California Resources Emerges from Chapter 11

Oil and gas producer California Resources Corp. has completed its financial restructuring under Chapter 11, the company announced Tuesday.The Santa Clarita firm, one of the state’s largest oil producers, filed for Chapter 11 reorganization in July to alleviate more than $5 billion in debt.According to a Tuesday press statement from the company, “approximately $4.4 billion of loans and notes outstanding as of June 30, 2020 have been equitized. Additionally, all of the company’s previously existing equity interests have been cancelled and ceased to exist after the market close on October 27, 2020.”California Resources emerges from Chapter 11 more than $345 million in available liquidity. It has entered a new revolving credit facility with a $1.2 billion borrowing base that will mature in 2024. The company’s capital structure includes a $200 million second lien term loan and $300 million of secured notes due to creditor Ares Management in 2027. Ares, in Los Angeles, is CRC’s joint venture partner on the Elk Hills power plant and cryogenic gas plant near Bakersfield.Shares of California Resources will resume trading on the New York Stock Exchange Wednesday under the ticker “CRC.” More than 83 million new shares will be issued.The company has also appointed a new board of directors. Chief Executive Todd Stevens will remain in his role.Stevens said in a statement that CRC’s balance sheet is much stronger and the restructured organization is better equipped to withstand oil price cycles. The dramatic drop in the valuation of Benchmark Brent crude oil caused by the coronavirus pandemic was the last straw that forced the company to file Chapter 11.“You can expect CRC to build upon the fundamental strengths of our business that provide us a high degree of operating flexibility, including our low-decline conventional oil production, low capital intensity, exposure to the Brent crude oil markets, substantial mineral ownership in fee and integrated infrastructure,” he added.