California Resources Corporation CRC posted first-quarter 2026 adjusted earnings of 88 cents per share, down 17.8% year over year but ahead of the Zacks Consensus Estimate by 6%. Total operating revenues before net commodity-derivative impacts were $967 million, up 6% year over year and ahead of the consensus mark by 7.2%.
Results reflected CRC’s oil-weighted production base and strong realizations. Net production averaged 154 thousand barrels of oil equivalent per day (MBoe/d), with oil representing 81% of volumes.
CRC's Derivative Loss Masks Underlying Profit
On a GAAP basis, CRC reported a net loss of $711 million, primarily tied to a non-cash loss in the fair value of outstanding commodity derivatives. That swing in mark-to-market results dominated the income statement even as operating performance tracked well with management’s expectations.
Excluding those unusual and non-cash items, CRC generated adjusted net income of $79 million. Adjusted EBITDAX came in at $304 million, underscoring the company’s ability to translate a firmer Brent backdrop into stronger core cash earnings.
California Resources Corporation Price, Consensus and EPS Surprise
California Resources Corporation price-consensus-eps-surprise-chart | California Resources Corporation Quote
California Resources' Pricing Strength Supports Quarter
California Resources continued to benefit from favorable oil pricing during the quarter. The company’s average realized oil price was $74.53 per barrel before the impact of hedging, closely tracking Brent crude prices. After including hedging impacts, the realized price came to $69.37 per barrel.
Pricing for other products also remained healthy. The company received nearly $45 per barrel for natural gas liquids, while natural gas prices averaged $3.56 per Mcf. These results were supported by CRC’s regional market exposure and pricing strategy.
CRC's Cost Base Reflects Timing Items and Operating Mix
California Resources reported total operating costs of $365 million for the quarter. Administrative expenses came in higher than expected at $106 million, mainly due to legal-related costs and increased employee compensation linked to the company’s rising share price.
Other expenses also affected quarterly results. Taxes excluding income taxes totaled $67 million, while transportation expenses were $26 million. Other operating expenses, after adjusting for related revenues, came to $44 million. At the same time, the company benefited from some additional income sources, including $18 million from commodity marketing activities and $6 million from electricity-related operations.
California Resources' Resilient Cash Flow and Balance Sheet
California Resources continued to generate healthy cash flow during the quarter, even as spending increased to prepare for higher activity later in the year. The company generated $247 million in operating cash flow before working-capital changes, while free cash flow came in at $116 million. Total capital spending was $131 million, mainly related to drilling, well maintenance and facility upgrades to support future production growth.
The company also strengthened its balance sheet by refinancing part of its debt. CRC issued $350 million in new long-term notes and used the proceeds to repay higher-interest debt due earlier. It ended the quarter with solid liquidity of about $1.3 billion and maintained a relatively low debt level compared to earnings, with a net leverage of 1.1X on a last-12-month adjusted EBITDAX basis.
CRC Raises 2026 Targets on Activity Ramp and Synergies
California Resources increased its full-year forecast as it plans to ramp up drilling activity in the second half of 2026. The company expects to operate seven drilling rigs later this year, including six in California and one in Utah. CRC also expects production to gradually rise through the year, ending 2026 at around 175 MBoe/d.
The Zacks Rank #1 (Strong Buy) company raised guidance for several important financial measures. CRC now expects stronger production, higher earnings and increased investment spending in 2026. It also increased its expected cost savings from the Berry merger to $90-$100 million annually. At the same time, ongoing efficiency improvements and consolidation of operations are helping reduce certain infrastructure-related spending.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
California Resources Advances CCS and Data Center Optionality
Beyond its oil and gas operations, California Resources highlighted continued progress in its carbon management business. The company completed the construction of its carbon capture and storage project at the Elk Hills gas plant and is now awaiting final approval from the EPA to begin injecting and storing carbon dioxide underground. Management views this as an important milestone for the project and for carbon capture efforts in California.
CRC also pointed to growing interest in its Elk Hills “powered land” strategy. A major data center developer is investing millions of dollars to help prepare the site and speed up permitting work. The company believes its combination of natural gas supply, available land and carbon capture capabilities could help meet rising electricity demand from AI-related data centers.
A Look at Some Other E&P Earnings
While we have discussed CRC’s first-quarter results in detail, let’s take a look at some other upstream energy reports of this season.
EOG Resources EOG posted adjusted earnings of $3.41 per share, up 18.8% from the year-ago level of $2.87. The bottom line beat the Zacks Consensus Estimate for earnings of $3.07 by 11.1%. EOG’s total revenues of $6.9 billion increased 22.1% year over year and beat the consensus mark of $6.3 billion. Strong quarterly results were supported by higher production, with total crude-oil-equivalent volumes averaging 1,383.8 MBoe/d in the quarter, reflecting strong production execution.
Cost control helped keep the earnings flow-through intact even as activity remained elevated. Lease and well expenses were $462 million, and depreciation, depletion and amortization were $1.19 billion. For investors, the quarter reinforced that EOG’s earnings power is being driven by a combination of operating scale and steady expense execution.
Diamondback Energy FANG reported first-quarter 2026 adjusted earnings per share of $4.23, which beat the Zacks Consensus Estimate of $3.55, driven by strong production. However, the company’s bottom line declined from the year-ago adjusted profit of $4.54. The underperformance was due to a 91.5% drop in the year-over-year realized natural gas prices. Diamondback’s production of oil and natural gas averaged 979.4 MBoe/d, comprising 53.2% oil.
Diamondback Energy logged $933 million in capital expenditure — spending $784 million on operated drilling and completion additions to oil and natural gas properties, and $149 million on non-operated additions. The company booked $1.7 billion in adjusted free cash flow in the first quarter.
W&T Offshore WTI posted break-even first-quarter 2026 earnings per share compared with the Zacks Consensus Estimate of 2 cents. Revenues of $150 million beat the consensus mark of $137 million by 9.5% and increased 15.5% year over year. Operationally, W&T Offshore turned in average sales volumes of 36.2 MBoe/d (53% liquids), keeping output near the top end of guidance despite adverse weather. The quarter also featured sharply lower lease operating expenses per barrel, helping support a meaningful step-up in profitability measures such as adjusted EBITDA.
Production growth remained a key operational theme. W&T Offshore said first-quarter output increased 19% from the year-ago period, supported by contributions from prior acquisitions and continued execution across its Gulf of America asset base.
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EOG Resources, Inc. (EOG): Free Stock Analysis Report
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California Resources Corporation (CRC): Free Stock Analysis Report
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