actually produced earnings of $0.88, delivering a surprise of +6.02%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. California Resources, which belongs to the Zacks Oil and Gas - Exploration and Production - United States industry, posted revenues of $1.06 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 7.83%. This compares to year-ago revenues of $978 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. California Resources shares have added about 16.5% since the beginning of the year versus the S&P 500's gain of 13.3%. While California Resources has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for California Resources was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.89 on $901.95 million in revenues for the coming quarter and $4.02 on $3.68 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Oil and Gas - Exploration and Production - United States is currently in the bottom 13% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Big Sky Industrial Inc. (BSIN), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 11. This company is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of +73.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Big Sky Industrial Inc.'s revenues are expected to be $2.1 million, up 3.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report California Resources Corporation (CRC) : Free Stock Analysis Report Big Sky Industrial Inc. (BSIN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The oil and energy sector is nearing the end of the second-quarter 2026 earnings season after navigating a volatile operating environment. During the quarter, geopolitical developments — particularly the conflict involving Iran — disrupted global crude supplies and pushed oil prices higher, creating a more favorable pricing environment for many upstream producers and oilfield service companies. At the same time, steady demand for liquefied natural gas (“LNG”) exports and electricity generation continued to support the overall sector’s fundamentals. The stronger commodity price environment has provided a significant tailwind for the sector's financial performance. However, results have varied across companies depending on factors such as production growth, operating efficiency, cost management and regional asset exposure. As the earnings season nears its conclusion, investors are focusing on companies that have been able to translate favorable market conditions into stronger-than-expected quarterly results. In the second quarter of 2026, West Texas Intermediate (“WTI”) crude oil averaged $95.75 per barrel, up significantly from $64.63 in the corresponding period of 2025, according to Energy Information Administration (“EIA”) data. Tighter global oil supplies primarily drove the year-over-year increase amid heightened geopolitical tensions in the Middle East. As crude prices are highly responsive to geopolitical developments, supply disruptions and broader macroeconomic conditions, the conflict involving Iran and disruptions to flows through the Strait supported the sharp rise in prices. Brent crude registered an even stronger increase than WTI, reflecting its greater sensitivity to shipping disruptions in the Middle East because it is more closely linked to seaborne crude trade. For upstream producers, the sharp increase in WTI prices represents a meaningful improvement in realized pricing and cash-flow potential, particularly for companies with strong production volumes and relatively low operating costs. However, the benefit is less straightforward for offshore drillers and other service providers, where earnings are influenced more heavily by contract rates, utilization and backlog. Natural gas prices, however, moved in the opposite direction. Henry Hub averaged $2.95 per million British thermal units during the quarter, compared with $3.19 in the year-ago period, according to EIA data. The year-over-year decline was largely attributable to strong domestic production, ample storage inventories and milder spring weather following the spike in demand during the winter months. The divergence between oil and natural gas prices is important for investors because companies with different commodity exposures can experience significantly different earnings trends even when they operate within the same broader energy sector. The oil and energy sector is nearing the end of the second-quarter 2026 earnings season with momentum remaining strong, supported by elevated oil prices, disciplined capital spending and robust upstream profitability. The latest Zacks Earnings Trends report shows that 70.8% of the sector's companies, representing 82.4% of its market capitalization, have already reported second-quarter results, and the performance so far has been exceptionally strong. Companies that have reported so far have delivered 150.4% year-over-year earnings growth on 45.3% higher revenues, with 76.5% beating EPS estimates and an equal 76.5% surpassing revenue expectations, highlighting the benefits of the stronger commodity price environment. Looking at the broader blended outlook, which combines reported results with estimates for companies yet to announce, the Energy sector's second-quarter earnings are projected to increase 137.8% year over year, following just 3.6% growth in the prior quarter. Meanwhile, revenues are expected to rise 41.8%, reflecting significantly improved pricing dynamics and resilient demand across the energy value chain. Among all 16 Zacks sectors, Energy is projected to post the strongest earnings growth in the second