California Resources Corp 10-Q

Item 1 Financial Statements CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets As of September 30, 2025 and December 31, 2024 (in millions, except share data) September 30, December 31, 2025 2024 (unaudited) (audited) CURRENT ASSETS Cash and cash equivalents $ 196 $ 372 Trade receivables 286 330 Inventory 94 90 Assets held for sale 7 10 Receivable from affiliate 26 46 Other current assets, net 203 176 Total current assets 812 1,024 PROPERTY, PLANT AND EQUIPMENT 6,966 6,738 Accumulated depreciation, depletion and amortization ( 1,436 ) ( 1,058 ) Total property, plant and equipment, net 5,530 5,680 INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES 102 86 DEFERRED INCOME TAXES 27 73 OTHER NONCURRENT ASSETS 280 272 TOTAL ASSETS $ 6,751 $ 7,135 CURRENT LIABILITIES Current portion of long-term debt $ 122 $ — Accounts payable 316 369 Accrued liabilities 479 611 Total current liabilities 917 980 NONCURRENT LIABILITIES Long-term debt, net 889 1,132 Asset retirement obligations 965 995 Deferred tax liabilities 212 113 Other long-term liabilities 325 377 STOCKHOLDERS' EQUITY 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; 83,711,931 and 91,100,322 shares outstanding at September 30, 2025 and December 31, 2024) 1 1 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 ) Additional paid-in capital 2,365 2,578 Retained earnings 1,927 1,680 Accumulated other comprehensive income 72 75 Total stockholders' equity 3,443 3,538 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,751 $ 7,135 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Operations (unaudited) For the three and nine months ended September 30, 2025 and 2024 (dollars in millions, except share and per share data; shares in millions) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 REVENUES Oil, natural gas and natural gas liquids sales $ 715 $ 870 $ 2,231 $ 1,711 Net (loss) gain from commodity derivatives ( 23 ) 356 140 290 Revenue from marketing of purchased commodities 58 51 178 176 Electricity revenue 101 69 181 120 Other revenue 4 7 15 24 Total operating revenues 855 1,353 2,745 2,321 OPERATING EXPENSES Operating costs 316 311 927 643 General and administrative expenses 87 106 238 226 Depreciation, depletion and amortization 123 140 382 246 Asset impairment 2 — 2 13 Taxes other than on income 70 85 187 162 Costs related to marketing of purchased commodities 44 43 135 140 Electricity generation expenses 11 9 26 31 Transportation costs 19 23 59 60 Accretion expense 28 31 85 56 Net loss on natural gas purchase derivatives 27 9 24 11 Measurement period adjustments, net — — 1 — Other operating expenses, net 29 78 127 188 Total operating expenses 756 835 2,193 1,776 (Loss) gain on asset divestitures ( 1 ) — ( 1 ) 7 OPERATING INCOME 98 518 551 552 NON-OPERATING (EXPENSES) INCOME Interest and debt expense, net ( 25 ) ( 29 ) ( 77 ) ( 59 ) Loss on early extinguishment of debt — ( 5 ) ( 1 ) ( 5 ) Loss from investment in unconsolidated subsidiaries ( 2 ) ( 2 ) ( 3 ) ( 9 ) Other non-operating income (expense), net 4 1 9 ( 4 ) INCOME BEFORE INCOME TAXES 75 483 479 475 Income tax provision ( 11 ) ( 138 ) ( 128 ) ( 132 ) NET INCOME $ 64 $ 345 $ 351 $ 343 Net income per share Basic $ 0.76 $ 3.86 $ 4.00 $ 4.54 Diluted $ 0.76 $ 3.78 $ 3.97 $ 4.42 Weighted-average common shares outstanding Basic 83.7 89.4 87.8 75.5 Diluted 84.4 91.2 88.4 77.6 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Comprehensive Income (unaudited) For the three and nine months ended September 30, 2025 and 2024 (in millions) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Net income $ 64 $ 345 $ 351 $ 343 Other comprehensive income (loss) (a) : Recognition of net actuarial loss due to settlement 1 — 1 — Actuarial gain associated with pension and postretirement plans, net of tax — 9 ( 1 ) 9 Amortization of prior service cost credit included in net periodic benefit cost, net of tax ( 1 ) ( 4 ) ( 3 ) ( 6 ) 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. 6 CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Stockholders' Equity (unaudited) For the three and nine months ended September 30, 2025 and 2024 (in millions) Three months ended September 30, 2025 Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income Total Equity Balance, June 30, 2025 $ 1 $ ( 922 ) $ 2,359 $ 1,897 $ 72 $ 3,407 Net income — — — 64 — 64 Share-based compensation — — 6 — — 6 Cash dividend — — — ( 33 ) — ( 33 ) Shares cancelled for taxes — — ( 1 ) — — ( 1 ) Other — — 1 ( 1 ) — — 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 Income Total Equity Balance, June 30, 2024 $ 1 $ ( 697 ) $ 1,302 $ 1,374 $ 72 $ 2,052 Net income — — — 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 ) 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. 