What changed in this filing

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Item 1. Financial Statements

2025-11-05 compared with 2025-08-06 · 275 added, 248 removed, 730 unchanged (42% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

As of June 30, 2025 and December 31, 2024

As of September 30, 2025 and December 31, 2024

(in millions, except share data)

June 30, December 31,

September 30, December 31,

CURRENT ASSETS

1 unchanged sentence

Trade receivables 286 330

Inventories 93 90

Assets held for sale 7 10

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Total property, plant and equipment, net 5,530 5,680

INVESTMENT IN UNCONSOLIDATED SUBSIDIARY 93 86

INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES

DEFERRED INCOME TAXES

12 unchanged sentences

STOCKHOLDERS' EQUITY

Preferred stock ( 20,000,000 shares authorized at $ 0.01 par value) no shares outstanding at June 30, 2025 and December 31, 2024

Preferred stock ( 20,000,000 shares authorized at $ 0.01 par value) no shares outstanding at September 30, 2025 and December 31, 2024

Common stock ( 200,000,000 shares authorized at $ 0.01 par value) ( 105,063,163 and 109,613,585 shares issued;

83,679,985 and 91,100,322 shares outstanding at June 30, 2025 and December 31, 2024)

Treasury stock ( 21,351,232 shares held at cost at June 30, 2025 and 18,513,263 shares held at cost at December 31, 2024)

83,711,931 and 91,100,322 shares outstanding at September 30, 2025 and December 31, 2024)

Treasury stock ( 21,351,232 shares held at cost at September 30, 2025 and 18,513,263 shares held at cost at December 31, 2024)

( 922 ) ( 796 )

7 unchanged sentences

Condensed Consolidated Statements of Operations (unaudited)

For the three and six months ended June 30, 2025 and 2024

For the three and nine months ended September 30, 2025 and 2024

(dollars in millions, except share and per share data;

1 unchanged sentence

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

Oil, natural gas and natural gas liquids sales $ 715 $ 870 $ 2,231 $ 1,711

Net gain (loss) from commodity derivatives 157 5 163 ( 66 )

Net (loss) gain from commodity derivatives

( 23 ) 356 140 290

Revenue from marketing of purchased commodities 58 51 178 176

12 unchanged sentences

Accretion expense 28 31 85 56

Net loss (gain) on natural gas purchase derivatives

Net loss on natural gas purchase derivatives 27 9 24 11

Measurement period adjustments, net

1 unchanged sentence

Total operating expenses 756 835 2,193 1,776

Gain on asset divestitures — 1 — 7

(Loss) gain on asset divestitures

( 1 ) — ( 1 ) 7

OPERATING INCOME

4 unchanged sentences

Loss on early extinguishment of debt

— ( 5 ) ( 1 ) ( 5 )

Loss from investment in unconsolidated subsidiaries ( 2 ) ( 2 ) ( 3 ) ( 9 )

Other non-operating (expense) income, net

Other non-operating income (expense), net

INCOME BEFORE INCOME TAXES

75 483 479 475

INCOME (LOSS) BEFORE INCOME TAXES 242 11 404 ( 8 )

Income tax (provision) benefit ( 70 ) ( 3 ) ( 117 ) 6

NET INCOME (LOSS) $ 172 $ 8 $ 287 $ ( 2 )

Net income (loss) per share

Income tax provision

( 11 ) ( 138 ) ( 128 ) ( 132 )

$ 64 $ 345 $ 351 $ 343

Net income per share

Basic $ 0.76 $ 3.86 $ 4.00 $ 4.54

5 unchanged sentences

CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)

For the three and six months ended June 30, 2025 and 2024

Condensed Consolidated Statements of Comprehensive Income (unaudited)

For the three and nine months ended September 30, 2025 and 2024

(in millions)

Three months ended

Six months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

Net income (loss)

$ 64 $ 345 $ 351 $ 343

Other comprehensive loss (a) :

Actuarial gain associated with pension and postretirement plans — — ( 1 ) —

Other comprehensive income (loss) (a) :

Recognition of net actuarial loss due to settlement

Actuarial gain associated with pension and postretirement plans, net of tax

Amortization of prior service cost credit included in net periodic benefit cost, net of tax ( 1 ) ( 4 ) ( 3 ) ( 6 )

Comprehensive income (loss) $ 171 $ 8 $ 284 $ ( 4 )

(a) Tax effects of the actuarial gain associated with pension and postretirement plans and amortization of prior service cost credit were insignificant for the three and six months ended June 30, 2025 and 2024.

Comprehensive income

$ 64 $ 350 $ 348 $ 346

(a) Tax effects of the actuarial gain associated with pension and postretirement plans and amortization of prior service cost credit were insignificant for the three and nine months ended September 30, 2025 and 2024.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Condensed Consolidated Statements of Stockholders' Equity (unaudited)

For the three and six months ended June 30, 2025 and 2024

For the three and nine months ended September 30, 2025 and 2024

(in millions)

Three months ended June 30, 2025

Three months ended September 30, 2025

Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other

Comprehensive

Balance, March 31, 2025 $ 1 $ ( 897 ) $ 2,580 $ 1,759 $ 73 $ 3,516

Balance, June 30, 2025 $ 1 $ ( 922 ) $ 2,359 $ 1,897 $ 72 $ 3,407

Net income — — — 64 — 64

Share-based compensation — — 6 — — 6

Repurchases of common stock — ( 25 ) ( 228 ) — — ( 253 )

Cash dividend

— — — ( 33 ) — ( 33 )

Other comprehensive income, net of tax — — — — ( 1 ) ( 1 )

Shares cancelled for taxes — — ( 1 ) — — ( 1 )

— — 1 ( 1 ) — —

Balance, June 30, 2025 $ 1 $ ( 922 ) $ 2,359 $ 1,897 $ 72 $ 3,407

Three months ended June 30, 2024

Balance, September 30, 2025 $ 1 $ ( 922 ) $ 2,365 $ 1,927 $ 72 $ 3,443

Three months ended September 30, 2024

Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other

Comprehensive

Balance, March 31, 2024 $ 1 $ ( 662 ) $ 1,295 $ 1,387 $ 72 $ 2,093

Balance, June 30, 2024 $ 1 $ ( 697 ) $ 1,302 $ 1,374 $ 72 $ 2,052

— — — 345 — 345

Share-based compensation — — 5 — — 5

Repurchases of common stock — ( 42 ) — — — ( 42 )

Shares issued for warrants — — 37 — — 37

Shares issued for Aera Merger — — 1,135 — — 1,135

Cash dividend

— — — ( 36 ) — ( 36 )

Shares cancelled for taxes — — ( 1 ) — — ( 1 )

— — 1 $ — $ — 1

Balance, June 30, 2024 $ 1 $ ( 697 ) $ 1,302 $ 1,374 $ 72 $ 2,052

Other comprehensive income, net of tax — — — 5 5

Balance, September 30, 2024 $ 1 $ ( 739 ) $ 2,479 $ 1,683 $ 77 $ 3,501

The accompanying notes are an integral part of these condensed consolidated financial statements.

