California Resources Corporation Announces Second Quarter 2016 Financial Results

California Resources Corporation ("CRC" or the "Company") (NYSE:CRC), an
independent California-based oil and gas exploration and production
company, today announced a net loss of $140 million or $3.51 per diluted
share for the second quarter of 2016, compared with a net loss of $68
million or $1.78 per diluted share for the same period in 2015. The
adjusted net loss¹ for the second quarter of 2016 was $72
million or $1.80 per diluted share, compared with an adjusted net loss
of $51 million or $1.33 per diluted share for the same period in 2015.
For the first six months of 2016, the net loss was $190 million or $4.85
per diluted share, compared with a net loss of $168 million or $4.40 per
diluted share for the same period in 2015. The adjusted net loss for the
first six months of 2016 was $172 million or $4.39 per diluted share,
compared with an adjusted net loss of $148 million or $3.87 per diluted
share for the same period of 2015. Adjusted EBITDAX² for the
second quarter and first six months of 2016 was $160 million and $284
million, respectively, compared with $270 million and $468 million for
the second quarter and first six months of 2015.

Quarterly Highlights Include:

• Quarterly total production of 140,000 BOE per day
• 22% reduction in quarterly production costs year-over-year
• 28% reduction in quarterly general and administrative costs
  year-over-year
• $80 million debt reduction in exchange for common stock during the
  quarter
• Cash from settled hedges of $2.29 per barrel of oil for the quarter

Todd Stevens, President and Chief Executive Officer, said, "While the
second quarter price improvements were welcome, we continued our
commitment to executing on items within our control, remaining focused
on our core financial and operating tenets. Over the past year we have
reduced our debt by approximately $700 million from the post-spin peak
reached in early 2015. The recently announced tender would take us
another step closer to our long term goals, and we remain focused on
continued deleveraging efforts."

¹ See reconciliation on Attachment 3.

² For an explanation of how we calculate and use Adjusted
EBITDAX (non-GAAP) and reconciliations of net income / (loss) (GAAP) and
net cash provided by operating activities (GAAP) to Adjusted EBITDAX
(non-GAAP), please see Attachment 2.

Second Quarter Results

For the second quarter of 2016, CRC reported a net loss of $140 million
or $3.51 per diluted share, compared with a net loss of $68 million or
$1.78 per diluted share for the same period of 2015. The 2016 quarter
reflected lower production costs, general and administrative expense, ad
valorem expense, depreciation, depletion and amortization expense
(DD&A), exploration expense and interest expense, as well as gains on
the retirement of notes and divestiture of assets, more than offset by
lower oil and gas realized prices and lower oil, natural gas liquids
(NGL) and gas volumes. The second quarter 2016 adjusted net loss was $72
million or $1.80 per diluted share, compared with an adjusted net loss
of $51 million or $1.33 per diluted share for the same period of 2015.
The 2016 adjusted net loss excluded $137 million of non-cash derivative
losses on outstanding hedges at June 30, 2016, $44 million of gains on
the retirement of the Company's unsecured notes, a $31 million gain from
asset divestitures, and $6 million of other non-recurring charges. The
2015 adjusted net loss excluded $17 million of after-tax non-recurring
adjustments.

Adjusted EBITDAX for the second quarter of 2016 was $160 million,
compared to $270 million for the same period of 2015.

Total daily production volumes averaged 140,000 barrels of oil
equivalent (BOE) in the second quarter of 2016, compared with 161,000
BOE in the second quarter of 2015, a 13-percent decrease which is within
CRC's stated production decline range. The second quarter 2016
production decline reflected management's decision to withhold
development capital and selective deferral of workover and downhole
maintenance activity in the first half of the year. The Company began
increasing its activity levels gradually towards the end of the second
quarter. Additionally, temporary California pipeline disruptions
negatively impacted CRC's ability to sell all of the oil the Company
produced in the second quarter of 2016, some of which CRC held in
inventory at the end of the quarter. As a result, the actual second
quarter production was slightly higher than the reported volumes, which
represent sales. The Company expects this inventory to be sold in the
third quarter of 2016 and be reported as production at that time.
Year-over-year average oil production decreased by 13 percent, or 14,000
barrels per day, to 90,000 barrels per day in the second quarter of
2016, compared to the same period of the prior year. NGL production
decreased by 11 percent to 16,000 barrels per day and natural gas
production decreased by 14 percent to 202 million cubic feet (MMcf) per
day.

