CRC Delivers Record Cash Flow and Free Cash Flow per Share Annual Results

California Resources Corporation (NYSE: CRC) today reported financial and operating results for the fourth quarter and full-year 2023. The Company plans to host a conference call and webcast on Wednesday, February 28^th at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time). Participation details can be found within this release. In addition, supplemental slides are posted to CRC’s website at www.crc.com.

2023 Highlights:

• Generated $653 million of net cash from operating activities and $468 million of free cash flow¹
• Demonstrated strong capital efficiency with lower-than-expected total capital of $185 million delivering 6% entry to exit gross production decline
• Reported net income of $564 million, or $7.78 per diluted share. When adjusted for items analysts typically exclude from estimates (including gains on asset divestitures, business transformation costs and mark-to-market adjustments on commodity derivative contracts) adjusted net income¹ was $372 million, or $5.13 per share
• Average annual net production of 86 thousand barrels of oil equivalent per day (MBoe/d). Oil production averaged 52 thousand barrels of oil per day (MBo/d)
• Returned $280 million to stakeholders, more than half of 2023 free cash flow¹, through share repurchases, debt repurchases and dividends
• Exited 2023 with a leverage ratio¹ of 0.1 times, down from 0.3 times at year-end 2022
• Through the business transformation initiative, strengthened future outlook by achieving $65 million in annual, sustainable cost savings
• Announced receipt of California’s first U.S. Environmental Protection Agency (EPA) draft Class VI well permits for underground carbon dioxide (CO₂) injection and storage at Elk Hills. See Carbon TerraVault's 2023 Update for additional information

"Our 2023 results were exceptional, and our teams executed on our plan to build a stronger CRC while creating long-term value for all stakeholders," said Francisco Leon, CRC’s President and Chief Executive Officer. “We profitably grew our business and generated significant free cash flow that maintained our premier balance sheet and allowed us to prioritize cash returns to our shareholders. Our focus now is on securing the requisite approvals to close the recently announced merger with Aera Energy, while preparing for integration of their experienced team members and high value assets into CRC after closing. The Aera merger will provide CRC greater operating scale for the entire business, thereby improving our operating cash flows and liquidity profile. The Aera assets will also enhance CRC’s carbon management business from which CRC will accelerate the decarbonization of California.”

Fourth Quarter 2023 Financial and Operating Summary

The Company reported fourth quarter net cash from operating activities of $131 million and free cash flow¹ of $65 million. Net income for the period was $188 million, or $2.60 per diluted share of common stock, and adjusted net income¹ was $67 million, or $0.93 per diluted share. Adjusted EBITDAX¹ was $179 million.

CRC’s daily gross production in the fourth quarter averaged 98 MBoe/d. Net production averaged 83 MBoe/d, including 50 MBo/d. Average realized oil prices during the period were 99% of Brent.

Operating costs in the fourth quarter of 2023 averaged $24.49 per Boe, compared to $24.96 per Boe in the third quarter of 2023 and reflect a positive impact of recent organizational changes. In August 2023, CRC took actions to better align its resources to strategic priorities and improve operational efficiency. The Company realized approximately $15 million of savings in the fourth quarter and expects these actions to result in approximately $65 million of savings in operating costs and general and administrative expenses on an annualized basis.

Capital investments in the fourth quarter were in line with expectations and totaled $66 million. Capital allocation during the period was focused on a one-rig program in the Los Angeles basin.

Fourth Quarter and Full Year Financial Results

2023 Reserves

As of December 31, 2023, CRC’s proved reserves totaled an estimated 377 million Boe (MMBoe), of which 68% was oil and 331 MMBoe was proved developed. Estimated future net cash flows had a PV-10^* value of $5.5 billion based on SEC pricing of Brent $82.84 per barrel for oil and Henry Hub $2.64 per thousand cubic feet (Mcf) for natural gas, as of December 31, 2023.

Pending Aera Merger

On February 7, 2024, CRC entered into a definitive merger agreement (Merger Agreement) to combine with Aera Energy, LLC (Aera) in an all-stock transaction with an effective date of January 1, 2024. Aera is a leading operator of mature fields in California, primarily in the San Joaquin and Ventura basins, with high oil-weighted production. At closing, Aera's owners will receive 21.2 million shares of CRC's common stock plus an additional number of shares determined by reference to the dividends declared by CRC having a record date between the effective date and closing. CRC also agreed to assume Aera’s outstanding long-term indebtedness of $950 million. CRC expects to repay a significant portion of this indebtedness with cash on hand and borrowings under its revolving credit facility. CRC expects to refinance the balance through one or more debt capital markets transactions and, only to the extent necessary, borrowings under a bridge loan facility.

The Merger Agreement has been unanimously approved by CRC’s Board of Directors and the shareholders of Aera. The transaction is subject to certain closing conditions, including among others, regulatory approvals and approval of the stock issuance by CRC's shareholders. The transaction is expected to close in the second half of 2024.