Six months ended June 30, 2025

Nine months ended September 30, 2025

Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other

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Other — — 1 — — 1

Balance, June 30, 2025 $ 1 $ ( 922 ) $ 2,359 $ 1,897 $ 72 $ 3,407

Six months ended June 30, 2024

Balance, September 30, 2025 $ 1 $ ( 922 ) $ 2,365 $ 1,927 $ 72 $ 3,443

Nine months ended September 30, 2024

Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other

4 unchanged sentences

Repurchases of common stock — ( 135 ) — — — ( 135 )

Shares issued for warrants — — 37 — — 37

Shares issued for Aera Merger — — 1,135 — — 1,135

Cash dividend

2 unchanged sentences

Other comprehensive income, net of tax

— — — — ( 2 ) ( 2 )

Balance, June 30, 2024 $ 1 $ ( 697 ) $ 1,302 $ 1,374 $ 72 $ 2,052

Balance, September 30, 2024 $ 1 $ ( 739 ) $ 2,479 $ 1,683 $ 77 $ 3,501

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Condensed Consolidated Statements of Cash Flows (unaudited)

For the three and six months ended June 30, 2025 and 2024

For the three and nine months ended September 30, 2025 and 2024

(in millions)

Three months ended

Six months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

CASH FLOW FROM OPERATING ACTIVITIES

Net income (loss) $ 172 $ 8 $ 287 $ ( 2 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

$ 64 $ 345 $ 351 $ 343

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, depletion and amortization 123 140 382 246

Asset impairments 2 — 2 13

Deferred income tax provision (benefit) 6 3 41 ( 6 )

Net (gain) loss from commodity derivatives ( 154 ) ( 4 ) ( 166 ) 68

Net payments on settled commodity derivatives 10 ( 10 ) ( 18 ) ( 24 )

Deferred income tax provision

Net loss (gain) from commodity derivatives

50 ( 347 ) ( 116 ) ( 279 )

Net proceeds (payments) on settled commodity derivatives

6 ( 29 ) ( 12 ) ( 53 )

Net loss on early extinguishment of debt — 5 1 5

7 unchanged sentences

Proceeds from asset divestitures 1 — 2 12

Purchase of a business, net of cash acquired — ( 853 ) ( 853 )

Acquisitions — — — ( 6 )

3 unchanged sentences

Proceeds from Revolving Credit Facility 150 — 150 30

Repayments of Revolving Credit Facility ( 150 ) ( 30 ) ( 150 ) ( 30 )

Proceeds from 2029 Senior Notes, net — 298 — 888

4 unchanged sentences

Bridge loan commitments — — — ( 5 )

Stock warrants exercised — 37 — 37

Debt amendment costs — ( 7 ) — ( 10 )

Shares cancelled for taxes ( 1 ) — ( 12 ) ( 42 )

Debt redemption

Debt issuance costs

( 1 ) — ( 1 ) —

Debt redemption — ( 303 ) ( 123 ) ( 303 )

Other — ( 1 ) — —

Net cash (used in) provided by financing activities ( 68 ) ( 82 ) ( 589 ) 351

( 256 ) 564 ( 521 ) 433

Increase (decrease) in cash and cash equivalents 124 ( 790 ) ( 176 ) ( 255 )

( 142 ) 628 ( 300 ) 535

Cash and cash equivalents—beginning of period 72 1,031 372 496

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CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

Notes to the Condensed Consolidated Financial Statements (Unaudited)

September 30, 2025

NOTE 1 BASIS OF PRESENTATION

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We are also focused on maximizing the value of our land, mineral ownership, and energy expertise for decarbonization by developing carbon capture and storage (CCS) and other emissions-reducing projects.

On July 1, 2024, pursuant to the Agreement and Plan of Merger, dated as of February 7, 2024 (the Merger Agreement), we obtained all of the ownership interests in Aera Energy LLC (Aera) (Aera Merger).

On July 1, 2024, pursuant to the Agreement and Plan of Merger, dated as of February 7, 2024, we obtained all of the ownership interests in Aera Energy LLC (Aera) in an all-stock transaction (Aera Merger).

Our consolidated results of operations include the results of Aera beginning July 1, 2024, the closing date of the Aera Merger.

The Aera Merger significantly impacted the comparability of our financial results for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024.

See Note 2 Aera Merger for transaction details.

The Aera Merger significantly impacted the comparability of our financial results for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

See Note 2 Business Combinations for transaction details.

Except when the context otherwise requires or where otherwise indicated, all references to ‘‘CRC,’’ the ‘‘Company,’’ ‘‘we,’’ ‘‘us’’ and ‘‘our’’ refer to California Resources Corporation and its subsidiaries as of the date presented.

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Refer to Note 4 Debt for the fair value of our debt.

NOTE 2 AERA MERGER

Recently Issued but not Adopted Accounting and Disclosure Changes

In September 2025, the Financial Accounting Standards Board’s (FASB) issued amendments to accounting requirements for Internal-Use Software (ASC 350-40).

The amendment changes the framework for capitalizing internal-use software costs and adds disclosure requirements.

The rule becomes effective for fiscal years beginning after December 15, 2027, but early adoption is permitted.

We intend to apply the amendments on a prospective basis, but adoption on a retrospective basis is permitted.

We do not expect the adoption of the rule to have a significant impact on our financial statements.

NOTE 2 BUSINESS COMBINATIONS

Pending Berry Merger

On September 14, 2025, we entered into a definitive agreement and plan of merger (the Berry Merger Agreement) to combine with Berry Corporation (bry) (Berry) in an all-stock transaction (Berry Merger).

Berry is an independent upstream energy company that operates in two business segments:

(i) oil and natural gas and (ii) well servicing and abandonment services.

Berry's oil and gas assets are located in California and Utah.

We expect the transaction will add high quality, oil-weighted, mostly conventional proved developed reserves and sustainable cash flows to our operations.

Pursuant to the Berry Merger Agreement, on the effective date of the merger, we will issue 0.0718 shares of our common stock for each outstanding share of Berry stock.

Upon closing of the Berry Merger, we expect Berry's outstanding long-term debt to be repaid and the underlying credit agreement to be terminated.

We expect to repay a significant portion of this indebtedness with proceeds from our 2034 Senior Notes, which closed in October 2025.

Berry's Revolving Credit Facility is also expected to be terminated at closing.

For more information on the 2034 Senior Notes, refer to Note 16 Subsequent Events .

Closing of the Berry Merger is subject to certain conditions, including, among others, adoption of the Berry Merger Agreement by its stockholders, expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, prior authorization by the Federal Energy Regulatory Commission under Section 203 of the Federal Power Act and other customary closing conditions.

On July 1, 2024, we obtained by way of merger all of the ownership interests in Aera.

Aera is a leading operator of mature fields in California, primarily in the San Joaquin and Ventura basins, with high oil-weighted production.

The Aera Merger adds significant proved developed reserves to CRC.

The Aera Merger added significant proved developed reserves to CRC.

In connection with the closing of the Aera Merger, we issued shares of common stock to the former Aera owners.

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For more information on the 2029 Senior Notes, refer to Note 4 Debt.

See Note 10 Stockholders' Equity for details on a repurchase of shares during the second quarter of 2025 from one of the former Aera owners.

We have measured assets and liabilities at acquisition date fair value on a nonrecurring basis.

See Note 2 Aera Merger in our Quarterly Report on Form 10-Q for the six months ended June 30, 2025, for information on our final purchase price allocation.

The following table summarizes the consideration transferred:

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Total purchase consideration

The following table represents the final purchase price allocation to the identifiable assets acquired and the liabilities assumed based on their estimated fair values as of the closing date of the Aera Merger:

Preliminary Purchase Price Allocation as of December 31, 2024

Purchase Price Allocation as of June 30, 2025

(in millions)

Assets Acquired

$ 137 $ — $ 137

Accounts receivable

Other current assets

Investment in unconsolidated subsidiary

Property, plant and equipment 3,048 32 3,080

Pension and other postretirement benefits

Other noncurrent assets

Total Assets Acquired 3,629 50 3,679

Liabilities Assumed

Accounts payable ( 158 ) — ( 158 )

Accrued liabilities ( 157 ) ( 4 ) ( 161 )

Asset retirement obligations

( 646 ) 19 ( 627 )

Fair value of derivative contracts

( 351 ) — ( 351 )

Pension and other postretirement benefits

( 35 ) — ( 35 )

Deferred tax liability

( 101 ) ( 70 ) ( 171 )

Other long-term liabilities ( 37 ) ( 18 ) ( 55 )

Total Liabilities Assumed ( 1,485 ) ( 73 ) ( 1,558 )

Net Assets Acquired $ 2,144 $ ( 23 ) $ 2,121

Supplemental Pro Forma Information (unaudited)

The following supplemental pro forma financial information presents the condensed consolidated results of operations for the three and six months ended June 30, 2024 as if the Aera Merger had occurred on January 1, 2024.

