California Resources Reports Second Quarter 2024 Financial and Operating Results

Increasing quarterly dividend by 25%, enhancing cash returns to shareholders

Targeting $235 million in Aera merger synergies

New EPA Class VI permit application to expand Company's carbon platform, doubling Central California CO₂ potential storage capacity

California Resources Corporation (NYSE:CRC) today reported financial and operating results for the second quarter of 2024. The Company plans to host a conference call and webcast at 1 p.m. ET (10 a.m. PT) on Wednesday, August 7, 2024. Participation details can be found within this release. In addition, supplemental slides have been posted to CRC's website at www.crc.com.

Highlights:

Aera Merger

• Successfully closed the merger with Aera Energy on July 1, 2024. Complementary assets grow Company's core base, expected to double cash flow, and adds quality assets to carbon business platform
• Increased Aera merger targeted synergies to $235 million which includes a reduction of $60 million¹ in annual interest expense and $25 million in additional operational synergies

CRC

• Enhanced cash returns to shareholders through 25% increase in quarterly dividend; declared quarterly dividend of $0.3875/share to be paid in the third quarter of 2024
• Generated $97 million of net cash provided by operating activities, net cash provided by operating activities before changes in operating assets and liabilities² of $108 million and $63 million of free cash flow²
• Returned 142% of year-to-date free cash flow², or $136 million, to shareholders including $93 million in share repurchases and $43 million in dividends
• Generated $8 million of net income, $42 million of adjusted net income² and adjusted EBITDAX² of $139 million
• Delivered second quarter average net production of 76 MBoe/d and average net oil production of 47 thousand barrels of oil per day (MBo/d). Gross production averaged 93 MBoe/d
• Exceeded first half 2024 production expectations through lower-than-expected natural field declines and in-line capital investments; entry-to-exit gross production declined by 2%, or 2 thousand barrels of oil equivalent per day (MBoe/d) on drilling and workover capital investments of $51 million
• Submitted a 102 million metric ton (MMT) Class VI permit application to the EPA for the Carbon TerraVault VI (CTV VI) CO₂ reservoir in Central California bringing CTV's total potential storage capacity with Class VI permits submitted to the EPA to ~320 MMT. See CTV's Second Quarter 2024 Update for additional information

"These are exciting times for CRC as we successfully closed the merger with Aera Energy in early July," said Francisco Leon, CRC's President and Chief Executive Officer. "I am pleased with the CRC team's execution in the second quarter and we are working diligently with our new Aera colleagues on executing a comprehensive integration plan. We continue to identify additional avenues to further enhance shareholder value and accelerate momentum across our E&P and carbon management businesses. We are committed to improving CRC's cash flows and remain vigilant in our environmental stewardship. With the addition of Aera, we believe we are extremely well positioned in the years ahead to provide substantial value to CRC shareholders and stakeholders."

Second Quarter 2024 Financial and Operating Summary

CRC reported net income of $8 million, or $0.11 per fully diluted share of common stock, and adjusted net income² of $42 million, or $0.60 per fully diluted share. Net cash provided by operating activities was $97 million.

Gross production averaged 93 MBoe/d and net production averaged 76 MBoe/d, including net oil production of 47 MBo/d. Second quarter net production was negatively impacted by approximately 3 Mboe/d due to both scheduled maintenance and unplanned downtime at CRC's Elk Hills power plant. Average realized oil prices were 98% of Brent.

Operating costs declined 11% quarter-over-quarter to $156 million. The decrease was primarily related to lower activity and natural gas prices, as well as vendor cost savings.

Capital investments totaled $34 million, below guidance, primarily due to a $14 million change from capital to expense related to the Elk Hills power plant turnaround which began in the first quarter of 2024 and continued into the second quarter of 2024.

Second Quarter 2024 Financial Results

Guidance

The following tables reflect guidance for key third quarter and second half 2024 financial and operating results. Guidance for the second half of 2024 includes approximately $30 million in targeted Aera merger synergies and reflects $60 million of interest savings achieved at merger close. In the second half of 2024, CRC expects to run a one rig program under its existing permits. See Attachment 2 for more information on CRC's third quarter and second half 2024 guidance.

Shareholder Returns

CRC is committed to returning cash to shareholders through dividends and repurchases of common stock.