quarter. Against this backdrop, let's take a closer look at four prominent oil and energy companies scheduled to report their second-quarter 2026 results on Aug. 10 and assess how they are positioned amid the industry's evolving operating environment. Our proprietary model indicates that a company needs to have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Let's take a closer look at three prominent companies and assess how they are positioned ahead of their second-quarter earnings releases. California Resources CRC is slated to report second-quarter 2026 results before the market opens. In the last reported quarter, the company’s adjusted earnings per share of 88 cents beat the Zacks Consensus Estimate by 6%. CRC’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one, delivering an average surprise of 8.57%. This is depicted in the chart below: California Resources Corporation price-eps-surprise | California Resources Corporation Quote California Resources is an independent energy company engaged in the exploration, development and production of crude oil and natural gas, primarily in California. Our proven model does not conclusively predict an earnings beat for California Resources this time around. This is because it has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell) at present. The Zacks Consensus Estimate for CRC’s second-quarter earnings and revenues is pegged at $1.31 per share and $979.33 million, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Seadrill Limited SDRL is scheduled to report its second-quarter 2026 results before the market opens.In the last reported quarter, the company’s adjusted loss per share of 11 cents was slightly wider than the Zacks Consensus Estimate of 10 cents. Seadrill’s earnings missed the Zacks Consensus Estimate in three of the trailing four quarters and beat in one, delivering an average negative surprise of 75.99%. This is depicted in the chart below: Seadrill Limited price-eps-surprise | Seadrill Limited Quote Seadrill is an offshore drilling contractor that provides drilling services to the oil and gas industry through its fleet of high-specification offshore drilling rigs. Our proven model does not conclusively predict an earnings beat for Seadrill this time around. This is because it has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for SDRL’s second-quarter earnings and revenues is pegged at 29 cents per share and $386 million, respectively. Infinity Natural Resources Inc. (INR) is set to report its second-quarter 2026 results following the market close.In the last reported quarter, the company’s adjusted earnings per share of $1.76 beat the Zacks Consensus Estimate of 85 cents. INR’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 105.02%. This is depicted in the chart below: Infinity Natural Resources Inc. price-eps-surprise | Infinity Natural Resources Inc. Quote Infinity Natural is an independent oil and natural gas exploration and production company focused on developing and producing oil, natural gas and natural gas liquids. Our proven model does not conclusively predict an earnings beat for Infinity Natural this time around. This is because it has an Earnings ESP of -2.22% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for INR’s second-quarter earnings and revenues is pegged at 86 cents per share and $165.37 million, respectively. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Seadrill Limited (SDRL) : Free Stock Analysis Report California Resources Corporation (CRC) : Free Stock Analysis Report Infinity Natural Resources Inc. (INR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Cheniere Energy (LNG) came out with quarterly earnings of $3.02 per share, beating the Zacks Consensus Estimate of $2.89 per share. This compares to earnings of $7.3 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +4.50%. A quarter ago, it was expected that this natural gas company would post earnings of $3.91 per share when it actually produced earnings of $4.77, delivering a surprise of +21.99%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Cheniere Energy, which belongs to the Zacks Oil and Gas - Exploration and Production - United States industry, posted revenues of $5.73 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 13.96%. This compares to year-ago revenues of $4.64 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Cheniere Energy shares have added about 31.1% since the beginning of the year versus the S&P 500's gain of 12.8%. While Cheniere Energy has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Cheniere Energy was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.36 on $5.37 billion in revenues for the coming quarter and -$2.60 on $21.67 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Oil and Gas - Exploration and Production - United States is currently in the bottom 13% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, California Resources Corporation (CRC), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 10. This company is expected to post quarterly earnings of $1.31 per share in its upcoming report, which represents a year-over-year change of +19.1%. The consensus EPS estimate for the quarter has been revised 34.3% lower over the last 30 days to the current level. California Resources Corporation's revenues are expected to be $979.33 million, up 0.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cheniere Energy, Inc. (LNG) : Free Stock Analysis Report California Resources Corporation (CRC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research