Three months ended June 30, Six months ended June 30,

Supplemental Pro Forma Information

The following supplemental pro forma financial information presents the condensed consolidated results of operations for the nine months ended September 30, 2024 as if the Aera Merger had occurred on January 1, 2024.

Nine months ended September 30,

(in millions)

Total operating revenue

$ 1,045 $ 1,658

Net income (loss) (a)

$ 168 $ ( 118 )

Net income (loss) per share

$ 1.88 $ ( 1.31 )

$ 1.84 $ ( 1.31 )

(a) The six months ended June 30, 2024 reflects a net loss of $ 118 million primarily resulting from a significant net loss on commodity derivatives related to hedge positions held by Aera.

The pro forma information is presented for illustration purposes only and is not necessarily indicative of the operating results that would have occurred had the Aera Merger been completed on January 1, 2024, nor is it necessarily indicative of future operating results of the combined entity.

The pro forma financial information for the three and six months ended June 30, 2024 is a result of combining our three and six months statements of operations with Aera's pre-merger results from January 1, 2024 and the pro forma adjustments include estimates and assumptions based on currently available information.

Net income per share

This supplemental pro forma financial information is presented for illustration purposes only and is not necessarily indicative of the operating results that would have occurred had the Aera Merger been completed on January 1, 2024, nor is it necessarily indicative of future operating results of the combined entity.

The pro forma financial information for the nine months ended September 30, 2024 is a result of combining our nine months statements of operations with Aera's pre-merger results from January 1, 2024 through June 30, 2024 and pro forma adjustments include estimates and assumptions based on currently available information.

The pro forma results do not reflect any cost savings anticipated as a result of the Aera Merger and exclude the impact of any severance.

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Management believes the estimates and assumptions are reasonable, and the relative effects of the Aera Merger are properly reflected.

Future results may vary significantly from the financial results reflected in the table above.

NOTE 3 INVESTMENTS AND RELATED PARTY TRANSACTIONS

3 unchanged sentences

Investment, December 31, 2024

Loss from investment in unconsolidated subsidiary

Contributions 26

Investment, June 30, 2025

Investment, September 30, 2025

Midway Sunset Cogeneration Company

1 unchanged sentence

Investment, December 31, 2024

Adjustment to the preliminary purchase price allocation (see Note 2 Aera Merger )

Income from investment in unconsolidated subsidiary

Investment, June 30, 2025

Adjustment to the preliminary purchase price allocation in the Aera Merger

Investment, September 30, 2025

Carbon TerraVault JV

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Because the parties have certain put and call rights (repurchase features) with respect to the 26R reservoir if certain milestones are not met, the initial investment by Brookfield is reflected as a contingent liability included in other long-term liabilities on our condensed consolidated balance sheets.

The contingent liability was $ 107 million at December 31, 2024 and $ 112 million at June 30, 2025, inclusive of interest.

The contingent liability was $ 107 million at December 31, 2024 and $ 115 million at September 30, 2025 , inclusive of interest.

The amount payable to Brookfield under the put and call rights, if exercised, includes additional capital contributions made by Brookfield to develop the 26R storage reservoir, inclusive of interest.

This payment would differ from the contingent liability currently recognized because the contingent liability reported in other long-term liabilities on our condensed consolidated balance sheet relates solely to the initial investment and does not include capital contributions made by Brookfield for ongoing development activities to the Carbon TerraVault JV.

This payment would differ from the contingent liability currently recognized because the contingent liability reported in other long-term liabilities on our condensed consolidated balance sheet relates solely to the initial investment by Brookfield and does not include capital contributions made for ongoing development activities of the 26R reservoir.

The table below presents the summarized financial information related to our equity method investment in the Carbon TerraVault JV (and does not include amounts we have incurred related to development of our carbon management business, Carbon TerraVault), along with related party transactions for the periods presented.

June 30, December 31,

September 30, December 31,

(in millions)

1 unchanged sentence

Other long-term liabilities (b)

(a) At June 30, 2025, the amount of $ 31 million includes the remaining $ 28 million of Brookfield's first and second installments of their initial investment which is available to us and $ 3 million related to the Master Service Agreement (MSA) and vendor reimbursements.

(a) At September 30, 2025, the amount of $ 26 million includes the remaining $ 17 million of Brookfield's first and second installments of their initial investment which is available to us and $ 9 million related to the Master Service Agreement (MSA) and vendor reimbursements.

At December 31, 2024, the amount of $ 46 million includes $ 43 million remaining of Brookfield's initial contribution available to us and $ 3 million related to the MSA and vendor reimbursements.

(b) Other long-term liabilities include the contingent liability related to the Carbon TerraVault JV put and call rights.

We recognized a loss of $ 1 million and $ 2 million for the three and six months ended June 30, 2025, respectively, and a loss of $ 4 million and $ 7 million for the three and six months ended June 30, 2024, respectively, related to our investment in the Carbon TerraVault JV.

We are also performing well abandonment work at our Elk Hills field to prepare our 26R reservoir for injection of CO 2 .

During the three and six months ended June 30, 2025, we performed abandonment work and sought reimbursement in the amounts of $ 6 million and $ 8 million, respectively, from the Carbon TerraVault JV.

During the three and six months ended June 30, 2024, we performed abandonment work and sought reimbursement in the amounts of $ 5 million and $ 9 million, respectively, from the Carbon TerraVault JV.

We recognized a loss of $ 2 million and $ 4 million for the three and nine months ended September 30, 2025, respectively, and a loss of $ 3 million and $ 10 million for the three and nine months ended September 30, 2024, respectively, related to our investment in the Carbon TerraVault JV.

During the three and nine months ended September 30, 2025, we performed well abandonment work to prepare the 26R reservoir for injection of CO 2 and sought reimbursement in the amounts of $ 2 million and $ 9 million, respectively, from the Carbon TerraVault JV.

During the three and nine months ended September 30, 2024, we performed well abandonment work and sought reimbursement in the amounts of $ 4 million and $ 13 million, respectively, from the Carbon TerraVault JV.

We recorded these reimbursements as a reduction to property, plant and equipment, net on our condensed consolidated balance sheets.

Midway Sunset Cogeneration Company

In July 2024, our merger with Aera led to our partial ownership of Midway Sunset Cogeneration Company, which owns, manages, and operates a cogeneration facility in Kern County, California.

The Aera Merger led to our partial ownership of Midway Sunset Cogeneration Company, which owns, manages, and operates a cogeneration facility in Kern County, California.

The Midway Sunset Cogeneration Company is owned 50 % by us and 50 % by San Joaquin Energy Company, a subsidiary of NRG Energy Inc.

We recorded our investment in the Midway Sunset Cogeneration Company at $ 52 million as of July 1, 2024, which was $ 41 million in excess of the carrying value of the underlying assets held by the partnership.

This difference is associated with property, plant and equipment and we expect this amount will reverse over the remaining useful life of the power plant.

There are no significant transactions between us and Midway Sunset Cogeneration Company.

Our 50 % share of the net income related to our investment in Midway Sunset Cogeneration Company for the three and six months ended June 30, 2025 was $ 1 million.