7 Nine months ended September 30, 2025 Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income Total Equity Balance, December 31, 2024 $ 1 $ ( 796 ) $ 2,578 $ 1,680 $ 75 $ 3,538 Net income — — — 351 — 351 Share-based compensation — — 20 — — 20 Repurchases of common stock — ( 126 ) ( 228 ) — — ( 354 ) Issuance of common stock — — 6 — — 6 Cash dividend — — — ( 104 ) — ( 104 ) Shares cancelled for taxes — — ( 12 ) — — ( 12 ) Other comprehensive income, net of tax — — — — ( 3 ) ( 3 ) Other — — 1 — — 1 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 Comprehensive Income Total Equity Balance, December 31, 2023 $ 1 $ ( 604 ) $ 1,329 $ 1,419 $ 74 $ 2,219 Net income — — — 343 — 343 Share-based compensation — — 19 — — 19 Repurchases of common stock — ( 135 ) — — — ( 135 ) Shares issued for warrants — — 37 — — 37 Shares issued for Aera Merger — — 1,135 — — 1,135 Cash dividend — — — ( 79 ) — ( 79 ) Shares cancelled for taxes — — ( 42 ) — — ( 42 ) Other comprehensive income, net of tax — — — — 3 3 Other — — 1 — — 1 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. 8 CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (unaudited) For the three and nine months ended September 30, 2025 and 2024 (in millions) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 CASH FLOW FROM OPERATING ACTIVITIES Net income $ 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 35 90 76 84 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 Gain on asset divestitures 1 — 1 ( 7 ) Other non-cash charges to income, net 41 45 110 97 Net changes in operating assets and liabilities ( 43 ) ( 29 ) ( 165 ) ( 45 ) Net cash provided by operating activities 279 220 630 404 CASH FLOW FROM INVESTING ACTIVITIES Capital investments ( 91 ) ( 79 ) ( 202 ) ( 167 ) Changes in accrued capital investments 5 6 ( 10 ) 8 Proceeds from asset divestitures 1 — 2 12 Purchase of a business, net of cash acquired — ( 853 ) ( 853 ) Acquisitions — — — ( 6 ) Other, net ( 2 ) ( 2 ) ( 7 ) ( 4 ) Net cash used in investing activities ( 87 ) ( 928 ) ( 217 ) ( 1,010 ) CASH FLOW FROM FINANCING ACTIVITIES 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 Repurchases of common stock ( 34 ) ( 42 ) ( 352 ) ( 135 ) Common stock dividends ( 32 ) ( 34 ) ( 102 ) ( 77 ) Dividend equivalents on equity-settled awards — — ( 1 ) ( 4 ) Issuance of common stock — — 2 2 Bridge loan commitments — — — ( 5 ) Stock warrants exercised — 37 — 37 Debt amendment costs — ( 7 ) — ( 10 ) Shares cancelled for taxes ( 1 ) — ( 12 ) ( 42 ) Debt issuance costs ( 1 ) — ( 1 ) — Debt redemption — ( 303 ) ( 123 ) ( 303 ) Other — ( 1 ) — — Net cash (used in) provided by financing activities ( 68 ) ( 82 ) ( 589 ) 351 Increase (decrease) in cash and cash equivalents 124 ( 790 ) ( 176 ) ( 255 ) Cash and cash equivalents—beginning of period 72 1,031 372 496 Cash and cash equivalents—end of period $ 196 $ 241 $ 196 $ 241 The accompanying notes are an integral part of these condensed consolidated financial statements. 9 CALIFORNIA RESOURCES CORPORATION AND SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements (Unaudited) September 30, 2025 NOTE 1 BASIS OF PRESENTATION We are an independent energy and carbon management company committed to energy transition. We are committed to environmental stewardship while safely providing local, responsibly sourced energy. 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, 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 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. In the opinion of our management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present our financial position, results of operations, comprehensive income, equity and cash flows for all periods presented. We have eliminated all significant intercompany transactions and accounts. We account for our share of oil and natural gas producing activities in which we have a direct working interest by reporting our proportionate share of assets, liabilities, revenues, costs and cash flows within the relevant lines on our condensed consolidated financial statements. In applying the equity method of accounting, our investments in our unconsolidated subsidiaries are recognized either at cost, as is the case with Carbon TerraVault JV HoldCo, LLC, or at fair value if acquired in a business combination, as is the case for Midway Sunset Cogeneration Company. These investments are then adjusted for our proportionate share of income or loss in addition to contributions and distributions. We have prepared this report in accordance with generally accepted accounting principles (GAAP) in the United States and the rules and regulations of the U.S. Securities and Exchange Commission applicable to interim financial information which permit the omission of certain disclosures to the extent they have not changed materially since the latest annual financial statements. We believe our disclosures are adequate to make the information presented not misleading. The preparation of financial statements in conformity with GAAP requires management to select appropriate accounting policies and make informed estimates and judgments regarding certain types of financial statement balances and disclosures. Actual results could differ. Management believes that these estimates and judgments provide a reasonable basis for the fair presentation of our condensed consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2024 (2024 Annual Report). The carrying amounts of cash, cash equivalents and on-balance sheet financial instruments, other than debt, approximate fair value. Refer to Note 4 Debt for the fair value of our debt. 