August Corporate Presentation Forward Looking / Cautionary Statements - - PowerPoint PPT Presentation

August Corporate Presentation

CRC August Corporate Presentation| 2 This presentation 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 include those regarding our expectations as to our future:

Actual results may differ from anticipated results, sometimes materially, and reported results should not be considered an indication of future performance. While we believe assumptions or bases underlying our expectations are reasonable and make them in good faith, they almost always vary from actual results, sometimes materially. We also believe third-party statements we cite are accurate but have not independently verified them and do not warrant their accuracy or completeness. Factors (but not necessarily all the factors) that could cause results to differ include: Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "goal," "intend," "likely," "may," "might," "plan," "potential," "project," "seek," "should," "target, "will" or "would" and similar words 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 we undertake 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.

• financial position, liquidity, cash flows and results of operations
• business prospects
• transactions and projects
• perating costs
• Value Creation Index (VCI) metrics, which are based on certain estimates including

future production rates, costs and commodity prices

• perations and operational results including production, hedging and capital investment
• budgets and maintenance capital requirements
• reserves
• type curves
• expected synergies from acquisitions and joint ventures
• commodity price changes
• debt limitations on our financial flexibility
• insufficient cash flow to fund planned investments, debt repurchases or changes to our

capital plan

• inability to enter desirable transactions, including acquisitions, asset sales and joint

ventures

• legislative or regulatory changes, including those related to drilling, completion, well

stimulation, operation, maintenance or abandonment of wells or facilities, managing energy, water, land, greenhouse gases or other emissions, protection of health, safety and the environment, or transportation, marketing and sale of our products

• joint ventures and acquisitions and our ability to achieve expected synergies
• the recoverability of resources and unexpected geologic conditions
• incorrect estimates of reserves and related future cash flows and the inability to replace

reserves

• changes in business strategy
• PSC effects on production and unit production costs
• effect of stock price on costs associated with incentive compensation
• insufficient capital, including as a result of lender restrictions, unavailability of capital

markets or inability to attract potential investors

• effects of hedging transactions
• equipment, service or labor price inflation or unavailability
• availability or timing of, or conditions imposed on, permits and approvals
• lower-than-expected production, reserves or resources from development projects, joint

ventures or acquisitions, or higher-than-expected decline rates

• disruptions due to accidents, mechanical failures, transportation or storage constraints,

natural disasters, labor difficulties, cyber attacks or other catastrophic events

• factors discussed in “Item 1A – Risk Factors” in our Annual Report on Form 10-K

available on our website at crc.com.

Forward Looking / Cautionary Statements – Certain Terms

See the Investor Relations page at www.crc.com for important information about 3P reserves and other hydrocarbon resource quantities, PV-10 and standardized measure, finding and development (F&D) costs, recycle ratio calculations, reserve replacement ratios, Value Creation Index (VCI), debt adjusted shares calculation, drilling locations and reconciliations of non-GAAP measures to the closest GAAP equivalent.

CRC August Corporate Presentation| 3

Positioned to Execute Our Strategy to Deliver Long Term Value

Value Focu cus

Value Creation Index

The VCI Difference Delivers Real Value

• Value-directed investments
• Disciplined capital allocation
• Enhanced returns over full-cycle

time frame

• Drives team alignment
• CRC ahead of competitive

landscape in shifting to value PV10 pre-tax cash flows PV10 of investments VCI =

CRC August Corporate Presentation| 4

Strengthen Balance Sheet Drive Operational Excellence Ensure Effective Capital Allocation

• Reinvest to grow cash

flow

• Simplify capital

structure

• Enhance credit metrics
• Pursue value-accretive

M&A

• Reduce absolute level of

debt

• Utilize VCI-based

decision-making

• Optimize core operating

area investment

• Enhance targeted

growth area investment

• Pursue impactful

capital workovers

• Streamline processes
• Apply technology
• Leverage sizeable

infrastructure

• Drive strategic

consolidation

• Employ new thinking

and approaches

• Pursue value-driven

production growth

• Delineate future growth

areas

• Enhance already

substantial inventory

• Pursue strategic joint

ventures

Capture Value

• f Portfolio

CRC’s Value-Driven Strategic Approach

Proven and pressure-tested strategic approach preserved value through the downturn and is set to drive significant value creation for years to come

