OXY - California Resources Corporation: Great On Paper But Not Practical

2024-05-20 16:02:25 ET

Summary

• California Resources Corporation is doubling down on its investments in California through the acquisition of Aera Energy.
• The company sees potential in its carbon capture business and the sale of its Huntington Beach real estate.
• However, the unknowns and regulatory risks in California make it a challenging investment, and the future success of the company depends on navigating these challenges effectively.

The risks of investing in California are notable. The state's rigorous environmental regulations have made new drilling permits difficult to obtain, slowing down production and increasing operational costs. California Resources Corporation ( CRC ) does not see that as an issue, and it's doubling down on the state via the purchase of Aera Energy. Management (and some shareholders) also see substantial upside potential in its carbon capture business and the sale of its Huntington Beach real estate....

For further details see: