Occidental Petroleum Corp. (Oxy) on Thursday began the federal regulatory process to spin off its California operations into an independent oil/natural gas exploration and production (E&P) company before the end of this year.

Oxy’s California Resources Corp. (CRC) filed a registration statement (Form 10) with the U.S. Securities and Exchange Commission (SEC), which is posted on Oxy’s website. Earlier this year the company announced the move (see Daily GPI, Feb. 14).

Following the spin-off, Oxy executives are predicting that CRC will focus on “high-growth, high-return conventional and unconventional assets exclusively in California.” The SEC filing outlines what CRC will look like as a standalone company, including its financial structure and risk factors. The new company will have the largest oil/gas acreage position in the state.

Including four basins in California (San Joaquin, Los Angeles, Ventura and Sacramento). CRC will hold 2.3 million net acres, 8,655 producing wells, and an identified 15,185 additional net drilling sites in the state, according to the filing.

For 2014, CRC projects it will have nearly 1,200 development wells and its capital spending program will be $2.1 billion for the year. In 2013, during which oil represented 58% of production, California operations produced 154,000 boe/d and CRC’s proved reserves at the end of the year totaled 744 million boe. Oxy placed a value of about $14 billion on the California reserves.

Relative to other booming U.S. oil/gas basins, there has been “significantly less” effort to apply today’s advanced E&P technology in California, CRC told the SEC in the filing. It also said that the spun-off Oxy operations intend to change this situation with a “drive for strong production growth through increased application of modern technologies and increased capital spending.”

CRC’s approach will apply to both unconventional Monterey Shale plays and “lower-risk, high-growth” conventional plays, the company told the SEC.

As part of the upcoming spin-off, each current Oxy shareholder will receive shares in CRC. The exact proportion for how much CRC stock for each Oxy share is still to be determined. CRC told the SEC that Oxy management favors the tax-free distribution of common stock as an “efficient way” to separate the California operations, as opposed to selling stock in the new company.