Category: Energy

California Resources Corp. acquires full ownership of Elk Hills oil field

  • BY JOSEPH LUIZ
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In this file photo taken at Elk Hills , Matt Wells, Mitch Tate and Steve Northern, left to right, make a connector change.

The California Resources Corp. has acquired 100 percent ownership of the Elk Hills oil and natural gas field in Kern County, according to the company.

The oil company said it purchased Chevron’s interests for $460 million and issued 2.85 million shares of CRC stock to Chevron. The deal went through April 1. Chevron had owned about 20 percent of the field’s assets. CRC had owned the rest of the field and has been its operator.

“We have operated this field for over 20 years and have developed a deep knowledge of the geology and strong operational expertise to deliver robust value from this asset,” said CRC President/Chief Executive Officer Todd Stevens. “We intend to apply this know-how to our newly acquired position, as well as transfer learnings and efficiencies to enhance CRC’s assets across California.”

 In 2017, the interests that Chevron held produced approximately 13,300 barrels of oil and natural gas liquids per day, according to the company.

CRC estimates that based on current prices, the field could provide the company an operating cash flow of around $100 million annually. Elk Hills is now estimated to make up about 43 percent of the company’s total production.

CRC’s acquisition of Chevron’s interests comes after the company went into a joint venture on the Elk Hills field in early 2017 with a portfolio company that is part of the private equity group Ares Management, L.P.

Ares paid $750 million and purchased 2.34 million shares in CRC stock to obtain some of CRC’s Elk Hills assets. The particular interests under the agreement are the Elk Hills power plant, a natural gas-fired power plant and a cryogenic gas-processing plant.

Some of the proceeds from the joint venture were used in purchasing Chevron’s interest in the field, Stevens said.

 “Acquiring sole ownership of such a prolific field is an ideal use of proceeds from our recent midstream joint venture transaction, adding both immediate production and cash flow, while providing for quick synergies and tremendous long-term development opportunities,” he said.

Elk Hills, located west of Bakersfield, was initially discovered in 1911 and has produced more than 2 billion barrels of oil and gas since then, according to CRC.

Kern County Energy Summit

Each fall, industry leaders gather in Bakersfield to exchange information on the latest advances and innovation in the energy industry, specifically as it affects Kern County’s position as a U.S. energy leader.

Kern EDC partners with other industry supporters every November to explore current challenges and opportunities facing the petroleum, utility, and renewable energy industries. By attending this annual forum, you too will have a chance to network with top industry experts and suppliers to learn about local innovations and technologies that are shaping the energy future of the state and nation.

Kern County solar farm is sold

Central Valley Business Times

  • Southern Power is buying Gaskell West 1 Solar Facility
  • “Gaskell West 1 is an excellent fit for Southern Power’s evolving business”

Southern Company subsidiary Southern Power is buying the 20-megawatt Gaskell West 1 Solar Facility in Kern County, the Atlanta, Georgia-based firm says.

“We are pleased to start the quarter with continued growth in our renewable portfolio,” says Southern Power President and CEO Buzz Miller. “Gaskell West 1 is an excellent fit for Southern Power’s evolving business as we strive to meet market demands through our commitment to develop clean, safe, reliable and affordable energy resources for the benefit of our customers.”

Construction of the approximately 280-acre project began in October 2017, and the facility is expected to begin commercial operation in March. Southern California Edison will purchase the electricity and associated renewable energy credits generated by the facility under a 20-year power purchase agreement and will have the option to keep or sell the associated credits. Southern Power purchased the facility from Recurrent Energy, which is developing the project. The purchase price was not announced.

D.H. Blattner & Sons Inc. is performing the engineering, procurement and construction services, and First Solar Energy Services will operate and maintain the facility upon completion. Southern Power plans to use third-party tax equity as part of the funding of the transaction.

The announcement marks Southern Power’s fifth solar facility within Kern County and 12th solar facility within California. With the addition of Gaskell West 1, Southern Power owns more than 3,500 MW of renewable generation from 38 solar, wind and biomass facilities either announced, acquired or under construction from California to Maine. In total, the Southern Company system has added or announced more than 6,500 MW of renewable generation since 2012.

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