CRC Builds a Steadier Cash Flow Base as Policy Tailwinds Grow

California Resources Corporation (CRC) enters 2026 with a simpler near-term playbook and clearer long-term pivots. Liquidity strengthened, the dividend edged higher, and capital discipline held.

At the same time, state actions have brightened permitting visibility and carbon infrastructure, anchoring CRC’s early-2026 carbon capture and storage (CCS) timeline.

Why 2026 Starts from a Steadier Base

CRC’s short-term setup is balanced. The shares carry a Zacks Rank #3 (Hold) with a VGM Score of A, indicating expectations for in-line performance near term while screening attractively on value and momentum factors.

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

California’s 2025 policy changes have also helped. SB 237 makes it easier to approve new in-state production permits, while SB 614 allows CO2 to be transported through pipelines. Together, these laws give CRC a clearer path for future drilling activity and for executing its carbon storage plans heading into 2026.

What the Latest Quarter Says About Durability

Third-quarter operations were stable: net production averaged 137 thousand barrels of oil equivalent per day (Mboe/d) with around 78% oil. Adjusted EBITDAX was about $338 million, and free cash flow was roughly $188 million; before working capital, it was ~$231 million.

Liquidity exceeded $1.1 billion, including $180 million of cash, and the quarterly dividend was raised 5%. The credit profile remains conservative after terming out debt and lifting revolver capacity.

How the Decline Profile and Capital Plan Evolve

Management targets an 8–13% corporate base decline for 2026, a step toward steadier volume performance. Capital spending is expected at roughly $280–$300 million, consistent with a disciplined, cash-flow-first approach.

The combination of a moderated decline rate, hedging and cost control underpins free-cash-flow durability while leaving room for shareholder returns.

Carbon Projects that Could Add Resilience

CRC’s first CCS injection at Elk Hills is targeted for early 2026, pending final approvals. Construction completion is guided around year-end 2025, with additional Class VI applications planned that could add some 100 million metric tons of Central California storage over time.

CO2 pipeline approval under SB 614 is an important step because it helps connect future capture sites to storage locations. CRC also has a memorandum of understanding with Capital Power, which outlines potential “power-to-CCS” projects in Kern County. Together, these efforts support and expand CRC’s growing carbon storage footprint in the region.

What the Zacks Rank Implies for Investors

A Zacks Rank #3 suggests in-line performance over the next one to three months. Investors should watch near-term execution on permits, the timing of first injection, and progress toward stabilizing production against the lower 2026 base-decline framework.

California Resources Corporation Price and Consensus

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

Peers to monitor include Matador Resources (MTDR), another #3 Ranked name in the U.S. E&P cohort; its low leverage and Permian exposure provide a useful barometer for oil-weighted operators’ capital returns.

Murphy Oil (MUR), also Zacks #3 Ranked, offers a contrast with offshore and onshore mix and a comparable dividend profile, helping frame relative value and cash-return pacing within the group.

Bottom Line

CRC’s 2026 setup leans on a stronger liquidity position, measured capex, and improving policy support. With CCS milestones approaching and base declines moderating, the near-term call remains balanced while medium-term diversification potential builds.

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