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I am just looking at CRC's price historically at $39/BO ~$2.50.
CRC was being priced for Bankruptcy until it's last quarterly earnings.
As mentioned before, CRC will likely announce many deals this year. If you are out when those deal are broadcast then ....
Brent trading at $39.37/BO
If it stays about $39/BO or breaks $40 Monday will be another big day.
Next target price is ~$2.50 PPS
Thanks
So if you don't do anything it will just turn into cash? When?
Thanks
Executives are buying the stock.
Several milestones:
1) $40 Brent
2) Sale of midstream - $500 million+
3) $45-$50
4) JV deals 2.3 million acres of land
All doable and likely this year.
When Brent breaks $40/bo, CRC will definitely have a really big move up.
Many small oil companies can no longer get extensions on their LOC. They have been producing oil at a loss and many have just given up - increasing the decline rate of oil in the US. This is what is fueling oil price. Huge oil fields in Texas and Oklahoma have been shut-in.
My guess oil price will increase to the $45-$50/bo. Too much production comes online after $50.
CRC will increase to $5-$7 per share.
Yep and a higher chance of BK if the price dips.
Breakeven oil price is $28/BO including the hedges. Every $1 increase in Brent is 140K bopd *365 or $51 million per year more free cash flow. Valued at roughly $510 million or about $1.3/share (387 million shares outstanding).
In theory, CRC should increase $1.3/share for every $1 increase in Brent oil price.
@ $38/BO Brent CRC was trading at about $2.50/share.
Exxon is looking for bargains and world class oil properties. CRC has both. Exxon CEO mentioned just buying these types of properties versus companies. They are short on the reserve replace side, so there is no choice.
Yeah this is why Exxon is probably really interested.
It's possible exxon buys 30% of the assets (southern part of CRC ~42 boepd) for ~$2.5B.
If CRC was purchased by Exxon at $1.5 I would be really disappointed. Upside potential alone is much greater.
Exxon (NYSE:XOM) is doing a big bond offering, and there is the possibility that this will be used for acquisitions. CRC is potentially a target, and will likely become volatile to the upside as the anticipated M&A activity develops in the Energy sector.
CRC is trading way below its liquidation value.
Horizon Energy, CRC Farmout Agreement Expected To Close In April. The OilVoice (2/26, 608) reports that the Farmout Agreement between Horizon Energy’s wholly owned subsidiary, Grapevine Energy, LLC and “California Resources Production Company” is expected to close in April. Under the agreement, Grapevine will receive “a 100% interest (subject to certain conditions) in a large acreage position in the southern San Joaquin Basin.” The deal is described as “a unique opportunity for Grapevine to discover and produce large quantities of ‘conventional’ oil at finding and development costs less than $10/barrel.”
The A&D Center (2/25) reports that beginning in March, Grapevine will begin conducting a “new, 27 square mile 3-D seismic survey over the area.”
With 2.3 million acres CRC can do a ton of these types of projects.
If CRC sold all of its assets tomorrow the PPS would be north of $1.50.
How it got so low is amazing.
Reverse split in May - stay on the NYSE and get picked up by some funds. Should be +$2.50/share now at ~$36/BO oil price.
Remember CRC was at about $1.5/share price before with $35/BO Brent oil price.
Let's review, late last year CRC discussed possible midstream sales, JV, etc. the stock rose but the deals never happened. These deals were baked into CRC's share price, so it started to fall big. Once it dropped below $1 all kind of funds like S&P400, hedge funds, etc. by law couldn't hold the stock, and had to sell. This snowball affect resulted in CRC's PPS falling to less than $0.3 per share.
CRC has 2.3 million acres of land 70% held in fee, power plants, huge reserves inventory, pipelines, etc. the book value of these assets are at least $1B more than the $5.8B in debt - even at fire sale prices. IMO CRC is highly undervalued. Once they start executing the deals discussed IMO the stock will move up huge. Obviously oil price plays a big role, north of $35/BO IMO is needed for big gains.
If trump wins he said he will tear up the Iran agreement.
Maybe oil will start heading up after he secures the republican nomination.
These ridiculous predictions are always a sign things will change - happened in housing, dot.com, & oil before. I take the prediction as this is a bottom.
CRC is currently worth more dead than alive. Land, power plants, reserves, gas fields, etc.
Have to admit I am confused by the downward price today - oil price up CRC down. The banks approved their LOC with periodic reviews. I would have thought this was a positive thing. Maybe being dropped from the S&P400 is the cause.
Yahoo Finance
California Resources Corporation Announces Its Fourth Quarter and Year-end 2015 Earnings Release and Conference Call
Business Wire California Resources Corporation 3 minutes ago
3 ways to get the freshest home on the block.
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LOS ANGELES--(BUSINESS WIRE)--
California Resources Corporation (CRC) will host its fourth quarter and full year financial results conference call on Monday, February 29th at 5:00 p.m. Eastern Standard Time. The Company’s earnings will be released following the market close on the same date.
We encourage participants to pre-register for the conference call using the following link http://dpregister.com/10076862. Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time.
To participate in CRC’s conference call, either dial (877) 328-5505 (International calls please dial +1 (412) 317-5421) or access via webcast at www.crc.com, fifteen minutes prior to the scheduled start time to register. A digital replay of the conference call will be archived for approximately 30 days and available online in Investor Relations at www.crc.com.
About California Resources Corporation
California Resources Corporation is the largest oil and natural gas exploration and production company in California on a gross-operated basis. The Company operates its world class resource base exclusively within the State of California, applying integrated infrastructure to gather, process and market its production. Using advanced technology, California Resources Corporation focuses on safely and responsibly supplying affordable energy for California by Californians.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160219005997/en/
Contact:
California Resources Corporation
Scott Espenshade (Investor Relations)
818-661-6010
Scott.Espenshade@crc.com
or
Margita Thompson (Media)
818-661-6005
Margita.Thompson@crc.com
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IMO really poor planning.
