CRC Advances CCS and Methane Strategy as 2026 Milestones Near

California Resources Corporation (CRC) is pushing its California-first strategy from concept to cash flow. The company’s Carbon TerraVault is tracking toward initial injection and commercial revenue in early 2026, while methane certifications and power optionality broaden market access.

Supportive state policies and a solid balance sheet help bridge execution risk as regulatory approvals progress.

CCS Moves Toward First Cash Flows

CRC’s Carbon TerraVault targets first injection and initial commercial carbon capture and storage (CCS) cash flows in early 2026, backed by seven Class VI permits under Environmental Protection Agency (EPA) review. Management plans to double the rig count to four in early 2026 as permitting normalizes, improving development visibility and cycle times.

The carbon management segment is pre-revenue today, but spending on permits, easements and early-stage work continued through the latest quarter, reinforcing the line of sight to monetization once approvals land.

Power and Data Center Optionality

CRC and Capital Power signed an MOU to capture and store up to roughly 3 million metric tons of CO2 per year tied to the La Paloma natural gas plant in Kern County. The parties will also evaluate opportunities around data centers, infrastructure and regulatory partnerships. This collaboration highlights growing in-state demand for large-scale carbon reduction and grid-adjacent development.

Power-related upside also complements CRC’s existing electricity marketing and margin improvement noted in the recent quarter.

Policy Tailwinds Enhance Visibility

California’s backdrop turned more constructive in 2025. Legislation strengthened oil and gas permitting (SB 237), authorized CO2 pipelines and extended Cap-and-Invest through 2045. Management characterizes this as the most favorable framework in more than a decade, supporting in-state supply while accelerating approvals and reducing project cycle times into 2026.

With permitting frameworks normalizing and CO2 transport advancing, CRC sees improved confidence to schedule rigs and progress multiple storage permits under EPA review.

Methane Certification as Commercial Lever

CRC received MiQ ‘Grade A’ methane certifications for its Los Angeles Basin assets in 2024 and now for its Ventura Basin assets in 2025, remaining the only oil and gas producer in California and the Rocky Mountain region with MiQ certification. These third-party grades validate practices, monitoring technology deployment and methane intensity, providing an independently verified signal to end-users.

The certifications strengthen CRC’s transparency on emissions and can support wider demand for its oil and gas, as more buyers look for verified, lower-emission supply in both offtake and downstream markets.

Funding and Execution Posture

Liquidity exceeds $1.1 billion with minimal net leverage and maturities pushed to 2029, supporting flexibility while regulatory milestones are pending. A robust hedge book and a 5% dividend raise underscore balanced capital returns.

Management reaffirmed 2025 capex at $280–$330 million and outlined a steady 2026 program of $280–$300 million. Corporate base decline is guided to 8–13% in 2026, reflecting improved reservoir performance and integration benefits. Execution remains tied to timely state and federal approvals across CCS and traditional development.

Investor Takeaway

CRC carries a Zacks Rank #3 (Hold) and a VGM Score of A, aligning with a balanced near-term setup as the company builds differentiated carbon and certified-methane credentials that could widen demand and diversify earnings over time.

You can see the complete list of today’s Zacks #1 Rank stocks here.

California Resources Corporation Price and Consensus

California Resources Corporation price-consensus-chart | California Resources Corporation Quote

Peers to watch include Matador Resources (MTDR), which also holds a Zacks Rank #3 and competes among oil-weighted E&Ps focused on capital efficiency and free cash flow discipline.

Murphy Oil (MUR) likewise carries a Zacks Rank of 3, offering investors another diversified E&P with established scale. Comparative metrics such as dividend yield and EV/EBITDA help frame relative value across the group.

Near-term headwinds persist, including output softness, elevated operating costs and commodity-linked earnings volatility. But with CCS moving closer to first cash flows, policy tailwinds strengthening and independent methane credentials in hand, CRC’s California-anchored platform screens as a differentiated way to participate in emerging carbon and certified supply themes into 2026.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research