California Resources Corporation

Good day and welcome to the California Resources Corporation fourth quarter and year end 2024 earnings conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Joanna Park, Vice President of Investor Relations and Treasurer. Please go ahead.

Good morning and welcome to California Resources Corporation's fourth quarter and year-end 2024 conference call. Following our prepared remarks, members of our leadership team will be available for questions. By now, I hope you have had a chance to review our earnings release and supplemental slides. We have also provided information reconciling non-GAAP financial measures to comparable GAAP measures on our website and in our earnings release. Today, we will be making some forward-looking statements based on current expectations. Actual results may differ due to factors described in our earnings release and in our periodic SEC filings. As a reminder, please limit your questions today to one primary and one follow-up, as this allows us to get to many more of your questions today. And I'll now turn the call over to Francisco.

Good morning, and thanks for joining us. We have a lot of good news to share. I will kick off with a summary of our 2024 accomplishments and recent milestones from our carbon management business. I'll also provide more details around today's announcement with National Cement. Next, I asked our new CFO, Cleo Crespi, to cover the fourth quarter, our 2025 outlook, and key financial priorities. So here we go. 2024 was an exceptional year for CRC. We're executing well today and building for tomorrow. We delivered on our key targets and meaningfully reduced costs across the business by achieving sustainable era-related synergies. Importantly, we announced an exciting new deal today with National Cement. This agreement further validates the Carbon TerraVolt business model and our ability to provide industrial partners with near-term solutions to create a cleaner California. TRC is a different kind of energy company. Today, we will highlight the big value drivers gaining visibility in our story. Our conventional oil and gas business has a proven track record, delivering robust cash flow and solid financial results. Post our era merger, we're California's largest oil and gas producer, supported by quality proof reserves and a deep inventory. This scale unlocks significant synergies from our low decline, low capital intensity assets. We're also excited of our new high-growth opportunities in power and carbon management. With available behind-the-meter power capacity in our portfolio, we're actively pursuing agreements with multiple well-known and capitalized parties to advance new AI data centers in California. Stay tuned. Let's talk about a rapidly expanding carbon-terrable business. which has moved from concept to reality as leading companies across industries are coming to us for innovative solutions to complex challenges. This should allow us to command a premium valuation in the market. The expected returns we model under these new arrangements are compelling and show a path to future profitability and attractive returns. ERA made us bigger, better, and more sustainable. Our operating teams have captured over 70% of our targeted synergies, improving our 2025 cost structure and reinforcing that assets are better in our hands. Now, let's look at our growing carbon management business. We received the nation's first EPA Class VI permits, giving us the green light to advance California's first TCS project at Elk Hills. We plan to break ground in the second quarter, with first injection expected later this year. Including today's announcement with National Cement, we have nearly 9 million metric tons per annum of carbon management projects under consideration. Our CTV business has seven additional Class VI permits in the queue, with an estimated total storage capacity of 287 million metric tons. Our Brookfield JV is working well, allowing us to capitalize the growth of the CTV business. Let me expand on today's announcement with National Cement, a large private domestic subsidiary of an international cement producer. This is a first-of-its-kind brownfield project to decarbonize a very hard-to-avate sector of the economy. The cement industry is vital to the growth of any community across America. Here are some important details. When operational, the plant will mark the first step in establishing a decarbonized cement market. It will be California's first net-zero cement facility, backed by up to $500 million in DOE funding. California Senate Bill 596 requires 40% of all cement used in the state to be net zero by 2035 and 100% by 2045. This project is crucial to meeting these mandates. And National Cement selected CTV as its partner. This vote of confidence validates our CCS strategy and our expertise in carbon management and transportation. Just last week, Governor Newsom flagged carbon management as part of a statewide plan for economic growth, recognizing it as an emerging sector with high strategic importance to the innovation ecosystem of California. CRC is in a great position today. We are selecting partners that meet our criteria and advance California's decarbonization goals. These projects are attracting significant new capital and high-paying jobs to the Golden State. Our unique asset portfolio offers our partners near-term answers to today's complex energy challenges. Whether it's access to clean and reliable power for a new AI data center or carbon capture and storage for critical industries like cement and agriculture, we have solutions. I'll now pass the mic to Cleo.