In the second quarter of 2016, realized crude oil prices including the
effect of cash received from settled hedges decreased 23 percent to
$43.70 per barrel from $56.73 per barrel in the second quarter of 2015.
Second quarter 2016 hedges contributed an additional $2.29 per barrel to
the realized crude oil price, compared with no effect in the second
quarter of 2015. Realized NGL prices increased 10 percent to $22.54 per
barrel in the second quarter of 2016 from $20.47 per barrel in the
second quarter of 2015. Realized natural gas prices decreased 33 percent
to $1.66 per thousand cubic feet (Mcf) in the second quarter of 2016,
compared with $2.49 per Mcf in the same period of 2015.

Production costs for the second quarter of 2016 were $188 million or
$14.76 per BOE, compared with $242 million or $16.59 per BOE for the
second quarter of 2015, a 22-percent reduction on an absolute dollar
basis. The decrease was driven by cost reductions across CRC's
operations, particularly in well servicing efficiency, field personnel
and lower natural gas prices, as well as management's decision to
selectively defer lower value workovers and downhole maintenance
activity. General and administrative (G&A) expenses were $61 million or
$4.80 per BOE for the second quarter of 2016, compared with $85 million
or $5.82 per BOE for the second quarter of 2015, reflecting employee and
contractor cost-reduction initiatives. Adjusted G&A expenses for the
second quarter of 2016 were $57 million or $4.49 per BOE, compared with
$75 million or $5.13 per BOE for the second quarter of 2015. Adjusted
G&A expenses for both quarters excluded severance and other
employee-related costs. Exploration expenses of $5 million for the
second quarter of 2016 were $2 million lower than the same period of
2015. Ad valorem taxes of $26 million for the second quarter of 2016
were $14 million lower than the same period of 2015.

Six-Month Results

For the first six months of 2016, CRC reported a net loss of $190
million of $4.85 per diluted share, compared with a net loss of $168
million or $4.40 per diluted share for the same period of 2015. The 2016
results reflected lower production costs, general and administrative
expense, ad valorem expense, DD&A expense, exploration expense and
interest expense, as well as gains on the retirement of notes and
divestiture of assets, more than offset by lower oil, NGL and gas
realized prices and volumes. The first six-month adjusted net loss was
$172 million or $4.39 per diluted share, compared with an adjusted net
loss of $148 million or $3.87 per diluted share for the same period of
2015. The 2016 adjusted net loss excluded $218 million of non-cash
derivative losses on outstanding hedges at June 30, 2016, $133 million
of gains on the retirement of the company's notes, a $31 million gain
from asset divestitures, a $63 million benefit from a deferred tax
valuation allowance adjustment and $27 million of other non-recurring
charges. The 2015 adjusted net loss excluded $20 million of after-tax
non-recurring adjustments.

Adjusted EBITDAX for the first six months of 2016 was $284 million,
compared to $468 million in the prior year period.

Total daily production volumes averaged 144,000 BOE in the first six
months of 2016, compared with 163,000 BOE in the first six months of
2015, a 12-percent decrease which is within CRC's stated production
decline range. The production decline in the first six months of 2016
reflected management's decision to withhold development capital and
selective deferral of workover and downhole maintenance activity in the
first half of the year. CRC's year-over-year average oil production
decreased by only 11 percent, or 12,000 barrels per day, to 94,000
barrels per day in the first six months of 2016, compared with the same
period of the prior year. NGL production decreased by 6 percent to
17,000 barrels per day and natural gas production decreased by 16
percent to 199 MMcf per day.

Realized crude oil prices including the effect of cash received from
settled hedges decreased 23 percent to $39.90 per barrel in the first
half of 2016 from $51.51 per barrel in the first half of 2015. Hedges
contributed $4.38 per barrel to the 2016 realized crude oil price
compared with $0.03 for 2015. Realized NGL prices decreased 8 percent to
$19.35 per barrel in the first half of 2016 from $21.00 per barrel in
the first half of 2015. Realized natural gas prices decreased 31 percent
to $1.85 per Mcf in the first half of 2016, compared with $2.67 per Mcf
in the same period of 2015.

