California Resources Corporation Reports Significant Financial Decline in Q1 2026

California Resources Corporation (CRC) reported a significant decline in financial performance for the first quarter of 2026, primarily due to the impact of the recent Berry Merger and fluctuations in commodity prices. The company recorded total operating revenues of $119 million, a decrease from $912 million in the same period last year. Oil, natural gas, and natural gas liquids sales amounted to $905 million, up from $814 million in the prior year, but the net loss from commodity sales derivatives reached $848 million, compared to a gain of $6 million in the previous year. The net loss for the quarter was $711 million, translating to a loss per share of $8.02, a stark contrast to the net income of $115 million, or $1.27 per share, reported in the first quarter of 2025.

The Berry Merger, completed on December 18, 2025, significantly influenced the comparability of CRC's financial results. The merger added high-quality, oil-weighted reserves and sustainable cash flows to the company’s operations, contributing to an increase in oil production. However, the merger also introduced complexities, including higher operating costs and a substantial loss from commodity derivatives due to increased oil prices. The company’s total operating expenses rose to $830 million, up from $726 million in the same quarter last year, driven by increased general and administrative expenses and costs related to the marketing of purchased commodities.

Operationally, CRC reported an increase in net production sold to 154 MBoe/d, up from 137 MBoe/d in the previous quarter, largely attributed to the addition of production from the Berry properties. The company’s oil production from the San Joaquin Basin increased to 96 MBbl/d, while natural gas production remained relatively stable. The average realized price for oil was $69.37 per barrel, down from $72.01 in the same quarter last year, reflecting the volatility in the market and the impact of derivative settlements.

Looking ahead, CRC has revised its capital program for 2026 to a range of $520 million to $560 million, with plans to increase to a seven-rig program in the second half of the year. The company aims to leverage its operational strengths and the benefits of the Berry Merger while navigating the challenges posed by fluctuating commodity prices and regulatory changes. CRC remains focused on its carbon management initiatives, including the development of carbon capture and storage projects, which are expected to play a crucial role in its long-term strategy. The company anticipates generating sufficient operating cash flow to support its capital investments and return cash to shareholders through dividends.