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. 10 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. Aera Merger 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 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. We also paid approximately $ 990 million in connection with the extinguishment of all of Aera's outstanding indebtedness using the proceeds from the issuance of our 8.25 % senior notes due 2029 (2029 Senior Notes) and cash on hand. As of July 1, 2024, and immediately following closing of the Aera Merger, our existing stockholders prior to the Aera Merger owned 76 % of CRC and the former owners of Aera owned 24 % of CRC. For more information on the 2029 Senior Notes, refer to Note 4 Debt. 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: Merger Consideration (in millions, except share and per share data) Shares of common stock (dividend adjusted) 21,422,972 Common stock per share fair value on July 1, 2024 $ 53.28 Fair value of share consideration 1,141 Settlement of Aera debt 990 Purchase price settlement ( 10 ) Total purchase consideration $ 2,121 11 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, 2024 (in millions) Total operating revenue $ 3,006 Net income $ 290 Net income per share Basic $ 3.23 Diluted $ 3.16 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. The pro forma results include adjustments to depreciation, depletion and amortization (DD&A) based on the purchase price allocated to property, plant, and equipment and the estimated useful lives as well as adjustments to interest and accretion expense. We also included pro forma adjustments for certain compensation-related costs and transaction costs we incurred related to the Aera Merger. Management believes the estimates and assumptions are reasonable, and the relative effects of the Aera Merger are properly reflected. NOTE 3 INVESTMENTS AND RELATED PARTY TRANSACTIONS The following tables present changes to our investments in unconsolidated subsidiaries for the periods presented: Carbon TerraVault JV (in millions) Investment, December 31, 2024 $ 27 Net loss ( 4 ) Contributions 26 Investment, September 30, 2025 $ 49 Midway Sunset Cogeneration Company (in millions) Investment, December 31, 2024 $ 59 Adjustment to the preliminary purchase price allocation in the Aera Merger ( 7 ) Net income 1 Investment, September 30, 2025 $ 53 12 Carbon TerraVault JV In August 2022, we entered into a joint venture with BGTF Sierra Aggregator LLC (Brookfield) for the further development of a carbon management business in California (Carbon TerraVault JV). We hold a 51 % interest in the Carbon TerraVault JV and Brookfield holds a 49 % interest. The Carbon TerraVault JV holds rights to inject CO 2 into the 26R reservoir in our Elk Hills field for permanent CO 2 storage (26R reservoir). 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 $ 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 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. September 30, December 31, 2025 2024 (in millions) Receivable from affiliate (a) $ 26 $ 46 Other long-term liabilities (b) $ 115 $ 107 (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 $ 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 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. 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 was insignificant for the three and nine months ended September 30, 2025 and 2024. 13 NOTE 4 DEBT 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 (in millions) Revolving Credit Facility $ — $ — SOFR plus 2.50 %- 3.50 % ABR plus 1.50 %- 2.50 % (a) March 16, 2029 2026 Senior Notes 122 245 7.125 % February 1, 2026 2029 Senior Notes 900 900 8.250 % June 15, 2029 Principal amount 1,022 $ 1,145 Unamortized debt discount and issuance costs ( 14 ) ( 16 ) Unamortized premium 3 3 Total debt, net 1,011 1,132 Less: Current maturities 122 — Long-term debt, net $ 889 $ 1,132 (a) At our election, borrowings under the amended Revolving Credit Facility may be alternate base rate (ABR) loans or term SOFR loans, plus an applicable margin. ABR loans bear interest at a rate equal to the highest of (i) the federal funds effective rate plus 0.50 % , (ii) the administrative agent prime rate and (iii) the one-month SOFR rate plus 1 % . Term SOFR loans bear interest at term SOFR, plus an additional 10 basis points per annum credit spread adjustment. The applicable margin is adjusted based on a commitment utilization percentage and will vary from (i) in the case of ABR loans, 1.50 % to 2.50 % and (ii) in the case of term SOFR loans, 2.50 % to 3.50 % . Revolving Credit Facility Our Amended and Restated Credit Agreement, dated April 26, 2023 (Revolving Credit Facility), consists of a senior revolving loan facility with an aggregate commitment of $ 1.15 billion. The amount we are able to borrow under our Revolving Credit Facility is limited to the amount of these commitments. Our Revolving Credit Facility also includes a sub-limit of $ 300 million for the issuance of letters of credit. 