California Resources Corporation (CRC) is the most financially stretched operator in our Focused US peer group. Almost from inception, the company has been in survival mode courtesy of the US$6.4 billion debt taken on as part of its late 2014 spin-off from Occidental. The oil price was already declining as the IPO was launched. With no hedging in place to protect against further declines, CRC was left with no option but to abandon growth ambitions and cut capital aggressively. Asset sales have been attempted to de-lever its unsustainable balance sheet, but a moribund M&A market has stymied any deals, contributing to investors concerns over the company's long-term viability.