California Resources Corporation Reports Strong Second Quarter 2023 Financial Results and Provides Updates on Carbon Management Business

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

"CRC’s focus on execution drove solid operational and financial performance in the second quarter," said Francisco Leon, CRC President and Chief Executive Officer. "We returned nearly $84 million to our shareholders in the second quarter, bringing the total shareholder return program to nearly $700 million since its inception in 2021. We have accomplished this while growing our cash flow per share along with developing our carbon management business. Cash flow, carbon and California remain our core strengths as we continue to deliver meaningful value to our shareholders and provide low carbon intensity oil and gas that California needs."

Primary Highlights

• Declared a quarterly dividend of $0.2825 per share of common stock, totaling ~$20 million payable on September 15, 2023 to shareholders of record on September 1, 2023
• Repurchased 1,618,746 common shares for $64 million at an average share price of $39.12 per share during the second quarter of 2023
• Repurchased a cumulative 14,498,770 shares for $584 million at an average price of $40.18 per share since the inception of the Share Repurchase Program in May 2021 through June 30, 2023
• Submitted a Class VI permit to the EPA for 17 million metric tons (MMT) for CTV V CO₂ reservoir in the Sacramento Basin, bringing CRC's total storage capacity with Class VI permits submitted the EPA to 191 MMT
• Signed a new storage-only carbon dioxide management agreement (CDMA) with Verde Clean Fuels Inc. for 100 thousand metric tons per annum (KMTPA) of CO₂ injection
• Expanded the previously announced Lone Cypress Energy Service, LLC, blue hydrogen project to an estimated 205 KMTPA of CO₂ injection

Financial Highlights

• Reported net income of $97 million, or $1.35 per diluted share. When adjusted for items analysts typically exclude from estimates including mark-to-market adjustments and one-time costs, the Company’s adjusted net income¹ was $38 million, or $0.53 per diluted share
• Generated net cash provided by operating activities of $108 million, adjusted EBITDAX¹ of $138 million and free cash flow¹ of $69 million
• Ended the quarter with $448 million of cash and cash equivalents and an undrawn Revolving Credit Facility, (excluding $148 million of letters of credit) with $479 million of availability representing $927 million of total liquidity²

Operational Highlights

• Reservoirs performed in line with expectations; total daily gross production of 103,000 gross barrels of oil equivalent per day (Boe/d) for the second quarter of 2023, which was flat compared to the first quarter of 2023
• Produced an average of 86 net MBoe/d, including 53,000 net barrels of oil per day (Bo/d), with E&P capital expenditures of $35 million during the quarter
• Total daily net production for the three months ended June 30, 2023, includes 2 net MBoe/d of combined negative effects; including 1 net MBoe/d related to CRC's production-sharing contracts (PSCs) and approximately 1 net MBoe/d due to changes in NGL storage volumes
• Operated 1 drilling rig in LA Basin; drilled 6 wells and brought 7 wells online in 2Q23
• Operated 35 maintenance rigs in the first quarter

Total Year 2023 Guidance and Capital Program³

CRC estimates average net total production between 85 and 91 MBoe/d3 (~61% oil) for the total year 2023. CRC is reaffirming its total year 2023 total capital which is expected to range between $200 and $245 million with heavier weighting in the second half of the year due to timing of projects and higher expected workover activity and facilities projects. The program includes an expected $185 to $220 million of adjusted E&P, corporate and other adjusted capital¹ and $15 to $25 million of adjusted CMB capital¹ for carbon management projects⁴. CRC is also narrowing its total year 2023 free cash flow¹ guidance range to $380 to $460 million from $360 to $470 million.

The Company plans to execute a 1 to 1.5 rig development program on average for 2023. Activity will focus on drilling new locations where CRC has permits and high return workovers. The capital plan also includes procuring long-lead time items for planned maintenance of our facilities in 2024.

CRC is lowering the top end of the range for its operating cost guidance from $815 to $865 million to $815 to $850 million as a result of lower natural gas prices expected in the second half of 2023. Natural gas marketing margin was increased from a range of $80 to $110 million to $135 to $150 million to reflect the Company's performance in the first half of the year. Similarly, CRC's 2023 estimated commodity realizations were adjusted to reflect the Company's results.

Third Quarter 2023 Guidance and Capital Program³

CRC expects its third quarter 2023 total capital to range between $52 million and $67 million under current operating conditions. This includes $1 to $2 million of adjusted CMB capital¹.

