Thank you. I'm Joanna Park, Vice President of Investor Relations and Treasurer. Welcome to California Resources Corporation's First Quarter Conference Call. Participating on today's call is Mac McFarland, President and Chief Executive Officer; Francisco Leon, Executive Vice President and Chief Financial Officer; Shawn Kerns, Executive Vice President of Operations and Engineering; Mike Preston, Senior Executive Vice President, CIO and General Counsel; and Jay Bys, Chief Commercial Officer, as well as several other members of the CRC executive team. I'd like to highlight that today, we have provided supplemental slides, which we may refer to during our prepared remarks, which can be found on the Investor Relations section of our website, www.crc.com. We have also provided a reconciliation of non-GAAP financial measures discussed to the most directly comparable GAAP financial measure on our website and in our earnings press release. Today's conference call contains certain projections and other forward-looking statements within the meaning of federal securities law. These statements are subject to risks and uncertainties that may cause actual results to differ from those expressed or implied in these statements. Additional information on factors that could cause results to differ are available in the company's 10-Q, which will be filed later today. We ask that you review it and the cautionary statement in our earnings press release. A replay will be made available on our website following today's call, and we have allotted additional time for Q&A at the end of our prepared remarks. Thanks, and I'll now turn the call over to Mac.

Thank you, Joanna, and thanks to everyone on the phone for attending today's earnings call. Jumping to the punch line. The first quarter results delivered $120 million of free cash flow, which set the backdrop for the $150 million share repurchase program we are announcing today. Our strong start to the year displayed CRC's ability to execute on our strategy and deliver meaningful cash flow. The company is trending towards the high end of our free cash flow guidance that we provided during our March 18 Strategy Day. That is $350 million of free cash flow for 2021 and would reflect an 18% free cash flow yield at yesterday's market valuation. Based on the progress we have made to date and because our stock price has not fully participated in the most recent energy sector rebound, we believe that our stock offers a very attractive return. The $150 million share repurchase program provides us the flexibility to make good on our commitment to return capital to our shareholders while also maintaining a healthy balance sheet with low leverage ratios and significant liquidity. Francisco will detail this later during his remarks. From an activity standpoint, first quarter results were achieved with just one drilling rig where we drilled 17 wells, 15 of which were brought online during the quarter and the other two came online during the second quarter. During the quarter, we also completed 40 capital workovers and performed 570 downhole maintenance jobs, bringing back online nearly 3,300 barrels of oil equivalent per day of gross production. In May, we added a second drilling rig and increased our maintenance rig count from 30 to 38. We expect to maintain this level over the next 6 months to focus on a quick payback, high-return backlog of wells. I'm extremely proud of our employees for maintaining safe and efficient operations and for adapting to and executing our strategy to deliver these strong results. We have one of the lowest safety incident rates in recent history and outstanding environmental performance. Shifting gears now. There has been a fair amount of discussion regarding the California regulatory environment, highlighted by the recent announcement to ban fracking. Regardless of whether or not such a ban is upheld, CRC will see no material impact because less than 1% of our proved reserves require well stimulation, and our current long-term development plans do not include well stimulation. In fact, CRC's operations do not require high-pressure cyclic steam. We continue to operate according to the strictest environmental regulations in the world and the carbon density of CRC's barrels is much lower than the average imported barrel as California continues to import 70% of its oil needs. Said differently, there will be no impact to CRC if the fracking ban is upheld. That being said, we look forward to working with the state on its energy transition plans. In the second half of this year, we are planning to provide additional clarity on several concrete items directly related to energy transition that will have the potential to benefit California's future success in this area. Our core operations will continue to deliver solid cash flow while we work on these future steps. Additionally, CRC is evaluating ways to strengthen our ESG commitment even further. We have multiple sustainability opportunities and are looking to strengthen our approach through a total review of our ESG efforts. The company is successfully delivering on our current 2030 sustainability goals. Given the significant progress in the areas of water recycling and methane reduction, our future efforts will focus on renewables integration and decarbonization projects. In other words, we are looking to revamp the environmental aspect of our ESG strategy to make a bigger impact on the state's decarbonization and energy transition plans through our focus on renewables and CCUS without compromising our social and governance commitments. This may include opportunities outside of the Elk Hills CCUS and EOR project as well as both self-supply and grid supply of renewable energy. We expect to provide further details on this revamped ESG strategy in the second half of the year. I'll now turn the call over to Francisco, who will provide additional details on the first quarter financial performance and on our borrowing base redetermination.

