At California Resources Corporation (CRC), cross-functional teams work in concert and use advanced technologies to optimize the development of oil and gas fields. CRC’s rigorous capital allocation process applies our Value Creation Index (VCI) to prioritize investments. Recognizing the long-lived nature of our fields, our VCI is calculated by dividing the net present value of the project's expected pre-tax cash flow over its life by the present value of the investments, each using a 10 percent discount rate. Projects are expected to meet a VCI of 1.3, meaning that 30 percent of expected value is created above our cost of capital for every dollar invested.
Following are descriptions of key activities within the various functions.
CRC has an exceptional 3D seismic library, which covers over 4,700 square miles, representing over 90 percent of the 3D seismic data available for California. We have developed unique and proprietary stratigraphic and structural models of the subsurface geology and hydrocarbon potential in each of the four basins in which we operate. As a result of our long successful operating history, our extensive exploration programs, our exceptional 3D seismic library and proprietary subsurface geologic models, we have tested and successfully implemented in recent years various exploration, drilling, completion and enhanced recovery technologies to increase recoveries, growth and returns from our portfolio.
Exploring for and producing oil and natural gas requires drilling wells – often more than a mile deep – to bring oil and natural gas from deep underground to the surface.
Once a well is drilled, steel pipe is placed in the well and cemented in place to isolate, support and protect the casing. Any potential ground water is cased off, cemented and isolated from any potential hydrocarbon bearing zones. The cemented pipe keeps the wellbore open for the life of the well and seals the formations that hold the oil and gas. Wells are completed in targeted pay zones in the oil and gas reservoir where the oil and gas flows into the well. Removable steel pipe, called “tubing,” is installed to carry the flow of oil and gas to the surface. The steel pipe, cement, tubing and valves at the surface contain and control the oil and gas.
CRC’s drilling professionals use state-of-the-art technologies and optimized equipment and leverage the expertise within our experienced drilling community of employees, contractors and suppliers to deliver superior drilling efficiency.
CRC utilizes a modern drilling rig fleet, including advanced technology rigs, to ensure safe, efficient and cost-effective drilling. Rigorous technical well design standards, a well-trained engineering staff, continuous performance monitoring and use of innovative technology help us develop resources effectively.
Among the techniques CRC uses to improve the productivity of certain wells is hydraulic fracturing, a well stimulation process that allows oil and natural gas to flow more freely from underground formations. Used safely and effectively by CRC’s operations and contractors for many years, hydraulic fracturing has been a routine practice in the oil and gas industry for more than six decades.
Reservoir, well and surface equipment conditions change as oil and gas are extracted. To manage reservoirs effectively, CRC’s multi-disciplinary teams collect and analyze data to optimize production and reserves.
The data, much of it from automated systems, includes pressure, temperature, production and injection rates, artificial lift efficiency, well logs and downhole conditions. Changes in these variables are interrelated; continuous monitoring enables CRC’s professionals to make prompt adjustments that improve oil and natural gas production.
CRC also uses performance prediction tools such as reservoir simulation and compares the results with actual performance. Based on the findings, opportunities are identified to fine-tune field development, enhanced oil recovery programs, artificial lift design and well servicing plans.