California Resources Corporation Reports Significant Revenue Growth and Net Income Recovery Following Aera Energy Merger

California Resources Corporation (CRC) reported significant financial developments in its latest 10-Q filing for the quarter ending September 30, 2024, following the completion of its merger with Aera Energy, LLC on July 1, 2024. The merger, valued at approximately $2.1 billion, involved issuing 21.3 million shares and settling $990 million of Aera's debt, resulting in a substantial increase in CRC's total assets from $3.998 billion at the end of 2023 to $7.128 billion by September 30, 2024.

For the third quarter of 2024, CRC's total operating revenues surged to $1.353 billion, a dramatic increase from $460 million in the same quarter of 2023. This growth was primarily driven by oil, natural gas, and NGL sales, which rose to $870 million from $510 million year-over-year. For the nine months ending September 30, 2024, total operating revenues reached $2.321 billion, up from $2.075 billion in the prior year.

Despite the revenue growth, total operating expenses also increased significantly, totaling $835 million for the third quarter of 2024 compared to $475 million in the same period of 2023. This rise in expenses was attributed to the operational integration of Aera's assets and increased costs associated with the expanded workforce. Operating income for the third quarter was reported at $518 million, a notable recovery from an operating loss of $15 million in the same quarter of 2023.

Net income for the third quarter of 2024 was $345 million, a stark contrast to a net loss of $22 million in the same period of the previous year. However, net income for the nine months ended September 30, 2024, decreased to $343 million from $376 million in 2023, reflecting the impact of increased operational costs and transaction expenses related to the merger.

The company also announced a workforce reduction of 12% as part of the merger integration, incurring severance costs of approximately $27 million in the third quarter. Additionally, CRC recognized $30 million in transaction and integration costs associated with the Aera merger during the same period.

In terms of cash flow, CRC reported net cash provided by operating activities of $220 million for the third quarter of 2024, up from $104 million in the same quarter of 2023. However, total liquidity as of September 30, 2024, was reported at $1.138 billion, with $925 million available under its Revolving Credit Facility.

Overall, CRC's financial performance reflects a transformative period marked by the Aera merger, which has significantly altered its operational scale and financial metrics.