California Resources updates deleveraging activities

California Resources Corp. (NYSE: CRC) expects total average production for the full year 2015 to increase 1% to an average of 160,000 barrels of oil equivalent per day and crude oil to increase by 5% to 104,000 barrels per day. Cash costs, excluding interest charges, are expected to fall by 11% from 2014 levels and 2015 capital investments are expected to total $400 million, enabling CRC to drill and complete 311 wells and invest about $160 million in its infrastructure and facilities.

CRC is actively working on a 2016 budget that will reflect its primary investment tenet of investing within cash flow from operations. Reflecting this principle and the recent further deterioration in oil prices, CRC is releasing both of its contracted drilling rigs in the San Joaquin basin moving into 2016. A rig will be maintained in the Los Angeles basin on an intermittent basis. Despite the drilling rig releases, the company currently intends to maintain a workover fleet of 30 rigs.

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 also 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, CRC does not expect to announce any further deleveraging transactions in 2015.

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