California Resources Corporation Reports Record First Quarter Financial Results, Provides an Update on the Progress of Business Repositioning and Further Expands Its Carbon Management Business

California Resources Corporation (NYSE: CRC), an independent energy and carbon management company committed to energy transition, today reported first quarter 2023 operational and financial results.

“We’re off to a great start this year with strong quarterly free cash flow driven by operational execution and natural gas markets in California, which underscores the quality of our asset portfolio and commodity diversification strategy,” said Francisco Leon, President and Chief Executive Officer. “We made good progress in advancing the plan to reposition our business, reduce our costs by $25 to $50 million on an annual run-rate basis and expand our carbon management business. Our focus remains on driving cash flow generation, increasing our financial flexibility and delivering meaningful value to our shareholders while providing the energy that California needs.”

Primary Highlights

• Named Manuela (Nelly) Molina as the new Executive Vice President and Chief Financial Officer, effective May 8, 2023 (see press release on May 1, 2023 for additional details around Nelly’s appointment)
• Achieved record quarterly financial results driven by natural gas realizations of 630% of NYMEX during the first quarter of 2023
• Increased 2023 free cash flow¹ guidance to reflect strong first quarter performance by 8% and lowered 2023 operating costs guidance by 3% to reflect lower natural gas outlook, at midpoint of ranges respectively
• Engaged Alvarez & Marsal (A&M) to assist with the execution of cost savings initiatives targeting $25 million to $50 million of sustainable annual run rate savings by the end of 2023
• Successfully amended the RBL credit facility - extended its term to July 31, 2027, improved financial flexibility and reaffirmed the $1.2 billion borrowing base
• Declared a quarterly dividend of $0.2825 per share of common stock, totaling ~$20 million payable on June 16, 2023 to shareholders of record on June 1, 2023, with subsequent quarterly dividends subject to final determination and Board approval
• Repurchased 1,423,764 common shares for $59 million during the first quarter of 2023; repurchased an aggregate 12,880,024 shares for $519 million at an average price of $40.31 per share since the inception of the Share Repurchase Program in May 2021 through March 31, 2023
• Submitted a Class VI permit to the EPA for 34 million metric tons (MMT) for CTV IV CO₂ reservoir
• Signed two new storage-only Carbon Dioxide Management Agreements (CDMAs) with Yosemite Clean Energy, LLC and InEnTec Inc. for 40,000 and 100,000 metric tons per annum (MTPA) of CO₂ injection, respectively

Financial Highlights

• Reported net income of $301 million, or $4.09 per diluted share. When adjusted for items analysts typically exclude from estimates including mark-to-market adjustments and gains on asset divestitures, the Company’s adjusted net income¹ was $193 million, or $2.63 per diluted share
• Generated net cash provided by operating activities of $310 million, adjusted EBITDAX¹ of $358 million and free cash flow¹ of $263 million
• Ended the quarter with $477 million of cash and cash equivalents and an undrawn $454 million Revolving Credit Facility, (net of $148 million of letters of credit), representing $931 million of total liquidity²

Operational Highlights

• Produced an average of 89,000 net barrels of oil equivalent per day (Boe/d), including 55,000 barrels of oil per day (Bo/d), with E&P capital expenditures of $40 million during the quarter
• Operated ~1.5 drilling rigs across CRC’s asset base; drilled 9 wells and brought 10 wells online in 1Q23
• Operated 35 maintenance rigs in the first quarter

Total Year 2023 Guidance and Capital Program³

CRC is reaffirming its total year 2023 capital program to a range between $200 and $245 million. The program includes $15 to $25 million of adjusted capital for carbon management projects⁴ and $185 to $220 million of E&P, Corporate and other adjusted capital, including procuring long-lead time items for planned maintenance at CRC's Elk Hills power plant in 2024. CRC's 2023 capital program related to oil and natural gas development to be focused primarily on executing projects using permits outside of Kern County.

CRC estimates average production between 85,000 and 91,000 Boe/d³ (~60% oil) for 2023. CRC expects to run a development program averaging 1.5 rigs for drilling locations where CRC has permits and plans to focus on workover and maintenance activity.

As a result of higher-than-expected natural gas market prices in the first quarter of 2023, CRC is raising its free cash flow¹ and lowering its operating costs guidance by 8% (to a range of $360 to $470 million) and 3% (to a range of $815 to $865 million) at the midpoint, respectively.

Second Quarter 2023 Guidance and Capital Program³

CRC expects its second quarter 2023 total capital program to range between $46 and $62 million under current operating conditions. This includes $1 to $2 million of adjusted capital¹ for carbon management projects.