All this automatic selling not based on value, but on obligations.
No, I am waiting for the earnings report and the stock to stabilize.
Yeah, my big concern is any debt restructuring. But for that I would be loading up.
This also doesn't take into consideration the value of the midstream- power plants, pipelines, land, etc.
Perfect storm for CRC this article IMO does a good job explaining. When the stock dropped below $1, it set in motion massive selling - funds like vanguard had to dump it by their charter. Also, Oxy has 20% to sell by May. The pieces of CRC are worth more than the current market capitalization- good acquisition target.
CALIFORNIA RESOURCES CORP (NYSE:CRC) IS A HIGH REWARD OPPORTUNITY
California Resources Corp (NYSE:CRC) Is A High Reward Opportunity
FEBRUARY 19, 2016 BY ALEX CARLSON LEAVE A COMMENT
800px-Flag_of_California.svg
Source: Wikimedia Commons
Like most small E&Ps, California Resources Corp (NYSE:CRC) has been the victim of low oil prices and a high debt load. Those two just do not go together and shareholders of CRC have paid a heavy price. However, we don’t think all hope is lost. Matter of fact, for opportunistic investors, we think CRC has big potential with high rewards at current prices.
First off, CRC is the largest oil and natural gas exploration and production company in California on a gross-operated basis. The company operates its world class resource base exclusively within the State of California, applying integrated infrastructure to gather, process and market its production. The firm has a mineral acreage consisting of approximately 2.4 million net acres spanning the state’s four gas and oil basins. The company’s four gas and oil basins include San Joaquin Basin, Los Angeles Basin, Ventura Basin and Sacramento Basin.
The key here is that CRC is not operating in some third world country with geopolitical risks like Libya, Iraq or Egypt. We don’t have to worry about a war or violence breaking out, except maybe for the occasional environmentalist in their Tesla (NASDAQ:TSLA) spouting global warming nonsense.
Second, doing a back of the napkin analysis yields an undervalued company. CRC is producing roughly 160k boepd. The current market value for this is $45k boepd. This gives the company an enterprise value of $7.2 billion. With a debt load of roughly $6.4 billion, that leaves an equity value of $800 million. At $.38 per share, CRC is trading with a market cap of just $147 million. By all accounts, CRC is undervalued.
Third, CRC’s management has already taken steps to get its financial house in order. Cash costs, excluding interest charges, are expected to fall by 11% from 2014 levels and 2015 capital investments are expected to total approximately $400 million, enabling CRC to drill and complete 311 wells and invest about $160 million in its infrastructure and facilities. In December, the company said:
“CRC continues to focus on its longer term debt reduction target. This month, CRC closed a bond exchange which reduces the principal on its outstanding debt by $563 million while increasing interest by just $21 million per year. CRC has been pursuing multiple transactions to achieve further deleveraging. Detailed discussions on specific transactions progressed throughout the fourth quarter. However, in light of the recent further drop in commodity prices, we do not expect to announce any further deleveraging transactions in 2015.”
Fourth, CRC has a crushing debt load because of its parent company Occidental Petroleum Corp (NYSE:OXY). OXY chose to burden the spin off with too much debt. The liabilities were transferred from OXY to CRC. We think OXY bears a lot of this responsibility and it wouldn’t take much for a good litigation attorney to make a case for CRC.
Fifth, most of the company’s debt is not due until 2020 or later. This bides the company time and allows for a recovery in oil prices to happen, which we think will occur within the next year or two. Drilling rig counts have dropped dramatically as investment in oil projects has grinded to a halt. When the supply/demand imbalance corrects itself, these projects will not ramp up fast enough to meet demand. As a result, oil prices can recover a lot quicker than people realize.
Sixth, institutions like Vanguard have been dumping the stock since prices went under $1. Couple this with short selling and you have a perfect storm for lower prices. However, at current levels, the risk to the downside looks minimal while the upside is enormous, especially when we look at the chart and see how far CRC has fallen.
Currently trading at 52 week lows, we see CRC as one of the best risk/reward opportunities in the oil patch. CRC certainly has the potential to be a multi-bagger and one which we are definitely watching and keeping an eye on.
Was vanguard's sale because of certain covenants within fund? Like rated above X? Or stock above $1?
Just curious...
Hope you right.
I don't think Oxy owes CRC any money. I believe Oxy just has to liquidate the 20%.
I agree managements inability to get deals completed like land sales, mid-stream, etc. has placed CRC in a bad position. I am certainly not happy about this situation.
Oxy has to liquidate 20% of the company by May 2016 (part of the spin). My guess is the high volume and move down with upward oil price is due to Oxy's liquidation.
~78 million shares to sell by May 2016. It just doesn't make any sense that CRC's stock is behaving this way.
Look at the change in oil price, again CRC just follows.
CRC is a leveraged oil price play. Oil price bulls are buying and vice-versa.
Again, you going to drive yourself crazy constantly watching it.
If it's money you need now, you definitely shouldn't be buying high flying volatile stocks. If not, my friendly advice is stop looking at it. A year from now, IMO it will be much higher.
Many people sold at the bottom in 2008/2009.
Just my 2 cents.
Linn energy is the 800 lb gorilla is the room now for all leveraged medium sized oil companies.
Linn's Breakeven oil price is ~$50/BO and has $10B in debt whereas CRC's Breakeven oil price is ~$30/BO and has ~$5B in debt.
Therefore at these prices linn is losing a significant amount of money, and their bank will not extend their LOC.
Good question, I am not sure. My guess is CRC has become a traders stock because of the volatility.
Yes, WTI (US) and Brent (Global).
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