As of June 30, 2025 and December 31, 2024, our long-term debt consisted of the following:

June 30, December 31,

Our 50 % share of the net income related to our investment in Midway Sunset Cogeneration Company was insignificant for the three and nine months ended September 30, 2025 and 2024.

As of September 30, 2025 and December 31, 2024, our long-term debt consisted of the following:

September 30, December 31,

2025 2024 Interest Rate Maturity

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Our Revolving Credit Facility also includes a sub-limit of $ 300 million for the issuance of letters of credit.

As of June 30, 2025, $ 167 million letters of credit were issued to support ordinary course marketing, insurance, regulatory and other matters.

As of June 30, 2025, we had $ 983 million of availability on our Revolving Credit Facility after taking into account $ 167 million in letters of credit outstanding.

Our borrowing base of $ 1.5 billion is redetermined semi-annually and was re-affirmed in April 2025.

As of September 30, 2025, $ 176 million letters of credit were issued to support ordinary course marketing, insurance, regulatory and other matters.

As of September 30, 2025, we had $ 974 million of availability on our Revolving Credit Facility after taking into account $ 176 million in letters of credit outstanding.

Our borrowing base of $ 1.5 billion is redetermined semi-annually and was re-affirmed in October 2025.

In connection with the Berry Merger Agreement in September 2025, we entered into a sixth amendment to our Revolving Credit Facility to, among other things, allow for the incurrence of the 2034 Senior Notes without a corresponding reduction in our existing borrowing base.

See Note 16 Subsequent Events for more information on our 2034 Senior Notes and the seventh amendment to our Revolving Credit Facility.

As shown in the table below, we estimate the fair value of our fixed rate 2029 Senior Notes and 2026 Senior Notes based on known prices from market transactions (using Level 1 inputs on the fair value hierarchy).

June 30, December 31,

September 30, December 31,

(in millions)

4 unchanged sentences

$ 1,061 $ 1,158

As of June 30, 2025, we were in compliance with all financial and other debt covenants under our Revolving Credit Facility, 2026 Senior Notes and 2029 Senior Notes.

As of September 30, 2025, we were in compliance with all financial and other debt covenants under our Revolving Credit Facility, 2026 Senior Notes and 2029 Senior Notes.

Note Redemptions

In February 2025, we redeemed $ 123 million of our 7.125 % senior notes due 2026 (2026 Senior Notes) at 100 % of the principal amount, resulting in an extinguishment loss in the amount of $ 1 million for the write-off of unamortized debt issuance costs.

There were no repurchases or redemptions of our 2026 Senior Notes in the three months ended June 30, 2025 or the three and six months ended June 30, 2024.

See Note 16 Subsequent Events for additional information on the redemption of the remaining balance of our 2026 Senior Notes in October 2025.

NOTE 5 LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES

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We accrue reserves for currently outstanding lawsuits, claims and proceedings when we determine it is probable that a liability has been incurred and the liability can be reasonably estimated.

Reserve balances for these items at June 30, 2025 and December 31, 2024 were not material to our condensed consolidated balance sheets as of such dates.

Reserve balances for these items at September 30, 2025 and December 31, 2024 were not material to our condensed consolidated balance sheets as of such dates.

We also evaluate the amount of reasonably possible losses that we could incur as a result of these matters.

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defaulted on its decommissioning obligations associated with two offshore platforms.

The Bureau of Safety and Environmental Enforcement (BSEE) determined that former lessees, including our former parent, Occidental Petroleum Corporation (Oxy) with a 37.5 % share, are responsible for accrued decommissioning obligations associated with these offshore platforms.

The Bureau of Safety and Environmental Enforcement (BSEE) determined that former lessees, including our former parent, Occidental Petroleum Corporation (Oxy) with a 37.5 % share, are responsible for decommissioning obligations associated with these offshore platforms.

Oxy sold its interest in the platforms approximately 30 years ago and it is our understanding that Oxy has not had any connection to the operations since that time and was challenging BSEE's order.

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In March 2024, we entered into a cost sharing agreement with former lessees to share in ongoing maintenance costs during the pendency of the challenge to the BSEE order.

Due to the preliminary stage of the process, no cost estimates to abandon the offshore platforms have been determined.

For the three and six months ended June 30, 2025, other operating expenses, net on our condensed consolidated statement of operations includes $ 2 million for our ongoing share of maintenance costs during the pendency of the challenge to the BSEE order.

In September 2025, the parties amended the cost sharing agreement to include well abandonment work.

As of September 30, 2025, we recognized a liability of $ 4 million, included in accrued liabilities in our condensed consolidated balance sheet related to this abandonment work.

For the three and nine months ended September 30, 2025, other operating expenses, net on our condensed consolidated statement of operations includes $ 5 million and $ 7 million, respectively, for our ongoing share of maintenance costs and well abandonment work.

We continue to challenge the BSEE order.

In 2023 and 2024, the California Geologic Energy Management Division (CalGEM) plugged and abandoned approximately 120 "orphaned" oil and gas wells located in Cat Canyon, Santa Barbara County, at an aggregate cost of $ 25 million.

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In connection with this dispute, we were required to remit $ 25 million to CalGEM under protest pending the outcome of this matter.

For the three and six months ended June 30, 2025, other operating expenses, net on our condensed consolidated statement of operations includes $ 25 million related to this matter.

For the nine months ended September 30, 2025, other operating expenses, net on our condensed consolidated statement of operations includes $ 25 million related to this matter.

NOTE 6 DERIVATIVES

We enter into commodity derivative contracts to help protect our cash flows, margins and capital program from the volatility of commodity prices.

We primarily hedge a portion of our forecasted oil production and purchased natural gas used in our steamflood operations.

We did not have any derivative instruments designated as accounting hedges as of and for the three and six months ended June 30, 2025 and 2024.

We primarily hedge a portion of our forecasted oil production and purchase natural gas used in our steamflood operations.

We did not have any derivative instruments designated as accounting hedges as of and for the three and nine months ended September 30, 2025 and 2024.

Unless otherwise indicated, we use the term "hedge" to describe derivative instruments that are designed to implement our hedging strategy.

Summary of Derivative Contracts

We held the following Brent-based contracts as of June 30, 2025:

We held the following Brent-based contracts as of September 30, 2025:

2026 2027 2028

6 unchanged sentences

Weighted-average price per barrel $ 69.86 $ 68.98 $ 68.03 $ 67.51 $ 66.99 $ 64.80 $ 65.00

At June 30, 2025, we also held the following swaps to hedge purchased natural gas used in our operations as shown in the table below.

At September 30, 2025, we also held the following swaps to hedge purchased natural gas used in our operations as shown in the table below.

2026 2027 2028

7 unchanged sentences

$ 4.22 $ 4.67 $ 3.64 $ 3.63 $ 4.22 $ 4.08 $ 3.95

In the three and six months ended June 30, 2025 and 2024, we also had a limited number of derivative contracts related to our natural gas marketing activities that were intended to lock in locational price spreads.

In the three and nine months ended September 30, 2025 and 2024, we also had a limited number of derivative contracts related to our natural gas marketing activities that were intended to lock in locational price spreads.

These derivative contracts were not significant to our results of operations or financial statements taken as a whole.