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. Fair Value 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). September 30, December 31, 2025 2024 (in millions) Fixed rate debt 2026 Senior Notes $ 122 $ 245 2029 Senior Notes 939 913 Fair Value of Long-Term Debt $ 1,061 $ 1,158 14 Other 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. 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 We are party to various legal and/or regulatory proceedings from time to time arising in the ordinary course of business. 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 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. We believe that reasonably possible losses that we could incur in excess of reserves cannot be accurately determined. In October 2020, Signal Hill Services, Inc. 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 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. Oxy notified us of the claim under the indemnification provisions of the Separation and Distribution Agreement between us and Oxy. In September 2021, we accepted the indemnification claim from Oxy and are challenging the order from BSEE. 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. 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. These wells had previously been operated by us prior to being sold to their current operators. CalGEM is seeking to recover these costs from us due to our prior operatorship of the wells, and we are disputing these claims. In connection with this dispute, we were required to remit $ 25 million to CalGEM under protest pending the outcome of 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 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. 15 Summary of Derivative Contracts We held the following Brent-based contracts as of September 30, 2025: Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 2027 2028 Sold Calls Barrels per day 29,000 35,000 35,000 35,000 35,000 — — Weighted-average price per barrel $ 87.13 $ 83.86 $ 83.86 $ 83.86 $ 83.86 $ — $ — Purchased Puts Barrels per day 29,000 35,000 35,000 35,000 35,000 — — Weighted-average price per barrel $ 61.72 $ 61.14 $ 61.14 $ 61.14 $ 61.14 $ — $ — Swaps Barrels per day 43,376 36,444 29,399 28,369 27,703 39,382 1,697 Weighted-average price per barrel $ 69.86 $ 68.98 $ 68.03 $ 67.51 $ 66.99 $ 64.80 $ 65.00 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. Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 2027 2028 SoCal Border MMBtu per day 22,408 20,350 13,250 10,750 9,908 — — Weighted-average price per MMBtu $ 3.53 $ 5.18 $ 4.82 $ 4.83 $ 4.84 $ — $ — NWPL Rockies MMBtu per day 51,750 51,750 51,750 51,750 51,750 38,546 1,576 Weighted-average price per MMBtu $ 4.22 $ 4.67 $ 3.64 $ 3.63 $ 4.22 $ 4.08 $ 3.95 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. The outcomes of the derivative positions shown in the tables above are as follows: • Sold calls – we make settlement payments for prices above the indicated weighted-average price per barrel. • Purchased puts – we receive settlement payments for prices below the indicated weighted-average price per barrel. • Swaps – with respect to swaps for crude oil, we make settlement payments for prices above the indicated weighted-average price per barrel and receive settlement payments for prices below the indicated weighted-average price per barrel. With respect to swaps for purchased natural gas, we receive settlement payments for prices above the indicated weighted-average price per MMBtu and we make settlement payments for prices below the weighted-average price per MMBtu. 16 Fair Value of Derivatives Derivative instruments not designated as hedging instruments are required to be recorded on the balance sheet at fair value. 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 (in millions) (in millions) Non-cash commodity derivative (loss) gain $ ( 32 ) $ 373 $ 130 $ 325 Net proceeds (settlements) and premium amortization 9 ( 17 ) 10 ( 35 ) 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 (in millions) (in millions) Non-cash loss (gain) on natural gas purchase derivatives $ 24 $ ( 3 ) $ 2 $ ( 7 ) Settlements 3 12 22 18 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 September 30, 2025 and December 31, 2024. September 30, 2025 Classification Gross Amounts at Fair Value Netting Net Fair Value (in millions) Other current assets, net $ 87 $ ( 10 ) $ 77 Other noncurrent assets 33 ( 7 ) 26 Current liabilities ( 27 ) 10 ( 17 ) Noncurrent liabilities ( 22 ) 7 ( 15 ) $ 71 $ — $ 71 17 December 31, 2024 Classification Gross Amounts at Fair Value Netting Net Fair Value (in millions) Other current assets, net $ 26 $ ( 12 ) $ 14 Other noncurrent assets 32 ( 16 ) 16 Current liabilities ( 62 ) 12 ( 50 ) Noncurrent liabilities ( 61 ) 16 ( 45 ) $ ( 65 ) $ — $ ( 65 ) NOTE 7 INCOME TAXES The following table presents the components of our income tax provision (benefit) and effective tax rate: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 (in millions) (in millions) Income before income taxes $ 75 $ 483 $ 479 $ 475 Current income tax (benefit) provision ( 24 ) 48 52 48 Deferred income tax provision 35 90 76 84 Income tax provision $ 11 $ 138 $ 128 $ 132 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. Con. Res. 