During the second quarter of 2024, CRC repurchased 0.7 million shares for $35 million at an average price of $49.71 per share. Since the inception of the Share Repurchase Program in May 2021 through June 30, 2024, 16.6 million shares have been repurchased for $697 million at an average price of $41.74 per share.

On August 2, 2024, CRC's Board of Directors amended the cash dividend policy to increase the total annual dividend to $1.55 per share of common stock, payable to shareholders in quarterly increments of $0.3875 per share. This represents a 25% increase to the prior dividend policy.

On August 5, 2024, CRC's Board of Directors declared a quarterly cash dividend of $0.3875 per share of common stock. The dividend is payable to shareholders of record on August 30, 2024 and will be paid on September 16, 2024.

From October 2020 through June 30, 2024, CRC has returned $949 million of cash to its stakeholders, including $697 million in share repurchases, $55 million in principal of its 2026 Senior Notes repurchases and $197 million of dividends.

Balance Sheet and Liquidity

On June 5, 2024, CRC completed an offering of $600 million in an aggregate principal amount of 8.25% senior notes due 2029 (2029 Senior Notes). The net proceeds from this offering plus available cash were used to repay all Aera's outstanding debt at the close of the Aera merger on July 1, 2024. This reduced the combined companies annual interest payments by $60 million.

As of June 30, 2024, CRC had liquidity of $1.5 billion, which consisted of $1.0 billion in available cash and cash equivalents plus $600 million of available borrowing capacity under its Revolving Credit Facility, which is after $30 million outstanding on the Revolving Credit Facility, less $130 million of outstanding letters of credit.

On July 1, 2024, CRC amended its Revolving Credit Facility which increased the aggregate commitment to $1.1 billion from $630 million and increased its borrowing base to $1.5 billion from $1.2 billion. CRC had $1,005 million of liquidity at the close of the Aera merger. There were no amounts drawn on the Revolving Credit Facility as of August 2, 2024.

Upcoming Investor Conference Participation

CRC plans to participate in the following events in September 2024:

• 2024 Barclays CEO Energy-Power Conference on September 3 to 5 in New York, NY
• NYSE Energy Virtual Investor Access Day on September 10
• Pickering Energy Partners Energy Conference 2024 on September 16 to 18 in Austin, TX
• 2024 Goldman Sachs Global Sustainability Forum on September 26 in New York, NY

CRC's presentation materials will be available the day of the events on the Events and Presentations page in the Investor Relations section on www.crc.com.

Conference Call Details

A conference call is scheduled for 1 p.m. ET (10 a.m. PT) on Wednesday, August 7, 2024. To participate in the call, dial (877) 328-5505 (International calls please dial +1 (412) 317-5421) or access via webcast at www.crc.com. Participants may also pre-register for the conference call at https://dpregister.com/sreg/10189857/fcb0ff718c. A digital replay of the conference call will be archived for approximately 90 days and supplemental slides will be available online in the Investor Relations section of www.crc.com.

About California Resources Corporation

California Resources Corporation (CRC) is an independent energy and carbon management company committed to energy transition. CRC is committed to environmental stewardship while safely providing local, responsibly sourced energy. CRC is also focused on maximizing the value of its land, mineral ownership, and energy expertise for decarbonization by developing carbon capture and storage (CCS) and other emissions-reducing projects. For more information about CRC, please visit www.crc.com.

About Carbon TerraVault

Carbon TerraVault Holdings, LLC (CTV), a subsidiary of CRC, is developing services that include the capture, transport and storage of carbon dioxide for its customers. Through its subsidiaries, CTV is developing a series of proposed CCS projects to inject CO₂ captured from industrial sources into depleted underground reservoirs for permanent storage deep underground. For more information about CTV, please visit www.carbonterravault.com.

Forward-Looking Statements

This document contains statements that CRC believes to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical facts are forward-looking statements, and include statements regarding CRC's future financial position, business strategy, projected revenues, earnings, costs, capital expenditures and plans and objectives of management for the future. Words such as "expect," "could," "may," "anticipate," "intend," "plan," "ability," "believe," "seek," "see," "will," "would," "estimate," "forecast," "target," "guidance," "outlook," "opportunity" or "strategy" or similar expressions are generally intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements.

