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California Resources Corp., Ares Management Form Joint Venture

California Resources Corp. has entered into a joint venture to own the Elk Hills power plant near Bakersfield. CRC in Chatsworth has teamed up with a portfolio company of investment firm Ares Management in Los Angeles. The Ares-led group has invested $750 million in the joint venture. About $297 million of the proceeds will repay CRC’s outstanding bank revolver balance. The Ares group also purchased $50 million worth of CRC stock at a value of $21.33 a share. Under a long-term commercial agreement, CRC will purchase power and gas processing services from the joint venture. In a statement, CRC said joint ventures provide an opportunity for the company “to prudently build on its solid track record of performance and accelerate sustainably profitable initiatives.” “We are proud to have Ares as a strategic partner in our midstream joint venture at Elk Hills, and believe their equity investment validates the strong positioning of our world-class assets and flexible business model,” Todd Stevens, chief executive at CRC, said in a statement. Shares of California Resources Corp. (CRC) closed Wednesday down $1.56, or 7.5 percent, to $19.24 on the New York Stock Exchange.

Joel Russel
Joel Russel
Joel Russell joined the Los Angeles Business Journal in 2006 as a reporter. He transferred to sister publication San Fernando Valley Business Journal in 2012 as managing editor. Since he assumed the position of editor in 2015, the Business Journal has been recognized four times as the best small-circulation tabloid business publication in the country by the Alliance of Area Business Publishers. Previously, he worked as senior editor at Hispanic Business magazine and editor of Business Mexico.
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