California Resources Corporation (CRC): Marketing Mix Analysis [11-2024 Updated]

As California Resources Corporation (CRC) navigates the dynamic energy landscape of 2024, its marketing mix—comprising product, place, promotion, and price—is pivotal to its success. Discover how CRC's focus on oil, natural gas, and carbon management aligns with its operational strategies in California, while also addressing environmental sustainability and market pricing dynamics. Dive into the details below to understand the intricacies of CRC's approach to the energy market.

California Resources Corporation (CRC) - Marketing Mix: Product

Focuses on oil, natural gas, and natural gas liquids (NGLs)

California Resources Corporation (CRC) primarily engages in the exploration and production of oil, natural gas, and natural gas liquids. For the nine months ended September 30, 2024, CRC reported total oil, natural gas, and NGL sales of $1,711 million, a slight increase from $1,672 million during the same period in 2023.

Oil production primarily from the San Joaquin and Los Angeles basins

In terms of production, CRC's operations are significantly focused on the San Joaquin and Los Angeles basins. For the three months ended September 30, 2024, the company achieved an oil production rate of 113 MBbl/d, with 90 MBbl/d coming from the San Joaquin Basin and 17 MBbl/d from the Los Angeles Basin.

Increased production due to the Aera merger

The completion of the Aera merger on July 1, 2024, has had a considerable impact on CRC’s production capabilities. The merger added approximately 16 MBbl/d to the company's net oil production, increasing total daily net production sold from 76 MBoe/d in June 2024 to 145 MBoe/d in September 2024.

Natural gas used for internal operations and sold in the California market

CRC utilizes a portion of its natural gas production for internal operations, specifically for generating electricity at its Elk Hills power plant. The company reported natural gas production of 126 MMcf/d for the three months ended September 30, 2024, with a significant portion being sold in the California market.

Emphasis on carbon capture and storage projects as part of energy transition

As part of its commitment to sustainability and energy transition, CRC is investing in carbon capture and storage projects. The company has allocated resources towards developing technology and infrastructure to capture and store carbon emissions, which is becoming increasingly vital in the evolving energy landscape.

California Resources Corporation (CRC) - Marketing Mix: Place

Operations predominantly in California, specifically Kern County

California Resources Corporation (CRC) primarily operates in California, focusing its activities in Kern County, which is a significant oil-producing region. The company’s operational footprint is heavily concentrated in this area, allowing it to leverage local resources and infrastructure for its production activities.

Sales primarily to California refiners with limited long-haul transportation contracts

CRC's sales strategy is targeted mainly at California refiners. In 2024, the company reported that approximately 70% of its crude oil production is sold to local refiners, minimizing long-haul transportation needs. This localized sales approach helps reduce costs and enhances delivery efficiency, ensuring that the product reaches its intended customers swiftly.

Utilizes third-party pipelines for crude oil distribution

The distribution of crude oil is facilitated through third-party pipelines. CRC has established contracts with various pipeline operators to transport its crude oil to refineries. In 2024, these contracts accounted for approximately 85% of the total crude oil transported, ensuring a steady flow of product to the market while maintaining operational flexibility.

Natural gas sales largely index-based, influenced by local market conditions

Natural gas sales for CRC are primarily index-based, reflecting the prices prevailing in the local market. As of September 30, 2024, the average realized price for natural gas was reported at $2.76 per Mcf, significantly lower than the $9.85 per Mcf achieved in the same period of the previous year. This decline is indicative of fluctuating market conditions and supply dynamics in California.

Transportation contracts secured for long-haul and localized natural gas

CRC has secured transportation contracts for both long-haul and localized natural gas. In 2024, the company maintained contracts that accounted for 60% of its natural gas transportation needs, allowing for both regional distribution and access to broader markets, which enhances its competitive position in the energy sector.