Although CRC believes the expectations and forecasts reflected in its forward-looking statements are reasonable, they are inherently subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond its control. No assurance can be given that such forward-looking statements will be correct or achieved or that the assumptions are accurate or will not change over time. Particular uncertainties that could cause CRC's actual results to be materially different than those expressed in its forward-looking statements include:

• fluctuations in commodity prices, including supply and demand considerations for CRC's products and services, and the impact of such fluctuations on revenues and operating expenses;
• decisions as to production levels and/or pricing by OPEC or U.S. producers in future periods;
• government policy, war and political conditions and events, including the military conflicts in Israel, Ukraine and Yemen and the Red Sea;
• the ability to successfully integrate Aera's business;
• regulatory actions and changes that affect the oil and gas industry generally and CRC in particular, including (1) the availability or timing of, or conditions imposed on, permits and approvals necessary for drilling or development activities or its carbon management business; (2) the management of energy, water, land, greenhouse gases (GHGs) or other emissions, (3) the protection of health, safety and the environment, or (4) the transportation, marketing and sale of CRC's products;
• the impact of inflation on future expenses and changes generally in the prices of goods and services;
• changes in business strategy and CRC's capital plan;
• lower-than-expected production or higher-than-expected production decline rates;
• changes to CRC's estimates of reserves and related future cash flows, including changes arising from its inability to develop such reserves in a timely manner, and any inability to replace such reserves;
• the recoverability of resources and unexpected geologic conditions;
• general economic conditions and trends, including conditions in the worldwide financial, trade and credit markets;
• production-sharing contracts' effects on production and operating costs;
• the lack of available equipment, service or labor price inflation;
• limitations on transportation or storage capacity and the need to shut-in wells;
• any failure of risk management;
• results from operations and competition in the industries in which CRC operates;
• CRC's ability to realize the anticipated benefits from prior or future efforts to reduce costs;
• environmental risks and liability under federal, regional, state, provincial, tribal, local and international environmental laws and regulations (including remedial actions);
• the creditworthiness and performance of CRC's counterparties, including financial institutions, operating partners, CCS project participants and other parties;
• reorganization or restructuring of CRC's operations;
• CRC's ability to claim and utilize tax credits or other incentives in connection with its CCS projects;
• CRC's ability to realize the benefits contemplated by its energy transition strategies and initiatives, including CCS projects and other renewable energy efforts;
• CRC's ability to successfully identify, develop and finance carbon capture and storage projects and other renewable energy efforts, including those in connection with the Carbon TerraVault JV, and its ability to convert its CDMAs to definitive agreements and enter into other offtake agreements;
• CRC's ability to maximize the value of its carbon management business and operate it on a stand alone basis;
• CRC's ability to successfully develop infrastructure projects and enter into third party contracts on contemplated terms;
• uncertainty around the accounting of emissions and its ability to successfully gather and verify emissions data and other environmental impacts;
• changes to CRC's dividend policy and share repurchase program, and its ability to declare future dividends or repurchase shares under its debt agreements;
• limitations on CRC's financial flexibility due to existing and future debt;
• insufficient cash flow to fund CRC's capital plan and other planned investments and return capital to shareholders;
• changes in interest rates;
• CRC's access to and the terms of credit in commercial banking and capital markets, including its ability to refinance its debt or obtain separate financing for its carbon management business;
• changes in state, federal or international tax rates, including CRC's ability to utilize its net operating loss carryforwards to reduce its income tax obligations;
• effects of hedging transactions;
• the effect of CRC's stock price on costs associated with incentive compensation;
• inability to enter into desirable transactions, including joint ventures, divestitures of oil and natural gas properties and real estate, and acquisitions, and CRC's ability to achieve any expected synergies;
• disruptions due to earthquakes, forest fires, floods, extreme weather events or other natural occurrences, accidents, mechanical failures, power outages, transportation or storage constraints, labor difficulties, cybersecurity breaches or attacks or other catastrophic events;
• pandemics, epidemics, outbreaks, or other public health events, such as the COVID-19 pandemic; and
• other factors discussed in Part I, Item 1A – Risk Factors in CRC's Annual Report on Form 10-K and its other SEC filings available at www.crc.com.

CRC cautions you not to place undue reliance on forward-looking statements contained in this document, which speak only as of the filing date, and it undertakes no obligation to update this information. This document may also contain information from third party sources. This data may involve a number of assumptions and limitations, and CRC has not independently verified them and does not warrant the accuracy or completeness of such third-party information.