For more information about this transaction please visit: https://www.crc.com/news/news-details/2024/California-Resources-Corporation-to-Combine-with-Aera-Energy/default.aspx

2024 Preliminary Outlook and First Quarter 2024 Guidance and Capital Program²

CRC’s 2024 guidance estimates exclude the pending merger with Aera. The Company intends to update guidance after the transaction closes.

CRC expects its total 2024 capital program to range between $300 million and $340 million assuming normal operating conditions. Of this amount, $250 million to $260 million is related to oil and natural gas development, $30 million to $40 million is related to maintenance of one of its gas processing facilities and a power plant, both of which are located in CRC's Elk Hills field, $15 million to $25 million is for carbon management projects and $5 million to $15 million is for corporate and other activities.

Through 2024, CRC expects to run a one rig program executing projects using existing permits. Subject to the availability of well permits, the Company expects to increase to a four rig program in the second half of 2024. The actual amount of spending related to oil and gas development under CRC's 2024 capital program will depend on a variety of factors. In particular, the rate and amount of this spending depends on its ability to obtain new well permits in the second half of the year. If CRC is not able to obtain these permits, CRC could reduce its capital program by up to $100 million.

CRC expects its first quarter capital program to range between $65 million to $75 million. The program includes capital of $36 million to $42 million for oil and natural gas, and facilities development³, $4 million to $6 million for carbon management projects and $25 million to $27 million for corporate and other activities, including maintenance at CRC's Elk Hills power plant.

CRC expects to produce 76 to 80 MBoe/d (~60% oil) in the first quarter of 2024. The table below provides highlights of the Company's first quarter 2024 guidance. See Attachment 2 for complete information on CRC's first quarter 2024 guidance.

Shareholder Return & Deleveraging Strategy

CRC is committed to returning significant cash to shareholders through dividends and repurchases of its common stock. On February 6th, 2024, CRC’s Board of Directors approved a $250 million increase of the Share Repurchase Program, bringing the aggregate program to $1.35 billion, and extended the program through December 31, 2025. Adjusting for this increase, CRC has approximately $747 million of capacity remaining under the repurchase program as of February 6, 2024.

In 2023, CRC repurchased 3.4 million shares for approximately $143 million at an average price of $41.69 per share. Since the inception of the Share Repurchase Program in May 2021 through December 31, 2023, 14.9 million shares have been repurchased for $604 million at an average price of $40.53 per share, including commissions and excise taxes. These total repurchases represent ~18% of CRC’s shares outstanding since December 31, 2020.

In 2023, CRC repurchased $55 million in principal of its Senior Notes at par. After these repurchases, the remaining principal amount of CRC’s Senior Notes is $545 million due February 1, 2026.

On February 27, 2024, CRC's Board of Directors declared a quarterly cash dividend of $0.31 per share of common stock. The dividend is payable to shareholders of record on March 6, 2024 and will be paid on March 18, 2024.

Through December 31, 2023, CRC has returned $813 million of cash to its stakeholders, including $604 million in share repurchases, $154 million of dividends and $55 million in principal of its Senior Notes repurchases.

Balance Sheet and Liquidity Update

On October 30, 2023, the borrowing base for the Revolving Credit Facility was reaffirmed at $1.2 billion as part of CRC's semi-annual redetermination. CRC's aggregate commitment from lenders under the Revolving Credit Facility was $630 million as of December 31, 2023.

As of December 31, 2023, CRC had liquidity of $973 million, which consisted of $496 million in cash and cash equivalents plus $477 million of available borrowing capacity under its Revolving Credit Facility (which is net of $153 million of issued letters of credit).

In connection with the Merger Agreement, on February 9, 2024, CRC entered into a second amendment to its Revolving Credit Facility to permit CRC to incur indebtedness under a bridge loan facility that may be used in connection with closing the Aera Merger.

Acquisitions and Divestitures

On December 29, 2023, CRC sold its non-operating working interest in the Round Mountain Unit in the San Joaquin basin for $35 million, before transaction costs and purchase price adjustments, recognizing a gain of $25 million. CRC retained an option to capture, transport and store carbon dioxide (CO₂) emissions from the production at Round Mountain Unit for future carbon management projects.

On February 22, 2024, CRC entered into an agreement to sell its 0.9 acre Fort Apache real estate property in Huntington Beach to a local real estate developer for approximately $10 million.

Sustainability

“2023 was another important year in CRC’s sustainability journey,” said Francisco Leon, CRC’s President and Chief Executive Officer. “We are dedicated to becoming an even more sustainable energy company while continuously prioritizing health, safety, and the environment in all we do. We achieved our second-best safety rate in the Company’s history, our best since the period during COVID. Throughout the year, our skilled teams plugged and abandoned more than 600 wells, exceeding stringent local and state requirements. Furthermore, we received the 2023 S&P Global Energy Transition - Upstream Award recognizing CRC’s perseverance in developing solutions to help reduce carbon emissions and tackle climate change, one of many industry awards we received during the year.”