At this level of spending, CRC expects to produce on average between 86,000 and 88,000 Boe/d³ (~61% oil) in the second quarter of 2023 and plans to run 1 drilling rig in the Los Angeles basin, where CRC plans to develop drilling locations for which it already has permits.

First Quarter 2023 E&P Operational Results

Total daily net production for the three months ended March 31, 2023, compared to the three months ended December 31, 2022 decreased by approximately 2 MBoe/d, or 2% largely due to higher amounts of rain and colder seasonal temperatures than normal in California, resulting in increased downtime in CRC's operations. Production-sharing contracts (PSCs) did not have an impact on production for the three months ended March 31, 2023 compared to the three months ended December 31, 2022.

During the first quarter of 2023, CRC operated an average of ~1.5 drilling rigs in the Los Angeles basin, drilled 9 wells and brought online 10 wells. See Attachment 3 for further information on CRC's production results by basin and Attachment 5 for further information on CRC's drilling activity.

First Quarter Financial Results

Review of First Quarter 2023 Financial Results

Realized oil prices, excluding the effects of cash settlements on CRC's commodity derivative contracts, decreased by $8.47 per barrel from $87.15 per barrel in the fourth quarter of 2022 to $78.68 per barrel in the first quarter of 2023. The decrease was primarily due to recession concerns across Western economies and disappointment at the pace and scale of the post-COVID-19 reopening in China.

Realized oil prices, including the effects of cash settlements on CRC's commodity derivative contracts, increased by $1.71 from $61.33 in the fourth quarter of 2022 to $63.04 in the first quarter of 2023.

Adjusted EBITDAX¹ for the first quarter of 2023 was $358 million. See table below for the Company's net cash provided by operating activities, capital investments and free cash flow¹ during the same periods.

The following table presents key operating data for CRC's oil and gas operations, on a per BOE basis, for the periods presented below. Energy operating costs consist of purchased natural gas used to generate electricity for CRC's operations and steam for its steamfloods, purchased electricity and internal costs to generate electricity used in CRC's operations. Gas processing costs include costs associated with compression, maintenance and other activities needed to run CRC's gas processing facilities at Elk Hills. Non-energy operating costs equal total operating costs less energy operating costs and gas processing costs.

Energy operating costs for the first quarter of 2023 were $125 million, or $15.56 per Boe, an increase of $45 million or 56% from $80 million, or $9.56 per Boe, for the fourth quarter of 2022. This increase includes $38 million for purchased electricity and purchased natural gas, which CRC uses to generate electricity for its operations, and $7 million for purchased natural gas used to generate steam for its steamfloods. Natural gas used in CRC's operations is purchased at first-of-the-month prices, which were higher than average daily prices during the period due to significant volatility in the natural gas market during the first quarter of 2023.

Non-energy operating costs for the first quarter of 2023 were $124 million, or $15.43 per Boe, which was an increase of $8 million or 7% from $116 million, or $13.82 per Boe, for the fourth quarter of 2022. This increase was primarily a result of increased downhole maintenance activity from the prior quarter.

Carbon Management Business Update

In April 2023, CRC applied for a Class VI permit for 34 MMT of permanent CO₂ storage for a new CTV VI in the Sacramento basin, which, subject to approval, brings CTV's total potential permitted storage to 174 MMT.

Additionally, in April 2023, Carbon TerraVault Holdings, LLC (CTV), a subsidiary of CRC, reached new storage-only CDMAs for 40,000 and 100,000 MTPA of CO₂ injection, at CTV carbon storage vaults from two new facilities to be constructed in Northern and Central California. See CTV's 1Q23 press release for further information on these CDMA's.

The CDMA frames the contractual terms between parties by outlining the material economics and terms of the project and includes conditions precedent to close. The CDMA provides a path for the parties to reach final definitive documents and FID.

Balance Sheet and Liquidity Update

On April 26, 2023, CRC amended its existing Revolving Credit Facility. The amended Revolving Credit Facility provides for an initial aggregate commitment of $592 million and a borrowing base of $1.2 billion. CRC's borrowing base for the Revolving Credit Facility was also reaffirmed at $1.2 billion on April 26, 2023. The amendments included, among other things:

• Extending the maturity date to July 31, 2027 (subject to a springing maturity to August 4, 2025 if any of our Senior Notes are outstanding on that date);
• Increasing CRC's ability to make certain restricted payments (such as dividends and share repurchases) and certain investments (including in its carbon management business);
• Releasing liens on certain assets securing the loans made under the Revolving Credit Facility, including CRC's Elk Hills power plant;
• Extending the period for which we can enter into hedges on our production from 48 months to 60 months; and
• Increasing CRC's capacity to issue letters of credit from $200 million to $250 million.

