Abstract

California Resources plans to release its second-quarter 2026 results on August 10, 2026 Pre-MKt, and this preview summarizes the latest market expectations for revenue, profitability, and adjusted EPS alongside company guidance, recent operational signals, and analysts’ majority view heading into the print.

Market Forecast

Consensus for the second quarter points to revenue of 976.56 million US dollars, up 24.44% year over year, with estimated EPS at 1.43, up 57.52% year over year, and EBIT at 247.36 million US dollars, up 73.06% year over year. The company’s most recent communication framed a second-quarter adjusted EBITDAX range of 370.00–410.00 million US dollars; margin forecasts are not broadly disclosed, but estimates imply improvement versus a derivative-driven weak GAAP base in the prior quarter. The main business continued to be oil and natural gas, which generated 905.00 million US dollars in the prior quarter and benefited from stronger realized oil prices; Q2 guidance targets 148–150 Mboe/d and an 81% oil mix, setting an operational baseline for volume and revenue continuity. The most promising adjacencies this quarter are tied to power and carbon-enabled opportunities anchored at Elk Hills: electricity revenue was 11.00 million US dollars in the prior quarter (down 50.00% year over year), but upcoming power offtake related to a planned 275-megawatt data center campus indicates a clearer demand path and incremental monetization potential.

Last Quarter Review

California Resources reported prior-quarter revenue of 967.00 million US dollars with a gross profit margin of 56.67%, a GAAP net loss attributable to common shareholders of 711.00 million US dollars, a net profit margin of -73.53%, and adjusted EPS of 0.88, down 17.76% year over year. A key financial highlight was the heavy non-cash derivative impact that swung GAAP earnings into loss territory, while adjusted profitability held resilient; adjusted EBITDAX was 304.00 million US dollars and free cash flow before working-capital changes was 116.00 million US dollars. Within the main business, oil and natural gas sales were 905.00 million US dollars, up 11.19% year over year on stronger realized liquids pricing and higher total production, partially offset by derivative mark-to-market effects outside adjusted metrics.

Current Quarter Outlook

Oil and Natural Gas Operations

Guided Q2 volumes of 148–150 Mboe/d with an 81% oil mix anchor the revenue model, and several sell-side previews indicate realized oil pricing improved sequentially. One trade update referenced realized oil with derivatives around the mid-70s per barrel for the second quarter, which, if sustained across the barrel and blended with NGL and gas realizations, supports the step-up in revenue and EBIT embedded in consensus. Expected EPS growth of 57.52% year over year to 1.43 is consistent with stronger liquids pricing, operational execution, and the absence of the outsized derivative marks that dominated GAAP earnings in the prior quarter. The company’s second-quarter adjusted EBITDAX guidance of 370.00–410.00 million US dollars sets a firm operational bar. Some analysts see the high end of capital spending as activity accelerates, yet with a low-decline base and ongoing synergy capture from prior integration, the volume and margin profile appears better positioned than the prior quarter’s GAAP optics implied. In short, revenue leverage to oil, a high oil cut, and production stability remain the core pillars underpinning the quarter’s consensus trajectory.

Power and Emerging Carbon Solutions

Power and grid-adjacent activities at Elk Hills delivered 11.00 million US dollars of electricity revenue last quarter, down 50.00% year over year, reflecting variability in both realized spreads and plant operating dynamics. Management has laid groundwork for a structural demand enhancement: a planned 275-megawatt data center campus to be served by the Elk Hills Power Plant is progressing through early-stage preparation with its partner, providing a potential multi-year demand anchor for power and complementary gas supply. This creates a channel for monetizing existing energy infrastructure with prospective stability and scale that differs from commodity sales. The company’s carbon platform remains pre-commercial for revenue, but it is approaching key operational milestones with the first CO2 injection at Elk Hills pending final regulatory approval. While carbon management contributed negative adjusted EBITDAX of -8.00 million US dollars in the prior quarter (an improvement versus a year ago), the setup suggests a transition toward revenue-bearing activity when injection commences and customer contracts advance. Taken together, the power side establishes near-term optionality for cash generation, while carbon services could develop into a contracted annuity-like stream once projects reach operation, creating a differentiated earnings mix beyond core barrels.