Production costs for the first half of 2016 were $372 million or $14.21
per BOE, compared with $484 million or $16.39 per BOE for the same
period in 2015, a 23-percent reduction on an absolute dollar basis. The
decrease was driven by cost reductions across CRC's operations,
particularly in well servicing efficiency, field personnel, energy use
and lower natural gas prices, as well as management's decision to
increase economic thresholds and selectively defer lower value workovers
and downhole maintenance activity. G&A expenses were $128 million or
$4.90 per BOE for the first half of 2016, compared with $161 million or
$5.45 per BOE for the same period in 2015, reflecting employee and
contractor cost-reduction initiatives as well as lower 2016 stock-based
compensation costs due to the lower stock price. Adjusted G&A expenses
were $110 million or $4.20 per BOE for the first half of 2016, compared
with $151 million or $5.11 per BOE for the same period of 2015. Adjusted
G&A expenses for both years excluded severance and other
employee-related costs. Exploration expenses of $10 million for the
first half of 2016 were $14 million lower than the same period of 2015.
Ad valorem taxes were $53 million for the first half of 2016 and $80
million for the same period of 2015.

Operating cash flow after working capital changes was $44 million for
the first six months of 2016 and $232 million for the first six months
of 2015. In addition to the increase in net loss, the first half of 2016
reflected higher interest payments, largely due to the timing of the
payment due dates.

Operational Update

CRC did not have any drilling rigs running during the second quarter of
2016. This was consistent with CRC's significantly reduced 2016 capital
program which focused on investments designed to maintain the mechanical
integrity of its facilities and systems and operate them safely. The
Company significantly slowed second quarter capital investment in
response to low commodity prices. Management's decision to withhold
development capital and defer well maintenance activity in the first
half of the year reduced its production levels, particularly in the
second quarter. The Company is increasing the level of its capital and
well maintenance activity in the second half of the year to a pace that
will bring the full-year investment to a level consistent with its
plans. CRC expects that this higher activity level will reduce its
production decline rate in the second half of the year to bring the
full-year decline to a range consistent with its stated decline range.
For 2016, CRC developed a dynamic capital program to align investments
with projected operating cash flow. The Company will monitor prices and
cash flow throughout the year and retain flexibility to increase
investments in drilling and capital workovers, to the extent crude oil
prices show sustained improvement, while abiding by its financial
covenants.

Hedging Update

CRC continues to opportunistically add hedges to protect its cash flow,
margins and capital program and to maintain liquidity. Currently, the
Company has the following Brent-based crude oil and NYMEX-based natural
gas hedges in place:

CRC Tender Offer for Outstanding Notes

As previously announced, CRC has made a cash tender of up to $525
million for its outstanding notes subject to certain conditions. For
further details, please see the press release dated August 1, 2016 on
CRC’s website.

Conference Call Details

To participate in today’s conference call, either dial (877) 328-5505
(International calls please dial +1 (412) 317-5421) or access via
webcast at www.crc.com,
fifteen minutes prior to the scheduled start time to register.
Participants may also pre-register for the conference call at http://dpregister.com/10086916.
A digital replay of the conference call will be archived for
approximately 30 days and supplemental slides for the conference call
will be available online in Investor Relations at www.crc.com.

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, cash flows, results of operations,
business prospects, budgets, drilling program, maintenance capital,
projected production, projected costs, future operations, hedging
activities, future transactions, planned capital investments and other
guidance included in this press release. Actual results may
differ from anticipated results, sometimes materially, and reported
results should not be considered an indication of future performance.
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: commodity price fluctuations; the ability of our lenders to
limit our borrowing capacity; other liquidity constraints; the effect of
our debt on our financial flexibility; limitations on our ability to
enter efficient hedging transactions; insufficiency of our operating
cash flow to fund planned capital expenditures; inability to implement
our capital investment program; inability to replace reserves; inability
to monetize selected assets; inability to obtain government permits and
approvals; restrictions and changes in restrictions imposed by
regulations including those related to our ability to obtain, use,
manage or dispose of water or use advanced well stimulation techniques
like hydraulic fracturing; risks of drilling; tax law changes;
competition with larger, better funded competitors for and costs of
oilfield equipment, services, qualified personnel and acquisitions; the
subjective nature of estimates of proved reserves and related future net
cash flows; risks related to our disposition and acquisition activities;
restriction of operations to, and concentration of exposure to events
such as industrial accidents, natural disasters and labor difficulties
in, California; the recoverability of resources; concerns about
climate change and air quality issues; lower-than-expected production
from development projects or acquisitions; catastrophic events for which
we may be uninsured or underinsured; the effects of litigation; cyber
attacks; operational issues that restrict market access; and
uncertainties related to the spin-off and the agreements related thereto.
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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