Having entered two partnerships earlier this year, California Resources Corp. (CRC) expects to see the benefits of joint ventures (JV) by the end of 2017 and continues to pursue more partners, CEO Todd Stevens said recently.
"We're in active negotiations for various JVs in every size you can imagine," Stevens said during a recent conference call. "They range potentially from $1 billion to a few $1 million, and some even smaller than that."
Stevens said that based on the opportunities he sees now, CRC should have another JV inked by the end of this year. "So far we have executed some large ones and some small ones." The signed nine other small JVs in one month recently, bringing in an added $30 million of capital, he said.
In February, CRC entered a JV with Benefit Street Partners LLC (BSP) to invest in the California properties with a focus on developing multiple producing fields. Two months later it entered another JV to boost exploration and production (E&P) activity involving Macquarie Infrastructure and Real Assets (MIRA).
The MIRA deal was a "strategic JV" in which MIRA committed $160 million to develop oil and gas assets in the San Joaquin Basin. MIRA could invest up to $300 million eventually, according to CRC.
CRC currently has nine rigs operating, six tied to JV-funded operations, said Stevens, who characterized the California-focused E&P's assets as having lower decline rates and less capital intensity than other North American basins. With the JVs now underway, CRC plans to double its 2017 well count from initial plans. Production was 129,000 boe/d for 2Q2017.
"We received a second $50 million capital tranch from BSP in July and expect additional Macquarie funding over the rest of this year," he said. CRC expects total 2017 capital expenditures to be $400 million. About $150 million of the capex total would be from the JV partners.
For 2Q2017, CRC reported a net loss of $48 million (minus $1.13/share), compared to a loss of $140 million (minus $3.51) for the same quarter last year.