7 unchanged sentences

We report gains and losses on our derivative contracts related to our oil production and our marketing activities in operating revenue on our consolidated statements of operations as shown in the table below:

Three months ended June 30, Six months ended

Three months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

(in millions) (in millions)

Non-cash commodity derivative gain (loss)

Non-cash commodity derivative (loss) gain

$ ( 32 ) $ 373 $ 130 $ 325

Net settlements and amortized premiums

Net proceeds (settlements) and premium amortization

9 ( 17 ) 10 ( 35 )

Net gain (loss) from commodity derivatives $ 157 $ 5 $ 163 $ ( 66 )

Net (loss) gain from commodity derivatives

$ ( 23 ) $ 356 $ 140 $ 290

We report gains and losses on our commodity derivative c ontracts related to purchases of natural gas in operating expenses on our condensed consolidated statement s of operations as shown in the table below:

Three months ended June 30, Six months ended

Three months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

(in millions) (in millions)

Non-cash gain on natural gas purchase derivatives

Non-cash loss (gain) on natural gas purchase derivatives

$ 24 $ ( 3 ) $ 2 $ ( 7 )

Net loss (gain) on natural gas purchase derivatives

Net loss on natural gas purchase derivatives

$ 27 $ 9 $ 24 $ 11

Our derivative contracts are measured at fair value using industry-standard models with various inputs, including quoted forward prices, and are classified as Level 2 in the required fair value hierarchy for the periods presented.

The following tables present the fair values of our outstanding commodity derivatives as of June 30, 2025 and December 31, 2024.

June 30, 2025

The following tables present the fair values of our outstanding commodity derivatives as of September 30, 2025 and December 31, 2024.

September 30, 2025

Classification Gross Amounts at Fair Value Netting Net Fair Value

17 unchanged sentences

The following table presents the components of our income tax provision (benefit) and effective tax rate:

Three months ended June 30, Six months ended June 30,

Three months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

(in millions) (in millions)

Income (loss) before income taxes

Income before income taxes

$ 75 $ 483 $ 479 $ 475

Current income tax provision 64 — 76 —

Deferred income tax provision (benefit)

Income tax provision (benefit)

Current income tax (benefit) provision

( 24 ) 48 52 48

Effective tax rate

Deferred income tax provision

Income tax provision

$ 11 $ 138 $ 128 $ 132

Our income tax provision or benefit for interim periods is determined by applying an estimated annual effective tax rate to income (loss) before income taxes with the result adjusted for discrete items, if any, in the relevant period.

Our annual effective tax rate of 29 % and 27 % for the three months ended June 30, 2025 and 2024, respectively, differed from the U.S.

statutory rate of 21% primarily due to state taxes.

Our annual effective tax rate of 29 % for the six months ended June 30, 2025 differed from the U.S.

statutory rate of 21% primarily due to state taxes.

Our annual effective tax rate of 75 % differed from the U.S.

statutory rate of 21% for the six months ended June 30, 2024 primarily due to the settlement of stock-based compensation awards in the first quarter of 2024 at a share price which exceeded the grant date value used to recognize compensation expense for financial accounting.

The difference resulted in a tax benefit and had the effect of increasing our effective tax rate for the six months ended June 30, 2024.

Annual effective tax rate

15 % 29 % 27 % 28 %

Our income tax provision for interim periods is determined by applying an estimated annual effective tax rate to income before income taxes with the result adjusted for discrete items, if any, in the relevant period.

Our annual effective tax rate for the three months ended September 30, 2025 differed from the U.S.

statutory rate of 21% primarily due to state taxes and the marginal well tax credit.

For all other periods presented, the difference between the U.S.

statutory rate of 21% and our effective tax rate is primarily due to state taxes.

The increase in our deferred tax liability of $ 99 million from $ 113 million as of December 31, 2024 to $ 212 million as of September 30, 2025 is primarily related to finalizing our purchase price allocations related to the Aera Merger and tax law changes.

On July 4, 2025, An Act to Provide for Reconciliation Pursuant to Title II of H.

14th and commonly referred to as the One Big Beautiful Bill Act was signed into law.

This law contains several legislative changes including the reinstatement of full expensing for qualified assets placed in service after January 19, 2025.

This law also reinstated the expensing of all domestic research and development costs, including favorable transition rules, and increases the limitation on the amount of annual business interest expense which can be deducted each year.

14th, commonly referred to as the One Big Beautiful Bill Act, was signed into law.

This law contains several legislative changes including the reinstatement of 100% bonus depreciation under Section 168(k) of the Internal Revenue Code for qualified assets acquired and placed in service after January 19, 2025.

This law also reinstated the current expensing of all domestic research and development costs, including favorable transition rules, and restored an EBITDA-based limitation on the amount of annual business interest expense which can be deducted each year under Section 163(j) of the Internal Revenue Code.

Management expects to realize the recorded deferred tax assets primarily through future income and reversal of taxable temporary differences.

2 unchanged sentences

Fort Apache in Huntington Beach

In March 2024, we sold our 0.9 -acre Fort Apache real estate property in Huntington Beach, California for $ 10 million and recognized a $ 6 million gain.

In March 2024, we sold a 0.9 -acre Fort Apache parcel in Huntington Beach, California for $ 10 million and recognized a $ 6 million gain.

Carbon Management Assets

In 2022, we acquired properties for carbon management activities with the intent to divest a portion of these assets.

The assets are carried at fair value and classified as held for sale as of June 30, 2025 on our condensed consolidated balance sheet.

In May 2025, we sold a portion of these properties for $ 1 million.

We did not recognize a gain or loss on this transaction.

In September 2025, we reduced the carrying value of these properties classified as held for sale to fair value and recognized an impairment charge of $ 2 million during the three and nine months ended September 30, 2025.

The fair value, using Level 3 inputs in the fair value hierarchy, declined due to market conditions.

NOTE 9 SEGMENT INFORMATION

6 unchanged sentences

Revenues related to sales of produced natural gas to our Elk Hills power plant are included in oil, natural gas and natural gas liquids sales in the table below.

Direct labor-related costs are allocated to our reportable segments based on job function.

Direct labor-related costs are allocated to our reportable segments based on job function and activity.

General and administrative expenses are allocated to a segment if they directly support a segment's activities.

1 unchanged sentence

We use proportionate consolidation to account for our share of oil and natural gas producing activities.

The following tables provide segment profit or loss and reconciliations of segment profit or loss to total operating revenues and consolidated income before income taxes for the three and six months ended June 30, 2025 and 2024.

Three months ended June 30, 2025

Three months ended September 30, 2025

Oil and Natural Gas Carbon Management Total Reportable Segments Elimination Total

6 unchanged sentences

(a) Other revenues and income includes net gain from commodity derivatives, revenue from marketing of purchased commodities, electricity revenue, interest income and unallocated other revenue.

Three months ended June 30, 2025

Three months ended September 30, 2025

Oil and Natural Gas Carbon Management Total Reportable Segments Reconciliation (Income)/Expense Total

16 unchanged sentences

Unallocated amounts (c)

( 104 ) ( 104 )

Income before income taxes $ 75

(a) Other segment expenses for our oil and natural gas segment includes transportation costs, accretion expense, and other operating expenses, net.

Other segment expenses for our carbon management segment primarily includes operating lease costs.

Other segment expenses for our carbon management segment primarily includes operating lease costs and an asset impairment.

(b) Other profit or loss includes the margin we earn from marketing activities and the margin we earn on sales of electricity from our Elk Hills power plant to customers.

(c) Unallocated amounts include net gain from commodity derivatives, net loss on natural gas purchase derivatives, transportation costs, other operating expenses, net, interest income and unallocated other revenue.

Three months ended June 30, 2024

Three months ended September 30, 2024

Oil and Natural Gas Carbon Management Total Reportable Segments Elimination Total

6 unchanged sentences

(a) Other revenue and income includes net gain from commodity derivatives, revenue from marketing of purchased commodities, electricity revenue, interest income and unallocated other revenue.

Three months ended June 30, 2024

Three months ended September 30, 2024

Oil and Natural Gas Carbon Management Total Reportable Segments Reconciliation (Income)/Expense Total

16 unchanged sentences

Unallocated amounts (c)

( 279 ) ( 279 )

Income before income taxes $ 483

2 unchanged sentences

(b) Other profit or loss includes margin from purchased commodities and the margin we earn on sales of electricity from our Elk Hills power plant to customers.

