California Resources Reports First Quarter 2022 Results, Increases and Extends Its Share Repurchase Program, Raises 2022 Guidance and Provides an Update on Its Carbon Management Business

California Resources Corporation (NYSE: CRC), an independent oil and natural gas company committed to energy transition in the sector, today reported first quarter 2022 operational and financial results.

"CRC began 2022 on a good note as we continued to deliver strong operational results. Given our continued robust free cash flow generation and pristine balance sheet, we are increasing our share repurchase program by $300 million to $650 million in total, adding one drilling rig at our Wilmington Field and raising our full year guidance," said Mac McFarland, President and Chief Executive Officer.

Mr. McFarland continued, "We are further advancing our energy transition efforts by filing additional EPA Class VI permits on 80 million metric tons of carbon dioxide (CO₂) permanent storage and expanding our carbon storage network to the San Francisco Bay Area. Additionally, we are pleased to announce that we are progressing our CalCapture project. We have engaged Next Carbon Solutions to conduct a second front-end engineering and design study to explore the decarbonization of our Elk Hills power plant and the potential to produce California's first "Net Zero" barrel. This project is estimated to capture up to 28 million metric tons of CO₂ over its 20 year project life, the equivalent emissions of more than 300,000 gas-fueled passenger vehicles per year. This opportunity further highlights our continued focus on lowering our emissions and advancing our ESG goals to demonstrate leadership in the energy transition."

Primary Highlights

• Increasing full year 2022 production, adjusted EBITDAX and free cash flow guidance
• Expanding the drilling program to add a fifth drilling rig at CRC's Wilmington Field which is expected to add ~1,000 net barrels of oil per day to CRC's full year 2022 production for approximately $25 million in capital
• Filed an additional 80 million metric tons (MMT) of CO₂ permanent storage with the EPA for Class VI permits and opened a second network of CO₂ storage in the Sacramento basin
• Reached an agreement with Next Carbon Solutions to conduct a second front-end engineering and design (FEED) study for CRC's CalCapture CCS+ project which could potentially produce the first "Net Zero" barrel of oil in California
• Successfully completed the 10-year maintenance turnaround at CRC's cryogenic gas plant, or CGP1 safely, ahead of schedule and within the $15 million budget
• Repurchased $71 million of shares during the first quarter; repurchased an aggregate 6,210,479 shares for $239 million since inception through April 29, 2022 for an average price of $38.40 per share
• Increased the Share Repurchase Program by $300 million to $650 million and extended the term of the program through June 30, 2023. After the repurchases through April 29, 2022, and the $300 million increase, CRC has $411 million available for future repurchases
• Amended the Revolving Credit Facility to, among other things, modify minimum hedge requirements and restricted payment and investment covenants
• Declared a quarterly dividend of $0.17 per share of common stock, totaling $13 million payable on June 16, 2022, to shareholders of record on June 1, 2022, with subsequent quarterly dividends subject to final determination and Board approval

First Quarter 2022 Highlights

Financial

• Reported net loss attributable to common stock of $175 million, or a loss of $2.23 per diluted share. When adjusted for items analysts typically exclude from estimates including noncash mark-to-market losses and gains on asset divestitures, the Company’s adjusted net income¹ was $91 million, or $1.13 per diluted share
• Generated net cash provided by operating activities of $160 million, adjusted EBITDAX¹ of $206 million and free cash flow¹ of $61 million
• Closed the quarter with $328 million of cash on hand, $23 million more than at the end of 2021, an undrawn credit facility and $744 million of liquidity²

Operations

• Produced an average of 88,000 net barrels of oil equivalent (BOE) per day, including 56,000 barrels per day of oil, with capital expenditures of $99 million during the quarter
• Operated three drilling rigs in the San Joaquin Basin and one drilling rig in the Los Angeles Basin; drilled 42 wells (40 online in 1Q22)
• Operated 32 maintenance rigs

2022 Production Guidance & Capital Program Update³

CRC is increasing its 2022 capital program to a range of $340 to $385 million from $330 million to $375 million. For CRC's oil and natural gas operations, in response to the continued strong commodity environment, CRC increased its capital program to add one rig at its Wilmington Field. This additional rig is expected to generate IRR's of above 160% and paybacks of approximately one year. For CRC’s carbon management activities, CRC decreased its capital program to remove approximately $20 million for purchases of properties, land easements and leases. These amounts will be reported separately from its 2022 capital program in its condensed consolidated financial statements. This level of expected spending is consistent with CRC's strategy of investing up to 50% of its operating cash flow back into its oil and gas operations and targeting investing approximately 25% of its operating cash flow in carbon management projects over the next several years.