CRC August Corporate Presentation| 5

California’s Compelling Needs

• World’s 5th largest economy runs first and foremost on energy

▪ Consume more gasoline than countries with populations 4x larger ▪ 37% of U.S. Port container traffic – with the busiest ports in the country

• Operate in energy island importing 73% of crude
• Equates to sending $32 billion annually out of the state
• Energy inequality reflected in highest poverty rate in

wealthiest state

• Industry provides high-paying, middle class careers to achieve

American dream

• Imported energy does not apply California’s safety, labor and

environmental standards

• Native energy aligns with state’s progressive values
• In-state production provides critical sources of state, county

and city revenues

• Over $4.8 billion generated by CRC’s Long Beach operations

alone over past 15 years

• CRC constructively engaged on legislative front to solve

California’s challenges

• Believe thoughtful leadership will prevail as it has in the past

CRC supplies affordable, reliable energy that California needs

CRC August Corporate Presentation| 6

Pressure Tested Through Cycle and Focused on Long-Term Value

5 10 15 20 25 30 $20 $50 $80 $110 07/14 01/15 07/15 01/16 07/16 01/17 07/17 01/18 07/18 01/19 07/19 Rig Count Brent Crude Oil Price ($/BBL)

Brent Crude Price CRC + JV Rig Count CRC Rig Count

TRANSITION TO OFFENSE

Cut rigs Began hedging Managed liabilities Utilized existing facilities Protected base production

QUICK RESPONSE TO PRICE CHANGE

Increased activity Engaged in JVs Locked in hedges Increased liquidity Extended maturities Invest for value preservation Drill high-graded portfolio Invest in exploration and facilities Strengthen balance sheet Enter new JV with Colony

VALUE PRESERVATION SEPARATION ANNOUNCEMENT

Spin Date

CRC August Corporate Presentation| 7

Key Highlights

$255 Million

$1.2 billion LTM

2nd Quarter 2019

$140 Million2

$124 million internally funded

129 Mboe/d

61% Oil

39 Total Wells Drilled1

Includes 37 CRC wells

$556 Million

$1.2 billion LTM

$278 Million2

$228 million internally funded

131 Mboe/d

63% Oil

99 Total Wells Drilled1

Includes 79 CRC wells

First Half 2019 ACTIVITY PRODUCTION CAPITAL Adj.EBITDAX3

CRC August Corporate Presentation| 8

• 5

10 15 20 25 30

Niobrara Barnett Anadarko - Woodford Haynesville - Bossier Utica Marcellus Shale Eagle Ford Bakken Permian (Wolfcamp + Sprayberry) California

Remaining Recoverable Resources (BBOE1)

Oil (BBO) NGL (BBOE) Gas (BBOE)

CRC Advantage

World-Class Hydrocarbon Province with Significant Potential

• Five of the largest conventional, onshore

fields in the lower 48

• Over 35 billion BOE produced since 1876
• Still discovering the limits of remaining

potential

• Over 10 billion BOE1 in remaining

recoverable resources

California a Top Oil Province

• Stacked pays provide additional
• pportunity through value chain
• Operating expertise to develop the diverse
• pportunity set
• Robust infrastructure turns disparate

fields into integrated plays

Note: produced volumes source: DOGGR; Remaining Recoverable Resources Source: USGS

CRC August Corporate Presentation| 9

Proved Reserves

Large Resource Base with Production Diversity

SAN JOAQUIN BASIN

Greater Elk Hills – Flagship Asset Thermal – Protecting Base Production South Valley – New Opportunities Shales & Tight Sands – New Opportunities

#2 Producer - 94,000 BOE/d2

26% of basin production 60% of basin mineral acreage

Note: Total basin production and CRC’s % of basin production are based on gross FY2017 production. Source: DOGGR. Total basin mineral acreage is based on internal estimates.