(c) Unallocated amounts include net gain from commodity derivatives, transportation costs, interest and debt expense, other operating expenses, net, other non-operating loss, interest income, unallocated other revenue, and gain on asset divestitures.

Six months ended June 30, 2025

(c) Unallocated amounts include net gain from commodity derivatives, transportation costs, other operating expenses, net, other non-operating loss, interest income, unallocated other revenue and loss on early extinguishment of debt.

Nine months ended September 30, 2025

Oil and Natural Gas Carbon Management Total Reportable Segments Elimination Total

6 unchanged sentences

(a) Other revenues and income includes net gain from commodity derivatives, revenue from marketing of purchased commodities, electricity revenue, interest income and unallocated other revenue.

Six months ended June 30, 2025

Nine months ended September 30, 2025

Oil and Natural Gas Carbon Management Total Reportable Segments Reconciliation (Income)/Expense Total

19 unchanged sentences

(a) Other segment expenses for our oil and natural gas segment includes transportation costs, accretion expense, and other operating expenses, net.

Other segment expenses for our carbon management segment primarily includes operating lease costs.

Other segment expenses for our carbon management segment primarily includes operating lease costs and an asset impairment.

(b) Other profit or loss includes the margin we earn from marketing activities and the margin we earn on sales of electricity from our Elk Hills power plant to customers.

(c) Unallocated amounts include net gain from commodity derivatives, net gain on natural gas purchase derivatives, transportation costs, other operating expenses, net, other non-operating losses, loss on early extinguishment of debt, interest income and unallocated other revenue.

Six months ended June 30, 2024

(c) Unallocated amounts include net gain from commodity derivatives, net loss on natural gas purchase derivatives, transportation costs, other operating expenses, net, other non-operating losses, loss on early extinguishment of debt, interest income and unallocated other revenue.

Nine months ended September 30, 2024

Oil and Natural Gas Carbon Management Total Reportable Segments Elimination Total

5 unchanged sentences

Total operating revenues $ 2,321

(a) Other revenue and income includes net loss from commodity derivatives, revenue from marketing of purchased commodities, electricity revenue, interest income and unallocated other revenue.

Six months ended June 30, 2024

(a) Other revenue and income includes net gain from commodity derivatives, revenue from marketing of purchased commodities, electricity revenue, interest income and unallocated other revenue.

Nine months ended September 30, 2024

Oil and Natural Gas Carbon Management Total Reportable Segments Reconciliation (Income)/Expense Total

16 unchanged sentences

Unallocated amounts (c)

( 153 ) ( 153 )

Income before income taxes $ 475

2 unchanged sentences

(b) Other profit or loss includes margin from purchased commodities and the margin we earn on sales of electricity from our Elk Hills power plant to customers.

(c) Unallocated amounts include net loss from commodity derivatives, transportation costs, interest and debt expense, other operating expenses, net, other non-operating loss, interest income, unallocated other revenue, and gain on asset divestitures.

The following table provides capital investment by segment and a reconciliation to our consolidated capital investment for the three and six months ended June 30, 2025 and 2024.

We do not provide total assets by segment because this is not used by our Chief Operating Decision Maker.

The following table provides capital investment by segment and a reconciliation to our consolidated capital investment for the three and nine months ended September 30, 2025 and 2024.

We do not provide total assets by segment because it is not used by our Chief Operating Decision Maker.

See Note 3 Investments and Related Party Transactions for information on our investment in the Carbon TerraVault JV, which is part of our carbon management segment.

3 unchanged sentences

(in millions)

Three months ended June 30, 2025 $ 51 $ 5 $ — $ 56

Three months ended June 30, 2024 $ 46 $ ( 2 ) $ ( 10 ) $ 34

Three months ended September 30, 2025 $ 72 $ 15 $ 4 $ 91

Three months ended September 30, 2024 $ 74 $ 4 $ 1 $ 79

Oil and Natural Gas

2 unchanged sentences

(in millions)

Six months ended June 30, 2025 $ 93 $ 7 $ 11 $ 111

Six months ended June 30, 2024 $ 82 $ 2 $ 4 $ 88

Nine months ended September 30, 2025 $ 165 $ 22 $ 15 $ 202

Nine months ended September 30, 2024 $ 156 $ 6 $ 5 $ 167

NOTE 10 STOCKHOLDERS' EQUITY

Share Repurchase Program

Our Board of Directors authorized a Share Repurchase Program to acquire up to $ 1.35 billion of our common stock through December 31, 2025.

The total value of shares that may yet be purchased under the Share Repurchase Program totaled $ 205 million as of June 30, 2025.

Refer to Note 16 Subsequent Events for more information on a recent extension to our Share Repurchase Program.

Our Board of Directors authorized a Share Repurchase Program to acquire up to $ 1.35 billion of our common stock through June 30, 2026.

The total value of shares that may yet be purchased under the Share Repurchase Program totaled $ 205 million as of September 30, 2025.

The repurchases may be effected from time-to-time through open market purchases, privately negotiated transactions, Rule 10b5-1 plans, accelerated stock repurchases, derivative contracts or otherwise in compliance with Rule 10b-18, subject to market conditions.

The Share Repurchase Program does not obligate us to repurchase any dollar amount or number of shares, and our Board of Directors may modify, suspend or discontinue authorization of the program at any time.

Pursuant to our Share Repurchase Program, we repurchased 5,516,050 shares of common stock during the three months ended June 30, 2025, including 4,950,000 shares from IKAV Impact S.a.r.l.

(IKAV) at a price of $ 46.00 per share in a privately negotiated transaction.

For the three months ended June 30, 2025, the aggregate purchase price consideration, inclusive of excise tax, for our shares was $ 253 million, including $ 228 million for the repurchase of the shares held by IKAV.

Pursuant to our Share Repurchase Program, we repurchased 7,787,969 shares of common stock during the nine months ended September 30, 2025.

For the nine months ended September 30, 2025, the aggregate purchase price consideration, inclusive of excise taxes, for our shares was $ 354 million.

We funded our share repurchases with available cash.

Simultaneously with the consummation of the stock repurchase from IKAV, the lock-up restrictions applicable to sales of common stock by IKAV and its affiliates IKAV Energy, Inc.

and Simlog Inc.

pursuant to a Registration Rights Agreement, dated July 1, 2024, with the sellers party thereto ceased to be effective.

This transaction did not impact any other terms of the Aera Merger.

The following is a summary of our share repurchases, for the periods presented:

The following table summarizes our share repurchases, for the periods presented.

There were no repurchases during the three months ended September 30, 2025;

however we remitted $ 34 million in U.S.

federal taxes withheld from a June 2025 share repurchase.

Total Number of Shares Purchased Total Value of Shares Purchased Average Price Paid per Share

(number of shares) (in millions) ($ per share)

Three months ended June 30, 2024 703,839 $ 35 $ 49.71

Three months ended June 30, 2025 5,516,050 $ 253 $ 45.73

Six months ended June 30, 2024 1,769,603 $ 93 $ 51.85

Six months ended June 30, 2025 7,787,969 $ 354 $ 45.23

Three months ended September 30, 2024 835,319 $ 42 $ 50.23

Nine months ended September 30, 2024 2,604,922 $ 135 $ 51.33

Nine months ended September 30, 2025 7,787,969 $ 354 $ 45.23

The total value of shares purchased includes accrued excise taxes, which are generally paid in the year following the share repurchase.