At this level of spending, CRC expects average net total production between 86 and 88 net MBoe/d³ (~61% oil) in the third quarter of 2023, running a 1 drilling rig program in the Los Angeles basin where it has permits.

Second Quarter 2023 E&P Operational Results

Total daily net production for the three months ended June 30, 2023, compared to the three months ended March 31, 2023 decreased by approximately 3 MBoe/d largely due to natural decline and changes in NGL storage volumes. This decrease was partially offset by increased production from drilling and workover activity. CRC's PSCs negatively impacted net oil production by 1 MBoe/d in the three months ended June 30, 2023 compared to the three months ended March 31, 2023.

During the second quarter of 2023, CRC operated an average of 1 drilling rig in the Los Angeles basin, drilled 6 wells and brought online 7 wells. See Attachment 3 for further information on CRC's production results by basin and Attachment 5 for additional information on CRC's drilling activity.

Second Quarter Financial Results

Review of Second Quarter 2023 Financial Results

Realized oil prices, excluding the effects of cash settlements on CRC's commodity derivative contracts, decreased by $2.91 per barrel from $78.68 per barrel in the first quarter of 2023 to $75.77 per barrel in the second quarter of 2023. Prices decreased slightly as global demand for crude remained generally flat.

Realized oil prices, including the effects of cash settlements on CRC's commodity derivative contracts, increased by $0.62 from $63.04 in the first quarter of 2023 to $63.66 in the second quarter of 2023.

Adjusted EBITDAX¹ for the second quarter of 2023 was $138 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.

Operating costs decreased during the three months ended June 30, 2023 compared to the three months ended March 31, 2023 primarily due to lower energy operating costs as natural gas prices in California markets declined between quarters.

Carbon Management Business Update

In July 2023, CRC applied for a Class VI permit for 17 MMT of permanent CO₂ storage at a new storage vault in the Sacramento basin, CTV V. With this new permit, CRC has six Class VI permits on-file with the EPA, bringing CTV's total potential permitted carbon storage to 191 MMT. As of June 30, 2023, the Class VI application for CTV IV was determined to be administratively complete.

In July 2023, CTV entered into a new storage-only CDMA for 100 KMTPA of CO₂ injection with Verde Clean Fuels Inc., at CRC's Net Zero Industrial Park at Elk Hills field in Kern County, California. Additionally, CTV expanded its Lone Cypress Energy Service, LLC, (Lone Cypress) blue hydrogen project to 205 KMTPA from 100 KMTPA of associated CO₂ that could be permanently sequestered at CTV I. See CTV's 2Q23 Press Release for further information on these projects.

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

The aggregate commitment under CRC's Revolving Credit Facility was $627 million as of June 30, 2023, which includes a net $25 million increase that occurred during the second quarter of 2023. The borrowing base for the Revolving Credit Facility was reaffirmed at $1.2 billion on April 26, 2023 as part of CRC's semi-annual redetermination.

As of June 30, 2023, CRC had liquidity of $927 million, which consisted of $448 million in cash and cash equivalents plus $479 million of available borrowing capacity under its Revolving Credit Facility (which is net of $148 million of issued letters of credit).

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.

On July 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 September 1, 2023 and will be paid on September 15, 2023.

During the second quarter of 2023, CRC repurchased 1.6 million shares for $64 million at an average price of $39.12 per share. Since the inception of the Share Repurchase Program in May 2021 through June 30, 2023, 14,498,770 shares have been repurchased for $584 million at an average price of $40.18 per share. These total repurchases represent 17% of CRC’s shares outstanding at emergence from bankruptcy.

Through June 30, 2023, CRC has returned approximately $700 million of cash to its shareholders, including approximately $600 million in share repurchases and approximately $100 million of dividends since May 2021. These figures exclude the $20 million second quarter dividend declared and payable in September 2023.

Upcoming Investor Conference Participation

CRC's executives will be participating in the following events in September of 2023:

• Barclays CEO Energy-Power Conference on September 5 to 7 in New York City, NY
• Pickering Energy Partners TE&M Fest Conference on September 20 to 22 in Austin, TX
• Goldman Sachs Sustainability Forum on September 27 in New York City, 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

To participate in the conference call scheduled for August 1, 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/10179237/f985ba358a. 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;
• CRC's ability to convert it's 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.