California Resources Corporation (CRC) - Marketing Mix: Promotion

Strategic focus on environmental stewardship and sustainability

California Resources Corporation (CRC) emphasizes its commitment to sustainability in its promotional strategies. The company has made significant investments in carbon management and environmental initiatives, aligning its marketing narrative with current environmental concerns. For instance, CRC reported an increase in carbon management business expenses to $36 million for the nine months ended September 30, 2024, up from $20 million during the same period in 2023.

Marketing emphasizes responsible sourcing of energy

CRC's marketing efforts highlight responsible energy sourcing. The company generated total operating revenues of $2.321 billion for the nine months ended September 30, 2024, reflecting a focus on sustainable energy production from its oil, natural gas, and electricity sales. This revenue includes $1.711 billion from oil, natural gas, and NGL sales, which represents a strategic positioning toward sustainable resource management.

Engages in community outreach to enhance corporate image

Community engagement is a key component of CRC's promotional strategy. The company actively participates in local initiatives, reinforcing its corporate image. This outreach is vital as CRC seeks to foster relationships with stakeholders and enhance its reputation as a responsible corporate citizen. The Aera Merger, completed on July 1, 2024, has further positioned CRC to engage with communities through enhanced operational capabilities.

Utilizes digital platforms for stakeholder communication

CRC leverages digital platforms to communicate effectively with its stakeholders. The company utilizes its website and social media channels to share updates on sustainability initiatives, operational achievements, and community engagements. This digital presence is crucial for maintaining transparency and fostering trust among investors and the general public, particularly in the context of its $1.35 billion share repurchase program authorized through December 31, 2025.

Highlights benefits of carbon management initiatives in promotional materials

Promotional materials from CRC increasingly focus on the benefits of its carbon management initiatives. The company aims to position itself as a leader in sustainable practices within the energy sector. For example, CRC's operational strategies include significant investments in carbon capture and storage technologies, which are expected to yield long-term environmental benefits and align with regulatory expectations.

California Resources Corporation (CRC) - Marketing Mix: Price

Oil prices tied closely to Brent and WTI benchmarks

The pricing of California Resources Corporation's (CRC) oil production is closely linked to global benchmarks such as Brent and West Texas Intermediate (WTI). These benchmarks serve as indicators for the pricing strategies employed by CRC in the competitive oil market.

Realized oil price with derivatives at $77.10 per barrel (as of September 2024)

For the nine months ended September 30, 2024, CRC reported a realized oil price of $77.10 per barrel when accounting for derivative settlements. This represents a significant increase from the $64.25 per barrel recorded in the same period of the previous year.

Natural gas prices influenced by local supply-demand dynamics

Natural gas prices for CRC are heavily influenced by local supply and demand dynamics. The average realized price for natural gas during the nine months ended September 30, 2024 was $2.76 per Mcf, a decrease from $9.85 per Mcf in the same period of 2023.

NGL pricing affected by both commodity prices and processing efficiency

Natural Gas Liquids (NGL) pricing is affected by broader commodity prices and the efficiency of processing operations. For the nine months ended September 30, 2024, the realized price for NGLs was approximately $45.77 per barrel, which is about 58% of Brent prices.

Price realization strategies include index-based contracts for natural gas sales

CRC employs index-based contracts for its natural gas sales, which helps in stabilizing revenue amidst fluctuating market conditions. The company reported a revenue from marketing of purchased commodities amounting to $176 million for the nine months ended September 30, 2024.

In summary, California Resources Corporation (CRC) effectively leverages its marketing mix to navigate the complexities of the energy sector. With a strong focus on oil, natural gas, and NGLs, CRC's operations are strategically centered in California, particularly in Kern County. The company emphasizes sustainability and community engagement in its promotional efforts, while its pricing strategies are closely aligned with market benchmarks. As CRC continues to innovate in carbon management and optimize its production capabilities, it positions itself favorably for future growth in a transitioning energy landscape.

Updated on 16 Nov 2024

Resources:

1. California Resources Corporation (CRC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of California Resources Corporation (CRC)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View California Resources Corporation (CRC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.