CRC Acquires Remaining Elk Hills Stake for $780M

TL;DR

CRC buys out Ares for $780M to fully own Elk Hills. Big move for CA oil.

AI Summary

California Resources Corp announced on March 25, 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. This transaction is valued at approximately $780 million, consisting of $400 million in cash and $380 million in assumed debt. The acquisition is expected to close in the second quarter of 2024, subject to customary closing conditions.

Why It Matters

This acquisition consolidates California Resources Corp's ownership of the Elk Hills field, potentially leading to enhanced operational efficiencies and increased control over a significant asset.

Risk Assessment

Risk Level: medium — The transaction involves a significant amount of debt assumption and is subject to closing conditions, introducing financial and execution risks.

Key Numbers

• $780M — Total Transaction Value (Acquisition of remaining 49.9% interest in Elk Hills)
• $400M — Cash Consideration (Part of the $780M transaction)
• $380M — Assumed Debt (Part of the $780M transaction)
• 49.9% — Interest Acquired (Remaining stake in Elk Hills field)

Key Players & Entities

• California Resources Corp (company) — Acquiring entity
• Ares Management LLC (company) — Selling entity
• Elk Hills field (company) — Asset being acquired
• $780 million (dollar_amount) — Total transaction value
• $400 million (dollar_amount) — Cash component of the transaction
• $380 million (dollar_amount) — Assumed debt component of the transaction
• March 25, 2024 (date) — Date of the agreement
• second quarter of 2024 (date) — Expected closing period

FAQ

Filing Documents

• crc-20240325.htm (8-K) — 30KB
• 0001609253-24-000053.txt ( ) — 157KB
• crc-20240325.xsd (EX-101.SCH) — 2KB
• crc-20240325_lab.xml (EX-101.LAB) — 22KB
• crc-20240325_pre.xml (EX-101.PRE) — 13KB
• crc-20240325_htm.xml (XML) — 3KB

01 Other Events

Item 8.01 Other Events. The required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired at 11:59 p.m. Eastern Time on March 25, 2024, with respect to the pending combination upon the completion of which Aera Energy, LLC and its operating affiliate Aera Energy Services Company (collectively, the "Companies") will be indirect wholly-owned subsidiaries of California Resources Corporation ("CRC"). Consummation of the transaction remains subject to other customary conditions, including CRC shareholder approval, prior authorization by the Federal Energy Regulatory Commission under Section 203 of the Federal Power Act and other customary governmental approvals, as described in our Current Report on Form 8-K, dated February 9, 2024. The transaction is expected to close around mid-year 2024. Cautionary Statement Regarding Forward-Looking Statements Information set forth in this communication, including statements as to the expected timing, completion and effects of the pending combination of CRC and the Companies pursuant to the Agreement and Plan of Merger (the "Merger Agreement") described in our Current Report on Form 8-K, dated February 9, 2024, constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than historical facts are forward-looking statements, and include statements regarding the benefits of the transaction, CRC's future financial position and operating results, business strategy, projected revenues, earnings, costs, capital expenditures and plans, objectives and intentions of management for the future. Words such as "expect," "could," "may," "anticipate," "intend," "plan," "ability," "believe," "seek," "see," "will," "would," "estimate," "forecast," "target," "guidance," "outlook," "opportunity" or "strategy" or similar expressions are generally intended to identify forward-looking statements. Such for

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