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. Realization of our existing deferred tax assets is not assured and depends on a number of factors including our ability to generate sufficient taxable income in future periods. NOTE 8 DIVESTITURES AND ASSETS HELD FOR SALE Fort Apache in Huntington Beach 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. 18 Carbon Management Assets In 2022, we acquired properties for carbon management activities with the intent to divest a portion of these assets. 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 We conduct our business primarily through two reportable segments: (1) oil and natural gas and (2) carbon management. We identified these segments based on the nature of their activities, the types of products sold and services to be provided. Our oil and natural gas segment explores for, develops, and produces oil and condensate, natural gas liquids and natural gas. Our carbon management segment, that we refer to as Carbon TerraVault, is primarily expected to build, install, operate and maintain CO 2 capture equipment, transportation assets and storage facilities. Our oil and natural gas segment and carbon management segment operate exclusively in California. 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 and activity. General and administrative expenses are allocated to a segment if they directly support a segment's activities. We do not allocate income taxes to our segments. 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 nine months ended September 30, 2025 and 2024. Three months ended September 30, 2025 Oil and Natural Gas Carbon Management Total Reportable Segments Elimination Total (in millions) Oil, natural gas and natural gas liquids sales $ 726 $ — $ 726 $ ( 11 ) $ 715 Other revenue 2 — 2 — 2 Segment operating revenues $ 728 $ — $ 728 Other revenues and income (a) 138 Total operating revenues $ 855 (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. 19 Three months ended September 30, 2025 Oil and Natural Gas Carbon Management Total Reportable Segments Reconciliation (Income)/Expense Total (in millions) Segment operating revenues $ 728 $ — $ 728 $ — $ 728 Less: Operating costs: Energy operating costs 97 — 97 ( 5 ) 92 Gas processing costs 6 — 6 — 6 Non-energy operating costs 218 — 218 — 218 General and administrative expenses 9 4 13 74 87 Depreciation, depletion and amortization 118 — 118 5 123 Taxes other than on income 57 — 57 13 70 Interest expense — 3 3 22 25 Loss from investment in unconsolidated subsidiaries — 2 2 — 2 Other segment expenses (a) 41 12 53 — 53 Segment profit or (loss) $ 182 $ ( 21 ) $ 161 Other profit or loss (b) ( 93 ) ( 93 ) Unallocated amounts (c) 70 70 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 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 September 30, 2024 Oil and Natural Gas Carbon Management Total Reportable Segments Elimination Total (in millions) Oil, natural gas and NGL sales to external customers $ 878 $ — $ 878 $ ( 8 ) $ 870 Other revenue 2 — 2 — 2 Segment operating revenues $ 880 $ — $ 880 Other revenues and income (a) 481 Total operating revenues $ 1,353 (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. 20 Three months ended September 30, 2024 Oil and Natural Gas Carbon Management Total Reportable Segments Reconciliation (Income)/Expense Total (in millions) Segment operating revenues $ 880 $ — $ 880 $ — $ 880 Less: Operating costs: Energy operating costs 97 — 97 ( 5 ) 92 Gas processing costs 5 — 5 — 5 Non-energy operating costs 214 — 214 — 214 General and administrative expenses 16 5 21 85 106 Depreciation, depletion and amortization 129 — 129 11 140 Taxes other than on income 72 — 72 13 85 Interest expense — 3 3 26 29 Loss from investment in unconsolidated subsidiary — 3 3 ( 1 ) 2 Other segment expenses (a) 49 14 63 — 63 Segment profit or (loss) $ 298 $ ( 25 ) $ 273 Other profit or loss (b) ( 60 ) ( 60 ) Unallocated amounts (c) ( 279 ) ( 279 ) Income before income taxes $ 483 (a) Amounts for our oil and natural gas segment include transportation costs, accretion expense, asset impairment, and other operating expenses, net. Amounts for our carbon management segment primarily include operating lease costs. (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, 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 (in millions) Oil, natural gas and natural gas liquids sales $ 2,265 $ — $ 2,265 $ ( 34 ) $ 2,231 Other revenue 7 — 7 — 7 Segment operating revenues $ 2,272 $ — $ 2,272 Other revenues and income (a) 507 Total operating revenues $ 2,745 (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. 