Largest Producer in California1

Operate

~12,000 ,000

wells with

712MMBOE3

SACRAMENTO BASIN

Gas Optionality

#1 Producer - 5,000 BOE/d2

86% of basin production 85% of basin mineral acreage

LOS ANGELES BASIN

Steady High Margin Oil Assets

#1 Producer - 24,000 BOE/d2

52% of basin production 65% of basin mineral acreage Across

135 fields

VENTURA BASIN

Growth and Exploration

#2 Producer - 6,000 BOE/d2

26% of basin production 90% of basin mineral acreage

CRC August Corporate Presentation| 10

2018 Highlights

Enhanced Inventory Growth and Expanded 3P Position

• Proved reserves today only 7% lower despite 29%

decrease in price from the YE 2014

• Life-of-field studies increased unproved resources
• Recent exploration success not included
• Organic F&D costs excluding price related revisions

and acquisitions were $11.31 per BOE in 2018 and 4-yea ear average ge of $6.42

• Organic recycle ratio of 1.9x in 2018 and 4-year

average of 2.6x

• Comprehensive technical review of 40% of fields
• Over 95% of total proved reserves audited by Ryder

Scott in the previous three years

reserves and other hydrocarbon quantities.

commodity price. Proven reserves utilize applicable SEC prices for all year-end periods.

Growth in Unproved Reserves1

58 58 109 109 156 156 204 204

768 768 644 644 568 568 618 618 712 712 222 222 251 251 226 226 204 204 171 171 181 181 431 431 450 450 458 458 150 150 159 159 395 395 679 679 704 704

250 500 750 1,000 1,250 1,500 1,750 2,000 2,250 2,500 2014 2015 2016 2017 2018 MMBoe

>250% Unproved Growth Probable3 Price-Contingent Reserves2 Proved Cumulative Production Possible3

CRC August Corporate Presentation| 11

Unlocking Value with a Deep Inventory of Actionable Projects at $65 Brent

• Fully burdened, growth-focused

portfolio

• Achieve a VCI of 1.3 or greater at

$65 Brent and $3.00 NYMEX

• Deliver robust cash flow
• Reflects all recovery

mechanisms and reserves types

• Leverage existing infrastructure,

while opportunistically targeting new infrastructure investment

5 10 100 200 300 400 500 600 700 800

Dev Capital (B$) Net Resources2 (MMBoe)

facility costs + field-level G&A + taxes other than on income.

regarding 3P resources and other hydrocarbon resource quantities.

10 20 30 40 50 100 200 300 400 500 600 700 800

Full Cycle Cost1 ($/Boe) Net Resources2 (MMBoe)

Steamflood Waterflood Primary Shale Gas

CRC August Corporate Presentation| 12

JVs Provide Additional Capital Flexibility

Net Production By Stream (MBOEPD)

exclude MIRA’s investment based on the accounting treatment of each venture.

CRC August Corporate Presentation| 13

Up to $250MM

▪ Total of $200MM funded to date

Focus on four fields within the San Joaquin Basin

▪ Kern Front, Mt. Poso, Pleito Ranch,

Wheeler Ridge

Accelerating Value and Derisking Inventory through JVs

Up to $500MM

▪ Current commitment of $320MM

Investor funds project capital in exchange for a net profits interest (NPI) held through a JV

▪ Investor preferred interest is redeemed

upon achieving target IRR

▪ CRC retains early termination options

Focus on the San Joaquin and Los Angeles Basins CRC operates all wells Up to $300MM

▪ Current commitment of $140MM,

with $122MM funded to date

DrillCo-type structure where investor funds 100% of project capital for 90% working interest (WI) in wells drilled, with CRC carried on its 10% WI

▪ CRC interest increases to 75% upon investor

achieving target IRR

▪ CRC retains an acceleration option

CRC operates all wells DrillCo-type structure where investor funds 100% of project capital for 90% WI in wells drilled, with CRC carried on its 10% WI

▪ CRC interest increases to 82.5% upon

investor achieving target IRR

Focus on portions of the Elk Hills field within the San Joaquin Basin CRC operates all wells

April 2017 Feb 2017 July 2019

CRC August Corporate Presentation| 14 50% Growth Projects 50% Mature Projects 25% Growth Projects 75% Mature Projects 10% Growth Projects 90% Mature Projects

Low-Price Scenario

• Invest to grow cash flow
• Drill in high-graded portfolio (>1.5 VCI)

generation facilities

• Delineate future growth areas to unlock upside
• Target 10-15% of discretionary cash flow to balance sheet strengthening