Thanks, Mac. Good morning, everyone, and thank you for joining us on this call. As Mac mentioned earlier, CRC continued to successfully execute on our corporate strategy based on strong business financial fundamentals, disciplined capital allocation and robust free cash flow generation. As you can see on Slide 4 of our earnings presentation slides, we have outlined several key quarterly highlights. Our strong performance during the quarter contributed to an adjusted EBITDAX of $189 million and adjusted net income of $102 million or $1.22 per diluted share. During the first quarter, we generated $120 million of free cash flow, showcasing our industry-leading free cash flow generation capability. We reported net quarterly production of 99,000 barrels of oil equivalent per day and 60,000 barrels of oil per day. Net oil production was lower by 3,000 barrels a day on a quarter-over-quarter basis, primarily due to PSC adjustments associated with higher oil prices. On a gross basis, oil production was essentially flat quarter-over-quarter, while operating just one drilling rig in the San Joaquin Basin, a true testament to the quality of our assets, our low decline rate, low capital intensity and the strong safety culture of our employees. As Mac highlighted, during the first quarter we took significant actions to further simplify and improve our capital structure. In January 2021, we issued $600 million of 7.125% senior unsecured notes due in 2026. With the proceeds of this deal, we successfully repaid in full our second lien term loan, all outstanding senior Elk Hills Power secured notes and used the remainder to repay substantially all of our outstanding borrowings on our revolving credit facility. Further, earlier this month and supported by our strong financial and operational performance, we completed our borrowing base redetermination, which resulted in an increase of our borrowing base to $1.2 billion, up from $1.167 billion previously. Additionally, we entered into the first amendment to our revolving credit facility that provides CRC with additional strategic flexibility regarding shareholder initiatives and future hedging levels. More specifically, the amendment loosens the restricted payment condition and increases our available capacity to return capital to our shareholders. With these actions, coupled with our industry's leading free cash flow generation capability, CRC exited the quarter with a single unsecured debt tranche and undrawn RBL, and total liquidity of $545 million, which included $102 million of net cash generated during the quarter for a total of $130 million of cash on our balance sheet. This quarterly performance additionally underscores the company's strong focus on free cash flow generation, our assets' capacity to support our strategy and our employees' ability to safely, efficiently and reliably produce much-needed energy for Californians. As stated during our Strategy Day, we anticipate our 2021 investment plan to generate between $250 million and $350 million of free cash flow in a $60 per barrel Brent environment, highlighting the efficiency of our capital deployment and industry-leading low decline rate. Given our current performance, we are reaffirming guidance and expect to trend towards the high end of our free cash flow range, implying a free cash flow yield in the high teens while assuming our current market capitalization. This yield, coupled with our estimated 2021 net leverage ratio of about 0.5 turns, positions CRC with a strong foundation to deliver sustainable shareholder returns. As Mac mentioned, as a result of the strong first quarter and steps taken to improve our cost and capital structures, we are now in a position to announce a $150 million share repurchase program effective in the second quarter of 2021, marking this first important step towards returning cash to shareholders just 7 months after our emergence. Further, as Slide 6 indicates, the value of our year-end 2020 SEC proved reserves at $60 Brent is over $5.7 billion, which is more than double our current enterprise value. Our high concentration of value in our low decline pro-developed category and large inventory of high-return assets in our core fields provide confidence in both the intrinsic value of our stock and the free cash flow deliverability. This supports the reasoning behind our share repurchase program. If I also expand further on peers' comparable valuation as compared to our guided 2021 numbers, we're certainly trading below our sector average of enterprise value over 2021 EBITDA multiple of around 5x. Continuing on, as we make progress on the goals of our new strategic direction discussed earlier in the year, CRC made several organizational changes by realizing the company's corporate and operational functions. As a result, our first quarter 2021 G&A cost averaged $5.36 per BOE, which is $0.87 below the previous quarter, primarily due to our ongoing cost-saving efforts and workforce reductions. For the remainder of the year, we expect CRC's G&A performance to further improve and reach an approximately $5 per BOE run rate, while trending towards the low end of the previously issued guidance of $180 million to $190 million per year. Further, operating costs for the first quarter of 2021 were $164 million or $18.33 per BOE, which is $0.91 higher than the previous quarter as the company invested in downhole maintenance and workovers of existing wells, incrementally raising OpEx. I would like to provide a bit more clarity on this point. On Slide 16 of our earnings deck, you can find additional color of CRC's opportunity set with respect to our high-impact maintenance well backlog. CRC is able to opportunistically reenter these existing wellbores and bring back incremental barrels through well maintenance. Through rapid technical identification and commercial analysis, well remediation work is prioritized to bring the highest-value wells back online first, increasing uptime and production through high-impact well work and OpEx maintenance at a fraction of the cost of a new well. This capital shift will allow for a return of PDP production barrels with almost no reservoir risk in short paybacks, demonstrating another strength of our assets. For the remainder of the year, we anticipate OpEx to modestly increase. However, since we view OpEx dollars and capital investment dollars almost interchangeably, capital investment will be reduced similarly, and our ability to achieve our free cash flow targets will be strengthened. Said simply, this is a huge differentiator for CRC. We're a conventional player with a low-decline asset base that compares favorably versus our shale counterparts. For the remainder of the year, we expect to continue demonstrating the resilience and quality of CRC's low decline and low-risk core assets, continuous improvement of our cost structure and disciplined capital allocation. The combination of all of this is what gives us confidence that we will trend towards the high end of our 2021 free cash flow guidance and our ability to return cash by initiating the $150 million share repurchase program. Finally, please note that we have provided detailed analysis of our quarterly financial and operational results and our 2021 guidance in the attachments to our earnings release. Thanks. And I'll now turn the call back over to Mac to discuss the outlook for the rest of 2021.

