California Resources Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported a net loss of $315 million for the third quarter of 2026, compared to net income of $514 million in the second quarter of 2026.
• Reported adjusted net income of $104 million ($1.17 per diluted share), compared to $88 million ($0.99 per diluted share) in the second quarter of 2026.
• Reported adjusted EBITDAX of $341 million, exceeding quarterly guidance, compared to $338 million in the second quarter of 2026.
• Generated net cash provided by operating activities of $305 million, compared to $263 million in the second quarter of 2026.
• Delivered free cash flow of $147 million, compared to $114 million in the second quarter of 2026.
• Total operating revenues before net loss from commodity derivatives were $1,096 million, compared to $1,092 million in the second quarter of 2026.
• Operating costs were $386 million, compared to $347 million in the second quarter of 2026.
• General and administrative expenses were $89 million, compared to $97 million in the second quarter of 2026; adjusted general and administrative expenses were $79 million.
• Net loss from commodity sales derivatives was $675 million, compared to a gain of $205 million in the second quarter of 2026.
• Capital investments totaled $158 million, compared to $149 million in the second quarter of 2026.
• Long-term debt, net was $1,281 million as of September 30, 2026, compared to $1,283 million as of December 31, 2025.
• Total stockholders' equity was $3,025 million as of September 30, 2026, compared to $3,674 million as of December 31, 2025.

Guidance and Future Outlook:

• Provided fourth quarter 2026 guidance for net production of 150–152 MBoe/d and adjusted EBITDAX of $340–$380 million.
• Provided fourth quarter 2026 guidance for capital investments of $110–$130 million.
• Preliminary 2027 outlook indicates 2027 drilling, completions, and workover capital is expected to be $450–$475 million.
• Plans to enter 2027 with six rigs in California, up from an average of five rigs in the third and fourth quarters of 2026.
• Intends to provide full-year 2027 guidance with the fourth quarter and year-end 2026 earnings release.
• Guidance assumptions include a Brent price of $102.90 per barrel and a NYMEX gas price of $3.25 per Mcf.

Business Segments and Product Lines:

• Delivered average net production of 152 MBoe/d (80% oil) in the third quarter of 2026, representing 2% quarter-over-quarter growth.
• Net oil production averaged 121 MBbl/d, net NGL production averaged 11 MBbl/d, and net natural gas production averaged 123 Mmcf/d.
• Net NGL and natural gas production exceeded guidance by approximately 1 MBoe/d, supported by the new Belridge-Elk Hills connection and the first carbon capture and storage (CCS) project at CRC's Elk Hills Cryogenic Gas Plant.
• Electricity revenue net of electricity generation expenses was $35 million, exceeding guidance, driven by higher resource adequacy revenue and sales from the Elk Hills power plant running at higher operational capacity.
• Closed the all-cash acquisition of Crimson Midstream Holdings, LLC ("Crimson"), strengthening the energy infrastructure platform and expanding CO2 transportation options.
• Announced a memorandum of understanding (MOU) with Bloom Energy to jointly evaluate the potential development of 1 gigawatt or more of solid-oxide fuel cell power generation paired with carbon capture and storage.
• Signed an agreement to divest Uinta Basin assets for approximately $90 million in cash consideration, expected to close by year-end.

Market and Competitive Landscape:

• Realized oil price without derivative settlements was $83.42 per Bbl, compared to $91.55 per Bbl in the second quarter of 2026.
• Realized NGL price was $48.57 per Bbl, compared to $49.62 per Bbl in the second quarter of 2026.
• Realized natural gas price was $3.52 per Mcf, compared to $1.84 per Mcf in the second quarter of 2026.
• Operating expenses increased over the prior period primarily due to higher prices for natural gas purchased for steamflood operations and higher workover activity.

Risks and Challenges:

• Net loss was significantly impacted by a non-cash loss of $540 million from changes in the fair value of outstanding commodity derivatives.
• Forward-looking statements are subject to risks including fluctuations in commodity prices, production levels, government policy, regulatory actions, and the ability to successfully identify and finance carbon capture projects.
• Future dividends and share repurchases are subject to commodity prices, debt agreement covenants, and Board of Directors' approval.

Management Commentary and Tone:

• Francisco Leon, President and CEO, stated the team is executing exceptionally well through strong operational performance, synergy realization, and impressive free cash flow.
• Management emphasized a shift from acquisition to optimization in 2027, focusing on lowering costs, improving capital efficiency, and leveraging midstream, power, and carbon opportunities.
• Management reaffirmed commitment to shareholder capital return programs, demonstrated by the 4% dividend increase and ongoing share repurchases.

Other Key Points:

• Increased the quarterly dividend by 4% to $0.42 per share, payable in the fourth quarter of 2026.
• Returned $66 million to shareholders in the third quarter of 2026, including $36 million in dividends and $30 million in share repurchases (0.6 million shares at an average price of $53.48).
• As of September 30, 2026, had $570 million remaining for share repurchases under its authorized program through December 31, 2027.
• Ended the quarter with $1,315 million in liquidity, consisting of $35 million in available cash and $1,280 million in borrowing capacity under the Revolving Credit Facility.
• Entered into a new amendment to its Revolving Credit Facility in October 2026, extending the maturity date to March 2030 and increasing elected commitments to $1,470 million.
• Since 2021, the Company has returned approximately $1,721 million to shareholders, including $1,210 million in share repurchases and $511 million in dividends.