Dynamic Capital Allocation Through Commodity Cycle

Oil Price $/BBL Gas Price $/MCF

High-Price Scenario Mid-Cycle Price Scenario

• Invest to accelerate production growth and explore/pilot new resources
• Add facilities (steam and water handling) to support pace of growth
• High cash generation
• VCI 1.3 floor to reinvest for value
• Accelerate balance sheet strengthening
• Invest to protect base production
• Take advantage of existing facilities and prior capacity investments

• Utilize excess equipment to reduce capital costs
• Engineering efforts focused on field surveillance to protect existing production

CRC August Corporate Presentation| 15

CRC’s Dynamic Portfolio Provides Flexibility

200 400 600 800

YEAR 5 200 400 600 800

YEAR 5 200 400 600 800

YEAR 5

0% 25% 50% 75% 100% Portfolio Mix

Gas Shale Primary Waterflood Steamflood Workover

Oil Oil Oil

For illustration of portfolio optionality based on normalized results per $10MM of investment and not guidance. See end note for details on type curves. Prices for recycle ratio are $65 Brent and $3.00 NYMEX.

CRC August Corporate Presentation| 16 $67.88 $69.50 $58.81 $54.90 $59.82 $64.11 $63.63 $59.97 $65.28 $70.66 $74.90 $75.97 $68.08 $63.90 $68.32 40 50 60 70 80

2Q18 3Q18 4Q18 1Q19 2Q19 $/ $/Bbl Bbl

WTI Realizations Brent

• ≈

62% 66% 74% 77% 47% 56% 60% 64% 67% 41% 30% 40% 50% 60% 70% 80% 2Q18 3Q18 4Q18 1Q19 2Q19

% of WTI & Brent

WTI Brent

• ≈

CRC believes near-term crude oil realizations will remain strong

CRC Price Realizations – Strong Brent Realizations

Oil Price Realization (with Hedges)

Gas Price Realization

• California refinery demand for native crude continues to be strong

and reduction in heavy waterborne crude has positively influenced differentials.

• Natural gas prices were impacted by temperate weather and

excess local and national supply.

• NGL prices were impacted by excess supply locally and nationally

as well as temperate weather in California.

NGL Price Realization - % of WTI & Brent

Realization % of WTI

94% 92% 102% 119% 118% $2.75 $2.88 $3.40 $3.24 $2.66 $2.25 $3.16 $3.77 $3.43 $2.33 1.50 2.00 2.50 3.00 3.50 4.00

2Q18 3Q18 4Q18 1Q19 2Q19 $/MMBtu & $/Mcf NYMEX Realizations

≈

Realization %

• f NYMEX

82% 110% 111% 106% 88%

CRC August Corporate Presentation| 17

Unparalleled California Expertise and Insight

Core Assets Provide Operational Leverage

Applying analog development to adjacent fields

Decades

• f observed field behavior and

demonstrated shallow base decline rates

Largest 3-D Seismic Position in California

Sources: DOGGR, Wood Mackenzie, Company Estimates. Note: Gross production data is average production in 2018.

151 146 116 31

• 50

100 150 200 CRC Chevron USA Aera Energy Berry Gross Operated MBOE/d

Top California Producers in 2018

$19 $21 $24 $22 $0 $5 $10 $15 $20 $25 $30 0% 25% 50% 75% 100% CRC Chevron USA Aera Energy Berry OPEX $/BOE

Production Mix

Shallow Deeper (>5,000') FY2018 OPEX $/BOE

Majority of CA Production is Shallow

Extensive Field Operations Experience

~ 25,000

net identified proven and unproved

drilling locations in 2018 Midstream infrastructure provides low cost advantage

CRC August Corporate Presentation| 18

Elk Hills Flagship Asset in San Joaquin Basin

• Large field with 100% NRI

▪

10 billion original BOE in place within multiple reservoirs

▪

Produces ~60,000 BOE/d with annual 10% base decline

• Infrastructure provides low-cost advantage

▪

On-site gas processing and liquids extraction

▪

Large power plant reduces electricity costs by 75%

▪

Various light crude blends desired by multiple customers

• Large integrated business

▪

Stacked reservoirs with 280+ MMBOE proven reserves

▪

Diverse development inventory

▪

Proving ground for recovery techniques

Annualized Elk Hills synergies1 ($MM)

