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California Resources Ups Capex by $100+MM for 2018; Production Dips Slightly YOY

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California Resources reported its Q1 2018 results.

Highlights:

- Produced 123,000 BOE per day, above the midpoint of the guidance range (down -2% from 4Q17 and down -7% YOY)

- Invested capital of $139 million

- Drilled 44 wells with internally funded capital and 30 wells with joint venture (JV) capital

- Generated adjusted EBITDAX¹ of $250 million, reflecting an adjusted EBITDAX margin¹ of 41%

Increases Budget by Over $100 Million

- Increased 2018 capital budget to a range of $550 million to $600 million , with approximately $100 to $150 million funded by JV partners BSP and Macquarie (the company's original budget was $425-450 million)

Operational Update

CRC operated an average of nine rigs during the first quarter of 2018 and drilled 74 wells with CRC and JV capital, consisting of 72 development wells (55 steamflood, 10 waterflood, one primary and six unconventional) and two exploration wells.

In the San Joaquin basin, CRC operated seven rigs and produced approximately 87,000 BOE per day for the first quarter. The Los Angeles basin had one rig directed toward waterflood projects, and contributed 24,000 BOE per day of production in the first quarter of 2018. Ventura basin activity included one rig focused on conventional projects and produced approximately 6,000 BOE per day for the first quarter of 2018.

The California wildfires in December 2017 and subsequent mudslides negatively impacted Ventura basin production by approximately 400 BOE per day in the first quarter of 2018, in line with expectations incorporated into the Company's previous guidance. The related production effects have been resolved and should not affect second quarter production. CRC continues to focus on oil weighted projects, with no development drilling activity in the Sacramento basin at this time.