21 Nine months ended September 30, 2025 Oil and Natural Gas Carbon Management Total Reportable Segments Reconciliation (Income)/Expense Total (in millions) Segment operating revenues $ 2,272 $ — $ 2,272 $ — $ 2,272 Less: Operating costs: Energy operating costs 293 — 293 ( 20 ) 273 Gas processing costs 15 — 15 — 15 Non-energy operating costs 639 — 639 — 639 General and administrative expenses 30 10 40 198 238 Depreciation, depletion and amortization 365 — 365 17 382 Taxes other than on income 157 — 157 30 187 Interest expense — 8 8 69 77 Loss from investment in unconsolidated subsidiaries — 4 4 ( 1 ) 3 Other segment expenses (a) 131 44 175 — 175 Segment profit or (loss) $ 642 $ ( 66 ) $ 576 Other profit or loss (b) ( 164 ) ( 164 ) Unallocated amounts (c) ( 32 ) ( 32 ) Income before income taxes $ 479 (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 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, 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 (in millions) Oil, natural gas and NGL sales to external customers $ 1,729 $ — $ 1,729 $ ( 18 ) $ 1,711 Other revenue 5 — 5 — 5 Segment operating revenues $ 1,734 $ — $ 1,734 Other revenues and income (a) 605 Total operating revenues $ 2,321 (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. 22 Nine months ended September 30, 2024 Oil and Natural Gas Carbon Management Total Reportable Segments Reconciliation (Income)/Expense Total (in millions) Segment operating revenues $ 1,734 $ — $ 1,734 $ — $ 1,734 Less: Operating costs: Energy operating costs 197 — 197 ( 11 ) 186 Gas processing costs 12 — 12 — 12 Non-energy operating costs 445 — 445 — 445 General and administrative expenses 34 10 44 182 226 Depreciation, depletion and amortization 225 — 225 21 246 Taxes other than on income 137 — 137 25 162 Interest expense — 6 6 53 59 Loss from investment in unconsolidated subsidiary — 10 10 ( 1 ) 9 Other segment expenses (a) 137 37 174 — 174 Segment profit or (loss) $ 547 $ ( 63 ) $ 484 Other profit or loss (b) ( 107 ) ( 107 ) Unallocated amounts (c) ( 153 ) ( 153 ) Income before income taxes $ 475 (a) Amounts for our oil and natural gas segment include transportation costs, accretion expense, asset impairment and other operating expenses, net. Amounts for our carbon management segment primarily include operating lease costs. (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, other operating expenses, net, other non-operating loss, interest income, unallocated other revenue, loss on early extinguishment of debt 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 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. Oil and Natural Gas Carbon Management Corporate and Other Total (in millions) Three months ended September 30, 2025 $ 72 $ 15 $ 4 $ 91 Three months ended September 30, 2024 $ 74 $ 4 $ 1 $ 79 Oil and Natural Gas Carbon Management Corporate and Other Total (in millions) Nine months ended September 30, 2025 $ 165 $ 22 $ 15 $ 202 Nine months ended September 30, 2024 $ 156 $ 6 $ 5 $ 167 23 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 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 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. 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 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 Note: The total value of shares purchased includes accrued excise taxes, which are generally paid in the year following the share repurchase. Commissions paid on share repurchases were not significant in all periods presented. Dividends Our Board of Directors declared the following cash dividends for each of the periods presented. Total Dividend Rate Per Share (in millions) ($ per share) 2025 Three months ended March 31, 2025 $ 35 $ 0.3875 Three months ended June 30, 2025 35 $ 0.3875 Three months ended September 30, 2025 32 $ 0.3875 Nine months ended September 30, 2025 $ 102 2024 Three months ended March 31, 2024 $ 21 $ 0.31 Three months ended June 30, 2024 22 $ 0.31 Three months ended September 30, 2024 34 $ 0.3875 Nine months ended September 30, 2024 $ 77 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. See Note 16 Subsequent Events for information on future cash dividends. 24 NOTE 11 EARNINGS PER SHARE 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. For basic EPS, the weighted-average number of common shares outstanding excludes shares underlying our equity-settled awards and warrants. 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 nine months ended September 30, 2025 and 2024: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 (in millions, except per-share amounts) Numerator for Basic and Diluted EPS Net income $ 64 $ 345 $ 351 $ 343 Denominator for Basic EPS Weighted-average shares 83.7 89.4 87.8 75.5 Potential common shares, if dilutive: Warrants — 1.0 — 1.1 Restricted stock units 0.4 0.4 0.3 0.5 Performance stock units 0.3 0.4 0.3 0.5 Denominator for Diluted EPS Weighted-average shares 84.4 91.2 88.4 77.6 EPS Basic $ 0.76 $ 3.86 $ 4.00 $ 4.54 Diluted $ 0.76 $ 3.78 $ 3.97 $ 4.42 25 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 nine months ended September 30, 2025 and 2024: Three months ended September 30, Three months ended September 30, 2025 2024 Pension Benefit Postretirement Benefit