LONG BEACH, Calif. - California Resources Corporation (NYSE:CRC), an independent energy and carbon management company, has determined the consideration for its cash tender offer to purchase a portion of its outstanding 7.125% senior notes due 2026. The offer, which was initially announced on August 8, 2024, aims to acquire up to $300 million of the $545,452,000 aggregate principal amount currently in circulation.
Holders of the 2026 Notes who tendered their securities by the early deadline, which was 5:00 p.m. New York City time on Wednesday, are eligible to receive an early tender consideration of $1,009.15 per $1,000 principal amount. This figure includes the early tender premium and is calculated based on a fixed spread plus the yield of a specified U.S. Treasury Reference Security, with the price determined as of 10:00 a.m. New York City time today.
With the principal amount tendered by the early deadline exceeding the maximum amount set for purchase, the notes will be subject to proration at approximately 61.4%. California Resources Corporation has indicated that it does not plan to accept notes tendered after the early deadline. The anticipated early settlement date for the tendered notes is August 23, 2024, subject to the satisfaction or waiver of the offer's conditions.
The tender offer is being managed by Jefferies LLC, Citigroup Global Markets Inc., and TD Securities (USA) LLC, with D.F. King & Co., Inc. serving as the depositary and information agent. Following the completion of the tender offer, California Resources Corporation may continue to purchase additional 2026 Notes through various means, or redeem them according to their terms.
This press release is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The tender offer is made solely by the Offer to Purchase and only in jurisdictions where it is legally permitted.
In other recent news, California Resources Corporation (CRC) has reported strong second-quarter financials following its merger with Aera, with a significant focus on enhancing cash flow and accelerating decarbonization efforts. The company reported $139 million in adjusted EBITDAX and $63 million in free cash flow, returning $57 million to shareholders. CRC has projected a substantial increase in cash flow in the second half of 2024, with an expected adjusted EBITDAX of around $1 billion.
Despite some setbacks due to a major plant turnaround and less robust energy contribution compared to the previous year, the company remains optimistic about opportunities in the data center market and the regulatory progress in California. CRC is also exploring the potential of its power plants, including the CalCapture project at the Elk Hills power plant.
As part of recent developments, CRC is managing its hedge book to support investments, debt servicing, and shareholder returns, with significant hedges in place for 2026. The company is also focusing on reducing net leverage and is considering refinancing or prepaying debt. These strategies, along with the confidence in the intrinsic value of the business and prospects for power generation, reservoirs, and data centers, underscore CRC's commitment to putting capital to work for returns.
InvestingPro Insights
As California Resources Corporation (NYSE:CRC) maneuvers through its tender offer strategy for its 7.125% senior notes due 2026, investors and analysts are keeping a close eye on the company's financial health and market performance. According to InvestingPro data, CRC's market capitalization stands at $4.63 billion, reflecting the company's size and investor valuation within the energy sector. Despite challenging market conditions, CRC has maintained a Gross Profit Margin of 52.41% over the last twelve months as of Q2 2024, which highlights the company's ability to retain a significant portion of revenue after accounting for the cost of goods sold.
Investors might also be interested in the company's dividend profile, as CRC has increased its dividend for three consecutive years, with a notable dividend growth of 37.17% in the last twelve months as of Q2 2024. This commitment to returning value to shareholders is further underscored by a solid dividend yield of 3.01%. Moreover, CRC's commitment to sound financial management is evident in its strategic liquidity position where its liquid assets surpass short-term obligations, as pointed out by one of the InvestingPro Tips.
For those looking to delve deeper into CRC's financial metrics and strategic outlook, InvestingPro offers additional insights. There are currently 8 more InvestingPro Tips available, which can provide investors with a comprehensive analysis of the company's performance and potential investment opportunities. For further information, interested parties can visit the InvestingPro platform for California Resources Corporation at https://www.investing.com/pro/CRC.
With an InvestingPro Fair Value estimation of $51.23, closely aligned with the previous closing price of $51.52, investors can gauge the current market sentiment and future prospects of CRC. The company's next earnings date is set for October 30, 2024, which will be a pivotal moment for investors to assess the company's ongoing financial performance and strategic initiatives.
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