• New common shares begin trading on the NYSE on October 28, 2020

• Chapter 11 Restructuring Eliminates Pre-Existing Debt and Intermediary Joint Venture Interest in Exchange for Equity

• CRC emerges with $ 540 million revolving credit facility, $ 300 million of secured notes and $ 200 million of secondary term loan

California Resources Corporation (NYSE: CRC) (“CRC” or the “Company”) announced today that it will complete its financial restructuring and emerge from bankruptcy proceedings with a significantly stronger balance sheet. . CRC’s Joint Reorganization Plan (“Plan”) in its Chapter 11 case canceled pre-existing debt, consolidated CRC’s ownership in the Elk Hills Power Plant and Cryogenic Gas Plant, and provided for full payment. of all valid and undisputed trade and claims in the ordinary course of business. Today, the CRC will officially conclude its reorganization after having successfully completed all the required actions and fulfilling the other conditions of the Plan.

Todd Stevens, President and CEO of CRC, said: “With the full support of our stakeholders and a much stronger balance sheet, the restructured CRC is well designed to withstand price cycles and continue to provide affordable energy. , durable and reliable that is so essential to Californians. You can expect CRC to build on the fundamental strengths of our business that provide us with a high degree of operating flexibility, including our low declining conventional oil production, low capital intensity, market exposure. Brent crude oil, an important mineral property in and integrated infrastructure. We believe the streamlined CRC and our commitment to disciplined capital allocation will serve as a solid foundation for generating free cash flow. CRC is committed to fostering sustainable energy production to meet the future needs of all Californians. I would also like to thank our employees for their dedication, focus and effort to maintain our proven track record of safety, environmental national stewardship and operational excellence during the restructuring process. “

The story continues

As previously noted, CRC has entered into a settlement and assumption agreement with certain affiliates of Ares Management LP (“Ares”) relating to the CRC and Ares Elk Hills joint venture. Under the agreement, CRC acquired the joint venture interests and 100% ownership of the Elk Hills power plant and cryogenic gas processing plant in exchange for approximately 20.8% of the new shares. shares of CRC and $ 300 million in guaranteed notes issued by EHP Midco Holding Company, LLC, a subsidiary of CRC. As a result, the assets of the joint venture are now wholly owned by CRC.

Under the plan approved by the bankruptcy court, approximately $ 4.4 billion in loans and notes outstanding as of June 30, 2020 have been capitalized. In addition, all previous holdings of the Company were canceled and ceased to exist after market close on October 27, 2020. As part of its emergence, the shares of the new ordinary shares of the Company have been approved for trading. listed on the New York Stock Trading under the ticker symbol “CRC” and trading is expected to begin October 28, 2020. At emergence, CRC will have approximately 83.3 million common shares issued and outstanding, which includes shares representing 32.5% of our new common shares issued to holders of loans and notes under the Plan, shares representing 45.7% of our new common shares issued under a fully secured rights offering of 450 million that was fully subscribed and takes effect at emergence, as well as shares representing 20.8% of our new common shares issued under the Ares settlement described above. The CRC has also issued Level 1 warrants and Level 2 warrants (each as defined in the plan) to acquire up to 2% and 3% of new ordinary shares, respectively, at a “price”. year ”to be calculated on the basis of a total equity value of $ 3 billion. , valid for four years.

At emergence, CRC entered into a new revolving credit facility with a borrowing base of $ 1.2 billion and a commitment level of $ 540 million. The facility matures on April 27, 2024. CRC has a net borrowed position of approximately $ 37 million on the Emergence Facility, net of unallocated cash of $ 70 million and $ 118 million used for provisionally guarantee certain outstanding letters of credit. under CRC’s senior debtor-in-chief credit facility. CRC’s capital structure also includes a second term loan of $ 200 million and $ 300 million of secured notes due 2027 issued to Ares in connection with the Ares settlement described above. CRC is well capitalized at emergence with over $ 345 million in cash on hand.

Summary of the new capital structure

The following table presents the principal amount of CRC’s debt and mezzanine equity as at June 30, 2020 and at emergence:

– Certain letters of credit outstanding under our senior credit facility have been cash secured on an interim basis until transferred to our new revolving credit facility. This interim cash guarantee resulted in a temporary financing of $ 118 million under the new revolving credit facility. Excluding this amount, the outstanding balance on our new revolving credit facility, net of unallocated cash of $ 70 million, would have been $ 37 million.

Newly appointed board of directors

As per plan, CRC has a new Board of Directors (the “Board”) effective today. New Board members are President Mark A. McFarland, Douglas E. Brooks, Tiffany (TJ) Thom Cepak, James N. Chapman, Julio M. Quintana, William B. Roby and Brian Steck. President and CEO Todd Stevens will also continue to serve as a director of CRC. The board has standing audit, remuneration, nomination and governance committees. The formation and composition of a sustainability committee will be discussed after its emergence.

Further information Additional information regarding the filing of Chapter 11 of the CRC is available at https://investors.crc.com/Corporate-Restructuring-Information/default.aspx and will be provided in a Form 8-K, which can be viewed on the Company’s website at www.crc.com or the SEC website atwww.sec.gov . Copies of the signed orders and the complete court file for this case can be viewed online at https://dm.epiq11.com/CaliforniaResources

and questions regarding the details of the bankruptcy should be directed to the Company’s claims agent by emailing [email protected] or calling (855) 917-3506.

Disclosure of forward-looking statements

This press release contains forward-looking statements that involve risks and uncertainties that could materially affect our expected results of operations, liquidity, cash flow and business outlook. These statements include those regarding our expectations for our future: financial condition, liquidity, cash flow and results of operations; business prospects; operations and projects; operating costs; operations and operational results, including expected capital investments and IVCs; and budget. Actual results may differ from anticipated results, sometimes significantly, and reported results should not be taken as an indication of future performance. Although we believe that the assumptions or bases underlying our expectations are reasonable and that we make them in good faith, they almost always differ from actual results, sometimes materially. Factors (but not necessarily all factors) that could cause different results include the factors discussed in the “Risk Factors” section of our Annual Report on Form 10-K available on our website atwww.crc.com

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Words such as “anticipate”, “believe”, “continue”, “could”, “estimate”, “‘)” “potential”, “project”, “seek”, “should”, “target,” “or “” And similar words that reflect the forward-looking nature of events or results generally identify forward-looking statements. statement speaks only as of the date on which such statement is made and the Company assumes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise , unless required by applicable law. .

About California Resources Corporation

California Resources Corporation is an independent exploration and production company and the largest producer of oil and natural gas in California. The Company operates its world-class resource base exclusively in the State of California, applying a complementary and integrated infrastructure to aggregate, process and market its production. Using cutting-edge technology, California Resources Corporation is focused on providing safe and responsible, affordable energy to California by Californians. See the source version on businesswire.com:

https://www.businesswire.com/news/home/20201027006207/en/

Contacts

CRC Contact:
Scott Espenshade (Investor Relations)
(818) 661-6010

[email protected]
Margita Thompson (Media)
(818) 661-6005