California Resources 1Q26 Postmortem and Model Update: Shifting to Capital Efficient Oil Growth

Research evidence excerpt

California Resources 1Q26 Postmortem and Model Update: Shifting to Capital Efficient Oil Growth

J P M O R G A N North America Equity Research

12 May 2026

California Resources Overweight

CRC, CRC US

1Q26 Postmortem and Model Update: Shifting to Price (11 May 26):$59.68

Capital Efficient Oil Growth ▼Price Target (Dec-26):$83.00 Prior (Dec-26):$86.00

JPM View. With the 1Q26 print, CRC announced plans to ramp activity in 2H26

to capitalize on a more favorable oil price environment, positioning the company Oil & Gas Exploration & Production

for modest oil growth moving into 2027 that should pull forward value for a stock Zach Parham AC

that still trades below PDP value at current strip. CRC will shift from a declining (1-212) 622-5837

production profile to modest oil growth in 2H26, though the true magnitude of the zach.parham@jpmorgan.com

growth is masked by the impact of the PSC in a higher oil environment, which Arun Jayaram

drove CRC’s FY26 oil production guidance modestly lower despite the increase in (1-212) 622-8541

arun.jayaram@jpmchase.com

activity. Under the new capital program, CRC will be adding 3 rigs in 2H26 (2 rigs

Pankaj Bhatter, CFA

in CA and 1 in UT), driving a ~$100 MM increase in D&C capex ($54 MM for CA’s

(1-212) 622-3795

2 rigs and $46 MM for UT). CRC now expects to spend ~$540 MM running a pankaj.bhatter@jpmchase.com

full-year average of ~5 rigs, including a 7-rig average in 2H26, which is up from Jack Jerusalmi

prior guidance of ~$450 MM and 4 rigs. On the 1Q conference call, management (1-212) 622-6552

underscored the program’s improved capital efficiency, highlighting that it can jack.jerusalmi@jpmorgan.com

now deliver entry-to-exit growth with an average of 5 rigs and under $400 MM in J.P. Morgan Securities LLC