California Resources Corp.’s shares have taken a beaten over the last year, falling by about 36%.
Since reaching an adjusted closing price of $51.52 on Jan. 2, shares in the Long Beach-based oil and gas producer have dropped by more than $16, closing at $34.87 on April 23. That’s a far cry the 52-week high the stock reached on Nov. 22, at $58.65 a share.
The Dow Jones, in comparison, was down by more than 5% from the start of the year. However, for the past 52-week period, the Dow was up by nearly 3%, while the Nasdaq was down by 13% since the start of the year and up by 6.4% over the past 52 weeks.
April has been a cruel month for California Resources, the largest oil and gas producer in the state.
The company’s stock price closed at $45.31 on April and took a tumble from that point, declining by 23%. The biggest drop during the month came on April 4, when the price closed at $34.83,14% lower than the day before.
Tariffs the reason for stock price drops
As a whole, the threat of tariffs on imports has taken a toll on global stock and financial markets. Between a closing price of $71.71 on April 2 and $59.58 on April 8, crude oil dropped nearly 17%. The price of crude oil reached a 52-week high of $83.88 on July 3 of last year.
Francisco Leon, chief executive of California Resources, didn’t discuss the potential threats of tariffs on the industry during a conference call with analysts for the fourth-quarter financial reporting on March 3.
CRC’s earnings report call with analysts
Leon did discuss the company’s recent joint venture with Carbon TerraVault to capture and store carbon generated by industrial companies.
“We are leading California’s decarbonization efforts,” Leon said. “We will soon break ground on the state’s first CCS (carbon capture and storage) project at Elk Hills, with first injection and cash flow expected later this year. Market demand for Carbon TerraVault is accelerating.”
On Dec. 31, the company announced that the Federal Environmental Protection Agency had issued a Class VI well permit to Carbon TerraVault – a joint venture of California Resources and Toronto-based Brookfield Renewable Partners – to inject and store up to 38-million tons of carbon dioxide in the depleted portion of California Resources’ Elk Hills Oil Field holdings in western Kern County.
According to the California Resources announcement, this is the first-ever EPA permit for carbon injection and storage in a depleted oil field.
And it marks a major milestone for the company’s effort to alter its business model to adapt to state targets to end oil drilling in the state by 2045.
In the context of CRC securing this permit, Michael Scialla, an analyst in the Denver office of Little Rock, Ark.-based financial services firm Stephens, asked what the next steps were in getting the other 26 reservoirs operational.
Leon said the EPA is still involved in the process and must determine that everything is set to go.
“But we bake that into the timeline – so what you should hear next from us is that we’ve broken ground on the project and then every big milestone, we’re happy to communicate it,” Leon said.
“But the plan is to get to that first injection that’s a big milestone,” he continued. “But along with that, we’re working on every other project around that to be able to fill this reservoir as quickly as we can from either our own emissions or third parties.”
