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What happened

Shares of California Resources Corporation (NYSE:CRC) are up a whopping 18.6% as of 2 pm EST today. While there hasn't been any company-related news, today's rapid rise in crude oil prices, and California Resources' need for higher prices, have sent shares soaring.

So what

California Resources is very much a marginal-cost-barrel supplier of oil. In the company's most recent quarterly earnings release, it said that its per-barrel costs for production, SG&A (selling, general and administrative expenses), and depreciation range from $32.50 to $33.50 per barrel of oil equivalent, and that doesn't include other expenses such as taxes or interest payments. So with oil prices in the low $40s per barrel, California Resources is barely getting by.

Today's oil price rally is trickling down to California Resources' stock price. The spot price for a barrel of Brent crude -- the international benchmark price -- is up more than 5% today to $45 per barrel. The theory behind this oil price surge is the on-again, off-again idea of OPEC cutting its production. Today's news seems to point at an increasing chance that a cut takes place.

Now what

While a few dollars in oil prices will help the bottom line -- a $1 change in Brent equates to a $2.5 million increase in net income, according to California Resources' price sensitivities index -- the truth of the matter is that California Resources is still dealing with a massive debt pile. It has cut it by about $900 million so far this year, but that still leaves about $5.1 billion in long-term debt to deal with. Before investors start to think the coast is clear to invest in California Resources again, just remember that it is going to take a lot more than a few days with oil at $45 a barrel before things really turn around.