With this capital program, CRC expects to maintain oil production flat from exit to exit and is increasing its production guidance to 91,000 to 94,000 BOE per day. CRC plans to run five drilling rigs in the Mount Poso, Elk Hills, Buena Vista and Wilmington fields, and will focus on high return oil opportunities and continue to build off of the success of the 2021 drilling program.

In addition, CRC is raising its free cash flow¹ and adjusted EBITDAX¹ guidance by 17% and 11% at the midpoint, respectively, to $330 to $410 million and $860 to $960 million.

As a result of higher prices for purchased natural gas, which CRC uses to generate electricity for its operations, and for purchased electricity, the company is also raising its operating cost guidance to $680 to $720 million from $640 to $670 million.

Carbon Management Business (CMB) Update

In May 2022, CRC applied for two Class VI permits for an additional 80 million metric tons of permanent CO₂ storage for two new Carbon TerraVault carbon capture and storage (CCS) projects in the Sacramento basin, which, subject to approval, brings its total potential permitted storage to 120 million metric tons. This puts CRC over halfway to its target of applying for 200 million metric tons of permanent CO₂ storage for Carbon TerraVault CCS projects by the end of 2022.

During the first quarter of 2022, CRC spent approximately $2 million for CMB expenses related to Carbon TerraVault projects and approximately $1 million of capital on these projects. In addition, CRC acquired properties and land easements for carbon management activities. Total spend for these carbon-related acquisitions was $17 million.

CalCapture CCS+ Update

In April 2022, CRC entered into an agreement with NEXT Carbon Solutions (NCS), a subsidiary of NextDecade Corporation, to further explore the decarbonization of CRC’s Elk Hills power plant through the application of NCS' proprietary post-combustion carbon capture processes for its CalCapture CCS+ project. Pursuant to this agreement, NCS will perform a FEED study for the post combustion capture and compression of up to 95% of the CO₂ produced at the Elk Hills power plant. CRC expects this FEED study to commence in the second quarter of 2022 and it is projected to take approximately six months to complete. NCS previously delivered a front-end loading stage 2 analysis (FEL-2) to CRC which provided improved project prospects from technical and economic perspectives for the CalCapture CCS+ project. CRC and NCS expect to finalize definitive commercial documents allowing the CalCapture CCS+ project to proceed with a final investment decision following the completion and the review of the FEED. The CalCapture CCS+ project targets initial injection of 1.4 million metric tons of CO₂ per year and is projected to average approximately 7,000 incremental barrels of "Net Zero" oil per day over the life of project.

Sustainability Update

CRC continues to prioritize its Environmental, Social, and Governance (ESG) initiatives and make progress toward its Full-Scope Net Zero goal by 2045. CRC defines Full-Scope Net Zero as achieving permanent storage of captured or removed carbon emissions in a volume equal to all of its scope 1, 2, and 3 emissions by 2045 through a variety of opportunities with an “all-of-the-above” strategy which includes CalCapture CCS+, Carbon TerraVault and other emissions reduction projects.

In April 2022, CRC updated and expanded its ESG goals that build upon CRC’s long-standing commitment to sustainability. CRC’s ESG goals focus on providing low carbon intensity fuel today and net zero fuel for the future that meets or exceeds California’s unparalleled sustainability standards – not only related to lowering greenhouse gas (GHG) emissions, but also to further decreasing methane emissions, reducing freshwater consumption, expanding leadership diversity, enhancing community engagement, and increasing accountability by linking executive compensation to ESG performance.

"CRC's ESG goals demonstrate our commitment to the energy transition, and we are proud that CRC successfully continues on a path to provide safe and reliable low carbon intensity fuel and develop carbon capture and storage and other emissions reducing projects," said Mac McFarland, CRC President and Chief Executive Officer.

First Quarter 2022 E&P Operational Results

Total daily net production for the first quarter of 2022, compared to the fourth quarter of 2021, decreased by approximately 9,000 BOE per day, or 9%. During the first quarter of 2022, a planned 10-year maintenance turnaround occurred at a cryogenic gas processing facility, and was completed safely, successfully and ahead of schedule. This maintenance reduced total daily net natural gas and NGL production for the first quarter of 2022 by approximately 5,000 BOE per day. Production was also affected by the divestiture of CRC's remaining 50% working interest in certain zones in the Lost Hills field in February 2022 and CRC's divestiture of its Ventura basin operations beginning in the fourth quarter of 2021 which reduced CRC's total net production by approximately 3,000 BOE per day for the first quarter of 2022 compared to the fourth quarter of 2021. CRC's production also decreased as a result of natural decline, which was partially offset by improved operational results from its developmental drilling. CRC's production-sharing contracts (PSCs) had a similar impact on its net oil production in the first quarter of 2022 compared to the fourth quarter of 2021.