Additional 2023 sustainability highlights and achievements include:

• Eliminated 269 gas venting pneumatics, keeping CRC on track with its 2030 methane reduction ESG goal
• Delivered more than 113 million barrels of water for agricultural use, or more than 3 times the amount for CRC's internal use
• Qualified for 22 National Safety Awards for 2023 safety performance
• Provided more than $2.5 million in charitable giving to local groups, organizations, and nonprofits

Upcoming Investor Conference Participation

CRC's executives will be participating in the following events in March and April of 2024:

• MS Global Energy and Power Conference on March 6 and 7 in New York, NY
• CERAWeek 2024 on March 18 to 20 in Houston, TX
• Capital One Carbon Capture Conference on March 27 in New York, NY
• North America CCUS & Hydrogen Decarbonization Summit on April 16 to 18 in Chicago, IL

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 Wednesday, February 28^th at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time). To participate in the call, 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/10184870/fb2ecfed18. 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.

¹ See Attachment 3 for the non-GAAP financial measures of operating costs per BOE (excluding effects of PSCs), adjusted net income (loss), adjusted net income (loss) per share - basic and diluted, net cash provided by operating activities before changes in operating assets and liabilities, net, adjusted EBITDAX, free cash flow, adjusted G&A and adjusted capital, including reconciliations to their most directly comparable GAAP measure, where applicable. For the 1Q24 estimates of the non-GAAP measure of adjusted general and administrative expenses, including reconciliations to its most directly comparable GAAP measure, see Attachment 2.

² Current preliminary 2024 outlook assumes a four rigs program starting from 2H24 subject to the availability of well permits. If CRC is not able to receive drilling permits or permits are delayed, the Company plans to run a one rig program with a $200 million to $240 million 2024E total capital program and would expect a 5% to 7% entry to exit decline rate. 1Q24 guidance assumes Brent price of $78.73 per barrel of oil, NGL realizations as a percentage of Brent consistent with prior years and a NYMEX gas price of $2.87 per mcf. CRC's share of production under PSC contracts decreases when commodity prices rise and increases when prices fall.

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.

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.

Additional Information and Where to Find It

This communication may be deemed to be solicitation material in respect of the transactions contemplated by the merger agreement pursuant to which California Resources Corporation (“CRC”) has agreed to combine with Aera Energy, LLC (“Aera”) (the “Merger Agreement”), including the proposed issuance of CRC’S common stock pursuant to the Merger Agreement. In connection with the transaction, CRC will file a proxy statement on Schedule 14A with the U.S. Securities and Exchange Commission (“SEC”), as well as other relevant materials. Following the filing of the definitive proxy statement, CRC will mail the definitive proxy statement and a proxy card to its stockholders. INVESTORS AND SECURITY HOLDERS OF CRC ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CRC, AERA, THE TRANSACTION AND RELATED MATTERS. Investors and security holders will be able to obtain copies of the proxy statement (when available) as well as other filings containing information about CRC, Aera and the transaction, without charge, at the SEC’s website, www.sec.gov. Copies of documents filed with the SEC by CRC will be available, without charge, at CRC’s website, www.crc.com.

Participants in Solicitation

CRC and its directors and executive officers may be deemed to be participants in the solicitation of proxies in connection with the transaction. Information about the directors and executive officers of CRC is set forth in the proxy statement for CRC’s 2023 Annual Meeting of Stockholders, which was filed with the SEC on March 16, 2023. Investors may obtain additional information regarding the interest of such participants by reading the proxy statement regarding the transaction when it becomes available.

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. Additionally, the information in this report contains forward-looking statements related to the recently announced Aera merger.

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;
• 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 the business of Aera once the Aera merger is completed;
• the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the Aera merger that could reduce anticipated benefits or cause the parties to abandon the Aera merger;
• the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;
• the possibility that the stockholders of CRC may not approve the issuance of new shares of common stock in the Aera merger;
• the ability to obtain the required debt financing in connection with the Aera merger and, if obtained, the potential impact of additional debt on its business and the financial impacts and restrictions due to the additional debt;
• 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 the company 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.

See Attachment 3 for management's disclosure of its use of these non-GAAP measures and how these measures provide useful information to investors about CRC's results of operations and financial condition.

¹ Current preliminary 2024 outlook assumes a four rigs scenario starting from 2H24 subject to the availability of well permits. If CRC is not able to receive drilling permits or permits are delayed, the Company plans to run a one rig program with a $200 million to $240 million 2024E total capital program and would expect a 5% to 7% entry to exit decline rate.

ESTIMATED ADJUSTED GENERAL AND ADMINISTRATIVE EXPENSES RECONCILIATION