Thank you, Francisco. To conclude, during the quarter, we have a robust $545 million liquidity position and one of the lowest leverage metrics in the sector. We began to deliver tangible results on our strategy, almost $200 million in adjusted EBITDAX and $120 million of free cash flow during the quarter. We initiated the share repurchase program that we discussed today, commencing a $150 million program. A very strong quarter, in my view, and something that we are proud of at CRC. As we look ahead, CRC has largely completed our strategic repositioning but we continue to look for additional ways to improve. We intend to provide insights on our business as we transition forward and demonstrate healthy progress on our targets. With our corporate strategy in place, we are on track to deliver the strong cash flows Francisco discussed and towards the high end of our guidance range. Our strategy of strong cost control, efficient operations and responsible portfolio management are set to drive free cash flow. As I mentioned previously, we're looking to expand and strengthen our ESG strategy to focus our approach on decarbonization and energy transition in California, but more on that in the second half of the year. Again, thank you for your interest in CRC and for joining us on this call today. At this point, we will now open the line for any questions.

And the first question will be from Leo Mariani with KeyBanc.

I wanted to touch base real quickly here on the return of capital plan. Obviously, you guys chose to go with the buyback. Looks like the stock is reacting favorably to that here today. But you also talked about other potential return of capital strategies that may come later in the year. How do you guys kind of think internally about those different options and kind of weigh them against each other? Clearly, it looks like the buyback won in the near term, but it sounds like you might be looking at supplementing this with maybe some kind of dividend later on.

Leo, it's Mac. Yes. Look, the share repurchase program, we felt was in the best interest of the deployment of capital and return to shareholders at this point in time, given where the stock has not necessarily participated, as we mentioned, with the rebound in the sector. And so we thought that, that's the best first step, and that's the first step we're taking. As we go through the remainder of the year, we'll continue to evaluate all different forms of ability to return cash to shareholders as well as potentially looking at little, I'll say, potential add-ons or recycling of capital into the business. But we'll make those decisions as we progress through the second quarter. Anything you want to add, Francisco?

No. I mean, I think we had a good quarter building cash, ready to announce the first step, and we'll circle back when we have anything else to announce.

I wanted to check in on the regulatory environment. In your prepared comments, you mentioned the potential frac ban in California, which seems to have a limited impact on most businesses there. Are you aware of any other regulatory developments in the state? I understand there was a Senate bill that could have been problematic but was recently halted in committee. Are you anticipating any other energy bills in the legislative sessions this year? Additionally, what are your thoughts on the possibility of 2,500-foot setbacks emerging in California? If that were to happen, how do you think it would impact your business?

