California Oil Driller Reaped Gains From Historic Texas Freeze

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California’s largest oil producer emerged as the latest financial winner from last month’s historic Texas freeze that left millions without heat or electricity for days.

California Resources Corp., which drills and produces crude exclusively in the Golden State, said its natural gas trading business generated a profit as a result of the storm, though the magnitude of the bonanza won’t be disclosed until the quarter is out.

“We did see a opportunity in the market to capture some of that gas-trading revenue,” Interim Chief Executive Officer Mark McFarland told analysts and investors during a conference call Thursday. “We ended up shutting in fields, shutting down gas requirements where we’re buying gas and pushing that gas back to the So-Cal border and, yes, we did do some optimization that benefited the bottom line.”

It’s just the latest detail to surface in the slowly emerging picture of financial winners and losers from the crisis that killed 57, left millions in the dark and paralyzed the second-largest U.S. state for the better part of a week.

As traders and power suppliers struggled to find gas during the height of the disaster, prices skyrocketed. In Oklahoma, gas traded at more than 300 times normal levels, while electricity in Texas surged to $9,000 per megawatt-hour.

The price swings benefited companies including Macquarie Group Ltd., the second-biggest physical gas supplier in the U.S. The Sydney-based investment bank raised its profit forecast last month, implying a windfall of as much as $210 million, as it cited increased demand for gas- and power-supply services. Pipeline operators Energy Transfer LP and Oneok Inc. also said they gained.

©2021 Bloomberg L.P.

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