Pension Benefit Postretirement Benefit (in millions) (in millions) Service cost - benefits earned during the period $ 1 $ 1 $ 3 $ 1 Interest cost on projected benefit obligation 4 1 4 1 Expected return on plan assets ( 6 ) ( 1 ) ( 6 ) ( 1 ) Curtailment gain — — ( 4 ) Cost of special termination benefits — — — 4 Amortization of prior service cost credit — ( 2 ) — ( 1 ) Net periodic benefit costs $ ( 1 ) $ ( 1 ) $ 1 $ — Nine months ended September 30, Nine months ended September 30, 2025 2024 Pension Benefit Postretirement Benefit Pension Benefit Postretirement Benefit (in millions) (in millions) Service cost - benefits earned during the period $ 1 $ 2 $ 3 $ 2 Interest cost on projected benefit obligation 11 4 4 2 Expected return on plan assets ( 17 ) ( 3 ) ( 7 ) ( 1 ) Curtailment gain — — — ( 4 ) Settlement loss 1 — — — Cost of special termination benefits — — — 4 Amortization of net actuarial gain — ( 1 ) — ( 1 ) Amortization of prior service cost credit — ( 4 ) — ( 4 ) Net periodic benefit costs $ ( 4 ) $ ( 2 ) $ — $ ( 2 ) 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 . We expect to contribute an insignificant amount to fund our pension benefit distributions during the remainder of 2025 . NOTE 13 SUPPLEMENTAL ACCOUNT BALANCES 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. 26 Revenues — We derive most of our revenue from sales of oil, natural gas and natural gas liquids, with the remaining revenue primarily generated from sales of electricity and revenue from resource adequacy contracts in addition to revenue from marketing activities related to storage and managing excess pipeline capacity. The following table provides disaggregated revenue for sales of produced oil, natural gas and natural gas liquids to customers: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 (in millions) (in millions) Oil $ 653 $ 804 $ 2,033 $ 1,505 Natural gas 26 22 73 68 Natural gas liquids 36 44 125 138 Oil, natural gas and natural gas liquids sales $ 715 $ 870 $ 2,231 $ 1,711 From time-to-time, we enter into transactions for third-party production, which we report as revenue from marketing of purchased commodities on our condensed consolidated statements of operations. Revenues from marketing of purchased commodities primarily results from the storage or transportation of natural gas to take advantage of differences in pricing or location, or marketing oil sales that have resulted from third-party purchases. The following table provides disaggregated revenue for sales to customers related to our marketing activities: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 (in millions) (in millions) Oil $ 20 $ 25 $ 66 $ 73 Natural gas 38 26 106 97 Natural gas liquids — — 6 6 Revenue from marketing of purchased commodities $ 58 $ 51 $ 178 $ 176 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. Inventory, by category, is as follows: September 30, December 31, 2025 2024 (in millions) Materials and supplies $ 89 $ 86 Finished goods 5 4 Inventory $ 94 $ 90 27 Other current assets, net — Other current assets, net include the following: September 30, December 31, 2025 2024 (in millions) Net amounts due from joint interest partners (a) $ 40 $ 41 Fair value of commodity derivative contracts 77 14 Prepaid expenses 17 28 Greenhouse gas allowances 2 27 Income tax receivable 51 50 Other 16 16 Other current assets, net $ 203 $ 176 (a) The amounts due from joint interest partners include insignificant amounts of allowances for credit losses for each period presented. Other noncurrent assets — Other noncurrent assets include the following: September 30, December 31, 2025 2024 (in millions) Operating lease right-of-use assets $ 95 $ 105 Deferred financing costs - Revolving Credit Facility 21 23 Emission reduction credits 11 11 Fair value of commodity derivative contracts 26 16 Funded pension 73 67 Postretirement plan 14 13 Other 40 37 Other noncurrent assets $ 280 $ 272 Accrued liabilities — Accrued liabilities include the following: September 30, December 31, 2025 2024 (in millions) Compensation-related liabilities $ 101 $ 177 Taxes other than on income 95 100 Asset retirement obligations - current portion 135 134 Operating lease liability 22 15 Fair value of derivative contracts 17 50 Premiums due on commodity derivative contracts 19 14 Advanced payments 14 25 Payable to the former owners of Aera 9 29 Other 67 67 Accrued liabilities $ 479 $ 611 28 Other long-term liabilities — Other long-term liabilities include the following: September 30, December 31, 2025 2024 (in millions) Compensation-related liabilities $ 46 $ 50 Postretirement and pension benefit plans 56 59 Operating lease liability 67 76 Fair value of commodity derivative contracts 15 45 Contingent liability ( Note 3 Investments and Related Party Transactions ) 115 107 Other 26 40 Other long-term liabilities $ 325 $ 377 NOTE 14 SUPPLEMENTAL CASH FLOW INFORMATION Supplemental disclosures to our condensed consolidated statements of cash flows are presented below: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 (in millions) (in millions) Supplemental