A firm undertone in the crude oil price, and the likelihood of a further improvement following recent OPEC machinations towards an output cut, spurred independent oil and gas explorer California Resources Corp (NYSE:CRC) higher on Wednesday.
The stock ended at $12.74, up 10.59%, with 3.59 million shares traded.
Technically California Resources has formed a symmetrical triangle base between July and October and yesterday’s jump has positioned the price at the upper line of the triangle, which also happens to coincide exactly with the 200 day moving average.
If the stock is able to close at $13 or above, it may have bottomed out and could assume an uptrend.
The company is California’s largest oil and natural gas producer as well as the largest privately-held mineral acreage holder in California with about 2.4 million net acres.
California Resources Corp (NYSE:CRC) lost money in the last two financial years
The company reported a net loss of $1.43 billion and $3.55 billion during the 12 month periods ended December 2014 and December 2015 respectively. The losses coincided with the sharp downturn in crude oil prices in recent years.
In the latest reported quarter (Q2 2016), California Resources reported an adjusted net loss of $72 million ($1.80 per diluted share). This was off analysts’ estimates by $0.31. Revenue was $317 million (missed estimates by $119.04 million) and was down 50% year-on-year.
In an operational update the company said that it did not have any drilling rigs running during the second quarter of 2016, in line with its curtailed 2016 capital program which was limited to maintaining the mechanical integrity of the facilities and systems and to operate them safely, in view of the low commodity prices.
Second-quarter production was therefore adversely affected due to the deferment of development investment capital and well maintenance activity during the first half of the year.
The company has been able to reduce its debt by about $700 million from the peak reached in early 2015.