CRC August Corporate Presentation| 19

Leveraging Infrastructure for Nearby Low-Cost Field Development

• Coring up with Elk Hills

▪

Elk Hills serves as the hub

▪

Power, pipelines, compression

▪

Connecting fields and building out

• Lower cost shared resources

▪

Central control facilities and automation

▪

Optimized service provider utilization

▪

Shared support staff across fields

• Efficient step-out to new growth areas

▪

Dominant acreage position

▪

Low development costs for bolt-ons

▪

Discovering new resources through exploration

Southern San Joaquin Valley Consolidation

~900 Million BOE of 3P reserves1

CRC August Corporate Presentation| 20

Developing Entire Southern San Joaquin Basin into Core Area

• Redevelopment, expansion and additional

recovery in existing CRC operated fields

▪

Large fields with low recovery factors

▪

>500 identified development locations

▪

>150 MMBOE potential 3P reserves1

• New field development project following

recent exploration successes: Pleito Ranch

▪

Extension of CRC operated Pleito Ranch field

▪

>90 identified development locations

▪

>30 MMBOE discovered resources1

• Delivering value-driven growth

▪

Apply technology, operating expertise and knowledge

▪

Improved returns from leveraging existing infrastructure

▪

Disciplined and deliberate investment into high graded portfolio

Large Inventory of Development Projects

Applying CRC asset playbook to substantial drilling inventory extends core Elk Hills

• perations and infrastructure

Yowlumne Paloma Coles Levee Rio Viejo Landslide TOTAL 900 1,000 1,300 60 70 3,300 13% 14% 21% 16% 23% 18%

Workover, primary drilling, New reservoirs and EOR Workover, primary drilling, and EOR Workover, primary drilling, and EOR Primary drilling, New reservoirs Workover, primary drilling and EOR

CRC August Corporate Presentation| 21

Conventional Exploration Program Generates Substantial Value

• 10 well exploration program in 2017 and 2018

▪

Delineation and expansion of proven play trends plus new impact play concepts

• Reduced risk via joint ventures

▪

7 exploration wells funded by partners1; CRC total initial net investment of ~$20MM

• Meaningful value creation

▪

~$4/share value, potential to increase further with additional appraisal

Multiple Small Joint Ventures $170+MM2,3 PV10 from Initial Net Investment of ~$20MM Fully-Burdened VCI

• f 1.52,4

Repeatable recipe for success provided by analog prospects in CRC’s differentiated inventory

CRC August Corporate Presentation| 22

Strengthening the Balance Sheet Remains a Priority

Target 2x – 3x Leverage Ratio

0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x 9.0x 10.0x YE14 YE15 YE16 YE17 YE18 Target Total Debt / LTM Adj. EBITDAX1 Leverage Core Adjusted EBITDAX Leverage

Complicated Capital Structure Simplified Capital Structure Simple Capital Structure

important information. Core Adjusted EBITDAX excludes settled hedges and cash settled equity compensation costs.

Capital Markets Solutions Disciplined Capital Investment Asset Monetizations

Joint ventures Infrastructure Producing assets Refinance and simplify capital structure Target 10-15% of discretionary cash flow for balance sheet strengthening2 Accretive acquisitions Cash flow growth and support future reinvestment

Conti tinu nue e to Employ

ALL of the ABOVE E

Approac roach

Mineral interests

CRC August Corporate Presentation| 23

Disciplined Capital Plan Leverages Project Portfolio

2019 Internally Funded Capital Program $350 to $385 Million Discretionary Cash Flow Expect to Align with Core Program JV Capital $175 to $225 Million

to invest in Core and Growth properties

Buena Vista | Elk Hills Wilmington Kern Front | Mount Poso 2019E Internally Funded Development Capital By Basin 2019E Total Capital

CRC August Corporate Presentation| 24

Current Enterprise Value Deeply Discounted

Current EV

• f $6.8

8 Bn5

CRC August Corporate Presentation| 25

Disciplined Execution on Highest Value Projects to Deliver Substantial Value

Portfolio of world-class assets investable throughout the commodity cycle Robust inventory of high value growth projects Deep operational knowledge and technical expertise Integrated and complementary infrastructure Disciplined and effective capital allocation

