California Resources’ production costs and margins
Excluding hedges, in 3Q16, California Resources (CRC) reported a positive cash margin and a negative total margin.
Gains on crude oil (USO) hedges helped California Resources to increase its cash margin, reducing the deficit in its total margin.
Production cash cost = LOE (lease operating expenses) + production and ad valorem taxes + transportation expenses + G&A (general and administrative) cash expenses + interest expenses
Total production cost = cash cost + DD&A (depletion, depreciation, and amortization)