Energy entities form oil, gas development partnership
California Resources Corporation (CRC) and Colony Capital, Inc. announced this week a partnership to fund up to $500 million in oil and gas-centered development projects.
The strategic joint venture will see Colony commit $320 million for the development of CRC’s flagship Elk Hills field, which is located in the San Joaquin Basin.
Subject to the mutual agreement of the parties, the total investment may be increased to $500 million.
“We are pleased to partner with an outstanding investment firm like Colony and its partners to provide certainty of development of our large and high-value inventory at Elk Hills, a very long-lived field,” Todd Stevens, president and CEO of CRC, said. “This is the largest joint venture capital commitment to date for CRC, and the terms reflect the sizable project inventory we have established at Elk Hills. This partnership also provides additional flexibility to aid in our deleveraging efforts through growing our production and cash flow.”
Tom Barrack, chairman and CEO of Colony Capital, said Colony is delighted to form the partnership with CRC to continue the development.
“This is also a milestone event in the establishment and growth of our new energy investment management platform, and there is no better partner than CRC and no better asset than Elk Hills with which to start,” Barrack said. “CRC’s operational expertise, technical understanding, and substantial infrastructure in the San Joaquin Basin are unparalleled and we look forward to building upon decades of profitable investment by CRC in the Elk Hills Field over the long-term.”
