California | July 2020
California, with both onshore and offshore oil production, has been supplying the U.S. with petroleum products since the 19th century. Operations are primarily focused around Kern County, the LA Basin, and the San Joaquin Valley, with the Midway-Sunset oil field in Kern County being the state’s largest.
State Drilling Statistics (End of July)
Total Rigs in California- 4
Total Rigs in United States- 251
Total U.S. Rigs down 73% YTD
Financial & Economic Updates
Largest California Producer Going Under
California Resource Corporation, most commonly known as the CRC, has recently filed for chapter 11 bankruptcy protection which heralds in total restructuring. The goal of this bankruptcy is to eliminate more than $5 billion in debt and equity interest along with consolidating its ownership of its Elk Hills power plant and another gas plant in Kern County. The company plans to continue the already hindered production that it does carry out during the process. The company was born out of Occidental and was immediately laden with debt. Even so, the company could still produce 132,000 of barrels daily in peak production times. These days, around half of its 17,500 wells now sit idle from coast to mainland. CRC has a strong goal to emerge from chapter 11, although many watch on with skepticism on their minds. $5 billion dollars is no small sum after all.
Governor Urged to Take Steps Towards P&A
While the CRC is beginning to go belly up, members of the Center for Biological Diversity urged the Governor to intervene in the CRC bankruptcy to ensure that they set enough money aside for cleanup. The CRC and its affiliates operate just under 19,000 wells which would require an estimated $1 billion to properly plug and abandon. “Bankruptcy proceedings like these endanger California because oil companies like CRC can weaponize them to dump their environmental cleanup costs on the public,” claimed Kathryn Phillips, the director of the Sierra Club California, one of many groups asking that the oil and gas industry put up the full amount in bonds to cover every well. For all the wells in California, it would cost at least $9.2 billion to plug and abandon everything, and companies like the CRC are already in the hole. A clear solution is not currently on the table.
California Oil Production
California Gas Production
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