6 unchanged sentences

Three months ended June 30, 2025

Six months ended June 30, 2025

Three months ended September 30, 2025 32 $ 0.3875

Nine months ended September 30, 2025 $ 102

Three months ended March 31, 2024

Three months ended June 30, 2024

Six months ended June 30, 2024

In addition to dividends on our common stock shown in the table above, we paid $ 1 million of dividend equivalents on equity-settled stock-based compensation awards in the six months ended June 30, 2025 .

We paid $ 4 million of dividend equivalents in the six months ended June 30, 2024.

Three months ended September 30, 2024 34 $ 0.3875

Nine months ended September 30, 2024

In addition to dividends on our common stock shown in the table above, we paid $ 1 million of dividend equivalents on equity-settled stock-based compensation awards in the nine months ended September 30, 2025 and $ 4 million of dividend equivalents in the nine months ended September 30, 2024.

Future cash dividends, and the establishment of record and payment dates, are subject to final determination by our Board of Directors each quarter after reviewing our financial performance and position.

1 unchanged sentence

NOTE 11 EARNINGS PER SHARE

Basic and diluted earnings per share (EPS) were calculated using the treasury stock method for the three and six months ended June 30, 2025 and 2024.

Basic and diluted earnings per share (EPS) were calculated using the treasury stock method for the three and nine months ended September 30, 2025 and 2024.

Our restricted stock unit (RSU) and performance stock unit (PSU) awards are not considered participating securities since the dividend rights on unvested shares are forfeitable.

1 unchanged sentence

For diluted EPS, the basic shares outstanding are adjusted by adding potential common shares, if dilutive.

The following table presents the calculation of basic and diluted EPS, for the three and six months ended June 30, 2025 and 2024:

Three months ended June 30, Six months ended June 30,

The following table presents the calculation of basic and diluted EPS, for the three and nine months ended September 30, 2025 and 2024:

Three months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

1 unchanged sentence

Numerator for Basic and Diluted EPS

Net income (loss)

$ 64 $ 345 $ 351 $ 343

11 unchanged sentences

Diluted $ 0.76 $ 3.78 $ 3.97 $ 4.42

The potentially dilutive weighted-average common shares of 6 million which were excluded from the denominator of diluted EPS for the six months ended June 30, 2024 included (i) 4.2 million for shares issuable upon exercise of warrants, (ii) 800,000 for shares issuable upon settlement of RSUs and (iii) 1 million shares issuable upon settlement of PSUs.

NOTE 12 PENSION AND POSTRETIREMENT BENEFIT PLANS

The following table sets forth the components of the net periodic benefit costs for our defined benefit pension and postretirement benefit plans for the three and six months ended June 30, 2025 and 2024:

Three months ended June 30, Three months ended June 30,

The following table sets forth the components of the net periodic benefit costs for our defined benefit pension and postretirement benefit plans for the three and nine months ended September 30, 2025 and 2024:

Three months ended September 30, Three months ended September 30,

Benefit Postretirement

5 unchanged sentences

Expected return on plan assets ( 6 ) ( 1 ) ( 6 ) ( 1 )

Settlement loss 1 — — —

Amortization of net actuarial loss

Curtailment gain — — ( 4 )

Cost of special termination benefits

Amortization of prior service cost credit — ( 2 ) — ( 1 )

Net periodic benefit costs $ ( 1 ) $ ( 1 ) $ 1 $ —

Six months ended June 30, Six months ended June 30,

Nine months ended September 30,

Benefit Postretirement

5 unchanged sentences

Expected return on plan assets ( 17 ) ( 3 ) ( 7 ) ( 1 )

Curtailment gain — — — ( 4 )

Settlement loss 1 — — —

Amortization of net actuarial loss

Cost of special termination benefits

Amortization of net actuarial gain

— ( 1 ) — ( 1 )

1 unchanged sentence

Net periodic benefit costs $ ( 4 ) $ ( 2 ) $ — $ ( 2 )

Contributions to our pension benefit plans were insignificant during the three and six months ended June 30, 2025.

During the three and six months ended June 30, 2024, we contributed $ 2 million to our pension benefit plans .

Contributions to our pension benefit plans were insignificant during the three and nine months ended September 30, 2025.

Contributions were insignificant during the three months ended September 30, 2024 and we contributed $ 2 million to our pension benefit plans during the nine months ended September 30, 2024 .

We do not expect to need to make any contributions to our qualified pension plans to satisfy minimum funding requirements during the remainder of 2025 .

1 unchanged sentence

NOTE 13 SUPPLEMENTAL ACCOUNT BALANCES

Restricted cash — Cash and cash equivalents includes restricted cash of $ 16 million and $ 18 million at June 30, 2025 and December 31, 2024, respectively.

Restricted cash — Cash and cash equivalents includes restricted cash of $ 16 million and $ 18 million at September 30, 2025 and December 31, 2024, respectively.

Restricted cash primarily includes funds held in an escrow account established to secure oil field well and infrastructure abandonment and habitat restoration at an oil and gas field previously owned by Aera.

1 unchanged sentence

The following table provides disaggregated revenue for sales of produced oil, natural gas and natural gas liquids to customers:

Three months ended June 30, Six months ended June 30,

Three months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

3 unchanged sentences

Natural gas liquids

36 44 125 138

Oil, natural gas and natural gas liquids sales

3 unchanged sentences

The following table provides disaggregated revenue for sales to customers related to our marketing activities:

Three months ended June 30, Six months ended June 30,

Three months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

5 unchanged sentences

$ 58 $ 51 $ 178 $ 176

Inventories — Materials and supplies, which primarily consist of well equipment and tubular goods used in our oil and natural gas operations and critical spares related to our cogeneration power plants, are valued at weighted-average cost and are reviewed periodically for obsolescence.

Inventory — Materials and supplies, which primarily consist of well equipment and tubular goods used in our oil and natural gas operations and critical spares related to our cogeneration power plants, are valued at weighted-average cost and are reviewed periodically for obsolescence.

Finished goods include produced oil and natural gas liquids in storage, which are valued at the lower of cost or net realizable value.

Inventories, by category, are as follows:

June 30, December 31,

Inventory, by category, is as follows:

September 30, December 31,

(in millions)

1 unchanged sentence

Finished goods 5 4

Inventories $ 93 $ 90

Other current assets, net — Other current assets, net include the following:

June 30, December 31,

September 30, December 31,

(in millions)

7 unchanged sentences

Other noncurrent assets — Other noncurrent assets include the following:

June 30, December 31,

September 30, December 31,

(in millions)

7 unchanged sentences

Accrued liabilities — Accrued liabilities include the following:

June 30, December 31,

September 30, December 31,

(in millions)

5 unchanged sentences

Premiums due on commodity derivative contracts 19 14

Withholding tax on IKAV stock repurchase ( Note 10 Stockholders' Equity )

Advanced payments

2 unchanged sentences

Other long-term liabilities — Other long-term liabilities include the following:

June 30, December 31,

September 30, December 31,

(in millions)

7 unchanged sentences

Supplemental disclosures to our condensed consolidated statements of cash flows are presented below:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

11 unchanged sentences

$ 2 $ — $ 23 $ 88

Dividends accrued for stock-based compensation awards

Dividend equivalents for stock-based compensation awards

$ 1 $ 2 $ 2 $ 2

1 unchanged sentence

$ — $ — $ 2 $ 1

Withholding tax on the Stock Repurchase

$ 34 $ — $ 34 $ —

NOTE 15 CONDENSED CONSOLIDATING FINANCIAL INFORMATION

2 unchanged sentences

We are required under the 2026 Senior Notes Indenture and 2029 Senior Notes Indenture to present the financial condition and results of operations of CRC and its Restricted Subsidiaries (as defined in the 2026 Senior Notes Indenture and 2029 Senior Notes Indenture) separate from the financial condition and results of operations of its Unrestricted Subsidiaries.

