California Resources Corporation Announces Offer to Purchase Outstanding Notes for Cash

California Resources Corporation (NYSE: CRC) today announced the
commencement of its offer to purchase (the “Tender Offers”), upon the
terms and conditions set forth in the offer to purchase, dated August 1,
2016 (the “Offer to Purchase”), and the related letter of transmittal
(“Letter of Transmittal”), up to a combined aggregate principal amount
of its outstanding 5.0% Senior Notes due 2020, 5.5% Senior Notes due
2021, 6.0% Senior Notes due 2024 (together, the “Unsecured Notes”) and
8.00% Second Lien Secured Notes due 2022 (the “8% Notes” and, together
with the Unsecured Notes, the “Outstanding Notes”) that can be purchased
with $525 million in cash (the “Maximum Consideration Amount”) subject
to the Acceptance Priority Levels and the 8% Tender Cap described below.

The Tender Offers will expire at 11:59 p.m., New York City time, on
August 26, 2016, unless extended by CRC (the “Expiration Time”) or
earlier terminated. Subject to the pro rata tender acceptance
structure, Acceptance Priority Levels and the 8% Notes Tender Cap and
other conditions set forth in Offer to Purchase, for each $1,000
principal amount of Outstanding Notes validly tendered (and not validly
withdrawn) prior to 5:00 p.m., New York City time, on August 12, 2016
(as it may be extended, the “Early Participation Time”), holders of the
Outstanding Notes (“Holders”) will be eligible to receive the “Full
Consideration” set forth in the table below, which includes the “Early
Participation Premium” of $50. For each $1,000 principal amount of
Outstanding Notes validly tendered after the Early Participation Time,
Holders will only be eligible to receive the “Base Consideration” set
forth in the table below.

The following table sets forth the Base Consideration, Early
Participation Premium and Full Consideration for each series of
Outstanding Notes:

In addition to the Base Consideration or Full Consideration, as
applicable, CRC will pay in cash accrued and unpaid interest on
Outstanding Notes purchased in the Tender Offers to, but excluding the
applicable Settlement Date as described below.

The Tender Offers are also conditioned on, among other things, (i) entry
into, and effectiveness of, an amendment (“Credit Agreement Amendment”)
to our existing first lien secured credit agreement (the “Existing
Facility”) and the availability of sufficient funds from the Existing
Facility (as amended by the Credit Agreement Amendment) to consummate
the Tender Offers and (ii) a sufficient aggregate principal amount of
Outstanding Notes being validly tendered (and not validly withdrawn) to
result in a minimum of $500 million in aggregate principal amount of our
Outstanding Notes being accepted for purchase.

The Company is currently seeking the Credit Agreement Amendment to
permit the consummation of these Tender Offers. We expect that the
Credit Agreement Amendment will, among other things, reduce the revolver
commitments by the lenders from $1.6 billion to $1.4 billion and grant a
lien on our assets not currently pledged to secure the Existing
Facilities. In connection with the Credit Agreement Amendment the
Company is in the process of marketing to prospective lenders a new
first lien secured credit facility (the “Syndicated Facility”) arranged
by Goldman Sachs Bank USA, acting as Lead Arranger and Bookrunner, with
an expected 25% of the proceeds of such Syndicated Facility being used
to pay down the term loans under the Existing Facility and the remaining
proceeds being used to pay down outstanding revolver borrowings under
the Existing Facility. The Company is seeking such Syndicated Facility
in an aggregate principal amount of at least $700 million, which will be
secured with a first priority lien on the same collateral used to secure
the Existing Facility, but with “second out” collateral recovery
pursuant to an intercreditor agreement between the Existing Facility
lenders and the Syndicated Facility lenders. The Company can make no
assurances that other material terms that further restrict it will not
be agreed with its lenders under the Existing Facility or under the
Syndicated Facility.

Outstanding Notes that are validly tendered (and not validly withdrawn)
at or before the Early Participation Time, and accepted by CRC, will be
purchased by CRC on a settlement date that is expected to be on or about
three business days following the Early Participation Time, or as
promptly as practicable thereafter (the “Early Settlement Date”).
Outstanding Notes that are validly tendered (and not validly withdrawn)
after the Early Participation Time and at or before the Expiration Time,
and accepted by CRC, will be purchased by CRC on a settlement date that
is expected to be on or about three business days following the
Expiration Time, or as promptly as practicable thereafter (together with
the Early Settlement Date, the “Settlement Dates”).

