California Resources Corp

We are subject to various risks and uncertainties in the course of our business. A discussion of such risks and uncertainties may be found under the heading Risk Factors in our 2024 Annual Report. There were no material changes to those risk factors during the three months ended September 30, 2025, except as described below.

Acquisition and disposition activities, including the Berry Merger, involve substantial risks.

On September 14, 2025, we entered into the Berry Merger Agreement with Berry. In addition, from time to time, we engage in acquisition activities. The Berry Merger and other such activities carry risks that we may:

•not fully realize anticipated benefits due to less-than-expected reserves or production or changed circumstances;

•bear unexpected integration costs or experience other integration difficulties;

•assume liabilities that are greater than anticipated; and

•be exposed to currency, political, marketing, labor and other risks.

In connection with our acquisitions, we are often only able to perform limited due diligence. Successful acquisitions of oil and natural gas properties require an assessment of a number of factors, including estimates of recoverable reserves, the timing for recovering the reserves, exploration potential, future commodity prices, operating costs and potential environmental, regulatory and other liabilities. Such assessments are inexact and incomplete, and we may be unable to make these assessments with a high degree of accuracy.

The Berry Merger is expected to close in the first quarter of 2026 and is subject to certain closing conditions, including, among others, adoption of the Berry Merger Agreement by its stockholders, the receipt of certain required government approvals, and other customary closing conditions. Our other acquisition activities may similarly require us to seek approvals from government agencies and other regulatory bodies, depending on the nature and extent of the businesses being acquired. There can be no assurances that we would be able to obtain such approvals. If we are not able to complete acquisitions, we may not be able to grow our reserves or develop our properties in a timely manner or at all.

We regularly review our property base for the purpose of identifying nonstrategic assets, the disposition of which would increase capital resources available for other activities and create organizational and operational efficiencies. Our disposition activities carry risks that we may:

•not be able to realize reasonable prices or rates of return for assets;

•be required to retain liabilities that are greater than desired or anticipated;

•experience increased operating costs; and

•reduce our cash flows if we cannot replace associated revenue.

There can be no assurance that we will be able to divest assets on financially attractive terms or at all. Our ability to sell assets is also limited by the agreements governing our indebtedness. If we are not able to sell assets as needed, we may not be able to generate proceeds to support our liquidity and capital investments.

In addition, we have expended and will continue to expend significant time and resources in connection with the Berry Merger, as well as any future acquisition and disposition activities. For example, time and resources will be expended in connection with seeking regulatory approvals for the Berry Merger.

While the Berry Merger is pending, we will be subject to certain contractual restrictions that could adversely affect our business and operations.

Due to certain restrictions in the Berry Merger Agreement on the conduct of business prior to completing the Berry Merger, we may be unable, during the pendency of the Berry Merger, to pursue strategic transactions and otherwise pursue other actions, even if such actions would prove beneficial, and we may have to forgo certain opportunities we might otherwise pursue.

In addition, the Berry Merger Agreement also contains certain termination rights for us and Berry. Upon termination of the Berry Merger Agreement in accordance with its terms, under certain circumstances, we will be required to reimburse Berry up to $5 million for certain costs and expenses incurred or paid by Berry in connection with the Berry Merger. In addition, upon a termination of the Berry Merger Agreement resulting from our fraud or willful breach of the Berry Merger Agreement, we may be liable to Berry, under certain circumstances, for damages up to $40,255,219, only to the extent proven, based on the loss of the premium that the Berry stockholders would have received if the Berry Merger was consummated pursuant to the terms of the Berry Merger Agreement and Section 261(a)(1) of the Delaware General Corporation Law.

Share Repurchases

Our Board of Directors has authorized a Share Repurchase Program to acquire up to $1.35 billion of our common stock through June 30, 2026. The repurchases may be affected 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 and contractual limitations in our debt agreements. 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. Shares repurchased are either retired or held as treasury stock.

Our share repurchase activity for the three months ended September 30, 2025 was as follows:

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