During the first quarter of 2022, CRC operated an average of three drilling rigs in the San Joaquin Basin and one drilling rig in the Los Angeles Basin. CRC's drilling program continues to see IRR's of above 100%. During the quarter, CRC drilled 42 net wells and brought online 40 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 2022 Financial Results

Review of First Quarter 2022 Financial Results

Realized oil prices, excluding the effects of cash settlements on CRC's commodity derivative contracts, increased by $17.14 per barrel from $78.99 per barrel in the fourth quarter of 2021 to $96.13 per barrel in the first quarter of 2022. Realized oil prices were higher in the first quarter of 2022 compared to the fourth quarter of 2021 as the effects of the COVID-19 pandemic have subsided leaving crude oil production and product inventories at historically low levels. As demand has rebounded, producers have generally maintained capital discipline, OPEC+ members have failed to produce at stepped-up quotas, and the conflict between Russia and Ukraine has created a disconnect between buyers and sellers of Russian produced crude oil. Realized oil prices, including the effects of cash settlements on CRC's commodity derivative contracts, decreased by $0.70 from $61.00 to $60.30. The reason for the decrease is due to higher settlement payments on CRC's commodity derivative contracts caused by the higher commodity price environment in the first quarter of 2022 compared to the fourth quarter of 2021. See Attachment 4 for further information on prices.

Adjusted EBITDAX¹ for the first quarter of 2022 was $206 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 purchases of natural gas used to generate electricity, purchased electricity and internal costs to generate electricity used in CRC's operations. Non-energy operating costs equal total operating costs less energy and gas processing costs. However, non-energy operating costs include the costs of purchasing natural gas to generate steam for its steamfloods.

Energy operating costs for the first quarter of 2022 were $53 million, or $6.68 per BOE, which was an increase of $5 million or 10% from $48 million, or $5.47 per BOE, for the fourth quarter of 2021. This increase was primarily a result of higher prices for purchased natural gas, which CRC used to generate electricity for its operations, and for purchased electricity. Energy operating costs were also higher on a per BOE basis as a result of lower production volumes between periods.

Non-energy operating costs for the first quarter of 2022 were $124 million, or $15.63 per BOE, which was a decrease of $6 million or 5% from $130 million, or $14.57 per BOE, for the fourth quarter of 2021. This decrease was primarily a result of reduced downhole maintenance activity and reduced volumes of natural gas purchased for use in CRC's steamflood operations. The per BOE increase was primarily due to lower production volumes between periods.

Balance Sheet and Liquidity Update

CRC's aggregate commitment under the Revolving Credit Facility was $552 million as of March 31, 2022. This amount includes $60 million of additional commitments from new lenders that CRC obtained in February 2022. The borrowing base for the Revolving Credit Facility is redetermined semi-annually and was reaffirmed at $1.2 billion on April 29, 2022.

On April 29, 2022, CRC amended its Revolving Credit Facility to, among other things, modify the minimum hedge requirement and the restricted payment contained in the Revolving Credit Facility. As a result of this amendment, the rolling hedge requirement as described in Part II, Item 8 – Financial Statements and Supplementary Data, Note 4 Debt in CRC's 2021 Annual Report has been modified. Furthermore, the restricted payment and investments covenants were modified to permit unlimited restricted payments and/or investments so long as (i) no Default, Event of Default or Borrowing Base Deficiency shall have occurred and be continuing under the Revolving Credit Facility at the time of such investment or restricted payment, (ii) the undrawn availability under the Revolving Credit Facility is not less than 30.0% at such time and (iii) the Consolidated Total Net Leverage Ratio is less than or equal to 1.50 to 1.00.

As of March 31, 2022, CRC had liquidity of $744 million, which consisted of $328 million in cash and $416 million of available borrowing capacity under its Revolving Credit Facility.

Acquisitions and Divestitures

During the first quarter of 2022, CRC recorded a gain of $6 million related to the sale of certain Ventura basin assets. CRC expects to divest its remaining assets in the Ventura basin during the second half of 2022, pending final approval from the State Lands Commission.

On February 1, 2022, CRC sold its 50% non-operated working interest in certain horizons within its Lost Hills field, located in the San Joaquin basin, recognizing a gain of $49 million. CRC retained an option to capture, transport and store 100% of the CO₂ from steam generators across the Lost Hills field for future carbon management projects. CRC also retained 100% of the deep rights and related seismic data.

Shareholder Returns Strategy

CRC continues to prioritize shareholder returns and is committed to delivering approximately 25% of operating cash flow to shareholders. In light of this strategy, CRC increased the Share Repurchase Program by $300 million to $650 million and extended the term of the program through June 30, 2023. After the repurchases through April 29, 2022, and the $300 million increase, CRC has $411 million available for future potential share repurchases.

