California Resources Corporation (CRC) is down sharply as investors react to its first-quarter 2026 results, which included a large headline net loss driven by commodity-derivative valuation moves. CRC reported a net loss of $711 million, primarily from a non-cash loss tied to the fair value of its outstanding commodity derivatives, while reporting adjusted net income of $79 million and adjusted EBITDAX of $304 million.

CRC delivered average net production of 154 MBoe/d (81% oil) in Q1 and posted $99 million of net cash provided by operating activities. The company also reported $32 million of negative free cash flow for the quarter and said oil volumes were reduced by about 1.5 MBo/d due to higher oil prices affecting production-sharing contracts—an item that can draw scrutiny when the market is already focused on realized margins and cash conversion.

CRC raised the midpoint of its 2026 adjusted EBITDAX guidance by 42% to $1.45 billion (guidance range $1.4–$1.5 billion) and increased its full-year capital budget to $520–$560 million, citing stronger oil prices, higher drilling activity, and operating efficiencies. It also increased the midpoint of the expected Berry merger annual synergy target range to $90–$100 million and described plans to ramp activity in the second half of 2026, including moving to a higher-rig program.

Adding to the stock-specific reaction, oil prices have been volatile and were notably weaker heading into May 6, weighing on the broader energy complex. With crude down sharply in the latest sessions, investors often de-risk E&P names even when company-level guidance improves, especially when reported GAAP results show large losses from hedge/derivative marks.