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Thursday, Jul 18, 2024

CRC’s Belated Quarterly Filing Outlines Precarious Situation

California Resources Corp. filed its first-quarter financial results with the Securities & Exchange Commission on Thursday with the caution that management has “substantial doubt” about the company’s ability to continue as a going concern. For the quarter ended March 31, the Santa Clarita petroleum and gas producer reported a loss of $1.75 billion, or $36.43 a share. Revenues totaled $573 million, a decline of 17 percent compared to the same quarter last year. The filing outlines that the COVID-19 pandemic impacted management’s ability to work at the office, and thus accounted for the lateness of the filing, which was due by April 30. The virus also severely depressed oil prices and hence CRC’s cash flow, leading to the company’s present crisis. On May 29, the company didn’t make a $51 million debt payment, but later entered into a forbearance agreement to delay the payment until June 30. On June 15, it didn’t make another $72 million debt payment, but it has a 30-day grace period, giving the company until July 15 to make the payment. “We are actively discussing the terms of a restructuring with our creditors and other stakeholders with the objective of reaching an agreement before the forbearance period … expires on June 30,” the filing states. “There can be no assurances that an agreement regarding a restructuring will be reached by the end of the forbearance period or at all.” In the final section of the filing, management states: “Lower commodity prices have continued into the second quarter and are currently expected to remain depressed for an extended period of time based on current futures curves. … We have concluded there is substantial doubt about our ability to continue as a going concern.” Shares of California Resources (CRC) closed Friday at $1.28, down 5 cents or 3.8 percent on the Nasdaq.

Joel Russel
Joel Russel
Joel Russell joined the Los Angeles Business Journal in 2006 as a reporter. He transferred to sister publication San Fernando Valley Business Journal in 2012 as managing editor. Since he assumed the position of editor in 2015, the Business Journal has been recognized four times as the best small-circulation tabloid business publication in the country by the Alliance of Area Business Publishers. Previously, he worked as senior editor at Hispanic Business magazine and editor of Business Mexico.

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