cash flow information Interest paid, net of amounts capitalized $ 2 $ 23 $ 47 $ 42 Income taxes paid $ 6 $ 29 $ 45 $ 55 Interest income $ 1 $ 1 $ 6 $ 15 Supplemental disclosure of non-cash investing and financing activities Contributions to the Carbon TerraVault JV $ 11 $ 15 $ 26 $ 20 Issuance of shares for stock-based compensation awards $ 2 $ — $ 23 $ 88 Dividend equivalents for stock-based compensation awards $ 1 $ 2 $ 2 $ 2 Excise tax on share repurchases $ — $ — $ 2 $ 1 NOTE 15 CONDENSED CONSOLIDATING FINANCIAL INFORMATION We have designated certain of our subsidiaries as Unrestricted Subsidiaries under the indenture governing our 2026 Senior Notes (2026 Senior Notes Indenture) and the indenture governing our 2029 Senior Notes (2029 Senior Notes Indenture). Unrestricted Subsidiaries (as defined in the 2026 Senior Notes Indenture and 2029 Senior Notes Indenture) are subject to fewer restrictions under the indentures. 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 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. 29 Condensed Consolidating Balance Sheets As of September 30, 2025 and December 31, 2024 As of September 30, 2025 Parent Combined Unrestricted Subsidiaries Combined Restricted Subsidiaries Eliminations Consolidated (in millions) Total current assets $ 260 $ 27 $ 525 $ — $ 812 Total property, plant and equipment, net 23 52 5,455 — 5,530 Investments in consolidated subsidiaries 5,706 ( 46 ) 17,013 ( 22,673 ) — Deferred tax asset 27 — — — 27 Investment in unconsolidated subsidiaries — 49 53 — 102 Other assets 117 45 118 — 280 TOTAL ASSETS $ 6,133 $ 127 $ 23,164 $ ( 22,673 ) $ 6,751 Total current liabilities 269 19 629 — 917 Long-term debt 889 — — — 889 Asset retirement obligations — — 965 — 965 Other long-term liabilities 106 133 86 — 325 Deferred tax liability 212 — — — 212 Amounts due to (from) affiliates 1,214 72 ( 1,286 ) — — Total equity 3,443 ( 97 ) 22,770 ( 22,673 ) 3,443 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,133 $ 127 $ 23,164 $ ( 22,673 ) $ 6,751 30 As of December 31, 2024 Parent Combined Unrestricted Subsidiaries Combined Restricted Subsidiaries Eliminations Consolidated (in millions) Total current assets $ 437 $ 46 $ 541 $ — $ 1,024 Total property, plant and equipment, net 14 31 5,635 — 5,680 Investments in consolidated subsidiaries 4,869 ( 32 ) 15,050 ( 19,887 ) — Deferred tax asset 73 — — — 73 Investment in unconsolidated subsidiary — 27 59 — 86 Other assets 113 58 101 — 272 TOTAL ASSETS $ 5,506 $ 130 $ 21,386 $ ( 19,887 ) $ 7,135 Total current liabilities 224 14 742 — 980 Long-term debt 1,132 — — — 1,132 Asset retirement obligations — — 995 — 995 Other long-term liabilities 114 138 125 — 377 Amounts due to (from) affiliates 385 — ( 385 ) — — Deferred tax liability 113 — — — 113 Total equity 3,538 ( 22 ) 19,909 ( 19,887 ) 3,538 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,506 $ 130 $ 21,386 $ ( 19,887 ) $ 7,135 Condensed Consolidating Statement of Operations 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 (in millions) Total operating revenues $ 1 $ — $ 875 $ ( 21 ) $ 855 Total costs and other 90 13 672 ( 19 ) 756 Loss on asset divestitures — — ( 1 ) — ( 1 ) Non-operating (loss) income ( 22 ) ( 4 ) 3 — ( 23 ) (LOSS) INCOME BEFORE INCOME TAXES ( 111 ) ( 17 ) 205 ( 2 ) 75 Income tax provision ( 11 ) — — — ( 11 ) NET (LOSS) INCOME $ ( 122 ) $ ( 17 ) $ 205 $ ( 2 ) $ 64 31 Three months ended September 30, 2024 Parent Combined Unrestricted Subsidiaries Combined Restricted Subsidiaries Eliminations Consolidated (in millions) Total operating revenues $ 2 $ — $ 1,437 $ ( 86 ) $ 1,353 Total costs and other 86 16 818 ( 85 ) 835 Non-operating (loss) income ( 32 ) ( 5 ) 2 — ( 35 ) (LOSS) INCOME BEFORE INCOME TAXES ( 116 ) ( 21 ) 621 ( 1 ) 483 Income tax provision ( 138 ) — — — ( 138 ) NET (LOSS) INCOME $ ( 254 ) $ ( 21 ) $ 621 $ ( 1 ) $ 345 Nine months ended September 30, 2025 Parent Combined Unrestricted Subsidiaries Combined Restricted Subsidiaries Eliminations Consolidated (in millions) Total operating revenues $ 6 $ — $ 2,800 $ ( 61 ) $ 2,745 Total costs and other 265 47 1,940 ( 59 ) 2,193 Loss on asset divestitures — — ( 1 ) — ( 1 ) Non-operating (loss) income ( 70 ) ( 11 ) 9 — ( 72 ) (LOSS) INCOME BEFORE INCOME TAXES ( 329 ) ( 58 ) 868 ( 2 ) 479 Income tax provision ( 128 ) — — — ( 128 ) NET (LOSS) INCOME $ ( 457 ) $ ( 58 ) $ 868 $ ( 2 ) $ 351 Nine months ended September 30, 2024 Parent Combined Unrestricted Subsidiaries Combined Restricted Subsidiaries Eliminations Consolidated (in millions) Total operating revenues $ 15 $ — $ 2,407 $ ( 101 ) $ 2,321 Total costs and other 222 44 1,611 ( 101 ) 1,776 Gain on asset divestitures — — 7 — 7 Non-operating (loss) income ( 66 ) ( 16 ) 5 — ( 77 ) (LOSS) INCOME BEFORE INCOME TAXES ( 273 ) ( 60 ) 808 — 475 Income tax provision ( 132 ) — — — ( 132 ) NET (LOSS) INCOME $ ( 405 ) $ ( 60 ) $ 808 $ — $ 343 NOTE 16 SUBSEQUENT EVENTS 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. 32 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. Dividend 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 . 33