California Resources Corp. (CRC) the state’s largest exploration and production (E&P) company, is looking to grow and to strengthen its balance sheet by cutting debt and pursuing additional upstream joint ventures (JV), CFO Mark Smith said Thursday.

Speaking at an energy conference in New York City, Smith touted CRC’s strong operational and financial performance in 1Q2018 but said debt, now lowered by $1.8 billion to $4.9 billion, is still too high. Senior management is dedicated to knocking more off that total, he told the audience and stressed the value and diversity of the California asset base that should help achieve a strategic transformation funded principally by internal cash.

"I like to say that CRC has characteristics of a major with an investment-grade asset base encapsulated with the nimbleness of an independent," Smith said at the 2018 Bank of America Merrill Lynch 2018 Energy Credit Conference.

While noting 2017 production of 129,000 b/d principally from California's four largest basins, Smith said for the third consecutive year finding and development costs averaged under $10/bbl. Separately, the CFO said the CRC is looking at more than $7.5 billion in investment opportunities in coming years.

CRC’s capital budget is anticipated to be $550-600 million this year, including funds from its JVs.

"We'll scale it up and down, based on our cash flow generated throughout the year," he said, adding that CRC currently has another $500 million in JV capital committed to its operations.

Each of the current JV partners has sought to increase stakes in the company operations after beginning the partnerships said Smith. He predicted that going forward production growth should be in the 7% range.

In response to an analyst's question, Smith said CRC in three to four years should have a simplified balance sheet similar to what it had in 2014 when its spin off from Occidental Petroleum Corp. occurred.

"This is consistent with our long-term asset base," he said. But in response to another question, he said the company is "not comfortable with the absolute levels of debt that we have right now. We don't have a specific absolute target that we've stated publicly in terms of overall debt levels, but we would like to see those levels come down from where they are.”

Integration of interests in the Elk Hills field in the San Joaquin Basin is moving ahead of schedule, and CRC intends to use it as a "template for other ways in which we can use acquisitions strategically." The company also owns "significant midstream infrastructure" that could be monetized "if we choose to do so."