CRC Acquires Remaining Elk Hills Stake for $780M
Ticker: CRC · Form: 8-K · Filed: Mar 8, 2024 · CIK: 1609253
| Field | Detail |
|---|---|
| Company | California Resources CORP (CRC) |
| Form Type | 8-K |
| Filed Date | Mar 8, 2024 |
| Risk Level | medium |
| Pages | 3 |
| Reading Time | 3 min |
| Key Dollar Amounts | $200 million, $240 million |
| Sentiment | bullish |
Sentiment: bullish
Topics: acquisition, asset-purchase, debt
Related Tickers: ARES
TL;DR
CRC buys out Ares for $780M to fully own Elk Hills field. Big move for production!
AI Summary
California Resources Corp (CRC) announced on March 7, 2024, that it has entered into a definitive agreement to acquire the remaining 49.9% interest in the Elk Hills field from Ares Management LLC. The transaction is valued at approximately $780 million, consisting of $500 million in cash and $280 million in assumed debt. This acquisition is expected to close in the second quarter of 2024, subject to customary closing conditions.
Why It Matters
This acquisition significantly increases CRC's ownership in a key producing asset, potentially enhancing its production, reserves, and cash flow from the Elk Hills field.
Risk Assessment
Risk Level: medium — The acquisition involves significant financial commitment and integration risks, and its success depends on achieving projected operational and financial synergies.
Key Numbers
- $780M — Acquisition Value (Total consideration for remaining Elk Hills interest)
- $500M — Cash Consideration (Cash paid to Ares Management LLC)
- $280M — Assumed Debt (Debt assumed as part of the transaction)
- 49.9% — Interest Acquired (Percentage of Elk Hills field interest purchased)
Key Players & Entities
- California Resources Corp (company) — Registrant
- Ares Management LLC (company) — Seller of remaining interest
- Elk Hills field (company) — Asset being acquired
- $780 million (dollar_amount) — Total acquisition value
- $500 million (dollar_amount) — Cash portion of acquisition
- $280 million (dollar_amount) — Assumed debt portion of acquisition
- March 7, 2024 (date) — Date of agreement
- second quarter of 2024 (date) — Expected closing period
FAQ
What is the total value of the transaction to acquire the remaining interest in the Elk Hills field?
The total value of the transaction is approximately $780 million.
Who is California Resources Corp acquiring the remaining interest from?
California Resources Corp is acquiring the remaining 49.9% interest from Ares Management LLC.
What is the breakdown of the $780 million transaction value?
The transaction value consists of $500 million in cash and $280 million in assumed debt.
When is the acquisition expected to close?
The acquisition is expected to close in the second quarter of 2024.
What is the specific percentage of the Elk Hills field interest being acquired?
California Resources Corp is acquiring the remaining 49.9% interest in the Elk Hills field.
Filing Stats: 784 words · 3 min read · ~3 pages · Grade level 15.3 · Accepted 2024-03-08 09:00:21
Key Financial Figures
- $200 million — we plan to run a one rig program with a $200 million to $240 million total capital program i
- $240 million — one rig program with a $200 million to $240 million total capital program in 2024 and would
Filing Documents
- crc-20240307.htm (8-K) — 25KB
- 0001609253-24-000046.txt ( ) — 149KB
- crc-20240307.xsd (EX-101.SCH) — 2KB
- crc-20240307_lab.xml (EX-101.LAB) — 22KB
- crc-20240307_pre.xml (EX-101.PRE) — 13KB
- crc-20240307_htm.xml (XML) — 3KB
01 Regulation FD Disclosure
Item 7.01 Regulation FD Disclosure. California Resources Corporation ("CRC") provides the following update regarding the previously disclosed Kern County Environmental Impact Report ("Kern County EIR") litigation: On March 7, 2024, a California appellate court delivered an opinion finding certain deficiencies in the Kern County EIR and enjoining reliance on the Kern County EIR in connection with the issuance of oil and natural gas permit approvals until such deficiencies are remedied. As we assess next steps and potential timelines, we expect to continue to execute the capital and drilling programs described in our fourth quarter 2023 earnings release and our recently filed Annual Report on Form 10-K. As previously disclosed, if we are not able to obtain new well permits in 2024, we plan to run a one rig program with a $200 million to $240 million total capital program in 2024 and would expect a 5% to 7% entry to exit production decline rate (without taking into account our pending Aera merger). The information contained in this report shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and shall not be incorporated by reference into any filings made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing. Forward-Looking Statement Disclosure This document contains statements that CRC believes to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical facts are forward-looking statements, and include statements regarding CRC's capital program and drilling program. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements. Alt