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California Resources Corp. (NYSE:CRC) said it’s evaluating next steps and potential timelines after an appellate court on Thursday maintained a permit pause in Kern County, California. CRC gained 1%.
“As we assess next steps and potential timelines, we expect to continue to execute the capital and drilling programs described in our fourth quarter 2023 earnings release” and its 10-K filing, according to an 8-K filing on Thursday.
The company reiterated that if it’s unable to obtain new permits this year, it plans to run a one rig program with $200 million to $240 million total capital program in 2024 and expects a 5% to 7% entry-to-exit production decline rate.
California Resources (CRC) dropped 8% in the wake of the court ruling on Thursday. CRC dropped 10% on Jan. 27, 2023 after disclosing a court order suspended the ability of Kern County, California, to rely on an existing environmental impact report for oil and gas permitting
“We think there is a path for permit resumption, but the County must address those items before a permit process is reinstated,” RBC analyst Scott Hanold, who has an outperform rating on CRC, wrote in a note on Thursday. “This uncertainty could weigh, but CRC’s intrinsic value of $50-55/share (strip), not attributing any value for the CMB, provides significant upside.”
RBC’s Hanold cut his price target on CRC to $65 from $70.
“We lowered our target by $5/share to $65 reflecting the oil & gas uncertainty that could weigh on CRC shares,” Hanold added.