The amount of each series of Outstanding Notes that is purchased on any
Settlement Date will be determined in accordance with the respective
“Acceptance Priority Levels” set forth in the table above (with 1 being
the highest Acceptance Priority Level and 3 being the lowest Acceptance
Priority Level), so that subject to the Maximum Consideration Amount and
the 8% Notes Tender Cap and other offer conditions, all validly tendered
(and not validly withdrawn) Outstanding Notes to be purchased on a
Settlement Date having a higher Acceptance Priority Level will always be
accepted before any validly tendered (and not validly withdrawn)
Outstanding Notes to be purchased on such Settlement Date having a lower
Acceptance Priority Level will be accepted. If a sufficient portion of
the Maximum Consideration Amount remains to purchase some, but not all,
of the Outstanding Notes of an applicable Acceptance Priority Level
which are validly tendered (and not validly withdrawn), the amount of
Outstanding Notes purchased of such Acceptance Priority Level will be
prorated based on the aggregate principal amount validly tendered (and
not validly withdrawn) with respect to such applicable Acceptance
Priority Level, except that the Outstanding Notes of the applicable
Acceptance Priority Level that were validly tendered (and not validly
withdrawn) at or before the Early Participation Time will be accepted
for tender before any such Outstanding Notes of the applicable
Acceptance Priority Level that were validly tendered (and not validly
withdrawn) after the Early Participation Time. If sufficient Outstanding
Notes are tendered on or prior to the Early Participation Time such that
the full amount of the Maximum Consideration Amount will be utilized, no
Outstanding Notes will be accepted for purchase after the Early
Participation Time. In addition, the maximum aggregate principal amount
of 8% Notes that will be purchased in the Tender Offers will be limited
to $200 million (such principal amount, the “8% Notes Tender Cap”).

Tendered Outstanding Notes may be withdrawn from the Tender Offers at or
prior to, but not after, 5:00 p.m., New York City time, on August 12,
2016 (the “Withdrawal Deadline”). CRC may, but is not obligated to,
increase the Maximum Consideration Amount without extending the Early
Participation Time or reinstating withdrawal rights. Additionally, CRC
may, subject to applicable law, with respect to the Tender Offers, in
its sole and absolute discretion, (a) extend the Early Participation
Time, Withdrawal Deadline or Expiration Time to a later date and time as
announced by CRC; (b) increase or eliminate the 8% Notes Tender Cap; (c)
waive any or all conditions to the Tender Offers; or (d) terminate,
withdraw or otherwise amend any or all of the Tender Offers.

The complete terms and conditions of the Tender Offers are described in
the Offer to Purchase and related Letter of Transmittal, copies of which
may be obtained by contacting Global Bondholder Services Corporation,
the tender agent and information agent in connection with the Tender
Offers, at (866) 470-3800 or (212) 430-3774 (banks and brokers).
Questions regarding the Tender Offers may be directed to Global
Bondholder Services Corporation or Goldman, Sachs & Co., who has been
retained as Lead Dealer Manager in connection with the Tender Offers,
and may be contacted at (212) 902-6941 (collect) or (800) 828-3182 (toll
free).

This press release does not constitute an offer to sell or a
solicitation of any offer to buy any securities, nor shall there be any
sale of any securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.

About California Resources Corporation

California Resources Corporation is the largest oil and natural gas
exploration and production company in California on a gross-operated
basis. The Company operates its world class resource base exclusively
within the State of California, applying integrated infrastructure to
gather, process and market its production. Using advanced technology,
California Resources Corporation focuses on safely and responsibly
supplying affordable energy for California by Californians.

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 flows and business prospects.
Such statements specifically include our expectations as to our future
financial position, liquidity and other guidance included in this press
release. Actual results may differ from anticipated results, sometimes
materially. For any such forward-looking statement that includes a
statement of the assumptions or bases underlying such forward-looking
statement, we caution that, while we believe such assumptions or bases
to be reasonable and make them in good faith, assumed facts or bases
almost always vary from actual results, sometimes materially. Factors
(but not necessarily all the factors) that could cause results to differ
include: factors noted in our offers to purchase, including, but not
limited to, market volatility, note valuation concerns, limited
acceptance of tendered notes pursuant to the offer terms, loss of
ability to participate in later capital markets opportunities for any
tendered notes, delay in or abandonment of the offers; the size of our
remaining debt after consummation of the offers; failure to consummate
the offers; commodity price fluctuations; the ability of our lenders to
limit our borrowing capacity; the effect of our debt on our financial
flexibility; changes in our debt credit ratings; potential inability to
pay our debt at maturity or interest on our debt and reduced liquidity
in our debt securities. Material risks are further discussed in “Risk
Factors” in our Annual Report on Form 10-K and Forms 10-Q available on
our website at crc.com. Words such as "aim," "anticipate," "believe,"
"budget," "continue," "could," "effort," "estimate," "expect,"
"forecast," "goal," "guidance," "intend," "likely," "may," "might,"
"objective," "outlook," "plan," "potential," "predict," "project,"
"seek," "should," "target," "will" or "would" and similar expressions
that reflect the prospective nature of events or outcomes typically
identify forward-looking statements. Any forward-looking statement
speaks only as of the date on which such statement is made and the
Company undertakes no obligation to correct or update any
forward-looking statement, whether as a result of new information,
future events or otherwise, except as required by applicable law.

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