v3.25.2
AERA MERGER
 6 Months Ended
Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
AERA MERGER AERA MERGER
On July 1, 2024, we obtained by way of merger all of the ownership interests in Aera. Aera is a leading operator of mature fields in California, primarily in the San Joaquin and Ventura basins, with high oil-weighted production. The Aera Merger adds significant proved developed reserves to CRC. In connection with the closing of the Aera Merger, we issued shares of common stock to the former Aera owners. We also paid approximately $990 million in connection with the extinguishment of all of Aera's outstanding indebtedness using the proceeds from the issuance of our 8.25% senior notes due 2029 (2029 Senior Notes) and cash on hand.

As of July 1, 2024, and immediately following closing of the Aera Merger, our existing stockholders prior to the Aera Merger owned 76% of CRC and the former owners of Aera owned 24% of CRC. For more information on the 2029 Senior Notes, refer to Note 4 Debt. See Note 10 Stockholders' Equity for details on a repurchase of shares during the second quarter of 2025 from one of the former Aera owners.

We have measured assets and liabilities at acquisition date fair value on a nonrecurring basis.

The following table summarizes the consideration transferred:

Merger Consideration
(in millions, except share and per share data)
Shares of common stock (dividend adjusted)
21,422,972 
Common stock per share fair value on July 1, 2024$53.28 
Fair value of share consideration1,141 
Settlement of Aera debt
990 
Purchase price settlement
(10)
Total purchase consideration
$2,121 
The following table represents the final purchase price allocation to the identifiable assets acquired and the liabilities assumed based on their estimated fair values as of the closing date of the Aera Merger:

Preliminary Purchase Price Allocation as of December 31, 2024
Adjustments
Purchase Price Allocation as of June 30, 2025
(in millions)
Assets Acquired
Cash
$137 $— $137 
Accounts receivable
176 — 176 
Inventories
30 (1)29 
Other current assets
49 13 62 
Investment in unconsolidated subsidiary
59 (7)52 
Property, plant and equipment3,048 32 3,080 
Pension and other postretirement benefits
73 — 73 
Other noncurrent assets
57 13 70 
Total Assets Acquired3,629 50 3,679 
Liabilities Assumed
Accounts payable(158)— (158)
Accrued liabilities(157)(4)(161)
Asset retirement obligations
(646)19 (627)
Fair value of derivative contracts
(351)— (351)
Pension and other postretirement benefits
(35)— (35)
Deferred tax liability
(101)(70)(171)
Other long-term liabilities(37)(18)(55)
Total Liabilities Assumed(1,485)(73)(1,558)
Net Assets Acquired$2,144 $(23)$2,121 

Supplemental Pro Forma Information (unaudited)

The following supplemental pro forma financial information presents the condensed consolidated results of operations for the three and six months ended June 30, 2024 as if the Aera Merger had occurred on January 1, 2024.

Three months ended June 30,
Six months ended June 30,
20242024
(in millions)
Total operating revenue
$1,045 $1,658 
Net income (loss)(a)
$168 $(118)
Net income (loss) per share
Basic
$1.88 $(1.31)
Diluted
$1.84 $(1.31)
(a)The six months ended June 30, 2024 reflects a net loss of $118 million primarily resulting from a significant net loss on commodity derivatives related to hedge positions held by Aera.
The pro forma information is presented for illustration purposes only and is not necessarily indicative of the operating results that would have occurred had the Aera Merger been completed on January 1, 2024, nor is it necessarily indicative of future operating results of the combined entity. The pro forma financial information for the three and six months ended June 30, 2024 is a result of combining our three and six months statements of operations with Aera's pre-merger results from January 1, 2024 and the pro forma adjustments include estimates and assumptions based on currently available information. The pro forma results do not reflect any cost savings anticipated as a result of the Aera Merger and exclude the impact of any severance. The pro forma results include adjustments to depreciation, depletion and amortization (DD&A) based on the purchase price allocated to property, plant, and equipment and the estimated useful lives as well as adjustments to interest and accretion expense. We also included pro forma adjustments for certain compensation-related costs and transaction costs we incurred related to the Aera Merger. Management believes the estimates and assumptions are reasonable, and the relative effects of the Aera Merger are properly reflected. Future results may vary significantly from the financial results reflected in the table above.