During the first quarter of 2022, CRC repurchased approximately 1.7 million shares of its common stock for $71 million. Since the inception of Share Repurchase Program through April 29, 2022, CRC has repurchased 6.2 million shares for $239 million.

On May 4, 2022, CRC's Board of Directors declared a quarterly dividend of $0.17 per share of common stock. The dividend is payable to shareholders of record on June 1, 2022, and will be paid on June 16, 2022.

Upcoming Investor Conference Participation

CRC's executives will be participating in the following virtual and in-person events in May 2022 and June 2022:

• Citi 2022 Global Energy, Utilities and Climate Technology Conference on May 10 - May 11, 2022, in Boston, MA
• BofA Securities 2022 Virtual Energy Transition & ESG Conference on May 11 - May 12, 2022
• Wells Fargo 2022 Energy Conference on June 1 - June 2, 2022 in Irving, TX
• RBC Capital Markets Global Energy and Power Infrastructure Conference on June 7 - June 8, 2022, in New York City, NY
• BofA Securities 2022 Energy Credit Conference on June 8 - June 9, 2022, in New York City, NY
• J.P. Morgan 2022 Energy, Power & Renewables Conference on June 22 - June 23, 2022, in New York City, NY
• Pickering Energy Partners CCUS Mini-Conference on June 28 - June 29, 2022, in Houston, TX

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 later today 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/10164563/f1eff7c58f. 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 California Resources Corporation

California Resources Corporation (CRC) is an independent oil and natural gas company committed to energy transition in the sector. CRC has some of the lowest carbon intensity production in the US and we are focused on maximizing the value of our land, mineral and technical resources for decarbonization by developing carbon capture and storage (CCS) and other emissions reducing projects. For more information about CRC, please visit www.crc.com.

Forward-Looking Statements

This document contains statements that we believe 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 we believe the expectations and forecasts reflected in CRC's 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 our actual results to be materially different than those expressed in CRC's forward-looking statements include:

• fluctuations in commodity prices and the potential for sustained low oil, natural gas and natural gas liquids prices;
• legislative or regulatory changes, including those related to (i) drilling, completion, well stimulation, operation, maintenance or abandonment of wells or facilities, (ii) managing energy, water, land, greenhouse gases (GHGs) or other emissions, (iii) protection of health, safety and the environment, (iv) tax credits or other incentives, or (v) transportation, marketing and sale of our products;
• availability or timing of, or conditions imposed on, permits and approvals necessary for drilling or development projects;
• changes in business strategy and CRC's capital plan;
• lower-than-expected production, reserves or resources from development projects or acquisitions, or higher-than-expected decline rates;
• incorrect estimates of reserves and related future cash flows and the inability to replace reserves;
• the recoverability of resources and unexpected geologic conditions;
• CRC's ability to realize the benefits of business strategies and initiatives related to energy transition, including carbon capture and storage projects and other renewable energy efforts;
• CRC's ability to finance and implement its carbon capture and storage projects;
• global geopolitical, socio-demographic and economic trends and technological innovations;
• changes in our dividend policy and our ability to declare future dividends;
• production-sharing contracts' effects on production and operating costs;
• limitations on CRC's financial flexibility due to existing and future debt;
• insufficient cash flow to fund planned investments, interest payments on our debt, stock repurchases or changes to CRC's capital plan;
• insufficient capital or liquidity unavailability of capital markets or inability to attract potential investors;
• limitations on transportation or storage capacity and the need to shut-in wells;
• inability to enter into desirable transactions, including acquisitions, asset sales and joint ventures;
• joint ventures and acquisitions and CRC's ability to achieve expected synergies;
• CRC's ability to utilize its net operating loss carryforwards to reduce its income tax obligations;
• CRC's ability to successfully gather and verify data regarding emissions, its environmental impacts and other initiatives;
• the compliance of various third parties with CRC's policies and procedures and legal requirements as well as contracts CRC enters into in connection with its climate-related initiatives;
• the effect of CRC's stock price on costs associated with incentive compensation;
• changes in the intensity of competition in the oil and gas industry;
• effects of hedging transactions;
• equipment, service or labor price inflation or unavailability;
• climate-related conditions and weather events;
• disruptions due to accidents, mechanical failures, power outages, transportation or storage constraints, natural disasters, labor difficulties, cyber-attacks or other catastrophic events;
• pandemics, epidemics, outbreaks, or other public health events, such as the COVID-19; 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 we have not independently verified them and do not warrant the accuracy or completeness of such third-party information.