Balance Sheet Goals High VCI Projects

Investing for the Future Growth Prospects Core Operating Areas Simplify Balance Sheet Reduce Fixed Charges Reduce Debt

Balance capital investment with

Financ ancial al St Strengthen gthening ing Ef Effo forts ts

for best long-term value creation

VALUE DRI UE DRIVEN VEN

APPENDIX

CRC August Corporate Presentation| 27

Opportunistically Built Oil Hedge Portfolio

Strategy

Protect cash flow, operating margins and capital investment program

Hedge program continues to target 50% of crude oil production and provides significant upside exposure to commodity price movement

The BSP JV entered into crude oil derivatives that are included in our consolidated results but not in the above

• table. For further information please see Attachment 7 of
• ur Earnings Release.

Sold Calls Purchased Puts Sold Puts

4Q19 1Q20 2Q20

35,000 $75.71 35,000 $60.00

• 25,000

$72.00 25,000 $57.00

• 10,000

$70.00 10,000 $55.00 5,0001 $70.05

51% 32% 19% Percentage of 2Q19 Oil Production Hedged Against Downside

3Q19

Purchased Calls Swaps

Barrels per Day Weighted Average Price per Barrel Barrels per Day Weighted Average Price per Barrel Barrels per Day Weighted Average Price per Barrel 40,000 $73.13 40,000 $57.50

• 44%

CRC August Corporate Presentation| 28

Improving Debt Metrics

6/30/2019 1st Lien 2014 Revolving Credit Facility (RCF) 525 $ 1st Lien 2017 Term Loan 1,300 1st Lien 2016 Term Loan 1,000 2nd Lien Notes 1,991 Senior Unsecured Notes 344 Total Debt 5,160 Less cash (15) Total Net Debt 5,145 Mezzanine Equity 777 Total Equity (279) Total Net Capitalization 5,643 $ Total Debt / Total Net Capitalization 91% Total Debt / LTM Adjusted EBITDAX2 4.4x LTM Adjusted EBITDAX2 / LTM Interest Expense 3.0x PV-103 / Total Debt 1.8x Total Debt / Proved Reserves3 ($/Boe) $7.25 Total Debt / Proved Developed Reserves3 ($/Boe) $9.74 Total Debt / 2Q19 Production ($/Boepd) $40,000

Capitalization ($MM)

and other important information.

$3.10 NYMEX. See the Investor Relations page at www.crc.com for details on how PV-10 is calculated.

balance of the 2016 Term Loan.

$0 $1,000 $2,000 $3,000 $4,000 2019 2020 2021 2022 2023 2024

2nd Lien Notes 2014 RCF Unsecured Notes 2016 Term Loan 2017 Term Loan

Debt Maturities ($MM)

1

CRC August Corporate Presentation| 29

CRC’s BOE Recovery per Foot Competes With Major Shale Plays

Normalizing estimated ultimate recovery (EUR)

• vs. measured depth shows CRC advantage:
• Better recovery factors driven by low decline

rate waterfloods and steamfloods

• Diverse reservoir portfolio provides optionality

to drill deep large EUR producers with later life up-hole recompletions Historical focus:

• Cheaper, simpler well designs (primarily vertical)
• Quality reservoirs that do not require

complicated completions or long horizontal Future upside:

• Tighter rock, horizontal drilling with new

generation stimulation, increasing reservoir contact

Well l Total l Measur ured Depth h (ft)

6,000’

BOE/ft ft

BV Nose South Valley LA Basin Notes: Source: Wood Mackenzie data for Shale Play areas; Source: Internal estimates for CRC, taking all wells drilled since 2012. BOE calculated as Oil + 20:1 Gas. Well dots sized by oil expected ultimate recovery (MMBOE). Darker colors are newer wells; lighter colors are older wells. Wolfcamp includes Midland and Delaware Basins.