CRC also amended the interest rates and fees it pays under its Revolving Credit Facility. At CRC's election, borrowings under the amended Revolving Credit Facility may be alternate base rate (ABR) loans or term SOFR loans, plus an applicable margin. ABR loans bear interest at a rate equal to the highest of (i) the federal funds effective rate plus 0.50%, (ii) the administrative agent prime rate and (iii) the one-month SOFR rate plus 1%. Term SOFR loans bear interest at term SOFR, plus an additional 10 basis points per annum credit spread adjustment. The applicable margin is adjusted based on the commitment utilization percentage and will vary from (i) in the case of ABR loans, 1.50% to 2.50% and (ii) in the case of term SOFR loans, 2.50% to 3.50%. CRC also pays customary fees and expenses. Interest is payable quarterly for ABR loans and at the end of the applicable interest period for term SOFR loans, but not less than quarterly. We also pay a commitment fee on unused capacity ranging from 37.5 to 50 basis points per annum, depending on the percentage of the commitment utilized.

As of March 31, 2023, CRC had liquidity of $931 million, which consisted of $477 million in unrestricted cash and $454 million of available borrowing capacity under its Revolving Credit Facility which is net of $148 million of letters of credit.

Leadership Changes

On February 24, 2023, CRC announced that Francisco J. Leon, its current Executive Vice President and Chief Financial Officer, will succeed Mark A. (Mac) McFarland as its President and Chief Executive Officer, and joined CRC's Board of Directors. Mr. McFarland will continue to serve as a non-executive member of CRC's Board of Directors and Chair of the Board of its Carbon TerraVault subsidiary. Manuela (Nelly) Molina has been appointed Executive Vice President and Chief Financial Officer, effective May 8, 2023.

Shareholder Return Strategy

CRC continues to prioritize shareholder returns and therefore dedicates a significant portion of its free cash flow to shareholders in the form of dividends and share repurchases.

During the first quarter of 2023, CRC repurchased 1.4 million shares for $59 million or an average price of $41.25 per share. Since the inception of the Share Repurchase Program in May 2021 through March 31, 2023, 12,880,024 shares have been repurchased for $519 million at an average price of $40.31 per share. These total repurchases represent 15% of CRC’s shares outstanding at its bankruptcy emergence in October 2020.

On April 28, 2023, CRC's Board of Directors declared a quarterly cash dividend of $0.2825 per share of common stock. The dividend is payable to shareholders of record on June 1, 2023 and will be paid on June 16, 2023.

Through March 31, 2023, CRC has returned $612 million of cash to its shareholders, including $519 million in share repurchases and $93 million of dividends. These figures exclude share repurchases made after March 31, 2023 as well as the $20 million second quarter dividend declared and payable in June 2023.

Upcoming Investor Conference Participation

CRC's executives will be participating in the following events in May through July of 2023:

• 2023 Citi Energy & Climate Technology Conference on May 9 to 10 in Boston, MA
• Goldman Sachs Eighth Annual Leveraged Finance and Credit Conference on May 22 to 24 in Rancho Palos Verdes, CA
• MS Sustainable Finance Summit on May 24 in New York City, NY
• Stifel 2023 Cross Sector Insight Conference on June 6 in Boston, MA
• 2023 RBC Capital Markets Global Energy, Power & Infrastructure Conference on June 7 in New York City, NY
• 2023 BofA Securities Energy Credit Conference on June 8 in New York City, NY
• 2023 JP Morgan Energy, Power & Renewables Conference on June 21 to 22 in New York City, NY
• 2023 TD Calgary Energy Conference on July 11 to 12 in Calgary, AB, Canada

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

To participate in the conference call scheduled for May 2, 2023, at 1:00 p.m. Eastern Time, please dial (877) 328-5505 (International calls please dial +1 (412) 317-5421) or access via webcast at www.crc.com 15 minutes prior to the scheduled start time to register. Participants may also pre-register for the conference call at https://dpregister.com/sreg/10177066/f8cf780338. A digital replay of the conference call will be archived for approximately 90 days and supplemental slides for the conference call will be available online in the Investor Relations section of www.crc.com.

About Carbon TerraVault

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

About California Resources Corporation

California Resources Corporation (CRC) is an independent energy and carbon management company committed to energy transition. CRC produces some of the lowest carbon intensity oil in the US and is focused on maximizing the value of its land, mineral and technical resources for decarbonization efforts. For more information about CRC, please visit www.crc.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 CRC's 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;
• 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 war in Ukraine and oil sanctions on Russia, Iran and others;
• 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 CRC's 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 CRC's 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;
• CRC's 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 CRC's 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, and 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 CRC 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 do not warrant the accuracy or completeness of such third-party information.