Yes, Leo. We've talked about this before. There are two bills in the Senate, SB-467 and SB-419. SB-467 had a notable impact on the exploration and production space but did not pass out of the subcommittee. It's still being restructured and hasn't made it to the subcommittee yet. SB-419 is the labor bill that affects upstream exploration and production, similar to how refineries were affected by union labor. We don't expect SB-419 to impact our projections since we already have an agreement to use trade unions for many surface and facilities operations. Let me have Mike Preston, our General Counsel, provide additional insights on this.

Thanks, Mac. I would agree. Those were the 2 primary bills that we've been watching this year. Setback bills have been introduced over the last 2 years and haven't advanced. There may be some rulemaking relating to setback that proceeds in the future. We're obviously keeping track of that. As you may be aware, the lion's share of our operations are in Kern County and relatively remote locations. But in any event, we're fully engaged with the rest of the industry in analyzing that legislation and keeping an eye on it. We don't anticipate anything in the near term that will significantly impact us.

The next question will be from Noel Parks with Tuohy Brothers.

Just a couple of things. You were talking a bit about the credit line and just some of the restricted payment conditions. They're not a topic that usually comes up a lot. But I guess, since it's a new revolver and everything like that, could you just talk a little bit more about the implications for various means of returning cash to shareholders with those conditions?

Sure, Noel. It's Mac. Just quickly, it's not common to discuss the complex agreements within our capital structure. After we exited bankruptcy, we had some adjustments to make, which is why we issued the high-yield notes and made the RBL amendment. This process aimed to organize everything properly following bankruptcy. While it helped us exit bankruptcy, it wasn't necessarily structured like a typical capital structure. That's what Francisco and the team have been addressing. I'll let Francisco explain the details of the RP covenant.

Yes, absolutely. So we want to make the RBL more standard form. The biggest changes are to distributable free cash flow going through a last 12 months calculation, which is very typical. And that allows us to really reflect the cash that we're building currently into the business and build that over time to think about distribution of capital to the shareholders. That's one. The second one runs around the ability to have more flexibility on our hedging. So we looked at both the maximum and minimums of the hedging capacity, raising the ceiling on the maximum hedging that we could choose to do. We went up to 85%, but also lowering the minimum hedging capacity to 33% of PDP volumes subject to a leverage ratio. Ultimately, we're bringing a lot of flexibility into our RBL that we didn't have on emergence, and just going to more of a regular way, as Mac said, way of distributing cash to shareholders.

Great, thanks for the clarification. And in terms of the different decarbonization and alternative energy projects that you're looking at. Just curious if you had an investment hurdle in mind for what you think would be worthy of capital? And just wondering what other considerations are in play as you look at the various projects that you might take on?

Yes, Noel, it's Mac. As I outlined at a fairly high level because we're still doing the detailed work, and that's why we said 'more on this in the second half'. We're looking at a number of things, including, in addition to the Elk Hills project continuing to advance the CCUS project there. We're completing the FEED study there and that will be out in September of this year, the completed study. We're also looking at using a number of our depleted fields for CCS as well as, as I mentioned, self-supply through renewables, primarily solar in this case, as well as providing grid supply using some of our surface acreage, using solar on those acres. When I look at those things, we have not necessarily fully developed the entire project plan, including how we're going to look at the financing, but we would also look for alternative financing structures to bring in or potential partners, because the renewables space, for example, has a different cost of capital than we do as an oil and gas company, so we'd be looking for bringing in the right type of capital structure, but leveraging our assets in order to be a part of that energy transition. A lot there, probably not specifically answering your question, but we would not enter into an uneconomic transaction from our perspective. That's why we would look at alternative sources of capital, both equity and debt, to fund some of these activities.

And the next question will be from Ray Deacon with Petro Lotus.

I had a question about your joint ventures and the funds you plan to allocate for exiting some of the drilling joint ventures. In which quarter do you expect those expenses to be recorded?

Yes, this is Francisco, Ray. As we outlined in the earnings release, we anticipate one of the JVs with Benefit Street Partners to be reverting sometime this year, late third quarter, early fourth quarter. That's part of the pre-agreed conditions on the contract, and it's a natural exit point for them, and there's no residual ownership of any of our wells when they revert.