CRC August Corporate Presentation| 30

250 500 1000

$600 $700 $800 $900 $1,000 $1,100 $1,200 $20 $40 $60 $80 $100 $120 Production Costs ($MM) Brent $/Bbl

Annual Production Costs & Capital Investment1

Demonstrated Experience Controlling Production Costs Through Price Cycle

• Capital

ital investm estmen ent scale ales s with commodity price changes

• Flexib

ible le oper eratio ions s and shallo llow base se dec ecline line allow for quick response to commodity price changes while pres eser ervin ing value value

• Consis

sisten ently ly contr trolle

• lled

d produc

• ductio

ion costs sts throughout pric ice e cycle les

• Production costs have been as low

w as approxim imat ately ely $15/b /boe

• e when

en commod

• mmodit

ity pric ices reac eached hed a rela lativ ive low w point 2014 (Pre-spin)

2015 2016 2017 2018

Capital Investment Scale ($MM)

CRC August Corporate Presentation| 31

CRC’s Regulatory Strategy Advances California’s Leading Standards

CRC’S CONSISTENT REGULATORY STRATEGY

✓

Reflect Californians’ values

✓

Solicit community input

✓

Advance community interests

✓

Build strategic alliances

✓

Educate and inform policy makers

✓

Sustain 90-day permit inventory per rig line

✓

Fulfill California’s high standards

✓

Help achieve the state’s long-term goals

✓

Contribute to vibrant future for all Californians

200 400 600 800 1000 1200 1400 1600 YE16 YE17 1Q18 2Q18 3Q18 4Q18

Growing Permit Inventory

(Permitted drilling rig days at end of period)

Seasoned operator with proven local expertise

CRC August Corporate Presentation| 32

“Duck” Curve

California Policies Impact Natural Gas Prices

Limited third-party storage, peak demand, and reliance on renewable sources have increased volatility in local natural gas prices

Source: EIA and SoCalGas Envoy Daily SoCalGas natural gas inventories (Bcf)

$0 $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 01/17 04/17 07/17 10/17 01/18 04/18 07/18 10/18 01/19 04/19 07/19 So Cal City Gate Wheeler Ridge NG Futures

Lack of Natural Gas Storage and Peak Demand

California Natural Gas Prices

Impact of Solar Generation Aliso Canyon Effect on Inventory

>$20

Source: Bloomberg Source: California ISO

>$20

CRC August Corporate Presentation| 33

Lost Hills Field – 50% Operated Working Interest Sale + Joint Venture

• Completed a sale of operatorship and a 50% working

interest in certain zones in the Lost Hills field

• Over $200

00 MM in tot

• tal

al con

• nsid

ider eration ation consisting of $168 MM in cash ash + drilling carry with estimated minimu imum m va value lue of $35 MM

• Implied transaction metrics (assuming minimum carry):
• ~$88,000 per flowing barrel
• Other transaction highlights:
• Partner

tner will ll carry y CRC RC on 100% of the inves estment ment in 200 new w we wells ls

• Operatorship is transferred to buyer
• CRC

RC ret etains ins righ ghts s to deep format mation ions

• Closed May 1, 2019
• Lost Hills is a heavy oil field in the northwestern San

Joaquin basin Map to be updated

Proposed Patterns Proposed Tulare Producer

CRC August Corporate Presentation| 34

End Notes

From Slide 24

1 CRC estimate of reserves value as of December 31, 2018. Includes field-level operating expenses, G&A and taxes other than on

• income. Assumes $3.00/MMBTU NYMEX in all cases.

2 Reflects the value of facilities and midstream assets, excluding assets owned by the Ares JV, at 50% of estimated replacement value.

This discount is estimated to exceed the burden on reserves that would be incurred if assets were monetized. Does not include value

• f extensive seismic library.

3 Surface & Mineral reflects the estimated value of undeveloped surface and mineral acreage held in fee. 4 Unproved reserves are comprised of risked probable and possible reserves as of December 31, 2018. 5 Calculated using debt as of pro forma March 31, 2019 and a market cap as of 5/30/2019. Includes non-controlling interests

reported as mezzanine and permanent equity as of March 31, 2019. See the Investor Relations page at www.crc.com for important information about 3P reserves and other hydrocarbon resource quantities, PV-10 and standardized measure, finding and development (F&D) costs, recycle ratio calculations, reserve replacement ratios, Value Creation Index (VCI), debt adjusted shares calculation, drilling locations and reconciliations of non-GAAP measures to the closest GAAP equivalent.