Key Stock Price Drivers This Quarter

The most visible swing factor for GAAP optics is commodity derivative settlement and mark-to-market. A recent filing indicated an estimated net settlement loss of approximately 190.00 million US dollars for the second quarter; while this may depress GAAP net income and headline net margin, it does not directly change the underlying operating run rate captured in adjusted EBITDAX, revenue before derivative effects, or cash operating metrics. Investors should therefore expect a gap between adjusted and GAAP profitability in the headline print, with consensus built around the adjusted lens. The cadence and quantum of synergy capture from the Berry integration and ongoing cost/operational efficiencies are also in focus. Management raised its annual synergy midpoint to a 90.00–100.00 million US dollars range and signaled higher-return drilling that could keep second-half activity elevated; combined with improved permitting progress, this supports a constructive trajectory for 2026 EBITDA generation. The trade-off is near-term capital intensity: second-quarter capital investments were guided to 120.00–140.00 million US dollars, and several previews anticipate spending toward the high end, a headwind to near-term free cash flow but potentially accretive to volumes and cash margins into late 2026. Finally, realized pricing and mix remain decisive. The quarter saw stronger liquids benchmarks versus the prior period, and with an 81% oil mix, the company stays meaningfully leveraged to oil realizations. Any deviation in realized differential capture or NGL/gas pricing could influence the conversion of revenue into EBIT and adjusted EPS. Netting all drivers, the setup favors a constructive adjusted outcome aligned with consensus, with GAAP results likely to be clouded by previously signaled derivative settlements.

Analyst Opinions

Across recent research since March 2026, the balance of commentary is decisively bullish, with the majority of published views maintaining Buy/Outperform stances versus a small minority of neutral opinions. Based on tracked notes, bullish opinions outnumber non-bullish by a wide margin—well over three-to-one—so we present the positive consensus as the prevailing view entering the quarter. RBC Capital Markets affirmed an Outperform rating and highlighted the company’s pivot toward organic production growth supported by improving permitting, a constructive liquids macro, and the depth of its drilling inventory. RBC also emphasized the Carbon TerraVault Elk Hills project’s readiness pending final regulatory clearance and framed a scenario in which free cash flow may reach into the hundreds of millions of US dollars for 2026 and 2027 under current planning. The firm’s 87.00 US dollars price target was reiterated alongside confidence that integration synergies and returns-focused activity can drive higher EBITDA and cash generation. UBS maintained a Buy rating while adjusting expectations to a more balanced near-term print, highlighting that operations are “trending well” with faster, better drilling execution in both California and Utah. UBS forecast second-quarter adjusted EBITDAX around 340.00 million US dollars, lower than the broader Street’s 372.00 million US dollars at the time, and anticipated consensus estimates would migrate into the 330.00–345.00 million US dollars range; the point was not to dismiss the quarter, but to align expectations with a cadence of spending and ramping activity that should yield improved production and cash conversion across the back half. UBS lowered its price target to 70.00 US dollars but maintained a bullish stance based on execution, capital allocation, and the incremental demand vector from the planned 275-megawatt data center aligned to Elk Hills power and carbon capabilities. Barclays and Wells Fargo each maintained Buy ratings with targets around the mid-70s to 80.00 US dollars range in recent updates, citing improved oil realizations, synergy capture, and a clearer operational playbook that places adjusted EBITDAX squarely within the guided corridor. Barclays focused on the revenue and EBITDA uplift embedded in the company’s Q2 and full-year guidance, while Wells Fargo framed upside risk to volumes from ongoing efficiency gains across key assets. Roth MKM reiterated Buy with a 72.00 US dollars target, echoing the constructive backdrop for second-half activity. Synthesizing these views, the bullish camp expects the second quarter to validate three linked assertions. First, adjusted metrics should track close to the company’s guidance despite GAAP noise from derivative settlements, supporting the reported consensus for revenue of 976.56 million US dollars, EBIT of 247.36 million US dollars, and EPS of 1.43. Second, operational momentum—higher realized oil pricing, steady volumes, and a high liquids mix—lines up with the forecasted year-over-year expansion in revenue and profitability. Third, the medium-term case strengthens as synergy capture deepens and the company readies both power-linked demand and CO2 injection at Elk Hills, which could incrementally diversify cash flows. The majority view thus frames the setup as constructive on an adjusted basis. While some analysts have trimmed near-term targets to reflect conservative modeling of capital timing and derivative settlements, the core message remains consistent: fundamental operations, cash margins, and synergy capture are advancing in line with, or slightly better than, plan. That underpins positive expectations around the August 10, 2026 Pre-MKt release, with attention on how management bridges GAAP and adjusted results, confirms the Q2 adjusted EBITDAX range, and reiterates the pace of second-half activity and capital deployment.