Okay. Got it. And I guess, just lastly, given that the free cash flow looks like it's at the high end of your prior guidance. Do you still feel the $1.5 billion over 5 years of free cash flow is the right number? Or could it be a number higher than that?

Yes, we guided in our Strategy Day to $1.5 billion, assuming the midpoint of our guidance at $60 Brent. We do see things rolling off, like BSP, and our hedges improve into next year. But we're not changing guidance at this point. We're staying with the $1.5 billion. But certainly, the price environment has continued to strengthen, and we'll see where we end up later in the year. But for now, we're staying with $1.5 billion guidance that we've given for 5 years. Mac?

No, I think that's right. We see a backlog of opportunity. Go ahead, Ray.

Right. Yes. Lastly, if I could ask a quick question. I agree that an 18% free cash flow yield seems excessively high. If the dividend doesn't address that, what would be your preferred approach to encourage the market to pay closer attention to the story?

Today, we announced a $150 million share repurchase program. We believe this is a strategic initial step because we consider our stock to be undervalued compared to the entire sector. Our free cash flow projections for the year are very strong, and we are not required to make any repayments. With our recent high-yield transaction and low leverage, we have many opportunities ahead. We will continue to monitor our stock's performance and determine the next steps accordingly. For now, we felt initiating the share repurchase program was the right move. We have various options, including potentially paying a dividend or investing more in our business and wells. We have built up sufficient cash and addressed our contractual restrictions. As we keep performing well, we will explore additional ways to return capital to our shareholders and enhance our stock price.

And the next question will come from Jeff Robertson with Water Tower Research.

My question is about the workover activity. As you address the backlog you have, will spending money on workovers positively impact the subsequent production costs for the company? Additionally, how long do you expect it will take to get through the backlog that was created while the company was managing its balance sheet and potentially deferring capital that would have been allocated to these types of projects?

Yes, Jeff, it's Mac. The backlog we had coming out of 2020, due to reduced maintenance last year, has given us this chance to allocate capital dollars to operational expenses, which will be reflected in our guidance slides. This shift does bring back production but also raises our operating expenses. While I'm uncertain about your specific question, we do achieve high-return barrels. We plan to maintain 38 maintenance rigs for the remainder of the year as we work through the backlog. In 2022, we expect fewer opportunities, which will lead us to reallocate funds back into capital expenditures. Shawn Kerns, our Head of Operations, may have additional insights.

No, Mac, you've got that right. We'll take care of that this year. We're picking up our maintenance rig activity, working that backlog off. The incremental operating cost is really just temporary to bring those barrels back on, and then you'll see the benefit going into 2022.

The next question will be from Eric Seeve with GoldenTree.

Great quarter. A couple of quick questions. Your realizations in the quarter were terrific, particularly on the NGL side. Can you provide any color in terms of what investors should expect going forward for the crude side and the NGL side in terms of realizations?

Eric, this is Jay Bys. Touching on the NGLs. Over the last year, obviously, it's been a very tumultuous marketplace for NGLs. So where we sit today compares quite favorably to the same period last year. Do we expect to see continued strength in that area? You've got some inflationary pressures. You've got some disequilibrium, however, in the economic rebound. It's hard to say that there's going to be the kind of appreciation that we've seen over the last 12 months over the next 12.

That's great, thank you. My other question is, could you provide some details for investors about your current drilling activities? You've mentioned workovers, but can you tell us where you are drilling new wells and what kind of returns you are experiencing?

We drilled 17 wells in the first quarter, which has now increased to 22 in the Mount Poso area. We're meeting our targets in both costs and initial production across these wells. While some are above and some below expectations, on average, we are exceeding the type curve. We began using a second rig earlier this quarter in Buena Vista and have started drilling there. Our original plan was to expand to 3 or 4 rigs in the second half of the year, which remains our current strategy, but we are reassessing whether to delay some of that in favor of allocating more funds to workovers. Shawn, do you have anything to add?

Nothing to add, Mac. Just drilling in and around our core areas.

Does that answer your question, Eric?

Yes.

Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Mac McFarland for any closing remarks.

To keep it simple. Thank you for your interest and participation in today's call, and I look forward to speaking with everyone at the second quarter earnings call and the upcoming investor meetings. Take care.

Thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.