The following condensed consolidating balance sheets as of June 30, 2025 and December 31, 2024 and the condensed consolidating statements of operations for the three and six months ended June 30, 2025 and 2024, as applicable, reflect the condensed consolidating financial information of CRC (Parent), our combined Unrestricted Subsidiaries, our combined Restricted Subsidiaries and the elimination entries necessary to arrive at the information for the Company on a consolidated basis.

The following condensed consolidating balance sheets as of September 30, 2025 and December 31, 2024 and the condensed consolidating statements of operations for the three and nine months ended September 30, 2025 and 2024, as applicable, reflect the condensed consolidating financial information of CRC (Parent), our combined Unrestricted Subsidiaries, our combined Restricted Subsidiaries and the elimination entries necessary to arrive at the information for the Company on a consolidated basis.

The financial information may not necessarily be indicative of the financial condition and results of operations had the Unrestricted Subsidiaries operated as independent entities.

Condensed Consolidating Balance Sheets

As of June 30, 2025 and December 31, 2024

As of June 30, 2025

As of September 30, 2025 and December 31, 2024

As of September 30, 2025

Parent Combined Unrestricted Subsidiaries Combined Restricted Subsidiaries Eliminations Consolidated

7 unchanged sentences

Investment in unconsolidated subsidiaries

— 49 53 — 102

Other assets 117 45 118 — 280

33 unchanged sentences

Condensed Consolidating Statement of Operations

For the three and six months ended June 30, 2025 and 2024

Three months ended June 30, 2025

For the three and nine months ended September 30, 2025 and 2024

Three months ended September 30, 2025

Parent Combined Unrestricted Subsidiaries Combined Restricted Subsidiaries Eliminations Consolidated

4 unchanged sentences

90 13 672 ( 19 ) 756

Loss on asset divestitures

— — ( 1 ) — ( 1 )

Non-operating (loss) income

6 unchanged sentences

$ ( 122 ) $ ( 17 ) $ 205 $ ( 2 ) $ 64

Three months ended June 30, 2024

Three months ended September 30, 2024

Parent Combined Unrestricted Subsidiaries Combined Restricted Subsidiaries Eliminations Consolidated

4 unchanged sentences

86 16 818 ( 85 ) 835

Gain on asset divestitures — — 1 — 1

Non-operating (loss) income ( 32 ) ( 5 ) 2 — ( 35 )

3 unchanged sentences

NET (LOSS) INCOME $ ( 254 ) $ ( 21 ) $ 621 $ ( 1 ) $ 345

Six months ended June 30, 2025

Nine months ended September 30, 2025

Parent Combined Unrestricted Subsidiaries Combined Restricted Subsidiaries Eliminations Consolidated

4 unchanged sentences

265 47 1,940 ( 59 ) 2,193

Loss on asset divestitures

— — ( 1 ) — ( 1 )

Non-operating (loss) income

6 unchanged sentences

$ ( 457 ) $ ( 58 ) $ 868 $ ( 2 ) $ 351

Six months ended June 30, 2024

Nine months ended September 30, 2024

Parent Combined Unrestricted Subsidiaries Combined Restricted Subsidiaries Eliminations Consolidated

7 unchanged sentences

(LOSS) INCOME BEFORE INCOME TAXES ( 273 ) ( 60 ) 808 — 475

Income tax benefit

Income tax provision

( 132 ) — — — ( 132 )

NET (LOSS) INCOME $ ( 405 ) $ ( 60 ) $ 808 $ — $ 343

NOTE 16 SUBSEQUENT EVENTS

On August 5, 2025 , our Board of Directors declared a quarterly cash dividend of $ 0.3875 per share of common stock.

The dividend is payable to shareholders of record at the close of business on August 27, 2025 and is expected to be paid on September 12, 2025 .

Share Repurchase Program

On July 30, 2025 the Board of Directors authorized an extension of our Share Repurchase Program through June 30, 2026.

Refer to Note 10 Stockholders' Equity for more information on our Share Repurchase Program .

2034 Senior Notes

On October 8, 2025, we completed a private offering of $ 400 million in an aggregate principal amount of 7.000 % senior notes due 2034 (2034 Senior Notes).

The terms of the 2034 Senior Notes are governed by the Indenture, dated as of October 8, 2025, by and among us, the guarantors and Wilmington Trust, National Association, as trustee (2034 Senior Notes Indenture).

The 2034 Senior Notes will mature on January 15, 2034.

Our 2034 Senior Notes are subject to a special mandatory redemption in certain circumstances if the Berry Merger does not close prior to March 14, 2026 (subject to up to two three -month extensions by either us or Berry upon written notice in certain circumstances).

As of September 30, 2025, it was not probable that this redemption feature would be triggered.

Security – Our 2034 Senior Notes are general unsecured obligations which are guaranteed on a senior unsecured basis by all of our existing subsidiaries that guarantee our obligations under the Revolving Credit Facility and our existing 2029 Senior Notes.

Redemption – We may redeem the 2034 Senior Notes at any time on or after January 15, 2029 at the redemption prices of (i) 103.500 % during the twelve-month period beginning on January 15, 2029, (ii) 101.750 % during the twelve-month period beginning on January 15, 2030 and (iii) 100.000 % after January 15, 2031 and before the maturity date.

Prior to January 15, 2029, we may on one or more occasions redeem up to 40 % of the aggregate principal amount of the 2034 Senior Notes with an amount not greater than the net cash proceeds of one or more equity offerings at the redemption price of 107.000 % provided that (i) at least 60 % of the aggregate principal amount of the 2034 Senior Notes originally issued remains outstanding immediately after the redemption and (ii) the redemption occurs within 180 days of the date of the closing of the equity offering.

In addition, before January 15, 2029, we may redeem some or all of the 2034 Senior Notes at a redemption price equal to 100 % of the aggregate principal amount of the 2034 Senior Notes redeemed, plus the applicable premium as specified in the 2034 Senior Notes Indenture and accrued and unpaid interest, if any, to, but excluding, the redemption date.

Other Covenants – Our 2034 Senior Notes include covenants that, among other things, restrict our ability to incur additional indebtedness, issue preferred stock, grant liens, make asset sales and investments, repay existing indebtedness, make subsidiary distributions, and enter into transactions that would result in fundamental changes.

Events of Default and Change of Control – Our 2034 Senior Notes provide for certain triggering events, including upon a change of control, as defined in the 2034 Senior Notes Indenture, that would require us to repurchase all or any part of the 2034 Senior Notes at a price equal to 101 % of the aggregate principal amount plus accrued and unpaid interest.

2026 Senior Notes Redemption

In October 2025, we redeemed $ 122 million of our 2026 Senior Notes at 100 % of the principal amount, resulting in an insignificant extinguishment loss for the write-off of unamortized debt issuance costs.

Following this redemption, none of our 2026 Senior Notes were outstanding.

Seventh Amendment to Revolving Credit Facility

In October 2025, we entered into a seventh amendment to our Revolving Credit Facility to, among other things, (i) add certain new lenders to the facility, and (ii) increase the aggregate elected commitment amount of the lenders from $ 1.15 billion to $ 1.45 billion.

On November 4, 2025 , our Board of Directors increased the cash dividend policy to anticipate a total annual dividend of $ 1.62 , payable to shareholders in quarterly increments of $ 0.405 per share of common stock.

The actual declaration of future cash dividends, and the establishment of record and payment dates, is subject to final determination by our Board of Directors each quarter after reviewing our financial performance and position.

On November 4, 2025 , our Board of Directors declared a quarterly cash dividend of $ 0.405 per share of common stock.

The dividend is payable to shareholders of record at the close of business on December 1, 2025 and is expected to be paid on December 15, 2025 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements